UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) February 23, 2005
NORDSTROM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 001-15059 91-0515058
(STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER
OF INCORPORATION) NUMBER) IDENTIFICATION NO.)
1617 SIXTH AVENUE, SEATTLE, WASHINGTON 98101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (206) 628-2111
INAPPLICABLE
(FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2 below):
___ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
___ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Named Executive Officer Compensation
On February 23, 2005 the Compensation Committee (the "Committee") of the
Board of Directors of Nordstrom, Inc. (the "Company") approved the following
executive compensation actions relative to the Company's Named Executive
Officers (as defined in Regulation S-K item 402(a)(3)):
2005-08
2004 Stock Option Performance Share 2005
Named Executive Bonus Grants (#) Unit Awards (#) Base Salary
Officer (1) (2) (3) (4)
-----------------------------------------------------------------------------
Blake W. Nordstrom
President $1,312,500 33,751 6,750 $700,000
Peter E. Nordstrom
Executive Vice
President $ 637,500 20,492 4,098 $450,000
Erik B. Nordstrom
Executive Vice
President $ 637,500 20,492 4,098 $450,000
Michael G. Koppel
Executive Vice President
and Chief Financial
Officer $ 570,605 18,563 3,713 $410,000
James O'Neal
Executive Vice
President $ 548,494 15,077 3,015 $385,000
(1) The 2004 cash bonuses were determined based on the achievement of pre-
established performance measures set by the Compensation Committee under the
shareholder approved Nordstrom, Inc. Executive Management Group Bonus Plan.
The normal form of bonus payments is cash. However, the Committee may either
(a) pay, or (b) allow a participant to elect to receive, all or a portion of
their bonus in the form of Company stock. The number of shares of Company
stock to be received by the participant is based on the fair market value of
the Company's Common Stock on January 29, 2005 ($47.60), the last day of the
2004 fiscal year.
(2) Stock options were granted pursuant to the terms of the Nordstrom, Inc.
2004 Equity Incentive Plan (the "Plan"). Stock option grants have a term of
ten years with an exercise price of $52.02, and vesting occurs at the rate of
25% annually beginning one year from the date of grant. The form of Notice
of Stock Option Grant and of Stock Option Agreement is attached hereto as
Exhibit 10.1.
(3) Performance Share Units (PSUs) are awarded pursuant to the terms of the
Nordstrom, Inc. 2004 Equity Incentive Plan. PSUs entitle the participant to
settle in shares of Company Common Stock or cash in lieu thereof upon the
achievement of such performance goals as may be established by the
Compensation Committee at the time of grant based on any one or combination
of certain performance criteria enumerated in the Plan. 2005-2008 PSUs are
earned over a three-year period. The percentage of PSUs granted that will
actually be earned at the end of the three-year period is based upon the
Company's total shareholder return compared to the total shareholder return
of companies in a pre-defined group of retail peers. Additionally, PSUs will
only be earned if the Company's total shareholder return for the period is
positive. The form of 2005-08 Performance Share Unit Notice and Award
Agreement is attached hereto as Exhibit 10.2.
(4) Represents Named Executive Officers' base salaries effective April 1,
2005 set by the Compensation Committee on February 23, 2005.
Lead Director Compensation
On February 23, 2005, the Company's Corporate Governance and Nominating
Committee approved the compensation arrangement for the Lead Director,
Enrique Hernandez Jr. for the fiscal year ending January 28, 2006. For his
continued service as Lead Director, and in addition to the normal director
and committee member retainers, Mr. Hernandez will receive Nordstrom, Inc.
shares worth $200,000 based upon the closing price of the Company's common
stock on February 23, 2005 ($52.02). Per Mr. Hernandez's election for his
2005 Director compensation, all cash fees and stock are to be deferred to his
Director Deferred Compensation Plan ("DDCP") account. As such, 3,845 shares
of stock will be credited to his DDCP account as stock units. These stock
units will be indexed against Company stock while in the plan and will be
distributed to Mr. Hernandez as shares of common stock of the Company upon
retirement or through pre-determined in-service distributions. Attached
hereto as Exhibit 99.2 is a Summary of Lead Director Compensation.
ITEM 5.02(B) AND 5.02(C) DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS;
ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS
On February 23, 2005, the Board of Directors approved the appointment of
Peter F. Collins as the Company's Principal Accounting Officer, effective
immediately. Mr. Collins will be assuming the duties of Principal Accounting
Officer from Michael Koppel who will remain as Executive Vice President and
Chief Financial Officer of the Company. Mr. Collins will be responsible for
all aspects of the Company's accounting and financial reporting.
Mr. Collins has served as the Company's Divisional Vice President/Corporate
Controller since April 2004. From July 2002 to March 2004, Mr. Collins was
employed at Albertson's, Inc. first as Group Vice President - Corporate
Accounting and Reporting, and from January 2003 as Group Vice President and
Controller. Mr. Collins has also served in various positions within Arthur
Andersen LLP from 1986 through 2002, including partner from 1998 through
2002.
The terms of his existing employment arrangement with the Company, terminable
at-will, include an annual base salary of $270,000. Upon hire in April 2004,
Mr. Collins received a grant of 10,000 non-qualified stock options with an
exercise price equal to the closing price of the Company's common stock on
May 24, 2004 ($39.84). Those options will vest equally over four years. In
May 2004, Mr. Collins also received 5,000 restricted common shares, which
will vest equally over three years. Mr. Collins will continue to be eligible
to participate in the Company's various benefit plans and programs generally
available to other executives of the Company.
ITEM 8.01 OTHER EVENTS
On February 24, 2005, Nordstrom, Inc. issued a press release announcing that
its Board of Directors has authorized a $500 million share repurchase
program. The prior $300 million authorization was completed during the
fourth quarter of 2004. The shares are expected to be acquired through open
market transactions during the next 24 to 36 months. The actual number and
timing of share repurchases will be subject to market conditions and
applicable SEC rules. A copy of this press release is attached as Exhibit
99.1. Nordstrom has adopted a pre-arranged stock trading plan that is
intended to follow the guidelines specified under Rule 10b5-1 of the
Securities Exchange Act of 1934, as amended, to effect at least part of the
repurchases under the share repurchase program.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORDSTROM, INC.
By: /s/ David L. Mackie
--------------------
David L. Mackie
Vice President, Real Estate
and Corporate Secretary
Dated: March 1, 2005
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
10.1 Form of Notice of Stock Option Grant and Stock Option Agreement
under the Nordstrom, Inc. 2004 Equity Incentive Plan
10.2 Form of 2005 Performance Share Unit Notice and Performance Share
Unit Award Agreement
10.3 Nordstrom, Inc. 2004 Equity Incentive Plan, incorporated by
reference to Registrant's definitive proxy statement filed with the
Commission on April 15, 2004.
99.1 Nordstrom, Inc.'s press release dated February 24, 2005 announcing
that its Board of Directors authorized a $500 million share repurchase
program.
99.2 Summary of Lead Director Compensation