AUDIT AND FINANCE COMMITTEE REPORT

The following Report of the Company’s Audit and Finance Committee of the Board (the “Audit and Finance Committee”) does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this Report by reference.

The Audit and Finance Committee operates under a written Charter adopted by the Board. The Charter contains a detailed description of the scope of the Audit and Finance Committee’s responsibilities and how they will be carried out. The Audit and Finance Committee’s Charter is available on our website at investor.nordstrom.com ~~under~~, and may be viewed by selecting the Corporate ~~Governance.~~

Governance item in the Investor Relations drop-down menu.

The Board determined that each member of the Audit and Finance Committee is independent from the Company as such term is defined in Sections 303.01(B)(2)(a) and (3) of the NYSE’s listing standards at all times during the fiscal year and that each member was an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K under the Securities Exchange Act of 1934.

The Audit and Finance Committee serves in an oversight capacity and is not part of the Company’s managerial or operational decision-making process. As part of its responsibilities for oversight of the Company’s Enterprise Risk Management process, the Audit and Finance Committee reviews and discusses Company policies and processes with respect to risk assessment and risk management, including discussions of individual risk areas. Management is responsible for the Company’s internal controls and the financial reporting process. Deloitte, the Company’s independent registered public accounting firm, reports to the Company’s Audit and Finance Committee, and is responsible for performing an integrated audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with auditing standards generally accepted in the United States of America.

Deloitte and the Company’s internal auditors have full access to the Audit and Finance Committee. The auditors meet with the Audit and Finance Committee at each of the Audit and Finance Committee’s regularly scheduled meetings, with and without management being present, to discuss appropriate matters. The Audit and Finance Committee has the sole authority to engage, evaluate and terminate the Company’s independent auditors. The Audit and Finance Committee also pre-approves all auditing services, internal control-related services and permitted nonaudit services to be performed by the Company’s independent auditors, and periodically reviews whether to request proposals for the engagement of the independent audit firm.

The Audit and Finance Committee recommended to the Board that the audited consolidated financial statements for the fiscal year ended ~~January 28, 2017~~February 2, 2019 be included in the Company’s Annual Report on Form 10-K for such fiscal year, based on the following actions by the Committee:

•

review ~~and discussion~~ of the Company’s audited consolidated financial statements with management;

review of the unaudited interim financial statements and Forms 10-Q prepared each quarter by the Company;

review of the Company’s Disclosure Committee practices and the certifications prepared each quarter in accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002;

review with management regarding the critical accounting estimates on which the financial statements are based, as well as its evaluation of alternative accounting treatments;

receipt of management representations that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America;

review with management, the internal auditors and Deloitte regarding management’s assessment of the effectiveness of the Company’s internal control over financial reporting and Deloitte’s evaluation of the Company’s internal control over financial reporting;

review with legal counsel and management regarding contingent liabilities;

receipt of the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with Audit and Finance Committees Concerning Independence; and

review with Deloitte regarding their independence, the audited consolidated financial statements, the matters required to be discussed by Auditing Standard No. 16 Communications with Audit and Finance Committees, as amended, and other matters, including Rule 2-07 of SEC Regulation S-X.



•	~~review of the unaudited interim financial statements~~Audit and ~~Forms 10-Q prepared each quarter by the Company;~~Finance Committee
	Bradley D. Tilden, Chair
•	~~review of the Company’s Disclosure Committee practices and the certifications prepared each quarter in accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002;~~Stacy Brown-Philpot
	Tanya L. Domier
•	~~discussions with management regarding the critical accounting estimates on which the financial statements are based, as well as its evaluation of alternative accounting treatments;~~Kirsten A. Green
Philip G. Satre

24 NORDSTROM, INC. - 2019 Proxy Statement

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•	~~receipt of management representations that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America;~~

•	discussions with management, the internal auditors, and Deloitte regarding management’s assessment of the effectiveness of the Company’s internal control over financial reporting and Deloitte’s evaluation of the Company’s internal control over financial reporting;

•	~~discussions with legal counsel and management regarding contingent liabilities;~~

•	receipt of the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence; and

•	~~discussions with Deloitte regarding their independence, the audited consolidated financial statements, the matters required to be discussed by~~~~Auditing Standard No. 16 Communications with Audit Committees~~~~, as amended, and other matters, including Rule 2-07 of SEC Regulation S-X.~~

~~AUDIT COMMITTEE~~

~~Shellye L. Archambeau~~

~~Tanya L. Domier~~

~~Brad D. Smith, Chair~~

~~Bradley D. Tilden~~

~~NORDSTROM, INC.~~~~- 2017 Proxy Statement~~23

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PROPOSAL 2

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board recommends a vote FOR this proposal.

The Audit and Finance Committee, consistent with NYSE and SEC rules, has appointed Deloitte to be the Company’s independent registered public accounting firm for the fiscal year ending February ~~3, 2018.~~1, 2020. Deloitte and its predecessors have served as the Company’s independent registered public accounting firm for over ~~forty-five~~45 years, including the fiscal year ended ~~January 28, 2017.~~

February 2, 2019.

As a matter of good corporate practice to provide shareholders an avenue to express their views on this matter, the Board has determined to seek shareholder ratification of Deloitte’s appointment at this time. If the shareholders do not ratify the appointment of Deloitte, the Board will reconsider the appointment. A representative of Deloitte will be present at the Annual Meeting to respond to questions and to make a statement if he or she so desires.

~~Audit Fees~~

Audit Fees

The following table summarizes fees billed or expected to be billed to the Company by Deloitte in connection with services for the fiscal years ended ~~January 28, 2017~~February 2, 2019 and ~~January 30, 2016:~~

Fiscal Year Ended
January 28, 2017 Fiscal Year Ended
January 30, 2016
Type of Fee ($) (%) ($) (%)
Audit Fees^(a) 2,298,000 71 2,490,000 78
Audit-Related Fees^(b) 921,000 29 669,000 21
Tax Fees^(c) — — 9,000 1
TOTAL 3,219,000 100 3,168,000 100

February 3, 2018:



	Fiscal Year Ended February 2, 2019		Fiscal Year Ended February 3, 2018
Type of Fee	($)	(%)	($)	(%)
Audit Fees^(a)	3,657,000	83	2,924,000	55
Audit-Related Fees^(b)	581,000	13	683,000	13
Other Fees^(c)	152,000	4	1,680,000	32
TOTAL	4,390,000	100	5,287,000	100

(a) Audit Fees

Audit Fees primarily ~~include~~relate to fees for services ~~for~~for: (i) auditing the consolidated financial statements of the Company; (ii) reviewing the interim financial information of the Company included in its Form 10-Qs; and (iii) auditing the Company’s internal control over financial reporting. Substantially all of Deloitte’s work on these audits was performed by full-time, regular employees and partners of Deloitte and its affiliates. ~~Audit Fees have decreased by $192,000 as there is no longer a requirement for the Nordstrom fsb audit.~~

(b) Audit-Related Fees

Audit-Related Fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and internal control over financial reporting.

This amount does not reflect reimbursement of ~~$306,000 in~~$274,000 for fiscal ~~2017. Also included are~~year ended February 2, 2019 and $254,000 for fiscal year ended February 3, 2018. This amount includes accounting research tool subscription fees of ~~$2,077~~$6,000 for fiscal year ended ~~January 28, 2017~~February 2, 2019 and ~~$2,850~~$6,000 for fiscal year ended ~~January 30, 2016.~~

February 3, 2018.

~~Tax~~

Other Fees ~~include various tax planning projects~~for fiscal years ended February 2, 2019 and ~~miscellaneous compliance matters.~~

~~Pre-Approval Policy~~

February 3, 2018 primarily related to fees for advice and recommendations on supply chain strategy.

Pre-Approval Policy

Consistent with SEC policies regarding auditor independence, the services performed by Deloitte for the fiscal years ended ~~January 28, 2017~~February 2, 2019 and ~~January 30, 2016~~February 3, 2018 were pre-approved in accordance with the policies and procedures adopted by the Audit and Finance Committee. The pre-approval policy is periodically reviewed and updated. It describes the permitted audit, audit-related, tax and other services that Deloitte may perform. Normally, pre-approval is provided at regularly scheduled Audit and Finance Committee meetings. However, the authority to grant specific pre-approval between meetings, as necessary, has been assigned to the Chair of the Audit and Finance Committee.

NORDSTROM, INC. - 2019 Proxy Statement 25

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The Chair is responsible for updating the Audit and Finance Committee at the next regularly scheduled meeting of any services that were pre-approved between meetings.

The Audit and Finance Committee approves ~~fees up to a specified amount associated with each~~ proposed ~~service. Providing for fees up to a specified amount for a service~~services, which incorporates appropriate oversight and control of the Deloitte relationship, while permitting the Company to receive immediate assistance from Deloitte when time is of the essence.

The Committee also reviews on a regular basis:

•	~~a listing of approved services since its last review;~~

•	~~a report summarizing the year-to-date services provided by Deloitte, including fees paid for those services; and~~

•	~~a projection for the current fiscal year of estimated fees.~~

a listing of approved services since its last review;

a report summarizing the year-to-date services provided by Deloitte, including fees paid for those services; and

a projection for the current fiscal year of estimated fees.

The policy prohibits the Company from engaging the independent registered public accountants for services billed on a contingent fee basis and from hiring current or former employees of the independent auditor who have not satisfied the statutory cooling-off period for certain positions.

26 NORDSTROM, INC.- ~~2017~~2019 Proxy Statement24

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EXECUTIVE OFFICERS

The Executive Officers of the Company are appointed annually by the Board following each year’s ~~Annual Meeting of Shareholders~~annual meeting and serve at the discretion of the Board. In addition to ~~Blake Nordstrom,~~ Erik Nordstrom and Peter Nordstrom, whose biographical information is provided under Election of Directors on ~~pages 20 and 21,~~page 22, the following are the other Executive Officers of the Company ~~appointed following~~on the ~~2016 Annual Meeting.~~

date of filing of this Proxy Statement.



	Anne L. Bramman
	Employee since 2017
	Age 51
	Chief Financial Officer since June 2017, when she joined the Company. From March 2015 to March 2017, Ms. Bramman served as Senior Vice President and Chief Financial Officer of Avery Dennison Corporation. She previously served as Chief Financial Officer of Carnival Cruise Line from December 2010 to March 2015. She was employed by L Brands in various finance leadership positions from July 2004 to December 2010, including Senior Vice President, Chief Financial Officer of Henri Bendel from 2008 to 2010.

	Christine F. Deputy
	Employee since 2015
	Age 51 53

Christine F. Deputy was named Executive Vice President, Human Resources upon joining the Company in June 2015. Prior to joining the Company, Ms. Deputy served as Group Human Resources Director (CHRO) at Aviva plc from March 2013 to June 2015. From February 2012 to March 2013, Ms. Deputy was Human Resources Director – Global Retail Banking for Barclays Bank. From July 2009 to February 2012, Ms. Deputy was Chief Human Resource Officer at Dunkin’ Brands. Ms. Deputy was employed at Starbucks, Inc. from March 1998 to June 2009, serving as Vice President, Human Resources Asia Pacific from November 2007 to June 2009, Vice President, Global Staffing from September 2005 to January 2008, as well as other executive positions from 1998 to 2005.

Chief Human Resources Officer since June 2015, when she joined the Company. Ms. Deputy previously served as Group Human Resources Director at Aviva plc from March 2013 to June 2015. From February 2012 to March 2013, she was Human Resources Director — Global Retail Banking for Barclays Bank. From July 2009 to February 2012, she was Chief Human Resource Officer at Dunkin’ Brands. She was employed at Starbucks Corporation from March 1998 to June 2009, serving as Vice President, Human Resources Asia Pacific from November 2007 to June 2009, Vice President, Global Staffing from September 2005 to January 2008, as well as other executive positions from 1998 to 2005.

*~~James A. Howell~~*	Kelley K. Hall
	Employee since ~~2007~~ 2017
	Age 51 46

James A. Howell was named Executive Vice President, Finance and Treasurer in November 2014. Mr. Howell also functions as the Company’s Principal Accounting Officer. From 2007 to 2014, he served as Vice President, Finance. From July 2003 to August 2007, Mr. Howell held various positions at Blockbuster Inc., most recently as Senior Vice President and Corporate Controller. From 2002 to 2003, Mr. Howell worked for CAE SimuFlite, Inc., a provider of training for the civil aviation industry, after spending 12 years with PricewaterhouseCoopers serving clients in both the retail and financial services industries.

Chief Accounting Officer and Treasurer since August 2017, when Ms. Hall joined the Company. From October 2008 to August 2017, she held various senior finance leadership positions at NIKE, Inc. most recently as Vice President and Chief Financial Officer for NIKE, Inc.’s Enterprise Operations. Prior to NIKE, she spent 14 years with Starbucks Corporation in a variety of finance leadership roles, including several roles as vice president supporting U.S. retail and corporate finance.

~~Michael G. Koppel~~

~~Employee since 1999~~

~~Age 60~~

Scott A. Meden

Michael G. Koppel was named Executive Vice President and Chief Financial Officer in May 2001. From 1999 to 2001, he served as Vice President, Corporate Controller and Principal Accounting Officer. Mr. Koppel previously served as Chief Operating Officer of CML Group, a specialty retail holding company, and as Chief Financial Officer of Lids Corporation, a specialty retailer from 1997 through 1998. Prior to that, Mr. Koppel spent 13 years with the May Department Stores Company in a variety of financial and operating roles. Mr. Koppel plans to retire in Spring 2017.

~~Daniel F. Little~~

~~Employee since 2002~~

~~Age 55~~

Daniel F. Little was named Executive Vice President and Chief Information Officer in February 2014. From 2003 to 2014, he served as Executive Vice President and Chief Administrative Officer and from July 2002 until March 2003, he served as Vice President, Supply Chain Strategy. Prior to joining the Company in July 2002, Mr. Little held various positions with Colgate-Palmolive from April 1993 through June 2002, most recently as Manufacturing General Manager for Personal Care Products in Europe.

~~Karen S. McKibbin~~

Employee since 1985

Age 57

Karen S. McKibbin was named Executive Vice President and President, Nordstrom Rack in January 2017. From September 2012 to January 2017, she served as President, Nordstrom Canada. She previously served as Northern California Regional Manager from June 2011 to September 2012, and as Southeast Regional Manager from March 2010 to June 2011. Ms. McKibbin was the Northeast Regional Manager from January 2006 to March 2010, and was the Los Angeles Regional Manager from December 1999 to January 2006. Prior to a break in employment with the Company from January 1997 to December 1999, Ms. McKibbin held various other leadership positions within the Company.

Chief Marketing Officer since August 2016. From February 2010 to August 2016, Mr. Meden served as Executive Vice President and General Merchandise Manager, Shoe Division. He previously served as Executive Vice President and President, Nordstrom Rack from February 2006 to February 2010, as Divisional Merchandise Manager from September 2002 to January 2006, as Director of Business Planning and Analysis from 2001 to September 2002, and as Financial Manager, Shoes from 1999 to 2001.

*~~Scott A. Meden~~*	Edmond Mesrobian
	Employee since ~~1985~~ 2018
	Age 54 58

Scott A. Meden was named Executive Vice President and Chief Marketing Officer in August 2016. From February 2010 to August 2016, he served as Executive Vice President and General Merchandise Manager, Shoe Division. He previously served as Executive Vice President and President, Nordstrom Rack from February 2006 to February 2010, as Divisional Merchandise Manager from September 2002 to January 2006, as Director of Business Planning and Analysis from 2001 to September 2002, and as Financial Manager, Shoes from 1999 to 2001.

~~NORDSTROM, INC.~~~~- 2017 Proxy Statement~~25

Chief Technology Officer since August 2018, when he joined the Company. Previously he was Chief Technology Officer for multi-national grocery retailer Tesco PLC from 2015 to July 2018. From 2011 to 2014, he served as Chief Technology Officer for global travel company Expedia Group, Inc., which includes online travel brands Expedia.com, Hotels.com and Hotwire.com. Prior to joining Expedia, he held the role of Chief Technology Officer at RealNetworks, Inc. from 2003 to 2010, where he led development across multiple digital media services and software.

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	James F. Nordstrom, Jr.
	Employee since 1986
	Age 44 46

James F. Nordstrom, Jr. was named Executive Vice President and President, Stores in May 2014. From 2005 to 2014, he served as Executive Vice President and President, Nordstrom Direct. He previously served as Corporate Merchandise Manager, Children’s Shoes, from May 2002 to February 2005, and as a project manager for the design and implementation of the Company’s inventory management system from 1999 to May 2002. Mr. Nordstrom is a great-grandson of the Company founder.

President, Stores since May 2014. From 2005 to 2014, Mr. Nordstrom served as Executive Vice President and President, Nordstrom.com. He previously served as Corporate Merchandise Manager, Children’s Shoes, from May 2002 to February 2005, and as a project manager for the design and implementation of the Company’s inventory management system from 1999 to May 2002. Mr. Nordstrom is a great-grandson of the Company’s founder.

~~Robert B. Sari~~

~~Employee since 2009~~

~~Age 61~~

Robert B. Sari was named Executive Vice President, General Counsel and Secretary upon joining the Company in April 2009. Prior to joining the Company, he served as Executive Vice President, General Counsel and Secretary of Rite Aid Corporation since October 2005. Mr. Sari also served as Rite Aid’s Senior Vice President, General Counsel and Secretary from 2002 to 2005 and as Senior Vice President, Deputy General Counsel and Secretary from 2000 to 2002. Mr. Sari served in other roles for Rite Aid beginning in 1997.

~~Geevy S. K. Thomas~~

~~Employee since 1983~~

~~Age 52~~

Geevy S. K. Thomas was named Executive Vice President and Chief Innovation Officer in January 2017. From 2010 to 2017, he served as Executive Vice President and President, Nordstrom Rack. He previously served as Executive Vice President and South Regional Manager from November 2001 to February 2010, as Executive Vice President and General Merchandise Manager, Full-Line Stores from February 2001 to November 2001, and as Executive Vice President, Full-Line Stores and Director of Merchandising Strategy from February 2000 to February 2001. Prior to February 2000, Mr. Thomas held various merchandise strategy, store and regional management positions with the Company.

~~Kenneth J. Worzel~~

~~Employee since 2010~~

~~Age 52~~

Kenneth J. Worzel was named Executive Vice President and President, Nordstrom.com in September 2016. From 2010 to 2016, Mr. Worzel served as Executive Vice President, Strategy and Development. Prior to joining the Company, he was a partner with McKinsey & Company, a global management consulting firm, from 2009 to 2010. While at McKinsey, Mr. Worzel provided the Company and other clients with management strategy and organizational services. Prior to joining McKinsey, Mr. Worzel was a managing partner at Marakon Associates, an international strategy consulting firm, from 1992 to 2008. As a partner at Marakon Associates, Mr. Worzel provided consulting services to the Company from 1997 to 2008.

~~NORDSTROM, INC.~~~~- 2017 Proxy Statement~~26

NORDSTROM, INC. - 2019 Proxy Statement 27

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~~Back~~

	Robert B. Sari
	Employee since 2009
	Age 63
	General Counsel and Corporate Secretary since April 2009, when he joined the Company. Mr. Sari previously served as Executive Vice President, General Counsel, and Secretary of Rite Aid Corporation since October 2005. Mr. Sari also served as Rite Aid’s Senior Vice President, General Counsel and Secretary from 2002 to ~~Contents~~2005 and as a Senior Vice President, Deputy General Counsel and Secretary from 2000 to 2002. He served in other roles for Rite Aid beginning in 1997.

