Exhibit 10.42
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Nordstrom, Inc. 1997 Stock Option Plan
non-qualified
stock option agreement
time-vested option
A NON-QUALIFIED STOCK OPTION GRANT for the number of shares of Common Stock
(hereinafter the “Option”) as noted in your Notice of Grant of Stock Options, of
Nordstrom, Inc., a Washington Corporation (the “Company”), is hereby granted to
the “Optionee.” The option price is as noted in your Notice of Grant of Stock
Options and was determined as provided in, and is subjected to, the terms of the
Nordstrom, Inc. 1997 Stock Option Plan (the “Plan”) adopted by the Company,
which is incorporated by this reference. To the extent inconsistent with this
agreement, the terms of the Plan shall govern. The Option is subject to the
following:

1.   OPTION PRICE       The option price is one hundred percent (100%) of the
fair market value of the Company’s Common Stock, as determined by the closing
price of the Company’s Common Stock on the New York Stock Exchange on the date
of the grant, as noted in your Notice of Grant of Stock Options.   2.   VESTING
AND EXERCISING OF OPTION       Except as set forth in Section 4, the Option
shall vest and be exercisable in accordance with the provisions of the Plan as
follows:

  (a)   Schedule of Vesting and Rights to Exercise.

      Years of Service Following   Percent of Grant of Option   Option Vested
After 1 year   25% After 2 years   50% After 3 years   75% After 4 years  
100%  

  (b)   Method of Exercise. The Option shall be exercisable by a written notice
that shall:

  (i)   state the election to exercise the Option, the number of shares, the
total option price, name, address and Social Security number of the Optionee;  
  (ii)   be signed by the person entitled to exercise the Option; and     (iii)
  be in writing and delivered to Nordstrom Leadership Benefits (either directly
or through a stock broker).

      The Company has made arrangements with a broker for stock option
management and exercises. Procedures for management and exercises shall be
disseminated to the Optionee with the agreement.         Payment of the purchase
price of any shares with respect to which an Option is being exercised shall be
by check or bank wire transfer, by means of the surrender of shares of Common
Stock previously held for at least six months by Optionee, or where not acquired
by Optionee by exercising a stock option, having a fair market value at least
equal to the exercise price, or by giving an irrevocable direction for a
securities broker approved by the Company to sell all or part of your Option
shares and to deliver to the Company from the sale proceeds an amount sufficient
to pay the option exercise price and any withholding taxes. (The balance of the
sale proceeds, if any, will be delivered to you.) The directions must be given
by signing a special “Notice of Exercise” form provided by the Company.        
The certificate(s) or shares of Common Stock as to which the Option shall be
exercised shall be registered in the name of the person(s) exercising the Option
unless another person is specified. An Option hereunder may not at any time be
exercised for a fractional number of shares.

  (c)   Restrictions on Exercise. These Options may not be exercised if the
issuance of the shares upon such exercise would constitute a violation of any
applicable federal or state securities or other law or valid regulation. As a
condition to the exercise of these Options, the Company may require the person
exercising the Options to make any representation and warranty to the Company as
the Company’s counsel advises and as may be required by any applicable law or
regulation.

3.   NONTRANSFERABILITY OF OPTIONS       The Option may not be sold, pledged,
assigned or transferred in any manner otherwise than by will or the laws of
descent and distribution, and except as set forth in Section 4 below, may be
exercised during the lifetime of the Optionee only by the Optionee or by the
guardian or legal representative of the Optionee. The terms of the Option shall
be binding upon the executors, administrators, heirs and successors of the
Optionee.   4.   TERMINATION OF EMPLOYMENT       Except as set forth below, the
Option may only be exercised while the Optionee is an employee of the Company.
If an Optionee’s employment is terminated, the Optionee or his or her legal
representative shall have the right to exercise the Option after such
termination as follows:

 

