exv10w3





Exhibit 10.3




	 	 	 
	Performance Share Unit Award Agreement

	 	2009






AN AWARD FOR PERFORMANCE SHARE UNITS (hereinafter the “Units”), representing a number of shares of
Common Stock as noted in the 2009 Notice of Award of Performance Share Units (the “Notice”), of
Nordstrom, Inc., a Washington Corporation (the “Company”), is hereby granted to the “Unit holder”
on the date set forth in the Notice, subject to the terms of this Agreement. The Units are also
subject to the terms, definitions and provisions of the Nordstrom, Inc. 2004 Equity Incentive Plan
(the “Plan”) adopted by the Board of Directors of the Company and approved by the Company’s
shareholders, which is incorporated in this Agreement. Each vested Unit is equal in value to one
share of Nordstrom Common Stock (“Common Stock”). To the extent inconsistent with this Agreement,
the terms of the Plan shall govern. The Compensation Committee of the Board has the discretionary
authority to construe and interpret the Plan and this Agreement. The Units are subject to the
following:




	1.	 	VESTING AND SETTLEMENT OF UNITS
	 
	 	 	At the end of three fiscal years following the date of the Award (“the Performance Cycle”), Units
shall vest and be settled in accordance with the provisions of the Plan as follows:






	 	(a)	 	Vesting






Except as set forth in Section 4, Units shall vest at the applicable percentage when the
Compensation Committee of the Board certifies that (1) the Company’s Total Shareholder Return
(TSR) is positive, and (2) its TSR performance relative to the TSR of other companies in the
Peer Group exceeds the following corresponding percentile rankings. For purposes of
determining the Company’s TSR relative to the TSR of other companies in the Peer Group, the
share price of our Common Stock, and the share prices of the companies in the Peer Group, are
based on the thirty trading day closing price average immediately prior to the start of the
Performance Cycle and the thirty trading day closing price average immediately prior to the
end of the Performance Cycle.



PSU Vesting % Based on Nordstrom

Percentile Rank Among Peers




	 	 	 	 	 
	If Nordstrom TSR Is Positive and Our	 	 
	Percentile Rank Is:	 	PSU Vesting Is:
	 
	>85%
	 	 	125	%
	 
	>75%
	 	 	100	%
	 
	>65%
	 	 	85	%
	 
	>50%
	 	 	75	%
	 
	£50%
	 	 	0	%







	 	 	 	While the relative percentile rankings may change during the Performance Cycle based upon
mergers, acquisitions, dissolutions and other industry consolidation involving the companies
in the Peer Group, the application of the percentile vesting above is applied consistently.
Generally, Units will be earned if the Nordstrom TSR for the Performance Cycle is in the top
half of performers relative to the other companies in the Peer Group.
	 
	 	(b)	 	Settlement
	 
	 	 	 	Units shall be settled upon vesting, unless the Unit holder has elected to defer the Units
into the Executive Deferred Compensation Plan (EDCP) in accordance with the rules. Upon
deferral, the vested Units (and their subsequent settlement and payment) shall be governed by
the terms and conditions of the EDCP as that Plan may be amended from time to time by the
Company.
	 
	 	 	 	Unless earlier deferred into the EDCP, the Unit holder shall elect (during a period prior to
settlement as prescribed by and in accordance with procedures established by the Company) to
settle the Units upon vesting in either one share of Common Stock for each vested Unit,
receive an equivalent amount of cash for each vested Unit, or receive a combination of cash
and stock. In the event the Unit holder does not or is unable to make such a settlement
election, the Units shall be settled in stock. In the event the Units are settled in cash, the
amount of cash will be determined on the basis of the closing price of the Common Stock on the
New York Stock Exchange on the last day of the Performance Cycle.
	 
	 	(c)	 	Withholding Taxes
	 
	 	 	 	No stock certificates or cash will be distributed to the Unit holder, or amounts deferred into
the EDCP, unless the Unit holder has made acceptable arrangements to pay any withholding taxes
that may be due as a result of the settlement of this Award. These arrangements may include
withholding shares of Common Stock that otherwise would be distributed when the Units are
settled. The fair market value of the shares required to cover withholding will be applied to
the withholding of taxes prior to the Unit holder receiving the remaining shares or the cash
value of those shares.
	 
	 	(d)	 	Restrictions on Resale
	 
	 	 	 	The Unit holder agrees not to sell any shares of Common Stock at a time when applicable laws
or Company policies prohibit a sale. This restriction will apply as long as the Unit holder is
an employee, consultant or director of the Company or a subsidiary or affiliate of the
Company.






	2.	 	ACCEPTANCE OF UNITS
	 
	 	 	Although the Company does not require the Unit holder’s signature upon accepting the Award, the
Unit holder remains subject to the terms and conditions of this Agreement.
	 