	Geevy S.K. Thomas
	Employee since 1983
	Age 54
	President, Nordstrom Rack since January 2018. Mr. Thomas previously served as Chief Innovation Officer since January 2017. From 2010 to 2017, he served as Executive Vice President and President, Nordstrom Rack. He previously served as Executive Vice President and South Regional Manager from November 2001 to February 2010, as Executive Vice President and General Merchandise Manager, Full-Line Stores from February 2001 to November 2001, and as Executive Vice President, Full-Line Stores and Director of Merchandising Strategy from February 2000 to February 2001. Prior to February 2000, he held various merchandise strategy, store and regional management positions with the Company.

	Kenneth J. Worzel
	Employee since 2010
	Age 54
	Chief Digital Officer since May 2018 and President of Nordstrom.com since 2016. From 2010 to 2016, Mr. Worzel served as Executive Vice President, Strategy and Development. Prior to joining the Company, he was a partner with McKinsey & Company, a global management consulting firm, from 2009 to 2010. While at McKinsey, he provided the Company and other clients with management strategy and organizational services. Prior to joining McKinsey, he was a managing partner at Marakon Associates, an international strategy consulting firm, from 1992 to 2008. As a partner at Marakon Associates, he provided consulting services to the Company from 1997 to 2008.

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COMPENSATION OF EXECUTIVE OFFICERS

Compensation Discussion and Analysis

This section describes our executive compensation program and the compensation decisions made for our fiscal year ~~2016~~2018 Named Executive ~~Officers:~~

Officers. Our Named Executive Officers include Blake Nordstrom, our former Co-President, who passed away unexpectedly on January 2, 2019.

~~Blake W.~~

Erik B. Nordstrom		Co-President
Anne L. Bramman		Chief Financial Officer
Peter E. Nordstrom		Co-President
~~Erik B. Nordstrom~~		~~Co-President~~
~~Michael G. Koppel~~		~~Executive Vice President and Chief Financial Officer~~
Kenneth J. Worzel		~~Executive Vice President~~Chief Digital Officer and President, Nordstrom.com
Christine F. Deputy		Chief Human Resources Officer
Blake W. Nordstrom		Former Co-President

For purposes of our filings with the SEC, including this annual Proxy Statement, ~~Blake~~Erik Nordstrom is considered our Principal Executive Officer and Anne Bramman is considered our Principal Financial Officer.

~~2016 Snapshot~~

2018 Snapshot

Increased Customer Engagement Driving Continued ~~Top-Line~~ Growth ~~Despite Challenging Retail Environment~~

~~Our 2016~~

In fiscal year 2018, net earnings were $564 million, or $3.32 per diluted share, ~~of $2.02,~~ which included a ~~goodwill impairment~~$0.05 favorable income tax benefit related to prior periods and an estimated non-recurring credit-related charge of ~~$1.12, exceeded our outlook~~$0.28 (see page 42 of $1.70 to $1.80. Our results were driven by continued operational efficiencies in inventory and expense execution and demonstrated our team’s speed and agility in responding to changes in business conditions.the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019). We ~~reached record~~achieved net sales of ~~$14.5~~$15.5 billion. This compares to $15.1 billion in 2017, which included $220 million for the 53rd week associated with the 4-5-4 retail calendar. We maintained a strong financial position, generating annual operating cash flow of more than $1 billion for the 10th consecutive year and returning nearly $1 billion to shareholders through dividends and share repurchases during the year.



Achieved $15.5B in sales, reflecting scaling of our generational investments.	Grew comparable sales 1.7%, reflecting Full-Price increase of 0.9% and Off-Price increase of 3.5%.	Generated earnings of $564M, reflecting lower income tax expense associated with corporate tax reform.

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Our business model is a ~~net sales increase~~key point of ~~2.9%~~difference in serving customers in multiple ways — through stores, online, Full-Price and ~~comparable sales decrease of 0.4% primarily driven by full-line stores.~~

~~During the year,~~Off-Price — with meaningful synergies across Nordstrom. We are focused on leveraging our digital and physical assets to provide customers with a best-in-class experience. In 2018, we achieved the following milestones in executing our customer ~~strategy:~~

strategy through our three strategic pillars: providing a compelling product offering, delivering outstanding services and experiences, and leveraging the strength of the Nordstrom brand:

We continued to see positive customer trends. In 2018, over 35 million customers shopped with us, an increase of 6% from last year. One-third of our customers shopped across our multiple channels, which generally leads to higher customer spend.

Digital sales increased 16% and made up 30% of net sales. Additionally, Nordstrom.com achieved scale, with the profitability of Full-Price digital sales at parity with store sales. We believe our early investments to build a robust digital business have given us a competitive advantage.

Our generational investments continued to scale, contributing approximately $2 billion in sales and an improvement in profitability. Nordstromrack.com/HauteLook became our fastest business to reach $1 billion in sales. Trunk Club delivered sales growth of 35%. We opened our Men’s Store in New York City and furthered our expansion into Canada ~~where~~with the introduction of six Nordstrom Rack stores.

We launched our local market strategy in Los Angeles, which drove outsized market share gains in this market by increasing product selection, delivery speed and convenience for customers.

As we ~~currently have five full-line stores, including two that opened last fall, contributed total sales of $300 million in 2016.~~

~~Nordstrom.com sales reached over $2.5 billion, representing approximately 25% of Nordstrom full-price sales.~~

~~Our off-price business reached $4.5 billion, with growth mainly driven by our online net sales increase of 32% and 21 new store openings. Off-price continues~~aspire to be ~~our largest source of new customers, gaining approximately 6 million~~the best fashion retailer in ~~2016.~~

~~Our expanded Nordstrom Rewards program, which launched in the second quarter, drove~~ a ~~strong customer response with 3.7 million customers joining through our non-tender offer, and~~digital world, we ~~ended the year with a total of 7.8 million active Nordstrom Rewards customers.~~

~~Our working capital improvements contributed to the $1.6 billion in operating cash flow and $0.6 billion in free cash flow.~~

~~These milestones~~believe we are ~~the outcome of our strategy to serve customers on their terms and~~well positioned to deliver ~~the Nordstrom experience they expect. Several years ago, we began to accelerate growth in multiple channels to evolve the~~a differentiated customer experience that merges the store experience with the convenience of online. We look forward to the opportunities ahead as we continue to pursue our goal of providing a best-in-class customer experience through service, product and ~~capabilities across all channels at Nordstrom.~~

drive increased shareholder value.

Shareholders Support our Compensation Program

Our shareholders approved our Board’s recommendation to hold ~~Say-on-Pay~~executive compensation advisory votes on an annual basis so that they may frequently and openly express their views about the compensation of our Named Executive Officers. Each year since 2011, more than 90% of the votes cast have been supportive of our compensation programs. Based on the majority of shareholders voting in favor of our ~~Say-on-Pay proposal. Shareholders have demonstrated strong support~~executive compensation program last year, we continued to implement similar compensation policies and programs in fiscal year 2018, with the exception of a change in the mix of the form of equity-based incentive awards for ~~our fundamental objective of pay for performance~~fiscal year 2018, only, as ~~we continue~~discussed on page 37, and continued to apply the following ~~guiding principles:~~

pay and benefits philosophy.

Our ~~Guiding Principles:~~

~~Motivate~~Pay and ~~reward~~Benefits Philosophy:

We believe that if our ~~people to achieve meaningful results that support our strategic goals and shareholder interests, while avoiding encouragement of excessive risk taking;~~

~~Attract and keep~~ ~~the best talent through programs that reflect our values and consider, but are not dictated by, market practice;~~

~~Ensure the cost~~ ~~of our programs best serve a balance of employee and shareholder business interests;~~

~~Keep things simple~~ ~~to promote understanding for~~customers win, our employees and ~~transparency~~shareholders win – our interests are aligned.

We pay for performance by investing in talent that delivers results and demonstrates the behaviors that drive our ~~shareholders;~~success, while not encouraging excessive risk taking.

We deliver competitive pay and

~~Be attuned~~ benefits for all jobs and differentiate pay for critical jobs that directly impact our ability to ~~trends~~deliver on our strategy.

We use objective market data to design flexible pay and ~~new ideas~~benefits programs to ~~support~~help attract, retain, motivate and reward our ~~programs~~employees and ~~diverse workforce.~~meet the needs of specific talent groups.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 27

We provide equal pay and promotion opportunities for all employees and give them the information they need to clearly understand their pay and effectively manage their careers.

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~~2016 Highlights Reflect Dynamics of Our Business Model~~

We Emphasize Variable Pay and Balance Short- and Long-Term Incentives

as Well as Incentive Values

In accordance with our pay-for-performance philosophy, the compensation program for our Named Executive Officers is straightforward in design and includes four primary elements: base salary, performance-based bonus, long-term incentives (“LTI”) and benefits. Within these elements, we emphasize variable pay over fixed pay, with ~~over 80%~~at least 70% of ~~our~~each Named Executive ~~Officers’ combined~~Officer’s target compensation linked to our financial or market results. The program also balances the importance of these executives achieving both critical short-term objectives and strategic long-term priorities.

The following graphics represent target compensation for the Co-Presidents and the other Named Executive Officers.

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Our Variable Pay Reflects Company Performance

Our pay-for-performance design includes rigorous performance goals and high performance standards. Further, with a substantial portion of pay in the form of Nordstrom stock, pay outcomes align with our shareholders’ experience. This is evidenced by our Named Executive Officers’ recent incentive compensation payouts and grant realizable values as of our ~~2016~~2018 fiscal year end, as shown ~~below~~below.



INCENTIVE COMPENSATION PAYOUTS	2014			2015			2016			2017			2018
Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”)		$1,391	M		$1,246	M		$1,076	M		$952	M		$909	M
Incentive Adjusted Return on Invested Capital (“Incentive Adjusted ROIC”)	13.6		%	11.0		%	12.4		%	10.0		%	12.8		%
Annual bonus (payout as a % of Target*)	83		%	0		%	80		%	96		%	89		%
3-year TSR percentile ranking within comparator group	63%ile			53%ile			16%ile			10%ile			24%ile
Performance Share Unit (“PSU”) vesting (payout as a % of Target)	75		%	75		%	0		%	0		%	0		%
PSU comparator group	Retail			Retail			S&P 500			S&P 500			S&P 500


*	Actual bonus payout for fiscal year 2017 as a % of Target for the Co-Presidents was 94%. Actual bonus payout for fiscal year 2018 as a % of Target for the Co-Presidents was 63%. See pages 35 and 36 for more information.

Incentive EBIT and Incentive Adjusted ROIC are not measures of financial performance under Generally Accepted Accounting Principles (“GAAP”) and should be considered in addition to, and not a substitute for, return on ~~the following page.~~

INCENTIVE COMPENSATION PAYOUTS 2012 2013 2014 2015 2016
Annual bonus (payout as % of Target) 85% 64% 83% 0% 80%
PSUs vesting (payout as % of Target) 75% 0% 75% 75% 0%
3-year TSR percentile ranking within comparator group 52%ile 50%ile 63%ile 53%ile 16%ile

~~Performance share units (“PSUs”)~~assets, net earnings, total assets or other financial measures prepared in accordance with GAAP. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures. PSU vesting as shown in the ~~tables~~table above ~~and on the following page correspond~~corresponds to the performance periods ending in fiscal years ~~2012~~2014 through ~~2016 (for~~2018. Three-year Total Shareholder Return (“TSR”) percentile ranking is based on our TSR performance over three-year rolling periods between fiscal years ~~2010~~2012 and ~~2016~~2018 versus the comparator ~~group). Three-year TSR percentile ranking is based on our TSR results for~~group. Beginning with the 2014 – 2016 performance period, ~~relative to our comparator group. For the ’14-’16 PSU award,~~ we changed our comparator group from our retail peer group to the Standard and Poor’s 500. See page 3337 to learn more about long-term incentive pay.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 28

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GRANT REALIZABLE VALUES 2012 2013 2014 2015 2016
PSUs vested (realizable value as a % of grant stock price) 88% 0% 63% 60% 0%
RSUs granted (realizable value as a % of grant stock price) N/A N/A 70% 53% 93%
Stock options granted (% stock price is below exercise price) -15% -17% -33% -76% -17%

GRANT REALIZABLE VALUES 2014
2015
2016
2017
2018
PSUs (realizable value as a % of grant value) 0 % 0 % 0 % 51 % N/A
RSUs (realizable value as a % of grant value) 94 % 75 % 111 % 111 % 94 %
Stock options (realizable value as a % of grant value) 38 % 0 % 6 % 6 % N/A

Realizable values shown above are based on the actual value at time of vest, current unvested values using our ~~2016~~2018 fiscal year end stock price of ~~$42.83. Restricted~~$45.33 and current performance for the outstanding PSUs granted in 2017 (which were tracking at 50% payout as of the end of the fiscal year), shown as a percent of grant value. PSUs, restricted stock units (“RSUs”) and stock options are shown in the column matching the year of grant. ~~The 2016 RSUs and stock options represent a weighted average of the Named Executive Officers’ February and June 2016 grants.~~

The Compensation Committee reviews these results and other analyses ~~to ensure~~with the goal of ensuring that the Named Executive Officers’ aggregate compensation aligns with shareholder interests. Based on these and other outcomes, the Compensation Committee believes that total direct compensation for our Named Executive Officers reflects our pay-for-performance objective and is well aligned with shareholder interests.

NORDSTROM, INC. - 2019 Proxy Statement 31

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Effective Corporate Governance Reinforces Our Compensation Program

Our ~~executive~~ compensation philosophy for our executive team, including our Named Executive Officers, is reflected in governance practices that support the needs of our business, drive performance and align with our shareholders’ long-term interests. Below is a summary of what we do and don’t do in that regard.



WHAT WE DO		WHAT WE DON’T DO
þ	Pay for performance: Our compensation program for Named Executive Officers emphasizes variable pay over fixed pay, with ~~over 80%~~at least 70% of ~~their collective~~each Named Executive Officer’s target compensation linked to our financial or market results.	Ø	Provide employment agreements.
þ	Retain meaningful stock ownership guidelines: Our expectations for ownership align executives’ interests with those of our shareholders, and all Named Executive Officers have exceeded their targets.	Ø	Offer separation benefits to Named Executive Officers who are Nordstrom family members.
þ	Mitigate undue risk: We have caps on potential performance-based bonus payments, a clawback policy on performance-based compensation, and active and engaged oversight and risk management systems, including those related to compensation-related risk.	Ø	Offer special perquisites to our Named Executive Officers.
þ		Ø	Maintain separate change in control agreements.
þ	Engage an independent compensation consulting firm:The Compensation Committee’s consultant does not provide any other services to the Company.	Ø	Gross up taxes, except in the case of selected relocation expenses.
þ	Apply conservative post-employment and change in control provisions: Executive Officers are subject to provisions in the same manner as those for our broader employee population.	Ø	Reprice underwater stock options.
þ	Limit accelerated vesting: Our equity plan provides for accelerated vesting of equity awards after a change in control only if an executive is involuntarily terminated by the Company or resigns for good reason, a provision referred to as a “double trigger.”	Ø	Issue grants below 100% fair market value.
þ		Ø	Pay dividends on any unearned or unvested equity awards.
þ	Restrict pledging activity: All Executive Officers are subject to pre-clearance requirements and restrictions.	Ø	Permit hedging or short-sale transactions.
þ	Receive strong shareholder support: Each year since 2011, more than 90% of the votes cast on the matter have been in favor of our ~~Say-on-Pay proposal.~~

compensation programs.

~~WHAT WE DON’T DO~~
	~~Provide employment agreements.~~
	~~Offer separation benefits to Named Executive Officers who are Nordstrom family members.~~
Ø	~~Offer special perquisites to our Named Executive Officers.~~
	~~Maintain separate change in control agreements.~~
	~~Gross up taxes upon change in control payments.~~
	~~Gross up taxes, except selected relocation expenses.~~
	~~Reprice underwater stock options.~~
	~~Issue grants below 100% fair market value.~~
	~~Pay dividends on any unearned or unvested equity awards.~~
	~~Permit hedging or short-sale transactions.~~
	Count pledged shares towards stock ownership targets.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 29

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Context for Understanding Our Compensation Program and Decisions

~~Context for Understanding Our Compensation Program and Decisions~~

This section provides background on the roles involved in determining compensation for our Named Executive Officers, our use of market data and the companies selected for our peer group.

Our Roles in Determining Compensation are Well Defined

Compensation Committee

Our Compensation Committee (“Committee”) oversees the development and delivery of our ~~guiding principles~~pay and benefits philosophy and compensation plans for the Named Executive Officers and other executives as described in the Committee Charter on our website atinvestor.nordstrom.com.

As part of that oversight, the Committee ensures the Named Executive Officers’ aggregate compensation aligns with shareholder interests by reviewing analyses that include:

Cash alignment to evaluate the short-term incentive payouts relative to our ~~EBIT performance results.~~financial performance.

Relative pay and performance to compare the percentile rankings of our total direct compensation (base salary + performance-based bonus + long-term incentives) with financial performance metrics of our peer group.

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Compensation Committee Consultant

The Committee’s independent executive compensation consulting firm, Semler Brossy Consulting Group, LLC (“Semler Brossy”), is retained by, and reports directly to, the Committee. A consultant from that firm attends the Committee meetings in person or by phone, and ~~supports~~in support of the Committee’s role, ~~by providing~~provides independent expertise on market practices, compensation program design and related subjects as described on page 15. Semler Brossy provides services only as directed by the ~~Committee and has no other relationship with the Company. All fees paid to Semler Brossy were for services that related exclusively to executive or Director compensation during~~Committee. During fiscal year ~~2016.~~

2018, Semler Brossy’s services included review of pay programs, performance goal-setting, alignment of pay and performance and other pay-related matters specific to the Committee’s Charter.

Management

Our Co-Presidents provide input to the Committee on the level and design of compensation elements for the Named Executive Officers and other Executive Officers, excluding themselves. Our ~~Executive Vice President,~~Chief Human Resources Officer joins the Co-President(s) in ~~Compensation~~ Committee meetings to provide perspective and expertise relevant to the agenda. Management supports the Committee’s activity by providing analyses and recommendations developed internally or occasionally with the assistance of external consulting firms other than the Committee’s consulting firm. ~~Management did not utilize any external consultants for such assistance in 2016.~~

Market Data Provides a Reference Point for Compensation

The Committee believes that knowledge of market practices, particularly those of our peers listed ~~on the following page,~~below, is helpful in assessing the design and targeted level of our executive compensation package. In reviewing peer group information, the Committee uses survey data provided by external consultants, monitors general market movement for executive pay and references proxy statements for specific roles.

When the Committee reviews market data, they consider the 50thpercentile (median) of our peer group as a reference point, rather than a policy, for positioning target total direct compensation. Target opportunities for individual pay elements vary by executive role based on scope of responsibilities and expected contributions.

~~Blake~~

Erik Nordstrom, Peter Nordstrom and ~~Erik~~Blake Nordstrom’s target total direct compensation for ~~2016~~2018 was below our peer group ~~median. Michael Koppel~~median, as it has been in previous years. Based on the Committee’s review of relevant market data and ~~Kenneth Worzel’s~~internal pay equity, the Committee believes the target total direct compensation for Anne Bramman, Kenneth Worzel, and Christine Deputy was within a competitive range of ~~our~~the peer group median. Actual pay for the Named Executive Officers can exceed our established targets or peer group actual pay through the variable compensation elements when pre-determined performance milestones are achieved.

Due to challenging business circumstances, actual or realizable pay for the past few years has been below target, as shown on page 31.

