EX-10.3



 Exhibit 10.3 

Performance Share Unit Award Agreement 

2014 
 AN AWARD (“AWARD”) FOR
PERFORMANCE SHARE UNITS (“UNITS”), representing a number of shares of Nordstrom Common Stock (“Common Stock”) as noted in the 2014 Notice of Award of Performance Share Units (the “Notice”), of Nordstrom, Inc., a
Washington Corporation (the “Company”), is hereby granted to the Recipient (“Unit holder”) on the date set forth in the Notice, subject to the terms and conditions of this Agreement. The Units are also subject to the terms,
definitions and provisions of the Nordstrom, Inc. 2010 Equity Incentive Plan (the “Plan”), adopted by the Board of Directors of the Company (the “Board”) and approved by the Company’s shareholders, which is incorporated in
this Agreement. To the extent inconsistent with this Agreement, the terms of the Plan shall govern. Terms not defined herein shall have the meanings as set forth in the Plan. The Compensation Committee of the Board (the “Compensation
Committee”) has the discretionary authority to construe and interpret the Plan and this Agreement. All decisions of the Compensation Committee upon any question arising under the Plan or under this Agreement shall be final and binding on all
parties. The Award and the Units issued thereunder are subject to the following terms and conditions: 

 



	1.	VESTING AND SETTLEMENT OF UNITS 

 Units shall vest and be settled in accordance with
the provisions of the Plan as follows: 
  

	 	(a)	Vesting 

 Each vested Unit is equal in value to one share of Common Stock. Except as
set forth in Section 4, Units shall vest at the applicable percentage when the Compensation Committee certifies that the Company’s Total Shareholder Return (TSR) relative to the TSR of companies in the Standard & Poor’s 500
(the “Peer Group”) exceeds the percentile rankings set forth below. For purposes of determining the Company’s TSR relative to the TSR of other companies in the Peer Group, the share price of 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 three fiscal-year period from 2/2/2014 to 1/28/2017 (“the Performance Cycle”), and the thirty trading day closing
price average immediately prior to the end of the Performance Cycle. The companies in the Peer Group shall be determined on the first day of the Performance Cycle and remain fixed for the duration of the Performance Cycle, even if the companies in
the Standard & Poor’s 500 change. In the event of a change in control of a company included within the Peer Group during the Performance Cycle where shareholders of that company receive cash, securities or other assets in exchange for
their shares, the TSR for such company for the Performance Cycle shall be fixed as of the date of the change of control and calculated including the amount received by the company’s shareholders in that transaction.




			
	 Percentile Rank

Among Peers
	  	 PSUs Earned

as % of Grant

	> 90%	  	175%
	> 80%	  	150%
	> 75%	  	125%
	> 65%	  	100%
	> 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 earned 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. Units vest following Compensation Committee certification of the percentage earned. 
  

	 	(b)	Settlement 

 Earned 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 its 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


 


  

					
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 vested Unit or receive an equivalent amount of cash for each vested Unit. The Unit holder may
also elect to 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 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 may or may 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 except in the event of the Unit holder’s death. In the event of the Unit holder’s death, the Units may be transferred to the person indicated on a valid Nordstrom Beneficiary Designation form, or if no Beneficiary
Designation form is on file with the Company, then to the person to whom the Unit holder’s rights have passed by will or the laws of descent and distribution. Except as set forth in Section 4 below, the Units 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 person named on the Unit holder’s Beneficiary Designation form shall be entitled to settlement of the Units, to the same extent to which the Unit holder
would have been entitled prior to death. 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 distribution with respect
to vested Units based on the period of service by the Unit holder during the term of this Agreement. If no valid Beneficiary Designation form is on file with the Company, then the person 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 less than six months prior to death, the Units shall be forfeited as of the date of death with no rights to a prorated distribution 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 of 1986, as amended (the “Code”), the Units were granted at least six months prior
to such separation, and the Unit holder provides Nordstrom Leadership Benefits with reasonable documentation of his or her disability, the Unit holder (or his or her beneficiary) shall be entitled to a prorated distribution 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 distribution at settlement. 

  

	 	(c)	If the Unit holder terminates employment after having met any of the requirements set forth below, and the Units were granted at least six months prior to the termination date, the Unit holder (or his or her
beneficiary) shall be entitled to a prorated distribution with respect to vested Units based on the period of service during the term of this Agreement: 

  

	 	(i)	the Unit holder was born on or before March 3, 1956; 

  

	 	(ii)	the Unit holder was born on or before March 3, 1961, but after March 3, 1956, and as of March 3, 2014 had 10 continuous years of service to the Company from the most recent hire date with the Company or a
Company subsidiary; or 

  

	 	(iii)	the Unit holder has attained age 55 with 10 continuous years of service to the Company from the most recent hire date with the Company or a Company subsidiary.



 


  

					
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 If the Units were granted less than six months prior to termination, such Units shall be
forfeited as of the date of termination with no rights to a prorated distribution at settlement. 
  

	 	(d)	If the Unit holder’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 Units, to the extent not vested and settled as of the date of termination, shall be forfeited as of that date. 

  

	 	(e)	If the Unit holder is separated for any reason other than those set forth in subparagraphs (a), (b), (c) and (d) 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 at any time 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 forfeited. 

 

	5.	TERM OF UNITS 

 Units not certified by the Compensation Committee 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 Common
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 medical 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.	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 Stock subject to these Units, unless and until the Units vest and are settled in shares of Common Stock of the Company. 

 

	10.	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.

  

	11.	CLAWBACK POLICY 

 The Units, and any proceeds (Common Stock or cash) received in
connection with the settlement of the Units or subsequent sale of such issued Common Stock, shall be subject to the Clawback Policy adopted by the Company’s Board, as amended from time to time. 

In the event the clawback policy is deemed unenforceable with respect to the Units, or with respect to the proceeds received in connection
with the settlement of the Units or subsequent sale of such issued Common Stock, then the award of Units subject to this agreement shall be deemed unenforceable due to lack of adequate consideration. 

 

	12.	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. 
  

	13.	CHOICE OF LAW 

 This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Washington, without regard to principles of conflicts of laws, as such laws are applied to contracts entered into and performed in such State.


 


  

					
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	14.	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. 



	15.	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 is made in a manner that complies with
Section 409A of the Code, together with regulatory guidance issued thereunder. 

 

  
 



 

  

					
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