	3.	 	NONTRANSFERABILITY OF UNITS
	 
	 	 	The Units may not be sold, pledged, assigned or transferred in any manner otherwise than in the
event of the Unit holder’s death, either indicated on a valid Nordstrom Beneficiary Designation
form, by will or the laws of descent and distribution and, except as set forth in Section 4
below, may be settled during the lifetime of the Unit holder only by the Unit holder or by the
guardian or legal representative of the Unit holder. The terms of the Award shall be binding upon
the executors, administrators, heirs and successors of the Unit holder.
	 
	4.	 	SEPARATION OF EMPLOYMENT
	 
	 	 	Except as set forth below, Units vest and may only be settled while the Unit holder is an
employee of the Company. If the Unit holder’s employment is terminated, the Units shall continue
to vest pursuant to the schedule set forth in subparagraph 1(a) above, and the Unit holder or his
or her legal representative shall have the right to settlement of the Units after such
termination only as follows:






	 	(a)	 	If the Unit holder dies while employed by the Company, the persons named on the















1 Performance Share Unit Award Agreement









 












	 	 	 	Unit holder’s Beneficiary Designation form shall be entitled to settlement of the Units. If no
valid Beneficiary Designation form is on file with the Company, then the persons to whom the
Unit holder’s rights have passed by will or the laws of descent and distribution shall be
entitled to settlement of the Units. If the Units were granted at least six months prior to
the death of the Unit holder while employed by the Company, the Unit holder’s beneficiary
shall be entitled to a prorated payment with respect to vested Units based on the period of
service during the term of this Agreement. If the Units were granted less than six months
prior to death, the Units shall be forfeited as of the date of death with no rights to a
prorated payment at settlement.
	 
	 	(b)	 	If the Unit holder is separated due to his or her disability, as defined in Section
22(e)(3) of the Internal Revenue Code, and the Units were granted at least six months prior
to such separation, and the Unit holder provides Nordstrom Leadership Benefits with
reasonable documentation of the Unit holder’s disability, the Unit holder (or his or her
beneficiary) shall be entitled to a prorated payment with respect to vested Units based on
the period of service during the term of this Agreement. If the Units were granted less than
six months prior to separation due to the Unit holder’s disability, the Units shall be
forfeited as of the date of separation with no rights to a prorated payment at settlement.
	 
	 	(c)	 	If the Unit holder is separated due to retirement between the ages of 53 and 57 with 10
years of continuous service to the Company from the most recent hire date, or upon attaining
age 58, and the Units were granted at least six months prior to such separation, the Unit
holder (or his or her beneficiary) shall be entitled to a prorated payment with respect to
vested Units based on the period of service during the term of this Agreement. If the Units
were granted less than six months prior to retirement, the Units shall be forfeited as of
the date of retirement with no rights to a prorated payment at settlement.
	 
	 	(d)	 	If the Unit holder is separated for any reason other than those set forth in
subparagraphs (a), (b) and (c) above, Units, to the extent not vested and settled as of the
date of his or her separation, shall be forfeited as of that date.






	 	 	Notwithstanding anything above to the contrary, if during the term of this Award, the Unit holder
directly or indirectly, either as an employee, employer, consultant, agent, principal, partner,
shareholder, corporate officer, director or in any other capacity, engages or assists any third
party in engaging in any business competitive with the Company; divulges any confidential or
proprietary information of the Company to a third party who is not authorized by the Company to
receive the confidential or proprietary information; or improperly uses any confidential or
proprietary information of the Company, then the post-separation proration of Units and
settlement rights set forth above shall cease immediately, and all outstanding vested but not
settled and unvested portions of the Award shall be automatically forfeited.
	 
	5.	 	TERM OF UNITS
	 
	 	 	Units not certified by the Compensation Committee of the Board as having vested as of the
end of the Performance Cycle for which the Units were awarded, shall be forfeited.
	 
	6.	 	ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
	 
	 	 	The number and kind of shares of Company stock subject to this Award shall be appropriately
adjusted pursuant to the Plan to reflect any stock dividend, stock split, split-up, extraordinary
dividend distribution, or any combination or exchange of shares, however accomplished.
	 
	7.	 	ADDITIONAL UNITS
	 
	 	 	The Compensation Committee may or may not grant the Unit holder additional Units in the future.
Nothing in this Award or any future Award should be construed as suggesting that additional Unit
awards to the Unit holder will be forthcoming.
	 
	8.	 	LEAVES OF ABSENCE
	 
	 	 	For purposes of this Award, the Unit holder’s service does not terminate due to 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, service terminates when the approved leave ends unless the Unit holder
immediately returns to active work.
	 
	9.	 	TAX WITHHOLDING
	 
	 	 	In the event that the Company determines that it is required to withhold any tax as a result of
the settlement of Units, the Unit holder shall make arrangements satisfactory to the Company to
enable it to satisfy all withholding requirements.
	 