Peer Group Companies Represent Our Business

Each year, the Committee reviews the appropriateness of our peer group for comparison on pay and related practices. While the companies represent prominent brands and specialty retailers that are relevant to Nordstrom, they may not always have a direct match to our product offerings or annual revenue. However, the peer group companies generally meet the following selection criteria:

collective representation of our primary business areasincluding our ~~full-price, off-price,~~Full-Price, Off-Price, in ~~stores,~~store, and online business and private label products;

some overlap with our industry group as defined by institutional shareholders and shareholder service organizations;

general compatibility with our compensation strategythrough a competitive offering of the primary pay elements of base salary, performance-based bonus and long-term incentives; and

public company subject to similar market pressureswith a track record of sustainability.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 30

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Our peer group used for ~~determining~~evaluating compensation infor fiscal year ~~2016~~2018 was comprised of the following retail companies:



Bed Bath & Beyond, Inc.	J. C. Penney Company, Inc.	Tapestry, Inc.
Capri Holdings Limited*	Kohl’s Corporation		~~Ross Stores, Inc.~~
~~Coach, Inc.~~		~~L. Brands, Inc.~~		~~Starbucks Corporation~~Tiffany & Co.
Dillard’s, Inc.		~~Macy’s,~~L Brands, Inc.		~~Tiffany & Co.~~The TJX Companies, Inc.
Estée Lauder Companies Inc.	Macy’s, Inc.	~~Michael Kors Holding Limited~~		~~The TJX Companies,~~Urban Outfitters, Inc.
Foot Locker, Inc.		Neiman Marcus ~~Inc.~~Group LTD LLC		~~Urban Outfitters, Inc.~~VF Corporation
Gap, Inc.		~~Nike, Inc.~~		~~VF Corporation~~
~~J.C. Penney Company, Inc.~~		Ralph Lauren Corporation		Williams-Sonoma, Inc.
Hudson’s Bay Company	Ross Stores, Inc.

* Formerly known as Michael Kors Holding Limited.

During ~~2016,~~2018, as part of its annual review of peer companies to be used for compensation comparison purposes, the Committee determined that no changes ~~were needed~~to the peer group would be made for ~~2017.~~

fiscal year 2019.

NORDSTROM, INC. - 2019 Proxy Statement 33

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Each Element of Compensation Has its Own Purpose

Our compensation program for Named Executive Officers is made up of four primary elements outlined below. Each element has its own purpose based on our fundamental premise of pay for performance and our ~~guiding principles,~~pay and benefits philosophy, described on page ~~27.~~30. Additional information is provided ~~on the following page~~below in the “About Our Compensation ~~Elements,~~Elements: What We Paid in ~~2016~~2018 and Why” section.



Compensation Element		Purpose
Base Salary (~~Page 32)~~See below)		Reflect scope of the role and individual performance through base-line cash compensation.
Performance-Based Annual Cash Bonus (~~Page 32)~~Pages 35 and 36)		Motivate and reward contributions to annual operating performance and long-term business strategy with cash that varies based on results.
Long-Term Incentives (Page ~~33)~~37)		Promote alignment of executive decisions with Company goals and shareholder interests through ~~stock options, performance share units and~~ restricted stock units where value varies with Company stock performance.
Benefits (Page ~~34)~~38)		Provide meaningful and competitive broad-based, leadership and retirement benefits that support healthy lifestyles and contribute to financial security.

Pay Changes for ~~2016~~

2018

On an annual basis, the Committee reviews base salary, performance-based bonus target opportunity and long-term incentive target grant value for each of the Named Executive Officers in consideration of the upcoming fiscal year. Committee decisions for fiscal year ~~2016~~2018 are summarized below and shown as a comparison of ~~2015~~2017 and ~~2016~~2018 fiscal year end (“FYE”) amounts. The Committee believes these elements and the overall compensation program are meeting the expectations for our pay-for-performance ~~philosophy~~ and ~~guiding principles.~~

Performance-Based Long-Term Incentives
Annual Cash Bonus Annual Grant Target
Base Salary (Target Opportunity as % of (Grant Value as % of
($) Base Salary) Base Salary)
Name FYE 2015 FYE 2016 FYE 2015 FYE 2016 FYE 2015 FYE 2016 *
Blake W. Nordstrom 740,000 758,500 200 same 250 350
Peter E. Nordstrom 740,000 758,500 200 same 250 350
Erik B. Nordstrom 740,000 758,500 200 same 250 350
Michael G. Koppel 770,000 790,000 90 same 175 same
Kenneth J. Worzel 600,000 750,000 80 same 150 same

pay and benefits philosophies.



	Base Salary ($)		Performance-Based Annual Cash Bonus (Target Opportunity as a % of Base Salary)		Long-Term Incentives Annual Grant Target (Grant Value as a % of Base Salary)*
Name	FYE 2017	FYE 2018	FYE 2017	FYE 2018	FYE 2017	FYE 2018
Erik B. Nordstrom	758,500	same	200	same	350	same
Anne L. Bramman	750,000	775,000	90	same	175	same
Peter E. Nordstrom	758,500	same	200	same	350	same
Kenneth J. Worzel	750,000	800,000	80	125	150	250
Christine F. Deputy	567,000	585,000	80	same	150	same
Blake W. Nordstrom	758,500	—	200	—	350	—

*
*	In ~~2016,~~2017, actual annual long-term incentive grant values varied from target grant values for certain Named Executive Officers. See page 3337 to learn more about the long-term incentive pay elements for ~~2016.~~2018.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 31

About Our Compensation Elements: What We Paid in 2018 and Why

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~~About Our Compensation Elements, What We Paid in 2016 and Why~~

Base Salary

The Committee begins its annual review of base salary for the Named Executive Officers through discussion with the Co-Presidents on the expectations and achievements of each executive during the previous year, as well as their pay history and pay equity with other internal roles. The Committee then references our pay levels to similar roles in peer companies to ensure they are within a competitive range of the peer group median.

Named Executive Officers do not necessarily receive increases in base salary every year. When they do, the changes are effective April 1stfollowing their annual performance review, which includes a discussion about individual results against defined expectations.

For ~~2016, Blake Nordstrom, Peter Nordstrom, Erik Nordstrom, Michael Koppel and~~2018, Anne Bramman, Kenneth Worzel and Christine Deputy each received increases in base salary of approximately ~~2.5%~~3% to acknowledge ~~their~~ performance and maintain relative market competitiveness. In addition, Kenneth Worzel received a base salary increase in ~~September 2016~~May 2018 from $775,000 to $800,000 when he ~~was promoted~~assumed additional responsibilities as Chief Digital Officer.

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Contents

Performance-Based Annual Cash Bonus

The opportunity for annual performance-based cash awards under our shareholder-approved Nordstrom, Inc. Executive Management Bonus Plan (“Executive Management Bonus Plan”) is designed to focus the Named Executive Officers on the alignment between annual operating performance and long-term business strategy. ~~In support of our guiding principles, the performance-based bonus awards pay out only when pre-determined performance milestones are achieved.~~ The Committee establishes the following criteria in developing the annual bonus arrangements:

Target bonus opportunity: In determining the target percentage of base salary, ~~shown on page 31,~~ the Committee takes into account the mix of pay elements, market pay information for similar roles within our peer group and the internal relationship between roles within the Company.

In support of our pay-for-performance philosophy, the maximum bonus payout, which is associated with superior performance, is 2.5 times an executive’s target bonus opportunity. This maximum is higher than is common among our retail peers because we believe it is important to continue encouraging and paying rewards when we achieve truly superior results.

Under our approach, truly superior results are rarely achieved. In the past nine years, we have not paid out bonuses in excess of 150% of target except for fiscal year 2010, when the payout was 200% of target.

In November 2017, the Committee approved an increase in Kenneth Worzel’s target bonus opportunity from 80% to 90% of base salary, effective at the beginning of fiscal year 2018. In May 2018, the Committee approved increasing his target bonus opportunity to 125%, effective as of the beginning of fiscal year 2018, to recognize his additional responsibilities as Chief Digital Officer.

Performance measures: The Committee establishes the performance measures to focus executives on the most important annual and long-term strategic goals. For fiscal year ~~2016,~~2018, the Named Executive Officers ~~all~~ had the following measures:


–	Incentive Adjusted ROIC to ensure our overall performance aligns directly with shareholder returns over the long term. The measure is expressed as a threshold that must be met before any payout can be made on Incentive EBIT results to ensure our executives are rewarded only after earnings generate a meaningful ~~return~~returns for our ~~shareholders.~~shareholders.

–

Incentive EBITto emphasize the importance of earnings and its role in driving shareholder value. ~~Each executive’s performance-based bonus was weighted~~Erik Nordstrom, Peter Nordstrom and Blake Nordstrom each had this performance measure weighed at 100% ~~on this measure,~~, subject to the achievement of the Incentive Adjusted ROIC threshold. Anne Bramman, Kenneth Worzel and Christine Deputy each had this performance measure weighed at 67%, again subject to the achievement of the Incentive Adjusted ROIC threshold.

–

~~Strategic Bonus~~

Individual Measureto ~~use as a~~enable differentiation in bonus payout modifier (up or down) by up to 25%, not to exceed the maximum payout under the Nordstrom, Inc. Executive Management Bonus Plan, which is 2.5 times an executive’s target bonus opportunity. The Strategic Bonus Measureopportunity based on individual contributions and execution against goals. This measure was added for fiscal year ~~2016 considered objective progress in expanding 1) market share, 2) customer count,~~2018 for Anne Bramman, Kenneth Worzel and ~~3) customer engagement, each~~Christine Deputy. The individual bonus measure accounted for 33% of ~~which are key indicators of our success in our “One Nordstrom” strategy of serving customers across~~ the ~~breadth of our physical and digital platforms.~~total bonus opportunity for these Named Executive Officers.

The following charts show the mix of financial and individual components of the bonus opportunity for the Co-Presidents and other Named Executive Officers for fiscal year 2018.

* Incentive EBIT measure is subject to the Incentive Adjusted ROIC threshold.

Performance measure milestones: The Committee defines financial milestones for Incentive Adjusted ROIC (as a threshold) and Incentive EBIT (as a range) that relate to varying percentages of bonus payout. The difficulty level in achieving the milestones reflects the Committee’s belief that there should be a balance between executive pay opportunity, reinvestment in the Company and return to shareholders. Quantitative and qualitative goals were established for the individual bonus measures.

NORDSTROM, INC. - 2019 Proxy Statement 35

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In accordance with our bonus plan, Incentive Adjusted ROIC and Incentive EBIT achievement used to determine bonus payout may differ from ROIC and EBIT, as reported in our Form 10-K ~~for the fiscal year ended January 28, 2017,~~ filed with the SEC, due to the exclusion of certain one-time gains or losses. ~~In this situation, we refer to the measure achievements as Incentive ROIC and Incentive EBIT.~~ This is the case for ~~2016~~2018 where achievements reflect a non-operating related ~~adjustments~~adjustment not included in the financial plan.

–

~~Our Incentive ROIC for fiscal 2016 was 12.4%, exceeding our threshold goal of 10.0%.~~

–

Our Incentive EBIT achievement of $1,077M was in line with our target goal of $1,077M, warranting a payout level of 100% of target. The Committee exercised negative discretion, reducing the 100% Incentive EBIT implied outcome to 70% of target, considering management’s performance as it relates to the fiscal year 2016 impairment charge of a recent acquisition.

–

While the market continued to grow at a rate slower than anticipated, we made considerable progress on our Strategic Bonus Measure even in a difficult environment. We showed favorable growth in all three of our strategic measures: 1) market share, 2) customer count, and 3) customer engagement, which we track in terms of customers who buy from us across more than one channel. Based on this progress, the Committee determined that of the 25% of potential upward adjustment, it would approve a 10% increase to fiscal year 2016 bonus payouts, bringing the total payout to 80% of target.

~~The 2016 performance-based cash bonus result is 80% of target (70% attributed to the~~ Incentive ~~EBIT results and 10% attributed to the Strategic Bonus Measure modifier). Incentive~~Adjusted ROIC and Incentive EBIT are not measures of financial performance under ~~Generally Accepted Accounting Principles (“GAAP”)~~GAAP and should be considered in addition to, and not a substitute for, return on assets, net earnings, total assets ~~and~~or other financial measures prepared in accordance with GAAP. See Appendix BA for a reconciliation of GAAP and non-GAAP financial measures. ~~The fiscal year 2016 Incentive EBIT performance milestones and actual achievement are shown below.~~

~~2016 Incentive EBIT Milestones and Bonus Payout~~

Minimum Threshold Target Superior / Maximum Actual Achievement
Incentive EBIT Performance Less than $915M $915M $1,077M $1,184M or Greater $1,077M
Bonus Payout Level
% of Executive’s Target Bonus Opportunity 0% 25% 100% 250% 100%*

~~The 2016 performance-based cash bonus~~

–

Our Incentive Adjusted ROIC for our Named Executive Officers other than the Co-Presidents was 12.8% for fiscal 2018, exceeding our threshold goal of 9.5%. This result reflects an adjustment that the Committee approved to remove the impact of an estimated $72 million non-operating credit-related charge (see page 42 of the Company’s Annual Report on Form 10-K for the ~~NEOs is 80%~~fiscal year ended February 2, 2019). The Committee did not approve this adjustment to Incentive Adjusted ROIC for the Co-Presidents. For that reason, their Incentive Adjusted ROIC result was 12.0%, which also exceeded the threshold goal of 9.5%.

–

Our Incentive EBIT achievement fell below our target ~~(70% attributed to~~goal of $941 million, warranting a payout level of less than 100%. As shown in the table below, the Incentive EBIT ~~results following Committee negative discretion from 100%~~achievement for the Co-Presidents was 63%, and ~~10% attributed~~was 89% for the other Named Executive Officers. This achievement includes the above-noted adjustment to remove the impact of an estimated $72 million non-operating credit-related charge for the Named Executive Officers, excluding the Co-Presidents.

Achievement results on the individual bonus measures varied. Performance against the quantitative and qualitative goals was evaluated by the Co-Presidents and the payout results were approved by the Committee.


–	After reviewing the Company’s Full-Price sales, Off-Price sales, selling, general and administrative expenses and free cash flow results for the fiscal year, the Committee determined that Anne Bramman achieved 100% of her target performance with respect to the ~~Strategic Bonus Measure modifier).~~aggregate individual performance measures.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 32


–	After reviewing the Company’s Full-Price sales, Full-Price EBIT and total sales, and the Company’s market share results for the Los Angeles market, the Committee determined that Kenneth Worzel achieved 75% of his target performance with respect to the aggregate individual performance measures.


–	After reviewing the Company’s Full-Price sales, Off-Price sales, selling, general and administrative expenses and progress on organizational capabilities and effectiveness, the Committee determined that Christine Deputy achieved 100% of her target performance with respect to the aggregate individual performance measures.

The performance-based annual cash bonus results are summarized in the following table.

2018 Bonus Measures, Incentive EBIT Milestones, Individual Measure Achievement and Total Bonus Payout



				Milestones									Total Bonus Payout (as a % of Target)
Named Executive Officer	Bonus Measures	Weight		Threshold (25%)			Target (100%)			Superior (250%)	Result / Payout %		Total Bonus Payout (as a % of Target)
Co-Presidents	Incentive EBIT	100	%		$728	M		$941	M	≥$1,153M	$837M/ 63%		63	%
Co-Presidents	Subject to Incentive Adjusted ROIC threshold			9.5		%					12.0	%	63	%
Anne L. Bramman	Incentive EBIT	67	%		$728	M		$941	M	≥$1,153M	$909M/ 89%		93	%
	Subject to Incentive Adjusted ROIC threshold			9.5		%					12.8	%
	Individual Measure	33	%								100	%
Kenneth J. Worzel	Incentive EBIT	67	%		$728	M		$941	M	≥$1,153M	$909M/ 89%		84	%
	Subject to Incentive Adjusted ROIC threshold			9.5		%					12.8	%
	Individual Measure	33	%								75	%
Christine F. Deputy	Incentive EBIT	67	%		$728	M		$941	M	≥$1,153M	$909M/ 89%		93	%
	Subject to Incentive Adjusted ROIC threshold			9.5		%					12.8	%
	Individual Measure	33	%								100	%

The Incentive EBIT achievement for the Co-Presidents was less than that for the other Named Executive Officers as the Committee determined that the adjustment they approved to remove the impact of an estimated $72 million non-operating credit-related charge described above would not apply for the Co-Presidents. Also, the Committee approved a discretionary bonus for Blake Nordstrom in the amount of $82,026 so that the sum of his performance-based bonus and the discretionary award equaled what his performance-based bonus would have been had he been an active employee on the last day of the fiscal year.

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Long-Term Incentives

Annual grants of equity under ~~the~~our shareholder-approved ~~2010 Equity Incentive Plan~~equity incentive plan are intended to provide the Named Executive Officers with additional incentive to create shareholder value and receive financial rewards. The long-term incentive value that determines the size of the annual grant to Named Executive Officers is expressed as a percentage of base salary as shown on page ~~31.~~

34.

In establishing the long-term incentive value at grant for each Named Executive Officer, the Committee considers the mix of pay elements, market pay information for similar roles within our peer group, our annual share usage and dilution, performance and internal equity of grant size by role. The ~~grant value of the equity awarded to the Named Executive Officers in the fiscal year 2016 annual grant consisted of 50% stock options, 25% performance share units and 25% restricted stock units.~~

~~We use a combination of vehicles that our Committee believes creates the right balance of absolute and relative performance.~~

Stock options granted as part of the annual grant vest and become exercisable in four equal annual installments and have a 10-year term. Our equity incentive plan does not permit repricing, grant prices below 100% of the fair market value of Common Stock on the date of grant or cash dividend payments on options.

Performance share units reward the executive team for our relative TSR performance compared to companies in Standard & Poor’s 500. The units are earned after a 3-year performance cycle only when the Company’s TSR outperforms more than 50% of the companies identified for that grant.

Restricted stock units granted as part of the annual grant vest in four equal annual installments, and they complement our objectives for balancing award value through both absolute and relative stock performance.

~~The~~ Committee typically approves annual grants of equity awards during the February Committee meeting, which is scheduled at least a year in advance. ~~Scheduling decisions are made without regard to anticipated earnings or other major announcements by the Company.~~ The February meeting occurs after performance results for the prior year are known, which allows the Committee to align compensation elements with our performance and business goals.

~~In February 2016, after consideration~~

For fiscal year 2018 only, the grant for all of ~~peer group compensation practices~~the Company’s Executive Officers, including the Named Executive Officers, was changed from a mix of restricted stock units, performance share units and ~~values as presented~~stock options to 100% restricted stock units, vesting equally over four years, which is consistent with the mix for all other eligible employees. This change resulted, in part, from the Committee’s deliberations following the announcement by the Nordstrom family group that it was exploring a potential going private transaction and the Committee’s ~~compensation consultant, the Committee decided~~determination to make awards which would remain relevant to executives and have some retention effect in the ~~following adjustments:~~

~~For our Co-Presidents Blake~~context of the uncertainty surrounding any potential transaction. The 2018 grant mix was a one-time response to a special circumstance and was not indicative of the Company’s pay strategy going forward. As described in the “Changes for 2019” section on page 39, the long-term incentive mix for 2019 is composed of performance-based equity and stock options for Erik Nordstrom and Peter Nordstrom and ~~Erik Nordstrom,~~performance-based equity and restricted stock units for the other Named Executive Officers.

In November 2017, the Committee ~~increased~~approved an increase in Kenneth Worzel’s target ~~Long-Term Incentive Annual Grant~~equity grant value ~~as a percent~~from 150% to 175% of base salary, ~~from 250% to 350%, noting that when compared to~~effective at the ~~three highest paid officers among our peers, their aggregate compensation is well below the peer median;~~

~~For Michael Koppel,~~beginning of fiscal year 2018. In May 2018, the Committee ~~provided a positive adjustment over~~approved increasing his target equity grant value to 250%, effective with the ~~target~~2019 annual equity grant, ~~guidelines for the 2016 Long-Term Incentive Annual Grant value~~to recognize his additional responsibilities as ~~a percent of base salary from 175% to 233%; and~~Chief Digital Officer.