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  (a)   If the Optionee dies, the persons to whom the Optionee’s rights have
passed by will or the laws of descent and distribution may exercise such rights.
If the Option was granted at least six (6) months prior to death, it shall
continue to vest and may be exercised during the period ending four (4) years
after the Optionee’s death, but in no event later than ten (10) years after the
date of grant. If the Option was granted less than six months prior to death,
such Option shall be terminated as of that date.     (b)   If the Optionee’s
employment is terminated due to his or her embezzlement or theft of Company
funds, defraudation of the Company, violation of Company rules, regulations or
policies, or any intentional act that harms the Company, such Option, to the
extent not exercised as of the date of termination, shall be terminated as of
that date.     (c)   If the Optionee’s employment is terminated due to his or
her disability, as defined in Section 22(e)(3) of the Internal Revenue Code, the
Option, if granted at least six (6) months prior to such termination, shall
continue to vest and may be exercised during the period ending four (4) years
after termination, but in no event later than ten (10) years after the date of
grant. If the Option was granted less than six months prior to disability, such
Option shall be terminated as of that date.     (d)   If the Optionee’s
employment is terminated due to his or her retirement upon attaining age 50 with
ten (10) years of service to the company or age 60, the Option, if granted at
least six (6) months prior to such termination, shall continue to vest and may
be exercised during the period ending four (4) years after termination, but in
no event later than ten (10) years after the date of grant. If the Option was
granted less than six months prior to retirement, such Option shall be
terminated as of that date.     (e)   If the Optionee’s employment is terminated
for any reason other than those set forth in subparagraphs (a), (b), (c) and
(d) above, the Optionee may exercise his or her Option, to the extent vested as
of the date of his or her termination, within one hundred (100) days after
termination, but in no event later than ten (10) years after the date of grant.

5.   TERM OF OPTIONS       The Option may not be exercised more than ten (10)
years from the date of original grant of these Options and may be exercised
during such term only in accordance with the Plan and the terms of this Option.
  6.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION       The number and kind of
shares of Company stock subject to this Option shall be appropriately adjusted,
pursuant to the Plan, along with a corresponding adjustment in the option price
to reflect any stock dividend, stock split, split-up or any combination or
exchange of shares, however accomplished.   7.   ADDITIONAL OPTIONS       The
Compensation Committee may or may not grant you additional stock options in the
future. Nothing in this Option or any future grant should be construed as
suggesting that additional grants of options to you will be forthcoming.

8.   LEAVES OF ABSENCE AND PART-TIME WORK       For purposes of this Option,
your Service does not terminate when you go on a military leave, a sick leave or
another bona fide leave of absence if the leave was approved by the Company in
writing and if continued crediting of Service is required by the terms of the
leave or by applicable law. But your Service terminates when the approved leave
ends, unless you immediately return to active work.       If you go on a leave
of absence, then the vesting schedule specified in the Notice of Grant of Stock
Options may be adjusted in accordance with the Company’s leave of absence policy
or the terms of your leave.

9.   TAX WITHHOLDING       In the event that the Company determines that it is
required to withhold any tax as a result of the exercise of this Option, the
Optionee, as a condition to the exercise of their Options, shall make
arrangements satisfactory to the Company to enable it to satisfy all withholding
requirements.

10.   RIGHTS AS A SHAREHOLDER       Neither the Optionee nor the Optionee’s
representative shall have any rights as a shareholder with respect to any Common
Shares subject to this Option, until (i) the Optionee or the Optionee’s
representative becomes entitled to receive such Common Shares by filing a notice
of exercise and paying the Option Price pursuant to this Option, and (ii) the
Optionee or Optionee’s representative has satisfied any other requirement
imposed by applicable law or the Plan.   11.   NO RETENTION RIGHTS       Nothing
in this option or in the plan shall give you the right to be retained by the
Company (or a subsidiary of the Company) as an employee or in any capacity. The
Company and its subsidiaries reserve the right to terminate your service at any
time, with or without cause.   12.   ENTIRE AGREEMENT       The Notice of Grant
of Stock Options, this Agreement and the Plan constitute the entire contract
between the parties hereto with regard to the subject matter hereof. They
supersede any other agreements, representations or understandings (whether oral
or written and whether express or implied) that relate to the subject matter
hereof.   13.   CHOICE OF LAW       This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Washington, as such laws
are applied to contracts entered into and performed in such State.

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10564 • 03/03 • 1.4K

 

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Nordstrom, Inc.
Notice of Grant of Stock Options

     
<NAME>
  ID: <ID#>
 
  Grant No: <GRANT#>

On February 18, 2003, you were awarded non-qualified stock options under the
Nordstrom, Inc 1997 Stock Option Plan to purchase <shares granted> shares of
Nordstrom, Inc, stock at $17.70 per share.
Your grant will vest over the four-year vesting period as outlined below:

          Shares   Vest Date   Expiration <shares1>   2/18/2004   2/18/2013  
<shares2>   2/18/2005   2/18/2013   <shares3>   2/18/2006   2/18/2013  
<shares4>   2/18/2007   2/18/2013

Please keep this Notice for your records You are not required to return this or
any other document to Nordstrom, Inc. in connection with your grant.
If you have any questions about your grant, please call Nordstrom Leadership
Benefits at (206) 303-5855, tie line 8-805-5855 or e-mail
leadership.benefits@nordstrom.com.