	10.	 	RIGHTS AS A SHAREHOLDER
	 
	 	 	Neither the Unit holder nor the Unit holder’s beneficiary or representative shall have any
rights as a shareholder with respect to any Common Shares subject to these Units, unless and
until the Units vest and are settled in shares of Common Stock of the Company.
	 
	11.	 	NO RETENTION RIGHTS
	 
	 	 	Nothing in this Agreement or in the Plan shall give the Unit holder 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 the Unit holder’s service at any time, with or
without cause.
	 
	12.	 	CLAWBACK POLICY
	 
	 	 	The Units are subject to the Clawback Policy adopted by the Company’s Board of Directors, which
provides as follows:
	 
	 	 	To the extent permitted by law, if the Board of Directors, with the recommendation of the
Compensation Committee, determines that any bonus, equity award, equity equivalent award or other
incentive compensation has been awarded or received by a Section 16 executive officer of the
Company, and that:






	 	(a)	 	such compensation was based on the achievement of certain financial results that were
subsequently the subject of a material restatement of the Company’s financial statements
filed with the Securities and Exchange Commission,
	 
	 	(b)	 	the Section 16 executive officer engaged in grossly negligent or intentional misconduct
that caused or substantially caused the need for the material restatement, and
	 
	 	(c)	 	the amount or vesting of the bonus, equity award, equity equivalent or other incentive
compensation would have been less had the financial statements been correct,






	 	 	then the Board shall recover from the Section 16 executive officer such
compensation (in whole or in part) as it deems appropriate under the circumstances.
	 
	 	 	In the event the Clawback Policy is deemed unenforceable with respect to the Units, then the
award of Units subject to this Agreement shall be deemed unenforceable due to lack of adequate
consideration.
	 
	13.	 	ENTIRE AGREEMENT
	 
	 	 	The Notice, 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.
	 
	 	 	This Agreement may not be modified or amended, except for a unilateral amendment by the Company
that does not materially adversely affect the rights of the Unit holder under this Agreement. No
party to this Agreement may unilaterally waive any provision hereof, except in writing. Any such
modification, amendment or waiver signed by, or binding upon, the Unit holder, shall be valid and
binding upon any and all persons or entities who may, at any time, have or claim any rights under
or pursuant to this Agreement.
	 
	14.	 	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.
	 
	15.	 	SEVERABILITY
	 
	 	 	If any provision of this Agreement shall be invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Agreement, and this Agreement
shall be carried out as if such invalid or unenforceable provision were not
contained herein.
	 
	16.	 	CODE SECTION 409A
	 
	 	 	The Company reserves the right, to the extent the Company deems reasonable or necessary in its
sole discretion, to unilaterally amend or modify this Agreement as may be necessary to ensure
that all vesting or delivery of compensation provided under this Agreement are made in a manner
that complies with Section 409A of the Internal Revenue Code of 1986, as amended, together with
regulatory guidance issued thereunder.











2 Performance Share Unit Award Agreement











 





Performance Share Units

  Notice of Award




			
	 	 	 
	 	 	 
	Name
	 	Employee No: XXXX

Grant No: XXXX





On February 25, 2009, you were awarded x,xxx Performance Share Units (PSUs) under the Nordstrom,
Inc. 2004 Equity Incentive Plan (the “Plan”).



Your PSUs are:





	 	•	 	Governed by the terms of your 2009 PSU Award Agreement and the terms of the Plan.
	 
	 	•	 	Earned based on the Nordstrom Total Shareholder Return (TSR) relative to the performance
of our retail peer group over the three-year period ending on January 28, 2012
(“Performance Cycle”).




At the end of the Performance Cycle, your PSUs could be earned as shown below:




	 	 	 	 	 
	If Nordstrom TSR is Positive	 	 
	and our Percentile Rank is:	 	PSU Vesting is:
	> 85%
	 	 	125	%
	> 75%
	 	 	100	%
	> 65%
	 	 	85	%
	> 50%
	 	 	75	%
	£ 50%
	 	 	0	%





The relative percentile rankings may change during the Performance Cycle based upon mergers,
acquisitions, dissolutions and other industry consolidation involving the companies in the peer
group. If that occurs, the application of the percentile vesting above will still be applied
consistently, relative to the remaining or resulting members of the peer group at the end of the
Performance Cycle.



TSR results are provided to you via e-mail on a quarterly basis during the fiscal year. Final
vesting of PSUs will be determined by the Compensation Committee of the Board of Directors, based
on the actual TSR measured at the end of the Performance Cycle.



Please keep this Notice for your records. If you have any questions about your grant, please
contact Nordstrom Leadership Benefits at 206.303.5855, tie line 8.805.5855, or
leadership.benefits@nordstrom.com.