~~For Kenneth Worzel, the Committee provided a positive adjustment over the target grant guidelines for the 2016 Long-Term Incentive Annual Grant value as a percent of base salary from 150% to 200%.~~One-Time Equity Awards

In ~~mid-2016, recognizing the significant challenges faced by our Company and many of our full-line retail peers,~~March 2018, the Committee determined to ~~grant a special equity~~ award for selected executives to strengthen alignment between executive and shareholder interests during this transformative period in the retail industry. Four of our NEOs received a grant: Blake Nordstrom, Peter Nordstrom and Erik Nordstrom received an equity grant of 75% of base salary, andAnne Bramman, Kenneth Worzel ~~received an equity grant of 200% of base salary. The grant value of this additional equity award consisted of 25% stock options~~ and ~~75%~~Christine Deputy restricted stock ~~units.~~unit grants, equal to 300% of their respective base salaries, to mitigate retention risk and to recognize their critical roles in their respective functions and in supporting the Company’s key strategies over the next few years. The ~~stock options will cliff-vest 100%~~grants were made on ~~June 10, 2019,~~March 6, 2018, the first day of the open trading window following Committee approval, and ~~the restricted stock units will vest 50% on June 10, 2018 and 50% on June 10, 2019. Michael Koppel did not receive this grant due to his planned retirement in 2017.~~

~~In the Fall of 2016, Kenneth Worzel was promoted to President, Nordstrom. com and received an additional grant of restricted stock units valued at $262,500 at the time of grant, which will~~ vest in ~~three~~four equal annual installments.

~~2014~~

2016 Performance Share Units Did Not Pay Out

Performance share units for the ~~2014-2016~~2016 – 2018 fiscal year performance cycle were granted based on the vesting schedule ~~shown~~ below. At the end of the performance cycle, our TSR did not meet the minimum threshold of greater than the 50^th50th percentile of the Standard & Poor’s 500, which is required for payout. As a result, none of these performance share units vested.



Required Percentile	Rank for Vesting	% of Granted Performance Share Units
~~Rank for Vesting~~		Paid Out at Vesting
>90^th		90th	175
>80^th		80th	150
>75^th		75th	125
>65^th		65th	100
>50^th		50th	75
≤50^th50th	—		0

~~2015 and 2016~~

2017 Performance Share Units are Still in Process

The 3-year performance cycle for the ~~2015~~2017 performance share units runs from January 29, 2017 through February 1, ~~2015 through February 3, 2018. The 3-year performance cycle for the 2016 performance share units runs January 31, 2016 through February 2, 2019.~~2020. The vesting schedule for ~~these grants~~the 2017 performance share unit grant is ~~the same as~~ shown ~~above, and the~~below. The peer group ~~is comprised~~for this grant consists of companies in the Standard & Poor’s 500 as of the first day of the performance cycle.



Required Percentile Rank for Vesting	% of Granted Performance Share Units Paid Out at Vesting
>85th	175
>75th	150
>65th	125
>55th	100
>40th	50
≤40th	—

NORDSTROM, INC. - 2019 Proxy Statement 37

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Stock Ownership Guidelines Align Executives and Shareholders

Ownership of Common Stock by our Named Executive Officers and other ~~Executive Officers~~executive officers is encouraged by management and the Board ~~to align executives’ interests with those of~~and our ~~shareholders. As a result,~~ stock ownership guidelines were formally established in 2004. Ownership shares are made up of all forms of Common Stock, as well as vested performance share units that are deferred and unvested restricted stock units. Ownership shares do not include unvested or vested stock options, unvested performance share units or pledged shares.

The Named Executive Officers and other Executive Officers have an annual share target defined as base salary on each April 1stmultiplied by their ownership multiple of base salary divided by a 52-week average closing stock price. The ownership multiples of base salary depend on the executive’s role in the Company and are as shown in the following table for the Named Executive Officers. The Committee has assigned these particular multiples to match or exceed market practice, and to represent a significant portion of the overall compensation package to reinforce the alignment of management’s ~~decision making~~decision-making with shareholder interests.

Executives new to the Company have five years to achieve their ownership target.



Position	Multiple of Base Salary Used to
~~Position~~		Establish Ownership Target
Co-President			10x
~~Executive Vice President and~~ Chief Financial Officer			4x
~~Executive Vice President~~Chief Digital Officer and President, Nordstrom.com	3x
Chief Human Resources Officer	3x

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 33

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Under our guidelines, Named Executive Officers and other Executive Officers are required to ~~arrange for stock~~conduct any open market transactions in Common Stock only in accordance with an SEC Rule 10b5-1 trading plan. These plans predetermine the timing, number of shares and price at which an Executive Officer may buy or sell Company shares. The Executive Officers must also achieve and retain a minimum holding of 100% of their ownership targets before they may sell Company ~~shares.~~

shares in the market.

The Committee regularly reviews stock ownership status for the Named Executive Officers. All of the Named Executive Officers have exceeded their ownership targets.

Benefits

~~Nordstrom~~

The Company offers the Named Executive Officers a comprehensive program of broad-based, leadership and retirement benefits. Their purpose varies by benefit, but in general enhances total compensation with meaningful and competitive offerings that support healthy lifestyles and contribute to financial security. These benefits are regularly reviewed for consistency with our ~~guiding principles,~~pay and benefits philosophy, organizational culture and market practices. Additional information on ~~2016~~2018 benefits is provided as noted below.



		Benefit		Where to Learn More
Broad-Based	●	• Company contribution to medical, dental and vision coverage; short- and long-term disability; life insurance; adoption assistance; and employee referral assistance. Employee access to accident insurance; health savings account and flexible spending accounts. Employee Stock Purchase Plan. Merchandise discount. Paid time off.	●	• For merchandise discount, see All Other Compensation in Fiscal Year ~~2016,~~2018, footnote ~~(b)~~(a) on page ~~38.~~ 44.
Leadership	●	• Salary continuance; long-term disability coverage; life insurance • ~~Executive Deferred Compensation Plan~~ • ~~Leadership Separation Plan~~	●	•For long-term disability and life insurance, see All Other Compensation in Fiscal Year ~~2016,~~2018, footnote ~~(a)~~(d) on page ~~38.~~ •45.
	●	Deferred Compensation Plan; Company match and discretionary profit-based match for eligible participants	●	See Nonqualified Deferred Compensation beginning on page ~~47.~~ •53 and All Other Compensation in Fiscal Year 2018, footnote (c) on page 44.
	●	Leadership Separation Plan	●	See Potential Payments Upon Termination or Change in Control at Fiscal Year-End ~~2016,~~2018, footnote ~~(f)~~(e) on page ~~52.~~59.
Retirement	●	• 401(k) match and discretionary profit-based match •	●	See All Other Compensation in Fiscal Year 2018, footnote (b) on page 44.
	●	Retiree health care (closed to new entrants in 2013) ~~• Supplemental Executive Retirement Plan (closed to new entrants in 2012)~~	●	~~• See All Other Compensation in Fiscal Year 2016, footnote (c) on page 39.~~ • See Potential Payments Upon Termination or Change in Control at Fiscal Year-End ~~2016,~~2018, footnote ~~(e)~~(d) on page ~~51.~~ • 59.
	●	Supplemental Executive Retirement Plan (closed to new entrants in 2012; annual benefit capped for current participants)	●	See Pension Benefits beginning on page ~~46.~~ 51.

38 NORDSTROM, INC. - 2019 Proxy Statement

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Changes for ~~2017~~

2019

Each year, the Committee reviews the design of our total compensation elements and makes changes as needed to improve alignment with our ~~guiding principles.~~pay and benefits philosophy. In ~~February 2017,~~consideration of recommendations made by the ~~Committee made~~Committee’s compensation consultant, the following ~~changes:~~

~~Base Salary~~

~~None of the Named Executive Officers received base pay increases.~~

~~Performance-Based Annual Cash Bonus~~

~~Annual cash bonus payout opportunity (as a % of base pay) remained the same~~changes were made for ~~all Named Executive Officers.~~

~~Long-Term Incentives~~

~~The Committee considered performance results, including as it relates to the~~ fiscal year ~~2016 impairment charge~~2019:

Base Salary

Anne Bramman and Christine Deputy each received increases of ~~a recent acquisition, and used discretion~~approximately 3%, effective April 1, 2019, to ~~decrease the Long-Term Incentives annual grant value (as % of base salary) for certain Named Executive Officers. Blake~~maintain their relative market competitiveness.

Erik Nordstrom, Peter Nordstrom and ~~Erik Nordstrom received~~Kenneth Worzel’s base salaries remained unchanged.

Performance-Based Annual Cash Bonus

Anne Bramman’s target bonus opportunity as a ~~decrease in their~~ percent of base salary increased from 90% to 100% to maintain relative market competitiveness for the Chief Financial Officer role.

Long-Term ~~Incentive Annual Grant, which decreased~~Incentives

The 2019 annual equity grant mix for the Co-Presidents was changed to 60% performance-based equity and 40% stock options. This mix is closely aligned with the Company’s pay for performance philosophy. The 2019 annual grant mix for the other Named Executive Officers was changed to 60% performance-based equity and 40% restricted stock units. This mix provides a balance of the key retention and performance objectives of the long-term incentive plan. Performance-based equity was reintroduced into the annual grant mix to support the Company’s communicated forward-looking strategy. Free cash flow growth and EBIT margin percent are the core measures for the performance-based equity with market share serving as a payout modifier. The Committee believes that these measures reflect the Company’s key areas of strategic focus over the next three years. Two-thirds of the performance-based equity grant for 2019 has a three-year performance period. The remaining one-third of the performance-based equity grant for 2019 has a one-year performance period for the core measures and a three-year performance period for the market share modifier.

Anne Bramman’s target equity grant value as a percent of base salary increased from ~~350%~~175% to ~~325%.~~200% to maintain relative market competitiveness for the Chief Financial Officer role.

One-Time Option Grant

In February 2019, the Committee approved a one-time stock option award to key leadership to recognize the critical and important role that the executives will play in executing the Company’s communicated forward-looking strategy and delivering results to shareholders over the next few years. Anne Bramman, Kenneth Worzel and Christine Deputy received ~~a decrease in his Long-Term Incentive Annual Grant, which decreased~~this award, representing options to purchase 123,554, 159,425 and 69,947 shares, respectively. The stock option award was granted on March 5, 2019, the ~~grant value as a percent~~first business day of ~~base salary from 150% to 140%. Michael Koppel’s Long Term Incentive Annual Grant value remained~~ the ~~same, with~~open trading window following the ~~grant value as a percent~~Committee’s approval of ~~base salary at 175%.~~

~~The Committee changed~~ the ~~annual equity grant mix for Named Executive Officers, from: 50%~~grant. The stock options ~~25% restricted stock units,~~will vest over four years, with 50% vesting at the end of year three and ~~25% performance share units, to:~~ 50% ~~restricted stock units, 25% stock options, and 25% performance share units, which~~vesting at the ~~Committee believes is more in line with peer group norms and helps strengthen our compensation program’s guiding principles as discussed on page 27.~~end of year four.

~~Additional Information~~

Additional Information

Compensation Risk Assessment Supports Integrity of the Pay Program

The Committee oversees an extensive review of the Company’s pay-for-performance philosophy, the composition and balance of elements in the compensation package and the alignment of plans with shareholder interests to ensure these practices do not pose a material adverse risk to the organization.

The review is conducted every other year as underlying programs and practices are generally consistent over time. The last review, for fiscal year ~~2016,~~2018, concluded with the following perspectives:

The goals of the Company’s compensation programs are to attract and retain the best talent and to motivate and reward our people in ways that are aligned with the long-term interests of our shareholders. This has been a long-standing objective of our pay-for-performance philosophy. We believe that the strong alignment of our employee compensation plans with performance has served our stakeholders, and in particular, our shareholders, well. The strength of this alignment is regularly reviewed and monitored by the Committee.

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~ 34

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As a leading fashion ~~specialty~~ retailer, the Company’s compensation-related risks are generally more straightforward than some other business sectors. We have systems in place to identify, monitor and control risks, making it difficult for a single individual or a group of individuals to expose the Company to material compensation risk.

Our compensation program rewards both short- and long-term performance. ~~Company results~~Performance measures are predominantly team-oriented rather than individually focused and tied to measurable factors that are both transparent to shareholders and drivers of their ~~returns.~~shareholder return.

The compensation program balances the importance of achieving critical short-term objectives with a focus on realizing strategic long-term priorities. Strong stock ownership guidelines are in place for Company leaders, and mechanisms, such as an executive clawback policy, exist to address inappropriate rewards.

NORDSTROM, INC. - 2019 Proxy Statement 39

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The Committee is actively engaged in establishing compensation plans, monitoring these plans during the year and using discretion in making rewards, as necessary.

The Company has active and engaged oversight systems in place. The ~~entire Board is aware of the compensation program, as established~~Audit and ~~approved by the Committee. The Audit~~Finance Committee and the full Board closely monitor and certify the performance that drives employee rewards through detailed and transparent financial reporting, which is in place to provide strong, timely insight into the performance of the Company.

~~As a result of~~

Based on this review, the Committee believes that the Company’s compensation plans do not encourage risk taking that is reasonably likely to have a material adverse effect on the Company.

Executive Compensation Clawback Policy Applies to Performance-Based Pay

In February 2008, the Board adopted a formal executive compensation clawback policy that applies to any performance-based bonus, equity, equity equivalent or other incentive compensation awarded to an Executive Officer, beginning in that fiscal year. Under that policy, in the event of a material restatement of the Company’s financial results, the Board will review the circumstances that caused the restatement and consider accountability to determine whether an Executive Officer was negligent or engaged in misconduct. If so, and if the amount or vesting of an award would have been less had the financial statements been correct, the Board will seek to recover compensation from the Executive Officer as it deems appropriate. This policy is in addition to any requirements which might be imposed pursuant to applicable law.

Termination and Change in Control Provisions are Committee-Directed

Under our Leadership Separation Plan, ~~the~~ eligible Company leaders, including certain Named Executive Officers, are entitled to receive severance benefits upon involuntary termination of employment by the Company, due to job elimination, to assist in the transition from active employment. ~~Blake Nordstrom, Peter~~Erik Nordstrom and ~~Erik~~Peter Nordstrom are not eligible for separation benefits under the Plan. Separation benefits are described in the Potential Payments Upon Termination or Change in Control section ~~beginning~~ on page ~~48.~~

59.

As described in the same section, the Named Executive Officers are generally not entitled to any payment or accelerated benefit in connection with a change in control of the Company. However, the Named Executive Officers are entitled to accelerated vesting of equity if they experience a qualifying termination (termination by the Company without cause or termination by the executive for good reason) within 12 months following a change in ~~control.~~

control, unless the Committee acts to prevent such acceleration.

Tax and Accounting Considerations Underlie the Compensation Elements

The Committee recognizes the tax and regulatory factors that can influence the structure of executive compensation programs, including:

Section 162(m) of the Internal Revenue Code (“IRC”), which generally disallows a tax deduction to public companies for annual compensation over ~~$1M~~$1 million paid to their Named Executive ~~Officers (other than~~Officers. Prior to the ~~Principal Financial Officer). The~~enactment of corporate tax reform in 2017 (the “Tax Act”), the IRC generally ~~excludes~~excluded from the calculation of the ~~$1M cap~~$1 million limit compensation that iswas based on the attainment of pre-established, objective performance goals established under a shareholder-approved plan. The ~~Committee considers, among other things, the impact of this~~ exclusion for performance-based compensation ~~when developing and implementing~~was repealed by the Tax Act, effective for taxable years beginning after December 31, 2017, such that compensation paid to our ~~executive~~Named Executive Officers in excess of $1 million is not deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. The Tax Act also expanded the category of covered officers for purposes of the limitations of Section 162(m). Following passage of the Tax Act, the Committee anticipates that compensation ~~programs. Annual awards under our short-term and long-term incentive plans are generally designed in a manner that is intended to meet the requirements under the exclusion. However, due~~paid to the ~~complex nature~~Company’s Named Executive Officers in excess of $1 million will not be deductible by the ~~requirements that must be met, we cannot guarantee that such awards will qualify as performance-based compensation under Section 162(m).~~Company.

While the Committee seeks to preserve tax deductibility in developing and implementing our compensation program, the Committee also believes that it is important to maintain flexibility in administering compensation programs in a manner designed to promote varying Company goals. Therefore, amounts paid under any of our executive compensation programs may be subject to the Section 162(m) limitation on deductibility.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 718, Stock Compensation (“ASC 718”),where stock options, performance share units and restricted stock units are accounted for based on their grant date fair value (see the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 28, 2017,~~February 2, 2019, filed with the SEC). The Committee regularly considers the accounting implications of our equity-based awards.

Section 409A of the IRC, the limitations of which primarily relate to the deferral and payment of benefits under the ~~Executive~~Nordstrom Deferred Compensation Plan and Supplemental Executive Retirement Plan. The Committee continues to consider the impact of Section 409A and in general, the evolving tax and regulatory landscape in which its compensation decisions are made.

40 NORDSTROM, INC. -~~2017~~2019 Proxy Statement 35

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Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. The Committee believes the Compensation Discussion and Analysis represents the intent and actions of the Committee with regard to executive compensation and has recommended to the Board that it be included in this Proxy Statement for filing with the SEC.

~~COMPENSATION COMMITTEE~~

Compensation Committee

Tanya L. Domier, Chair

Glenda G. McNeal

Philip G. Satre

Brad D. Smith

Gordon A. Smith

~~Philip G. Satre~~

~~Gordon A. Smith~~
~~Robert D. Walter~~

NORDSTROM, INC. -~~2017~~2019 Proxy Statement 36

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Summary Compensation Table

The following table summarizes the total compensation paid or accrued by the Company for services provided by the Named Executive Officers for fiscal years ended February 2, 2019, February 3, 2018 and January 28, ~~2017, January 30, 2016 and January 31, 2015.~~

Name and Principal Position Fiscal
Year Salary
($)(a) Bonus
($)(b) Stock
Awards
($)(c) Option
Awards
($)(d) Non-Equity
Incentive Plan
Compensation
($)(e) Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(f) All Other
Compensation
($)(g) Total
($)
Blake W. Nordstrom 2016 751,152 — 1,630,746 1,437,210 1,213,601 748,859 49,711 5,831,279
Co-President 2015 735,445 — 906,175 906,232 — — 61,858 2,609,710
2014 722,986 — 906,152 906,481 1,197,990 — 55,630 3,789,239
Michael G. Koppel 2016 782,223 — 835,218 898,239 568,800 647,994 25,598 3,758,072
Executive Vice President and Chief Financial Officer 2015 764,328 — 655,120 655,199 — — 23,659 2,098,306
2014 742,000 — 629,974 630,155 556,793 1,916,126 30,609 4,505,657
Peter E. Nordstrom 2016 751,152 — 1,630,746 1,437,210 1,213,601 758,249 47,811 5,838,769
Co-President 2015 735,445 — 906,175 906,232 — — 42,203 2,590,055
2014 722,986 — 906,152 906,481 1,197,990 318,071 40,137 4,091,817
Erik B. Nordstrom 2016 751,152 — 1,630,746 1,437,210 1,213,601 721,831 46,222 5,800,762
Co-President 2015 735,445 — 906,175 906,232 — — 55,224 2,603,076
2014 722,986 — 906,152 906,481 1,197,990 864,701 51,386 4,649,696
Kenneth J. Worzel 2016 657,417 — 1,742,820 907,475 424,932 412,356 35,880 4,180,880
Executive Vice President and President, Nordstrom.com 2015 588,467 — 405,569 405,580 — — 23,022 1,422,638
2014 535,889 — 1,389,848 390,088 357,447 453,928 30,549 3,157,749

2017.



