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Performance
Share Unit Award Agreement
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2009
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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:
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1.
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VESTING AND SETTLEMENT OF
UNITS
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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:
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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
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If Nordstrom TSR Is Positive and
Our
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Percentile Rank Is:
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PSU Vesting Is:
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125
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%
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100
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%
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85
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%
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75
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%
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0
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%
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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.
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(b)
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Settlement
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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.
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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.
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(c)
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Withholding Taxes
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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.
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(d)
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Restrictions on Resale
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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.
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2.
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ACCEPTANCE OF UNITS
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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.
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3.
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NONTRANSFERABILITY OF
UNITS
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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.
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4.
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SEPARATION OF EMPLOYMENT
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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:
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(a)
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If
the Unit holder dies while employed by the Company, the persons
named on the
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