Name and Principal Position	Fiscal Year	Salary ($)(a)	Bonus ($)(b)	Stock Awards ($)(c)	Option Awards ($)(d)	Non-Equity Incentive Plan Compensation ($)(e)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(f)	All Other Compensation ($)(g)	Total ($)
Erik B. Nordstrom	2018	756,393	—	2,654,705	—	963,144	—	77,504	4,451,746
Co-President	2017	771,142	—	1,760,169	616,272	1,431,290	988,659	50,395	5,617,927
	2016	751,152	—	1,630,746	1,437,210	1,213,601	721,831	46,222	5,800,762
Anne L. Bramman	2018	768,889	150,000	3,562,483	—	645,066	—	38,716	5,165,154
Chief Financial Officer	2017	504,173	—	749,965	—	430,384	—	316,516	2,001,038
Chief Financial Officer	2016	—	—	—	—	—	—	—	—
Peter E. Nordstrom	2018	756,393	—	2,654,705	—	963,144	—	59,386	4,433,628
Co-President	2017	771,142	—	1,760,169	616,272	1,431,290	1,030,787	40,774	5,650,434
	2016	751,152	—	1,630,746	1,437,210	1,213,601	758,249	47,811	5,838,769
Kenneth J. Worzel	2018	786,875	—	3,562,483	—	835,167	754,441	45,813	5,984,779
Chief Digital Officer and President, Nordstrom.com	2017	762,500	—	749,703	262,497	574,620	725,676	32,380	3,107,376
Chief Digital Officer and President, Nordstrom.com	2016	657,417	—	1,742,820	907,475	424,932	412,356	35,880	4,180,880
Christine F. Deputy	2018	604,587	—	2,551,421	—	432,819	—	86,153	3,674,980
Chief Human Resources Officer	2017	—	—	—	—	—	—	—	—
Chief Human Resources Officer	2016	—	—	—	—	—	—	—	—
Blake W. Nordstrom	2018	791,274	82,026	2,654,705	—	881,118	—	66,907	4,476,030
Former Co-President	2017	771,142	—	1,760,169	616,272	1,431,290	998,647	57,181	5,634,701
	2016	751,152	—	1,630,746	1,437,210	1,213,601	748,859	49,711	5,831,279


(a)	Salary

The amounts shown represent base salary earned during the fiscal year. ~~These~~The numbers shown for all fiscal years vary somewhat from ~~the~~ annual base salaries ~~disclosed on page 31~~ due to the fact that our fiscal year ends on the Saturday nearest to January 31stand salary increases are effective April 1stof each year. Also, as a result of our 4-5-4 retail reporting calendar, fiscal year 2017 included an extra week (the “53rd week”). The ~~2016~~2018 base salaries for the Named Executive Officers were $758,500 each for ~~Blake~~Erik Nordstrom, Peter Nordstrom and ~~Erik~~Blake Nordstrom, ~~$790,000~~$775,000 for ~~Michael Koppel~~ Anne Bramman and ~~$615,000~~$585,000 for ~~Kenneth Worzel.~~Christine Deputy. Kenneth Worzel’s base salary increased from $775,000 to ~~$750,000~~$800,000 effective ~~September 19, 2016,~~May 14, 2018, when he ~~became President, Nordstrom.com.~~

assumed additional responsibilities as Chief Digital Officer. The amount shown for Blake Nordstrom reflects a prorated amount based on his separation from service on January 2, 2019 and includes the payout of his accrued vacation pay. Christine Deputy was not a Named Executive Officer in fiscal years 2016 or 2017 so no amounts are shown for those years.

Kenneth Worzel and Christine Deputy elected to defer ~~$10,000~~$25,000 and $30,800, respectively, of their base ~~salary~~salaries earned during calendar year ~~2016~~2018 into the ~~Executive~~Nordstrom Deferred Compensation ~~Plan.~~Plan (“NDCP”). Anne Bramman and Christine Deputy elected to defer 8% and $32,000, respectively, of their base salaries earned during calendar year 2019 into the NDCP. Due to the timing of our fiscal year ~~end, $9,565 of this was~~ends, $2,695, $23,913, and $30,852, were attributed to fiscal year ~~2016,~~2018 deferrals for Anne Bramman, Kenneth Worzel, and Christine Deputy, respectively, as reported in the Fiscal Year ~~2016~~2018 Nonqualified Deferred Compensation Plan Table on page ~~48.~~

53.

Each of the Named Executive Officers contributed a portion of their base salary earned during fiscal year ~~2016~~2018 to the 401(k) Plan.

~~(b)~~

~~Bonus~~

(b) Bonus

The amounts ~~are~~ reported ~~because~~reflect discretionary bonuses approved by the Compensation Committee. In March 2018, the Committee determined to award Anne Bramman a one-time cash payment in recognition of her service since joining the Company ~~does not pay~~in June 2017 as Chief Financial Officer. In February 2019, the Committee approved a discretionary ~~or guaranteed bonuses~~bonus for Blake Nordstrom so that the sum of his performance-based bonus and this discretionary award equaled what his performance-based bonus would have been had he been an active employee on the last day of the fiscal year.

42 NORDSTROM, INC. - 2019 Proxy Statement

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~~(c)~~

~~Stock Awards~~

Contents

The amounts reported reflect the grant date fair value of ~~performance share~~restricted stock units and ~~restricted stock~~performance share units granted during the fiscal year under the 2010 Equity Incentive Plan. The amounts reported are not the value actually received.

The value the Named Executive Officers will ultimately receive from their performance share units will depend on whether the performance ~~requirement is~~requirements are met and the market price of Common Stock at the end of the performance cycle. The amounts reported were calculated in accordance with FASB Accounting Standards Codification 718,Stock Compensation (“(“ASC 718”) and reflect the probable outcome with respect to satisfaction of performance conditions at the date of grant. The payout could be as low as zero depending on performance over the relevant period, and the value of any payout will depend on stock price at the time of payout. ~~The maximum payout, or “potential value,” of~~No amounts are reported for fiscal year 2018 as the Company did not award performance share units ~~awarded in 2016, assuming~~during the grant date stock price, would be $1,133,043 each for Blake Nordstrom, Peter Nordstrom and Erik Nordstrom, $785,927 for Michael Koppel and $524,939 for Kenneth Worzel. See column (c) of the Grants of Plan-Based Awards in Fiscal Year 2016 table on pages 40 and 41 for the number of performance share units granted in fiscal ~~year 2016.~~

year.

The value the Named Executive Officers may receive from their restricted stock units will depend on whether the time-based vesting requirement is met and the market price of Common Stock on the vesting date. The amounts reported were calculated in accordance with ASC 718. See column ~~(d)~~(c) of the Grants of Plan-Based Awards in Fiscal Year ~~2016~~2018 table on ~~pages 40 and 41~~page 46 for the number of restricted stock units granted in fiscal year ~~2016.~~

~~(d)~~

~~Option Awards~~

2018.

(d) Option Awards

The amounts reported reflect the grant date fair value of stock options granted during the fiscal year under the 2010 Equity Incentive Plan. This is not the value received. The Named Executive Officers will only realize value from stock options if the market price of Common Stock is higher than the exercise price of the options at the time of exercise. The amounts reported were calculated in accordance with ASC 718. ~~See column (e) of~~No amounts are reported for fiscal year 2018 as the ~~Grants of Plan-Based Awards in Fiscal Year 2016 table on pages 40 and 41 for the number of~~Company did not grant stock options ~~granted in~~during the fiscal ~~year 2016.~~

~~NORDSTROM, INC.~~ - ~~2017 Proxy Statement~~ 37

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Assumptions used in the calculation of these amounts ~~for fiscal years 2016, 2015 and 2014~~ are included in the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 28, 2017,~~February 2, 2019, filed with the SEC.

~~(e)~~

~~Non-Equity Incentive Plan Compensation~~

(e) Non-Equity Incentive Plan Compensation

The amounts reported reflect the annual performance-based cash awards under the Executive Management Bonus Plan, as described beginning on page ~~32.~~35. The amounts of the cash awards for fiscal year ~~2016,~~2018, approved by the Compensation Committee ~~at its~~on February ~~16, 2017 meeting,~~26, 2019, were paid in March ~~2017. None of the Named Executive Officers~~2019. Kenneth Worzel elected to defer ~~their~~$50,000 of his cash ~~awards~~award for fiscal year ~~2016~~2018 into the ~~Executive~~NDCP.

(f) Change in Pension Value and Nonqualified Deferred Compensation ~~Plan.~~

~~(f)~~

~~Change in Pension Value and Nonqualified Deferred Compensation Earnings~~

Earnings

The amounts reported are the changes in actuarial present value from fiscal year-end ~~2015~~2017 to fiscal year-end ~~2016~~2018 for each of the eligible Named Executive Officer’s benefit under the Supplemental Executive Retirement Plan (“SERP”). The present value of the benefit is affected by current earnings, credited years of service, the executive’s age and time until normal retirement eligibility, the age of the executive’s spouse or life partner as the potential beneficiary and economic assumptions (discount rate and mortality table used to determine the present value of the benefit). ~~Because these factors vary~~

The present value of Erik Nordstrom’s and Peter Nordstrom’s benefits decreased from last year by ~~individual,~~$135,088 and $122,708, respectively. The decreases were primarily the result of an increase in the discount rate used to determine the present value of the ~~benefit increased more~~benefit. The interest rate used is the same as the discount rate used for ~~some~~financial reporting purposes for the SERP which changed from 3.95% to 4.27%. Under SEC rules, decreases are not reported in the table so no amounts are shown. No amount is shown for Blake Nordstrom as he passed away before the end of the ~~Named Executive Officers than~~fiscal year, and accordingly did not have a pension benefit as of the end of the fiscal year. Amounts are not reported for ~~others.~~Anne Bramman and Christine Deputy because the SERP was closed to new entrants prior to when they joined the Company. See the Pension Benefits section beginning on page 4651 for more information about the SERP.

The amounts were calculated using the same discount rate and mortality table assumptions as those used in the Company’s financial statements to calculate the Company’s obligations under the SERP. Assumptions used in the calculation of these amounts are included in the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 28, 2017,~~February 2, 2019, filed with the SEC.

~~Michael Koppel~~

Anne Bramman, Kenneth Worzel and ~~Kenneth Worzel~~Christine Deputy had account balances in the Company’s nonqualified deferred compensation plan in fiscal year ~~2016,~~2018, as shown on page ~~48.~~ 53.They did not receive above-market-rate or preferential earnings on their deferred compensation, so no amounts for these types of earnings are included in the table.

~~(g)~~

~~All Other Compensation~~

~~A detailed description~~

(g) All Other Compensation

Each component of all other compensation paid to the Named Executive Officers is shown in the ~~table below.~~

following table.

NORDSTROM, INC. - 2019 Proxy Statement 43

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All Other Compensation in Fiscal Year ~~2016~~

2018

The ~~following~~ table below shows each component of “All Other Compensation” for fiscal year ~~2016,~~2018, reported in column (g) of the Summary Compensation Table on page ~~37,~~42, calculated at the aggregate incremental cost to the Company.

Leadership
Benefit Broad-Based
Benefit Broad-Based
Retirement
Benefit Other
Name Premium
on
Insurance
($)(a) Merchandise
Discount
($)(b) 401(k) Plan
Company
Match
($)(c) Personal Use
of Company
Aircraft
($)(d) Total
($)
Blake W. Nordstrom 565 33,246 15,900 — 49,711
Michael G. Koppel 581 9,117 15,900 — 25,598
Peter E. Nordstrom 565 22,720 15,900 8,626 47,811
Erik B. Nordstrom 565 29,757 15,900 — 46,222
Kenneth J. Worzel 515 19,465 15,900 — 35,880



	Broad-Based Benefit	Broad-Based Retirement Benefit	Leadership Benefit			Other
Name	Merchandise Discount ($)(a)	401(k) Plan Company Match ($)(b)	NDCP Company Match ($)(c)	Premium on Insurance ($)(d)	SERP ($)(e)	Personal Use of Company Aircraft ($)(f)	Total ($)
Erik B. Nordstrom	58,100	15,840	—	1,939	—	1,625	77,504
Anne L. Bramman	20,902	15,840	—	1,974	—	—	38,716
Peter E. Nordstrom	39,995	15,840	—	1,939	—	1,612	59,386
Kenneth J. Worzel	27,948	15,840	—	2,025	—	—	45,813
Christine F. Deputy	25,661	15,840	43,156	1,496	—	—	86,153
Blake W. Nordstrom	49,128	15,840	—	1,939	—	—	66,907


(a)	~~Premium on Insurance~~ Merchandise Discount

The Company provides life insurance to the Named Executive Officers in an amount equal to approximately 1.25 times their base salary and additional long-term disability insurance. The amounts reported are the annual Company-paid premiums.

~~(b)~~

~~Merchandise Discount~~

The Company provides a merchandise discount for its employees. The Named Executive Officers were provided a discount of 33% for purchases at Nordstrom full-line stores and Nordstrom.com and 20% for purchases at Nordstrom Rack stores, Nordstromrack.com/HauteLook and our restaurants. A 40% discount is available at certain times of the year on specific merchandise. The

~~NORDSTROM, INC.~~ - ~~2017 Proxy Statement~~ 38

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merchandise discount provided to the Named Executive Officers is the same as for all other eligible management and high-performing ~~nonmanagement~~non-management employees of the Company. The amounts reported are the total discount the Named Executive Officers received on their Nordstrom purchases during the fiscal year. The Company provides the same merchandise discount program for its Board of Directors, as described on page ~~17.~~

18.

~~(c)~~
(b)	401(k) Plan Company Match

The Company offers a matching contribution on employee 401(k) contributions under the 401(k) Plan to all eligible employees, including the Named Executive Officers. The Named Executive Officers may defer up to 16% of their eligible pay (i.e., base salary, performance-based bonus and other taxable wages) into the Plan, subject to IRC limits.

Although the matching contribution is discretionary and subject to change, the Company currently matches employee contributions for the Plan year, dollar for dollar, up to 4% of eligible pay. The ~~2016~~2018 calendar year compensation limit for eligible pay was ~~$265,000,~~$275,000, as set by the IRS. ~~The~~In 2018, the maximum Company matching contribution for the eligible Named Executive Officers was ~~$10,600~~$11,000 (4% ~~x $265,000) for 2016.~~

of $275,000).

The Company also offers a discretionary match up to an additional 2% of eligible pay, based on Company performance. Based on the Company’s performance in ~~2016, an additional 2% profit-based~~2018, the Board approved a discretionary match ~~was made. The~~of $0.44 per dollar contributed by the employee, up to 4% of eligible pay. The maximum Company discretionary match for the eligible Named Executive Officers was ~~$5,300 (2% x $265,000)~~ $4,840(44% of 4% of $275,000)for ~~2016.~~

2018.The total Company contribution each of the eligible Named Executive Officers received in March 2019, for ~~2016~~calendar year 2018, was ~~$15,900,~~$15,840 as reported ~~on page 38.~~

above.

Contributions under the Plan may be directed to any of 12 custom target retirement date funds or to any of 9 individual investment alternatives, including Common Stock. The Plan also offers a self-directed brokerage option.


(c)	NDCP Company Match

The Company offers a dollar for dollar matching contribution, up to 4% of eligible pay over the 401(k) calendar year compensation limit, on deferrals into the NDCP by eligible participants. The Company may also make a discretionary profit-based match up to an additional 2% of eligible pay over the 401(k) calendar year compensation limit. Christine Deputy received the NDCP Company matching contribution on her 2018 deferrals. Anne Bramman and Kenneth Worzel also made deferrals into the NDCP during fiscal year 2018 but were not eligible for the NDCP Match. Anne Bramman did not defer any pay in calendar year 2018 and Kenneth Worzel is not eligible for the NDCP match as he is a participant in the Company’s SERP, as described beginning on page 51. See the Nonqualified Deferred Compensation section on page 53 for more information.

44 NORDSTROM, INC. - 2019 Proxy Statement

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(d)	Premium on Insurance

The Company provides life insurance to the Named Executive Officers in an amount equal to approximately 1.25 times their base salary and additional disability insurance. The amounts reported are the annual Company-paid premiums.


(e)	SERP

The Company has a SERP, in which certain Named Executive Officers participate. As described in the Pension Benefits section beginning on page 51, the SERP provides an annual benefit, paid upon retirement for the remaining life of the executive with a 50% annuity paid to the surviving spouse after the executive’s death. Although Blake Nordstrom was a SERP participant, he did not receive any SERP payments during the fiscal year and therefore no amount is reported in this table. Upon Blake Nordstrom’s death on January 2, 2019, his surviving spouse began receiving the 50% survivor annuity. For the period from January 2, 2019 to the end of our fiscal year, Blake Nordstrom’s surviving spouse received SERP benefit payments totaling $29,167.


(f)	Personal Use of Company Aircraft

The Company owns two ~~aircraft~~aircraft which it uses for business purposes. On rare occasions, a Named Executive ~~Officer’s~~Officer may have a guest ~~accompanies~~accompany the executive on a business trip on the Company’s aircraft as an additional passenger. Only the direct variable costs (i.e., costs the Company incurs solely as a result of the passenger being on the aircraft) are included in determining the aggregate incremental cost to the Company. When travel does not meet the IRS standard for business travel, the cost of the travel is imputed as income to the executive, which is the Company’s practice to fully disclose. The Company does not reimburse the Named Executive Officers for taxes incurred as a result of the imputed income.

In fiscal year ~~2016,~~2018, Erik Nordstrom and Peter Nordstrom ~~was~~were each accompanied by a family member on one business trip. The costs reported are the total direct variable costs associated with the family member’s travel which include the tax deduction the Company was not able to take as a result of the nondeductible portion of the aircraft operating costs.

NORDSTROM, INC. - ~~2017~~2019 Proxy Statement 39

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Grants of Plan-Based Awards in Fiscal Year ~~2016~~

2018

The following table discloses the potential range of payouts ~~for:~~

•	~~non-equity incentive plan awards granted in fiscal year 2016. These awards are performance-based cash bonuses granted under the Executive Management Bonus Plan, as described on page 32; and~~

•	~~equity incentive plan awards granted in fiscal year 2016. These awards are performance share units granted under the 2010 Equity Incentive Plan, as described on page 33.~~

~~The~~for non-equity incentive plan awards granted in fiscal year 2018. These awards are performance-based cash bonuses granted under the Executive Management Bonus Plan, as described beginning on page 35. The table also ~~discloses:~~

•	~~the grant date fair value of performance share units granted under the 2010 Equity Incentive Plan in fiscal year 2016;~~

•	~~the number, price and grant date fair value of stock options granted under the 2010 Equity Incentive Plan in fiscal year 2016, as described on page 33; and~~

•	~~the number and grant date fair value of restricted stock units granted under the 2010 Equity Incentive Plan in fiscal year 2016, as described on page 33.~~

discloses the number and grant date fair value of restricted stock units granted under the 2010 Equity Incentive Plan in fiscal year 2018, as described on page 37.

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(b)

Estimated Future Payouts Under Equity Incentive
Plan Awards
All Other
Stock
Awards:
Number of Shares
of Stock or Units (#)(c)
All Other
Option
Awards:
Number of Securities
Underlying Options
(#)
Exercise
or Base Price of
Option Awards
($/Sh)
Grant
Date Fair
Value of
Stock and Option Awards ($)(d)
Name and Award
Grant Date
(a)
Approval Date Threshold ($)
Target
($)

Maximum ($)
Threshold (#) Target (#) Maximum (#)
Erik B. Nordstrom

Executive
Management Bonus
379,250
1,517,001
3,792,502

Restricted Stock Unit
Award
3/6/2018 3/3/2018

54,233 2,654,705
Anne L. Bramman

Executive Management
Bonus
174,375
697,500
1,743,751

Restricted Stock Unit
Award
3/6/2018 3/3/2018

72,778 3,562,483
Peter E. Nordstrom

Executive Management
Bonus
379,250
1,517,001
3,792,502

Restricted Stock Unit
Award
3/6/2018 3/3/2018

54,233 2,654,705
Kenneth J. Worzel

Executive Management
Bonus 247,875
991,500
2,478,752

Restricted Stock Unit Award 3/6/2018 3/3/2018

72,778 3,562,483
Christine F. Deputy

Executive Management Bonus 117,000
468,000
1,170,000

Restricted Stock Unit Award 3/6/2018 3/3/2018

52,123 2,551,421
Blake W. Nordstrom

Executive Management Bonus 379,250
1,517,001
3,792,502

Restricted Stock Unit Award 3/6/2018 3/3/2018

54,233 2,654,705

46 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement 40

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Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(b) Estimated Future Payouts Under
Equity Incentive
Plan Awards
(c) All Other
Stock
Awards:
Number All Other
Option
Awards:
Number of Exercise
or Base Grant
Date Fair
Value of
Stock
Name
and Award Grant
Date
(a) Approval
Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) of Shares
of Stock
or Units
(#)(d) Securities
Underlying
Options
(#)(e) Price of
Option
Awards
($/Sh)(f) and
Option
Awards
($)(g)
Peter E. Nordstrom
Executive Management Bonus 379,250 1,517,001 3,792,502
Performance Share Unit Award 2/29/2016 2/24/2016 9,462.00 12,616.00 22,078.00 556,618
Stock Option Award 2/29/2016 2/24/2016 82,141 51.32 1,294,994
Restricted Stock Unit Award 2/29/2016 2/24/2016 13,190 647,497
Stock Option Award 6/7/2016 6/7/2016 10,838 40.50 142,216
Restricted Stock Unit Award 6/7/2016 6/7/2016 11,145 426,631
Erik B. Nordstrom
Executive Management Bonus 379,250 1,517,001 3,792,502
Performance Share Unit Award 2/29/2016 2/24/2016 9,462.00 12,616.00 22,078.00 556,618
Stock Option Award 2/29/2016 2/24/2016 82,141 51.32 1,294,994
Restricted Stock Unit Award 2/29/2016 2/24/2016 13,190 647,497
Stock Option Award 6/7/2016 6/7/2016 10,838 40.50 142,216
Restricted Stock Unit Award 6/7/2016 6/7/2016 11,145 426,631
Kenneth J. Worzel
Executive Management Bonus 132,792 531,165 1,327,912
Performance Share Unit Award 2/29/2016 2/24/2016 4,383.75 5,845.00 10,228.75 257,881
Stock Option Award 2/29/2016 2/24/2016 38,057 51.32 599,987
Restricted Stock Unit Award 2/29/2016 2/24/2016 6,111 299,989
Stock Option Award 6/7/2016 6/7/2016 23,433 40.50 307,488
Restricted Stock Unit Award 6/7/2016 6/7/2016 24,098 922,472
Restricted Stock Unit Award 11/21/2016 11/16/2016 4,788 262,478

~~NORDSTROM, INC.~~ - ~~2017 Proxy Statement~~ 41

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(a) Grant Date

~~(a)~~

~~Grant Date~~

The grant date is the first ~~open-window~~business day of the open trading ~~day~~window that falls on or after the Compensation Committee’s approval of the grant.

~~(b)~~

~~Estimated Future Payouts Under Non-Equity Incentive Plan Awards~~

(b) Estimated Future Payouts Under Non-Equity Incentive Plan Awards

The amounts shown report the range of possible cash payouts for fiscal year ~~2016~~2018 associated with established levels of performance or achievement under the Executive Management Bonus Plan. The amounts shown in the “Threshold,” “Target” and “Maximum” columns reflect the payout opportunity associated with established levels of performance or achievement, as discussed beginning on page ~~32.~~35. For there to be any payout, ~~the~~ minimum performance ~~milestone~~milestones or achievement must be ~~achieved.~~

met.

Although the column heading refers to future payouts, ~~the~~fiscal year 2018 performance-based bonuses have already been earned and were paid to the Named Executive Officers in March ~~2017.~~2019. These cash payments are reported in the Summary Compensation Table on page ~~37,~~42, in column (e), “Non-Equity Incentive Plan Compensation.”

~~(c)~~

~~Estimated Future Payouts Under Equity Incentive Plan Awards~~

~~The numbers shown report the range~~

(c) All Other Stock Awards: Number of ~~potential performance share unit payouts for the three-year performance cycle~~Shares of the 2016 grant, beginning January 31, 2016 and ending February 2, 2019. Payouts are shown in units at 75%, 100% and 175% of the number of performance share units granted. If the threshold level of performance is not met, no payout will be earned.

~~(d)~~

~~All Other Stock Awards: Number of Shares of Stock or Units~~

Stock or Units

The numbers shown report the number of restricted stock units granted to the Named Executive Officers in fiscal year ~~2016~~2018 under the 2010 Equity Incentive Plan. The restricted stock units were granted ~~in fiscal year 2016~~on March 6, 2018 and vest equally over ~~a period of~~four years, ~~as described below, with vesting occurring after at least one year,~~beginning on ~~the tenth day of the month immediately following the date of grant.~~March 10, 2019. The restricted stock units granted to Blake Nordstrom vested on February 29, 2016 vest in four equal annual installments. The restricted stock units granted on June 7, 2016 vest 50% after two years and 50% after three years. The restricted stock units granted on November 21, 2016 vest in three equal annual installments. For more information about long-term incentive grant practices, see page 33.

~~(e)~~

~~All Other Option Awards: Number of Securities Underlying Options~~

an accelerated basis as of January 2, 2019. The numbers shown ~~report~~for Anne Bramman, Kenneth Worzel and Christine Deputy include the ~~number~~one-time restricted stock unit awards of ~~stock options granted to the Named Executive Officers~~45,965, 45,965 and 34,749, respectively, as discussed in fiscal year 2016 under the 2010 Equity Incentive Plan. The stock options granted on February 29, 2016 vest and become exercisable in four equal annual installments beginning one year from the tenth day of the month immediately following the date of grant. The stock options granted on June 7, 2016 vest 100% three years from the tenth day of the month immediately following the date of grant. For more information about long-term incentive grant practices, see page 33.

~~Under the 2010 Equity Incentive Plan,~~ the Compensation ~~Committee may grant different types~~Discussion and Analysis on page 37.

(d) Grant Date Fair Value of ~~equity, including stock options, stock appreciation rights, unrestricted shares, restricted shares, restricted stock units~~Stock and ~~performance share units. In fiscal year 2016, the Named Executive Officers were granted stock options, restricted stock units and performance share units.~~

~~(f)~~

~~Exercise or Base Price of Option Awards~~

~~The exercise prices of the stock options granted in fiscal year 2016 of $51.32 and $40.50 were the closing price of Common Stock on the grant dates, February 29, 2016 and June 7, 2016, respectively.~~

~~(g)~~

~~Grant Date Fair Value of Stock and Option Awards~~

Option Awards

The grant date fair value of the ~~performance share units,~~ restricted stock units ~~and stock options~~ was calculated in accordance with ASC 718. The reported value for performance share units was calculated by multiplying the number of performance share units granted by the fair value of a performance share unit on the date of grant, which was $44.12 on February 29, 2016. This is not the value received. The actual value the Named Executive Officers may receive will depend on whether the performance requirement is met and the market price of Common Stock at the end of the performance cycle.

The reported value for restricted stock units was calculated by multiplying the number of restricted stock units awarded by the fair value of a restricted stock unit on the date of grant. The fair value for the grant ~~which~~on March 6, 2018 was ~~$49.09, $38.28 and $54.82 on February 29, 2016, June 7, 2016 and November 21, 2016, respectively.~~$48.95. This is not the value received. The actual value the Named Executive Officers may receive will depend on whether the time-based vesting requirement is met and the market price of Common Stock at the time of any vesting.

The reported value for stock options was calculated by multiplying the number of options awarded by the fair value of an option on the date of grant, which was $15.77 and $13.12 on February 29, 2016 and June 7, 2016, respectively. The Named Executive Officers will only realize value from the stock options if the market price of Common Stock is higher than the grant price at the time of exercise. The actual value received by the Named Executive Officers will be the difference between the stock price at that future exercise date and the grant prices of $51.32 and $40.50 on February 29, 2016 and June 7, 2016, respectively.

NORDSTROM, INC. - ~~2017~~2019 Proxy Statement 42

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Outstanding Equity Awards at Fiscal Year-End ~~2016~~

2018

The following table provides information on the current holdings of stock options and stock awards by the Named Executive Officers as of the fiscal year ended ~~January 28, 2017.~~February 2, 2019. The table includes vested but unexercised stock options, unvested stock options, unvested restricted stock units and performance share units with time remaining in ~~their~~the three-year performance ~~cycles.~~cycle. Because Blake Nordstrom passed away prior to the end of the fiscal year, resulting in the transfer of all outstanding awards to his estate, nothing is reported for Blake Nordstrom in the table below. The ~~vesting~~vesting schedules for outstanding stock options and restricted stock units are provided on pages 4449 and ~~45, respectively. Additional information about the outstanding performance share units is provided on page 45.~~50. Information about the amount of Common Stock beneficially owned by the Named Executive Officers is provided in the Beneficial Ownership Table on page ~~62.~~

Option Awards Stock Awards
Number of Securities
Underlying
Unexercised Options
(#) Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised Option Number
of Shares
or Units
of Stock
That Market
Value of
Shares
or
Units of
Stock
That Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
Unexer- Unearned Exercise Option Have Not Have Not Have That Have Not
Grant Exer- cisable Options Price Expiration Vested Vested Not Vested Vested
Name Date cisable (a) (#) ($) Date (#)(b) ($) (#)(c) ($)(d)
Blake W. 2/28/2008 55,522 — 35.51 2/27/2018
Nordstrom 2/27/2009 127,251 — 12.58 2/27/2019
2/26/2010 83,578 — 34.50 2/26/2020
2/25/2011 74,994 — 42.48 2/25/2021
2/22/2012 73,493 — 49.15 2/22/2022
3/4/2013 74,671 24,892 50.26 3/4/2023
3/3/2014 30,373 30,374 57.16 3/3/2024
3/3/2014 3,810 163,182
2/24/2015 11,499 34,497 75.23 2/24/2025
2/24/2015 4,673 200,145
2/29/2016 — 82,141 51.32 2/28/2026
2/29/2016 12,676 542,913
6/7/2016 — 10,838 40.50 6/7/2026
6/7/2016 11,145 477,340
13,978.50 598,699
Michael G. 2/26/2010 42,983 — 34.50 2/26/2020
Koppel 2/25/2011 42,585 — 42.48 2/25/2021
2/22/2012 47,245 — 49.15 2/22/2022
3/4/2013 50,403 16,801 50.26 3/4/2023
3/3/2014 21,114 21,115 57.16 3/3/2024
3/3/2014 2,640 113,071
2/24/2015 8,313 24,942 75.23 2/24/2025
2/24/2015 3,246 139,026
2/29/2016 — 56,975 51.32 2/28/2026
2/29/2016 8,793 376,604
9,828.75 420,965
Peter E. 2/28/2008 51,556 — 35.51 2/27/2018
Nordstrom 2/27/2009 118,161 — 12.58 2/27/2019
2/26/2010 77,609 — 34.50 2/26/2020
2/25/2011 69,637 — 42.48 2/25/2021
2/22/2012 68,244 — 49.15 2/22/2022
3/4/2013 74,671 24,892 50.26 3/4/2023
3/3/2014 30,373 30,374 57.16 3/3/2024
3/3/2014 3,963 169,735
2/24/2015 11,499 34,497 75.23 2/24/2025
2/24/2015 4,673 200,145
2/29/2016 — 82,141 51.32 2/28/2026
2/29/2016 13,190 564,928
6/7/2016 — 10,838 40.50 6/7/2026
6/7/2016 11,145 477,340
13,978.50 598,699

70.

Option Awards Stock Awards

Equity Incentive Plan Awards:
Number of Securities Underlying Unexer-
cised Unearned Options
(#)

Number of Shares or Units of Stock That Have Not Vested
(#)(b)
Market Value of Shares or Units of Stock That Have Not Vested
($)
Equity Incentive Plan Awards:
Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)(c)

Equity Incentive Plan Awards:
Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(d)

Number of Securities
Underlying
Unexercised Options
(#)
Option Exercise Price
($)

Option Expiration Date
Name Grant Date
Exer-
cisable

Unexer-
cisable (a)

Erik B. Nordstrom 2/26/2010 77,609
—
34.50
2/26/2020
2/25/2011 69,637
—
42.48
2/25/2021
2/22/2012 68,244
—
49.15
2/22/2022
3/4/2013 99,563
—
50.26
3/4/2023
3/3/2014 60,747
—
57.16
3/3/2024
2/24/2015 34,497
11,499
75.23
2/24/2025
2/24/2015
1,499 67,950
2/29/2016
6,348 287,755
2/29/2016 41,070
41,071
51.32
2/28/2026
6/7/2016 —
10,838
40.50
6/7/2026
6/7/2016 5,573 252,624
2/28/2017
13,207
598,673
2/28/2017 9,663
28,990
46.66
2/28/2027
2/28/2017
20,724 939,419
3/6/2018 52,210 2,366,679
Anne L. Bramman 8/21/2017
12,234 554,567
3/6/2018
45,965 2,083,593
3/6/2018 26,813 1,215,433
Peter E. Nordstrom 2/26/2010 77,609
—
34.50
2/26/2020
2/25/2011 69,637
—
42.48
2/25/2021
2/22/2012 68,244
—
49.15
2/22/2022
3/4/2013 99,563
—
50.26
3/4/2023
3/3/2014 60,747
—
57.16
3/3/2024
2/24/2015 34,497
11,499
75.23
2/24/2025
2/24/2015 1,497 67,859
2/29/2016
6,338 287,302
2/29/2016 41,070
41,071
51.32
2/28/2026
6/7/2016 —
10,838
40.50
6/7/2026
6/7/2016 5,573 252,624
2/28/2017
13,207
598,673
2/28/2017 9,663
28,990
46.66
2/28/2027
2/28/2017
20,691 937,923
3/6/2018 52,210 2,366,679

48 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement 43

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	Option Awards						Stock Awards
				Equity Incentive Plan Awards: Number of Securities Underlying Unexer- cised Unearned Options (#)			Number of Shares or Units of Stock That Have Not Vested (#)(b)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(c)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(d)
		Number of Securities Underlying Unexercised Options (#)			Option Exercise Price ($)	Option Expiration Date
Name	Grant Date	Exer- cisable	Unexer- cisable (a)		Option Exercise Price ($)	Option Expiration Date
Kenneth J. Worzel	3/4/2013	40,536	—		50.26	3/4/2023
Kenneth J. Worzel	3/3/2014	26,141	—		57.16	3/3/2024
	2/24/2015	15,438	5,147		75.23	2/24/2025
	2/24/2015						697	31,595
	2/29/2016						3,056	138,528
	2/29/2016	19,028	19,029		51.32	2/28/2026
	6/7/2016	—	23,433		40.50	6/7/2026
	6/7/2016						12,049	546,181
	11/21/2016						1,596	72,347
	2/28/2017								5,625	254,981
	2/28/2017	4,116	12,348		46.66	2/28/2027
	2/28/2017						9,170	415,676
	3/6/2018						26,813	1,215,433
	3/6/2018						45,965	2,083,593
Christine F. Deputy	8/24/2015	15,070	5,024		67.34	8/24/2025
Christine F. Deputy	8/24/2015						1,517	68,766
	8/24/2015						3,254	147,504
	2/29/2016						2,674	121,212
	2/29/2016	16,650	16,650		51.32	2/28/2026
	6/7/2016	—	15,432		40.50	6/7/2026
	6/7/2016						7,935	359,694
	2/28/2017								5,497	249,179
	2/28/2017	4,021	12,066		46.66	2/28/2027
	2/28/2017						8,960	406,157
	3/6/2018						34,749	1,575,172
	3/6/2018						17,374	787,563

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Option Awards Stock Awards
Number of Securities
Underlying
Unexercised Options
(#) Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised Option Number
of Shares
or Units
of Stock
That Market
Value of
Shares
or
Units of
Stock
That Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
Unexer- Unearned Exercise Option Have Not Have Not Have That Have Not
Grant Exer- cisable Options Price Expiration Vested Vested Not Vested Vested
Name Date cisable (a) (#) ($) Date (#)(b) ($) (#)(c) ($)(d)
Erik B. 2/28/2008 51,556 — 35.51 2/27/2018
Nordstrom 2/27/2009 118,161 — 12.58 2/27/2019
2/26/2010 77,609 — 34.50 2/26/2020
2/25/2011 69,637 — 42.48 2/25/2021
2/22/2012 68,244 — 49.15 2/22/2022
3/4/2013 74,671 24,892 50.26 3/4/2023
3/3/2014 30,373 30,374 57.16 3/3/2024
3/3/2014 3,963 169,735
2/24/2015 11,499 34,497 75.23 2/24/2025
2/24/2015 4,673 200,145
2/29/2016 — 82,141 51.32 2/28/2026
2/29/2016 13,190 564,928
6/7/2016 — 10,838 40.50 6/7/2026
6/7/2016 11,145 477,340
13,978.50 598,699
Kenneth J. 2/25/2011 32,140 — 42.48 2/25/2021
Worzel 2/22/2012 32,678 — 49.15 2/22/2022
3/4/2013 30,401 10,135 50.26 3/4/2023
3/3/2014 13,070 13,071 57.16 3/3/2024
3/3/2014 1,706 73,068
8/25/2014 7,677 328,806
2/24/2015 5,145 15,440 75.23 2/24/2025
2/24/2015 2,091 89,558
2/29/2016 — 38,057 51.32 2/28/2026
2/29/2016 6,111 261,734
6/7/2016 — 23,433 40.50 6/7/2026
6/7/2016 24,098 1,032,117
11/21/2016 4,788 205,070
6,405.00 274,326

(a)	Number of Securities Underlying Unexercised Options: Unexercisable

The following table shows the grant date, vesting schedule and expiration date for all unvested stock options as of the fiscal year ended ~~January 28, 2017.~~February 2, 2019. All stock option grants have a four-year vesting schedule of 25% per year, with the exception of the grant on June 7, 2016, which vests 100% ~~after three years,~~ on June 10, 2019. All grants have a 10-year term.



Grant Date	Vesting Schedule	Expiration Date
~~3/4/2013~~2/24/2015	25% per year with a remaining vesting date of ~~3/4/2017~~2/24/2019	~~3/4/2023~~2/24/2025
~~3/3/2014~~	~~25% per year with remaining vesting dates of 3/3/2017 and 3/3/2018~~	~~3/3/2024~~
2/8/24/2015	25% per year with a remaining vesting ~~dates~~date of ~~2/24/2017, 2/24/2018 and 2/~~8/24/2019	2/8/24/2025
2/29/2016	25% per year with remaining vesting dates of ~~3/10/2017, 3/10/2018,~~ 3/10/2019 and 3/10/2020	2/28/2026
6/7/2016	100% on 6/10/2019	6/7/2026
2/28/2017	25% per year with remaining vesting dates of 3/10/2019, 3/10/2020 and 3/10/2021	2/28/2027

NORDSTROM, INC. - ~~2017~~2019 Proxy Statement 44

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(b)	Number of Shares or Units of Stock That Have Not Vested

The following table shows the grant date and vesting schedule for all unvested restricted stock units as of the fiscal year ended ~~January 28, 2017.~~February 2, 2019. The restricted stock unit grants have a four-year vesting schedule of 25% per year with the ~~exception~~following exceptions: Christine Deputy’s grant of 8,135 units on August 24, 2015 vests 20% per year over five years; the grant on June 7, 2016 ~~which~~ vests 50% after each of years two and ~~three, and the~~three; Kenneth Worzel’s grant of 4,788 units on November 21, 2016 ~~which~~ vests 33% after each of years one and two and 34% after year three; and Anne Bramman’s grant of 18,350 units on August 21, 2017 vests 33% after each of years one and two and 34% after year three.



Grant Date		Vesting Schedule
~~3/3/2014~~2/24/2015		25% per year with a remaining vesting date of 2/24/2019
8/24/2015		25% per year with a remaining vesting date of 8/24/2019
8/24/2015		20% per year with remaining vesting dates of 8/24/2019 and 8/24/2020
2/29/2016		25% per year with remaining vesting dates of 3/~~3/2017~~10/2019 and 3/~~3/2018~~10/2020
~~8/25/2014~~6/7/2016		50% in years 2 and 3 with a remaining vesting date of 6/10/2019
11/21/2016		33% in years 1 and 2 and 34% in year 3 with a remaining vesting date of 12/10/2019
2/28/2017		25% per year with remaining vesting dates of ~~8/25/2017~~3/10/2019, 3/10/2020 and ~~8/25/2018~~3/10/2021
~~2/24/2015~~8/21/2017	~~25% per~~	33% in years 1 and 2 and 34% in year 3 with remaining vesting dates of ~~2/24/2017, 2/24/2018~~9/10/2019 and ~~2/24/2019~~9/10/2020
~~2/29/2016~~3/6/2018		25% per year with vesting dates of 3/10/~~2017,~~2019, 3/10/~~2018,~~2020, 3/10/~~2019~~2021 and 3/10/~~2020~~
~~6/7/2016~~	~~50% on 6/10/2018 and 50% on 6/10/2019~~
~~11/21/2016~~	~~33% per year with vesting dates of 12/10/2017 and 12/10/2018 and 34% per year with a vesting date of 12/10/2019~~2022


(c)	Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested

The numbers reported are the outstanding performance share units granted in fiscal ~~years 2015~~year 2017. The performance share units are earned on the last day of the three-year performance cycle, February 1, 2020, if performance criteria have been met, and ~~2016. Both of these grants~~vest when the results have been certified by the Compensation Committee. This grant has time remaining in ~~their~~its three-year performance ~~cycles.~~cycle. If the performance ~~cycles for these grants~~cycle had ended as of the close of fiscal year ~~2016, 0%~~2018, 50% of the number of performance share units granted ~~in 2015 and 2016~~ would have been earned.

As required to be disclosed, the number of estimated shares reported for the ~~2015 and 2016 grants~~2017 grant is based on achieving the next higher performance measure, which pays out at ~~75%~~100% of the number of units granted, as shown in the performance share unit vesting schedule on page ~~33. See the Outstanding Equity Awards: Performance Share Units table below for detailed information about these awards.~~

37.


(d)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested

The amounts reported relate to the outstanding performance share units granted in fiscal ~~years 2015 and 2016. Both of these grants have~~year 2017. This grant has time remaining in ~~their~~its three-year performance ~~cycles.~~cycle. If the performance ~~cycles~~cycle for ~~these grants~~this grant had ended as of the close of fiscal year ~~2016, 0%~~2018, 50% of the number of performance share units granted ~~in 2015 and 2016~~ would have been earned.

As required to be disclosed, the payout values reported are based on achieving the next higher performance measure, which pays out at ~~75%~~100% of the number of units granted. The value of estimated payouts has been calculated using the closing price of Common Stock on ~~January 27, 2017,~~February 1, 2019, the last market trading day of the fiscal year, of ~~$42.83.~~$45.33. The payout does not include estimated dividend amounts as the Company does not pay dividends on unvested performance share units. ~~See the Outstanding Equity Awards: Performance Share Units table below for detailed information about these awards.~~

~~Outstanding Equity Awards: Performance Share Units~~

The table below shows the detail for the outstanding performance share units that were granted in fiscal years 2015 and 2016 under the 2010 Equity Incentive Plan. The number and value of these outstanding performance share units are shown in columns (c) and (d) of the Outstanding Equity Awards at Fiscal Year-End 2016 table on pages 43 and 44. These 2015 and 2016 performance share unit grants have one and two years remaining in their three-year performance cycles, respectively. More information about performance share units and long-term incentive grant practices is provided on page 33.

Estimated Shares
(at 75% of the Number Granted Value of
Three-Year Performance Cycle for the 2015 and 2016 Grants) Estimated Payout
Name (a) (#) ($)
Blake W. Nordstrom 2/1/2015 – 2/3/2018 4,516.50 193,442
1/31/2016 – 2/2/2019 9,462.00 405,257
Michael G. Koppel 2/1/2015 – 2/3/2018 3,265.50 139,861
1/31/2016 – 2/2/2019 6,563.25 281,104
Peter E. Nordstrom 2/1/2015 – 2/3/2018 4,516.50 193,442
1/31/2016 – 2/2/2019 9,462.00 405,257
Erik B. Nordstrom 2/1/2015 – 2/3/2018 4,516.50 193,442
1/31/2016 – 2/2/2019 9,462.00 405,257
Kenneth J. Worzel 2/1/2015 – 2/3/2018 2,021.25 86,570
1/31/2016 – 2/2/2019 4,383.75 187,756

~~(a)~~

~~Performance Cycle~~

The performance share units are earned on the last day of the three-year performance cycle if performance criteria have been met, and become vested when the results have been certified by the Compensation Committee.

50 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement45

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Option Exercises and Stock Vested in Fiscal Year ~~2016~~

2018

The following table provides information for the Named Executive Officers on:

•	~~the number of shares of Common Stock acquired and value realized from stock option exercises in fiscal year 2016; and~~

•	~~the number of shares of Common Stock acquired and value realized from performance share units and restricted stock units that vested with respect to fiscal year 2016.~~

Option Awards Stock Awards
Number of Shares Value Realized Number of Shares Value Realized
Acquired on Exercise on Exercise Acquired on Vesting on Vesting
Name (#) ($)(a) (#)(b) ($)(c)
Blake W. Nordstrom 95,371 1,112,978 3,975 209,899
Michael G. Koppel 125,330 4,794,512 2,758 145,633
Peter E. Nordstrom 29,992 252,392 3,539 186,004
Erik B. Nordstrom 29,992 252,449 3,539 186,004
Kenneth J. Worzel — — 5,385 279,180

~~(a)~~

~~Value Realized on Exercise~~

~~The amount realized equals the aggregate difference between the fair market value of Common Stock on the dates of exercise and the grant prices, multiplied by~~ the number of shares of Common Stock acquired ~~on exercise.~~

and value realized from stock option exercises in fiscal year 2018; and

the number of shares of Common Stock acquired and value realized from performance share units and restricted stock units that vested with respect to fiscal year 2018.



	Option Awards		Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)	Number of Shares Acquired on Vesting (#)(a)	Value Realized on Vesting ($)(b)
Erik B. Nordstrom	169,717	5,646,094	22,718	1,170,494
Anne L. Bramman	—	—	6,116	400,537
Peter E. Nordstrom	169,717	5,557,886	21,061	1,083,875
Kenneth J. Worzel	64,818	1,298,088	23,618	1,260,447
Christine F. Deputy	—	—	22,412	1,262,623
Blake W. Nordstrom	182,773	6,914,212	21,122	1,087,145

~~(b)~~
(a)	Number of Shares Acquired on Vesting

The numbers reported are the restricted stock units that vested during the fiscal year. The numbers reported for Erik Nordstrom, Peter Nordstrom and Blake Nordstrom include 3,133, 2,023 and ~~Michael Koppel include 514 and 356~~2,023 shares, respectively, which vested on an accelerated basis in ~~2016~~2018 solely to satisfy Social Security, Medicare or income tax withholding obligations of retirement-eligible employees with respect to their restricted stock unit awards.

The numbers reported for Blake Nordstrom include those restricted stock units that vested during the fiscal year, prior to his date of death, January 2, 2019. An additional 86,370 units vested on an accelerated basis upon his date of death.

~~(c)~~
(b)	Value Realized on Vesting

The amounts disclosed for ~~Blake~~Erik Nordstrom, Peter Nordstrom and ~~Michael Koppel~~Blake Nordstrom include the number of shares of Common Stock withheld on vesting of restricted stock units to satisfy tax withholding obligations as described previously, multiplied by ~~$54.54,~~$52.99, the closing price of Common Stock on ~~October 12, 2016,~~November 27, 2018, the vesting date.

The amounts reported for Blake Nordstrom include the value received during the fiscal year, prior to his date of death, January 2, 2019. An additional $4,100,848 was realized from units that vested on an accelerated basis upon his date of death.

Pension Benefits

The Company’s original Supplemental Executive Retirement Plan (“(‘SERP”) was introduced in the 1980s. Over the years, the plan design changed to better meet the purpose of encouraging designated executives to stay with Nordstrom throughout their careers and rewarding their significant and sustained contribution to the Company’s success by adding to their financial security upon retirement. The SERP was closed to new entrants, beginning in 2012.

~~All of~~

The Named Executive Officers, except Anne Bramman and Christine Deputy, who both joined the Company after the SERP had been closed to new entrants, are or were eligible for the SERP. The eligible Named Executive Officers are ~~eligible for the SERP and are~~ entitled to receive ~~the~~their full retirement benefit at age 58. ~~The~~Their full benefit is equal to 1.6% multiplied by final average pay, as described ~~below,~~in a following paragraph, and ~~the executive’s~~their years of credited service, up to a maximum of 25 years. ~~An executive~~They may retire early and receive a reduced benefit if ~~he or she is~~they are between the ages of 53 and 57 with at least 10 years of credited service and the Board approves the early retirement. The early retirement benefit is reduced 10% for each year that ~~the~~their retirement age is less than 58. ~~An executive who retires~~If they retire after age 58, isthey are entitled to ~~his or her~~their full retirement benefit, increased with interest of 5% per year, compounded annually, for each full year worked beyond age 58, for a maximum of 10 years. The annual SERP benefit is capped at $700,000.

Final average pay is the average base salary and annual performance-based cash bonus of the highest 36 months over the longer of:

•	the most recent five years of service; or

•	~~the entire period of service after the executive’s 53~~^rd~~birthday.~~

~~There is no offset~~ or ~~reduction in~~

the ~~Named Executive Officers’ SERP benefit for Social Security or other Company retirement benefits such as~~entire period of service after the ~~401(k) Plan.~~

executive’s 53rd birthday.

NORDSTROM, INC. - 2019 Proxy Statement 51

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The annual SERP benefit is paid upon retirement for the remaining life of the executive with a 50% annuity paid to a surviving spouse or life partner after the executive’s death. A surviving spouse or life partner also receives a 50% survivor benefit if the executive dies before retiring. The amount of this survivor benefit depends on the executive’s age and years of credited service at the time of death.

Blake Nordstrom was eligible for his full SERP benefit upon his death on January 2, 2019. His benefit will be paid as a 50% survivor benefit to his surviving spouse.

The SERP provides that no benefit will be paid to an executive whose employment is terminated for cause, which includes competitive behavior against the Company, as determined by the Compensation Committee in the exercise of its discretion in accordance with the Plan. The Compensation Committee also has discretion to discontinue payment of benefits under the SERP if the retired executive is found to have engaged in misconduct or in competitive behavior against the Company.

Information about payment of the SERP benefit related to change in control is provided on page 58 in footnote (b) to the Potential Payments Upon Termination or Change in Control at Fiscal Year-End ~~2016 table on page 51.~~

2018 table.

Because the SERP is a nonqualified deferred compensation plan, the Company is not obligated to fund it. However, the Company does set aside funds to assist in the payment of future benefit obligations. If the Company were to become insolvent, participants would be unsecured general creditors, and there is no guarantee that funds would be available to pay all creditors in full. See the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 28, 2017,~~February 2, 2019, filed with the SEC, for a discussion of the benefit obligation.

~~NORDSTROM, INC. -~~ ~~2017~~~~Proxy Statement~~46

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Fiscal Year ~~2016~~2018 Pension Benefits Table

The following table shows the present value of the accumulated ~~Supplemental Executive Retirement Plan (“SERP”) benefits~~SERP benefit payable to each of the Named Executive Officers, based on the number of years of service credited under the Plan to each Named Executive Officer and actuarial assumptions consistent with those used in the Company’s financial statements to calculate the Company’s obligations under the Plan. See the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 28, 2017,~~February 2, 2019, filed with the SEC, for a discussion of the benefit obligation and assumptions used.

Number of Years Present Value of Payments During
Age Credited Service Accumulated Benefit Last Fiscal Year
Name Plan Name (a) (#)(b) ($)(c) ($)
Blake W. Nordstrom SERP 56 25 11,035,225 —
Michael G. Koppel SERP 60 25 9,908,499 —
Peter E. Nordstrom SERP 54 25 10,324,839 —
Erik B. Nordstrom SERP 53 25 9,723,295 —
Kenneth J. Worzel SERP 52 7 1,456,767 —



Name	Plan Name	Age (a)	Number of Years Credited Service (#)(b)	Present Value of Accumulated Benefit ($)(c)	Payments During Last Fiscal Year ($)
Erik B. Nordstrom	SERP	55	25	10,576,866	—
Anne L. Bramman	—	51	—	—	—
Peter E. Nordstrom	SERP	56	25	11,232,918	—
Kenneth J. Worzel	SERP	54	9	2,936,884	—
Christine F. Deputy	—	53	—	—	—
Blake W. Nordstrom	SERP	—	—	—	—

~~(a)~~
(a)	Age

Age is as of ~~January 28, 2017,~~February 2, 2019, the last day of the fiscal year.

~~(b)~~
(b)	Number of Years Credited Service

Although ~~Blake Nordstrom, Peter~~Erik Nordstrom and ~~Erik~~Peter Nordstrom each have 3739 or more years of service, the number of years of credited service under the SERP is capped at 25. Prior to 2006, the Compensation Committee selectively awarded additional years of service to executives hired mid-career so that they could earn the full 25 years of service by the time they reached the retirement age of 58. Michael Koppel received these additional years and has earned the equivalent of 25 years of service. Eight of Michael Koppel’s 25 years are additional years of service.

~~(c)~~
(c)	Present Value of Accumulated Benefit

The amounts shown are based on athe full retirement age of ~~58, or actual age on the last day of the fiscal year, January 28, 2017, if retirement is after age~~ 58. Kenneth Worzel is not currently entitled to receive any benefits, should he leave the Company, because he has not met the minimum retirement age of 53 with at least 10 years of service and as such, the amount is not vested. Blake Nordstrom, PeterErik Nordstrom and ~~Erik~~Peter Nordstrom have met the minimum retirement age ~~of 53~~ with at least 10 years of service and would be eligible for early retirement with prior approval from the Board. If the Board approved early retirement, ~~they~~Erik Nordstrom and Peter Nordstrom would be entitled to receive a reduced SERP benefit ~~with a~~having present ~~value~~values as of the end of the fiscal year of ~~$9,859,584, $7,685,370~~$8,730,232 and ~~$6,381,935,~~$10,018,456, respectively. Michael Koppel has met the normal retirement age of 58 and is entitled to receive a full SERP benefit, increased by 5% per year, compounded annually, for each year worked beyond age 58, with a present value as of the end of the fiscal year of $9,908,499, as shown above. These amounts are reported in the Potential Payments Upon Termination or Change of Control at Fiscal Year-End ~~2016~~2018 table on page ~~49.~~

55.

52 NORDSTROM, INC. - 2019 Proxy Statement

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Nonqualified Deferred Compensation

The Company offers participation in the ~~Executive~~Nordstrom Deferred Compensation Plan (“~~EDCP”~~NDCP”) to ~~designated leadership-level~~ employees, including the Named Executive Officers, who meet a minimum compensation threshold. Under this Plan, a participant may defer up to 80% of base salary, up to 100% of an annual performance-based bonus and up to 100% of any vested performance share units, less applicable payroll taxes.

Deferral elections ~~generally~~ are irrevocable and are made in compliance with Section 409A of the IRC. If a participant’s ~~EDCP~~NDCP deferrals cause a reduction in the Company’s 401(k) match contribution, the Company may deposit a make-up contribution into the participant’s ~~EDCP~~NDCP account. ~~Michael Koppel and Kenneth Worzel participate in~~The Company also provides a dollar for dollar matching contribution, up to 4% of eligible pay over the ~~EDCP and neither received a make-up contribution in the fiscal~~401(k) calendar year ~~ended January 28, 2017 because the Company’s contribution to Michael Koppel and Kenneth Worzel’s 401(k) Plan accounts was not reduced due to any~~compensation limit, on deferrals into the ~~EDCP.~~

NDCP by eligible participants. The Company may also make a discretionary profit-based match up to an additional 2% of eligible pay over the 401(k) calendar year compensation limit. Participants in the Company’s SERP are not eligible for this matching contribution. Christine Deputy is not a participant in the SERP and was eligible for and received a NDCP match for deferrals made in calendar year 2018.

Plan participants may direct their cash deferrals to deemed investment alternatives, priced and valued similar to retail mutual funds. As of the end of the fiscal year, the Company offered 2118 deemed investment alternatives. In addition, ~~plan~~Plan participants are offered a fixed rate option, which was ~~4.85% for calendar year 2016 and is~~ 4.4% for calendar year ~~2017,~~2018 and is 4.5% for calendar year 2019, which is not subsidized by the Company but rather is a rate based on guaranteed contractual returns from a third-party insurance company provider. With the exception of the fixed rate fund, participants may change their investment allocations among these investment alternatives daily. Gains and losses for cash deferrals are credited to participant accounts daily, based on their investment elections. The deemed investment alternatives for cash do not include Common Stock. Vested performance share units that are deferred into the ~~EDCP~~NDCP remain as stock units until distribution.

~~NORDSTROM, INC. -~~ ~~2017 Proxy Statement~~47

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Fiscal Year ~~2016~~2018 Nonqualified Deferred Compensation Table

The following table discloses information on nonqualified deferred compensation for the Named Executive Officers under the Company’s ~~EDCP~~NDCP for the fiscal year ended ~~January 28, 2017.~~February 2, 2019. The Company’s SERP is also a nonqualified plan. Information regarding benefits payable to Named Executive Officers under the SERP is provided on pages 4651 and ~~47.~~

Executive Registrant Aggregate Aggregate
Contributions in Last Contributions in Last Earnings in Last Withdrawals / Aggregate Balance at
Fiscal Year Fiscal Year Fiscal Year Distributions Last Fiscal Year-End
Name ($)(a) ($) ($)(b) ($) ($)(c)
Blake W. Nordstrom — — — — —
Michael G. Koppel — — (66,730) — 2,841,908
Peter E. Nordstrom — — — — —
Erik B. Nordstrom — — — — —
Kenneth J. Worzel 9,565 — 22,820 — �� 551,958

52.



Name	Executive Contributions in Last Fiscal Year ($)(a)	Registrant Contributions in Last Fiscal Year ($)(b)	Aggregate Earnings in Last Fiscal Year ($)(c)		Aggregate Withdrawals/Distributions ($)	Aggregate Balance at Last Fiscal Year-End ($)(d)
Erik B. Nordstrom	—	—	—		—	—
Anne L. Bramman	2,695	—	5		—	2,700
Peter E. Nordstrom	—	—	—		—	—
Kenneth J. Worzel	23,913	—	(21,675	)	—	669,043
Christine F. Deputy	30,852	43,156	4,674		—	137,300
Blake W. Nordstrom	—	—	—		—	—

~~(a)~~
(a)	Executive Contributions in Last Fiscal Year

~~Kenneth Worzel elected to defer $10,000 of base salary earned~~

The amounts reported are the deferrals made during the fiscal year.


(b)	Registrant Contributions in Last Fiscal Year

The amount reported for Christine Deputy is the Company matching contribution on her deferrals during calendar year ~~2016 into the EDCP. Due to the timing of our fiscal year end, $435 of this was attributed to fiscal year 2015 and $9,565 was attributed to fiscal year 2016.~~

2018 as described above.

~~(b)~~
(c)	Aggregate Earnings in Last Fiscal Year

The amounts include the total interest or other earnings (loss) accrued in fiscal year 2018 on the entire ~~EDCP~~NDCP account balance, including deferred performance share units.

~~(c)~~
(d)	Aggregate Balance at Last Fiscal Year-End

The amounts shown are the total ~~EDCP~~NDCP balances, including earnings on deferrals, as of ~~January 28, 2017. The amount for Michael Koppel, excluding earnings on deferrals, has been previously disclosed in the Summary Compensation Table in our prior~~February 2, 2019.

NORDSTROM, INC. - 2019 Proxy ~~Statements.~~

Statement 53

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Potential Payments Upon Termination or Change in Control

The information on the following pages describes and quantifies certain amounts that would become payable under existing compensation plans if the Named Executive Officers’ employment had terminated on ~~January 28, 2017,~~February 2, 2019, the last day of the fiscal year. The amounts are based on each executive’s compensation and years of service as of that date and, if applicable, based on the closing price of Common Stock on ~~January 27, 2017,~~February 1, 2019, the last market trading day of the fiscal year, of ~~$42.83.~~$45.33. The estimates are based on all relevant plans effective at the end of the fiscal year and information available at that time. Actual values would reflect specific circumstances at the time of any termination, the plans and provisions effective if and when a termination event occurs and any other applicable factors.

~~Employment Agreements~~

Employment Agreements

The Company does not have employment agreements with any Nordstrom employees, including the Named Executive Officers. The Company maintains a leadership separation plan to provide a broad group of leadership employees an appropriate level of severance benefits in the event of separation of service ~~under certain circumstances.~~due to job elimination. Except as described on the following pages, there are no agreements, arrangements or plans that entitle the Named Executive Officers to enhanced benefits upon termination of their employment.

54 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement48

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Potential Payments Upon Termination or Change in Control at Fiscal Year-End ~~2016~~

2018

The following table shows various termination scenarios and payments that would be triggered under the Company’s compensation plans.

Termination Change in
Death Disability Retirement without Cause Control
Name and Potential Payment ($) ($) ($) ($) ($)
Blake W. Nordstrom
Continued or Accelerated Vesting of Equity Awards^(a) 1,408,833 1,408,833 1,408,833 1,408,833 —
Vested SERP Benefit^(b) 4,823,168 — 9,859,584 9,859,584 —
Executive Deferred Compensation Plan Survivor Benefit^(c) — — — — —
Life Insurance Proceeds^(d) 948,000 — — — —
Retiree Health Care Benefit^(e) 157,895 351,907 351,907 351,907 —
Separation Benefit^(f) — — — — —
Disability Insurance Benefit^(g) — 35,000 — — —
Executive Management Bonus^(h) — — — — —
Total Value of Incremental Benefits 7,337,896 1,795,740 11,620,324 11,620,324 —
Michael G. Koppel
Continued or Accelerated Vesting of Equity Awards^(a) 628,702 628,702 628,702 628,702 —
Vested SERP Benefit^(b) 4,888,206 9,908,499 9,908,499 9,908,499 —
Executive Deferred Compensation Plan Survivor Benefit^(c) 2,026,920 — — — —
Life Insurance Proceeds^(d) 988,000 — — — —
Retiree Health Care Benefit^(e) 123,339 255,752 255,752 255,752 —
Separation Benefit^(f) — — — 203,427 —
Disability Insurance Benefit^(g) — 35,000 — — —
Executive Management Bonus^(h) — — — — —
Total Value of Incremental Benefits 8,655,167 10,827,953 10,792,953 10,996,380 —
Peter E. Nordstrom
Continued or Accelerated Vesting of Equity Awards^(a) 1,437,400 1,437,400 — — —
Vested SERP Benefit^(b) 3,902,577 — 7,685,370 7,685,370 —
Executive Deferred Compensation Plan Survivor Benefit^(c) — — — — —
Life Insurance Proceeds^(d) 948,000 — — — —
Retiree Health Care Benefit^(e) — — — — —
Separation Benefit^(f) — — — — —
Disability Insurance Benefit^(g) — 35,000 — — —
Executive Management Bonus^(h) — — — — —
Total Value of Incremental Benefits 6,287,977 1,472,400 7,685,370 7,685,370 —
Erik B. Nordstrom
Continued or Accelerated Vesting of Equity Awards^(a) 1,437,400 1,437,400 — — —
Vested SERP Benefit^(b) 3,095,540 — 6,381,935 6,381,935 —
Executive Deferred Compensation Plan Survivor Benefit^(c) — — — — —
Life Insurance Proceeds^(d) 948,000 — — — —
Retiree Health Care Benefit^(e) — — — — —
Separation Benefit^(f) — — — — —
Disability Insurance Benefit^(g) — 35,000 — — —
Executive Management Bonus^(h) — — — — —
Total Value of Incremental Benefits 5,480,940 1,472,400 6,381,935 6,381,935 —
Kenneth J. Worzel
Continued or Accelerated Vesting of Equity Awards^(a) 1,839,882 1,839,882 — — —
Vested SERP Benefit^(b) 483,471 — — — —
Executive Deferred Compensation Plan Survivor Benefit^(c) — — — — —
Life Insurance Proceeds^(d) 938,000 — — — —
Retiree Health Care Benefit^(e) — — — — —
Separation Benefit^(f) — — — 390,720 —
Disability Insurance Benefit^(g) — 35,000 — — —
Executive Management Bonus^(h) — — — — —
Total Value of Incremental Benefits 3,261,353 1,874,882 — 390,720 —

Name and Potential Payment
Death
($)

Disability
($)

Retirement
($)

Termination
without Cause
($)

Qualifying Termination
Following a Change in
Control
($)

Erik B. Nordstrom
Continued or Accelerated Vesting of Equity Awards^(a)
4,166,952
4,166,952
3,861,980
3,861,980
4,266,134
Vested SERP Benefit^(b)
4,220,346
—
8,730,232
8,730,232
8,730,232
Life Insurance Proceeds^(c)
948,125
—
—
—
—
Retiree Health Care Benefit^(d)
159,465
362,387
362,387
362,387
362,387
Separation Benefit^(e)
—
—
—
—
—
Disability Insurance Benefit^(f)
—
35,000
—
—
—
Executive Management Bonus^(g)
—
—
—
—
—
Total Value of Incremental Benefits 9,494,888
4,564,339
12,954,599
12,954,599
13,358,753
Anne L. Bramman
Continued or Accelerated Vesting of Equity Awards^(a)
3,853,594
3,853,594
—
—
3,853,594
Vested SERP Benefit^(b)
—
—
—
—
—
Life Insurance Proceeds^(c)
968,750
—
—
—
—
Retiree Health Care Benefit^(d)
—
—
—
—
—
Separation Benefit^(e)
—
—
—
400,564
400,564
Disability Insurance Benefit^(f)
—
35,000
—
—
—
Executive Management Bonus^(g)
—
—
—
—
—
Total Value of Incremental Benefits 4,822,344
3,888,594
—
400,564
4,254,158
Peter E. Nordstrom
Continued or Accelerated Vesting of Equity Awards^(a)
4,164,912
4,164,912
3,859,940
3,859,940
4,264,094
Vested SERP Benefit^(b)
5,090,904
—
10,018,456
10,018,456
10,018,456
Life Insurance Proceeds^(c)
948,125
—
—
—
—
Retiree Health Care Benefit^(d)
150,366
333,284
333,284
333,284
333,284
Separation Benefit^(e)
—
—
—
—
—
Disability Insurance Benefit^(f)
—
35,000
—
—
—
Executive Management Bonus^(g)
—
—
—
—
—
Total Value of Incremental Benefits 10,354,307
4,533,196
14,211,680
14,211,680
14,615,834
Kenneth J. Worzel
Continued or Accelerated Vesting of Equity Awards^(a)
4,701,801
4,701,801
—
—
4,744,049
Vested SERP Benefit^(b)
1,494,790
—
—
—
—
Life Insurance Proceeds^(c)
1,000,000
—
—
—
—
Retiree Health Care Benefit^(d)
—
—
—
—
—
Separation Benefit^(e)
—
—
—
549,455
549,455
Disability Insurance Benefit^(f)
—
35,000
—
—
—
Executive Management Bonus^(g)
—
—
—
—
—
Total Value of Incremental Benefits 7,196,591
4,736,801
—
549,455
5,293,504
Christine F. Deputy
Continued or Accelerated Vesting of Equity Awards^(a)
3,623,921
3,623,921
—
—
3,665,217
Vested SERP Benefit^(b)
—
—
—
—
—
Life Insurance Proceeds^(c)
731,250
—
—
—
—
Retiree Health Care Benefit^(d)
—
—
—
—
—
Separation Benefit^(e)
—
—
—
308,622
308,622
Disability Insurance Benefit^(f)
—
35,000
—
—
—
Executive Management Bonus^(g)
—
—
—
—
—
Total Value of Incremental Benefits 4,355,171
3,658,921
—
308,622
3,973,839

NORDSTROM, INC. - ~~2017~~2019 Proxy Statement49

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(a)	Continued or Accelerated Vesting of Equity Awards

As of the end of fiscal year ~~2016,~~2018, the Named Executive Officers had outstanding equity awards under ~~the~~our 2004 and 2010 Equity Incentive Plans. Treatment of the awards under various termination scenarios is described below.

Stock Options

Death or Disability

The stock option agreements under the Company’s 2004 and 2010 Equity Incentive Plan provide that if a participant’s employment is terminated by reason of death or disability, stock options granted more than six months prior to the termination event will immediately vest. The stock option agreements ~~under the Company’s 2004 and 2010 Equity Incentive Plans~~ provide that if a participant’s employment is terminated by reason of death or disability, vested stock options may be exercised by the participant or participant’s beneficiary during the period ending four years after termination, provided the 10-year term of the grant has not expired.

The amounts shown in the table include the values, as of the end of fiscal year ~~2016,~~2018, of unvested stock options that would immediately vest and be exercisable during the period ending four years after termination.

If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then the post-separation vesting and exercise rights will cease immediately and all outstanding vested and unvested options under such grants will be automatically forfeited.

Retirement or Termination without Cause

The stock option agreements under the 2004 and 2010 Equity Incentive Plans generally provide that if a participant satisfies a minimum age and years of service requirement and the participant’s employment is terminated by reason of retirement or termination without cause, stock options granted more than six months prior to termination will continue to vest and may be exercised during the period ending four years after termination, provided the 10-year term of the grant has not expired.

~~The amounts shown in the table for Blake~~ Erik Nordstrom and ~~Michael Koppel include~~Peter Nordstrom qualify for this continued vesting as they have reached the ~~values,~~minimum retirement age of 55 with at least 10 years of service. The stock option grant on June 7, 2016, under which Erik Nordstrom and Peter Nordstrom each received options to purchase 10,838 shares, does not provide for this continued vesting upon retirement or termination.

The closing price of Common Stock as of the end of the fiscal year ~~2016,~~2018 was lower than the exercise prices of the unvested stock options that would continue to vest and be exercisable during the ~~period ending~~earlier of four years after ~~termination. These executives qualify for this continued vesting upon retirement as~~termination or the 10-year term date of the ~~end of~~grant. Therefore, no amounts are included in the ~~fiscal year since they have each reached the minimum retirement age of 55 with at least 10 years of service.~~

table for Erik Nordstrom and Peter Nordstrom.

Qualifying Termination Following a Change in Control

The Named Executive Officers are not entitled to any payment or accelerated benefit upon a change in control with respect to their awards. However, under the 2010 Equity Incentive Plan, a Named Executive Officer will generally be entitled to accelerated vesting if the executive experiences a qualifying termination (termination by the Company without cause or termination by the executive for good reason) within 12 months following a change in control of the Company, unless the Compensation Committee acts to prevent acceleration or the award is of a type which would continue in effect notwithstanding the occurrence of the change in control. Generally, a change in control occurs upon:

•	~~the merger or consolidation of the Company with or into another entity;~~

•	~~the sale, transfer or other disposition of all or substantially all the Company’s assets;~~

•	~~a change in composition of 50% or more of the Board; or~~

•	any transaction as a result of which any person is the “beneficial owner” of securities of the Company representing at least 25% of the total voting power of the Company’s outstanding voting securities.

the merger or consolidation of the Company with or into another entity;

the sale, transfer or other disposition of all or substantially all the Company’s assets;

a change in composition of 50% or more of the Board; or

any transaction as a result of which any person is the “beneficial owner” of securities of the Company representing at least 30% of the total voting power of the Company’s outstanding voting securities.

The amounts shown include the values, as of the end of fiscal year 2018, of unvested stock options that would vest if the Named Executive Officers experienced a qualifying termination within 12 months following a change in control of the Company and the Committee did not act to prevent acceleration of the awards.

56 NORDSTROM, INC. - 2019 Proxy Statement

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Performance Share Units

Death ~~Disability, Retirement~~ or ~~Termination without Cause~~

Disability

The performance share unit award ~~agreements~~agreement under the 2010 Equity Incentive Plan ~~provide~~provides that if ~~the~~a participant’s employment is terminated before the end of a performance cycle by reason of death ~~disability~~ or ~~retirement,~~disability, the participant, or participant’s beneficiary, will be entitled to a prorated payment, based on the period of time the ~~executive~~participant worked during the performance cycle, with respect to any performance share units granted more than six months prior to termination that were earned during the performance cycle.

~~Both the 2015 and 2016 grants have~~

The 2017 grant has time remaining in ~~their~~its three-year performance ~~cycles.~~cycle. If the performance ~~cycles~~cycle for ~~these grants~~this grant had ended as of the close of fiscal year ~~2016, 0%~~2018, 50% of the number granted ~~in 2015 and 2016~~ would have been earned. Therefore, nothe amounts ~~for performance share units are reported~~included in the ~~table.~~

table are based on a payout at 50% of the prorated number.

If, during the term of any outstanding performance cycle, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then all outstanding vested but not settled and any unvested portions of the performance share unit awards will be automatically forfeited.

Retirement or Termination without Cause

The performance share unit award agreement under the 2010 Equity Incentive Plan provides that if a participant satisfies a minimum age and years of service requirement and the participant’s employment is terminated before the end of the performance cycle by reason of retirement or termination without cause, the participant will be entitled to a prorated payment, based on the period of time the participant worked during the performance cycle, with respect to any performance share units granted more than six months prior to termination that were earned during the performance cycle. Both Erik Nordstrom and Peter Nordstrom qualify for this prorated payment upon retirement as of the end of the fiscal year.

The 2017 grant has time remaining in its three-year performance cycle. If the performance cycle for this grant had ended as of the close of fiscal year 2018, 50% of the number granted would have been earned. Therefore, the amounts included in the table for Erik Nordstrom and Peter Nordstrom are based on a payout at 50% of the prorated number.

Qualifying Termination Following a Change in Control

The Named Executive Officers are not entitled to any payment or accelerated benefit upon a change in control with respect to their performance share units. However, a Named Executive Officer will generally be entitled to accelerated vesting if the executive experiences a qualifying termination (termination by the Company without cause or termination by the executive for good reason) within 12 months following a change in control of the Company, unless the Compensation Committee acts to prevent acceleration or the award is of a type which would continue in effect notwithstanding the occurrence of the change in control. See the Change in Control paragraph under Stock Options on page 56 for information about when a change in control occurs.

The 2017 grant has time remaining in its three-year performance cycle. If the performance cycle for this grant had ended as of the close of fiscal year 2018, 50% of the number granted would have been earned. Therefore, the amounts included in the table are based on a payout at 50% of the number granted.

Restricted Stock Units

Death or Disability

The restricted stock unit award agreements under the 2010 Equity Incentive Plan provide that if a participant’s employment is terminated by reason of death or disability, restricted stock units granted more than six months prior to the termination event will immediately vest.

The amounts shown in the table include the values, as of the end of fiscal year ~~2016,~~2018, of unvested restricted stock units that would immediately vest.

If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then any unvested units and any Common Stock delivered on vesting under such grants will be automatically forfeited.

~~NORDSTROM, INC. -~~ ~~2017~~~~Proxy Statement~~50

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Retirement or Termination without Cause

The restricted stock unit award agreements under the 2010 Equity Incentive Plan generally provide that if a participant satisfies a minimum age and years of service requirement and the participant’s employment is terminated by reason of retirement or termination without cause, restricted stock units granted more than six months prior to termination will continue to vest. The restricted stock ~~units granted~~unit grant on June 6,7, 2016, under which Erik Nordstrom and ~~November 21, 2016 do~~Peter Nordstrom each were awarded 11,145 units, does not provide for this continued vesting upon ~~retirement.~~

retirement or termination.

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The amounts shown in the table for ~~Blake~~Erik Nordstrom and ~~Michael Koppel~~Peter Nordstrom include the values, as of the end of fiscal year ~~2016,~~2018, of unvested restricted stock units that would continue to vest after termination. These executives qualify for this continued vesting ~~upon retirement~~ as of the end of the fiscal year since they had each reached the minimum retirement age of 55 with at least 10 years of service.

If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then any unvested units and any Common Stock delivered on vesting under such grants will be automatically forfeited.

Qualifying Termination Following a Change in Control

Under the 2010 Equity Incentive Plan, the Named Executive Officers are not entitled to any payment or accelerated benefit upon a change in control with respect to their restricted stock units. However, a Named Executive Officer will generally be entitled to accelerated vesting if the executive experiences a qualifying termination (termination by the Company without cause or termination by the executive for good reason) within 12 months following a change in control of the Company, unless the Compensation Committee acts to prevent acceleration or the award is of a type which would continue in effect notwithstanding the occurrence of the change in control. See the Change in Control paragraph under Stock Options on page 5056 for information about when a change in control occurs.

The amounts shown include the values, as of the end of fiscal year 2018, of unvested restricted stock units that would vest if the Named Executive Officers experienced a qualifying termination within 12 months following a change in control of the Company and the Committee did not act to prevent acceleration of the awards.

~~(b)~~
(b)	Vested SERP Benefit

The annual SERP benefit is paid upon retirement for the remaining life of the executive with a 50% survivor annuity paid to the surviving spouse or life partner for the remainder of their life after the executive’s death, as described in the Pension Benefits section beginning on page ~~46.~~

51.

Death

The amounts shown are the present ~~value~~values of the 50% survivor annuity, payable in semi-monthly installments to the spouse or life partner of the executive, assuming the payments would begin on the date on which the executive would have attained minimum retirement age of 53, or the executive’s actual age, if older, and would continue for the remaining lifetime of the spouse or life partner. There would be no immediate payment of the benefit if the date of death preceded the executive’s earliest retirement age of 53.

Disability

~~The amount~~

No amounts are shown ~~for Michael Koppel is~~as none of the ~~present value of his SERP benefit since he has~~eligible Named Executive Officers have reached normal retirement age of 58 ~~as defined in~~which is the ~~Plan.~~

earliest eligibility for the SERP disability benefit.

Retirement or Termination without Cause

The amounts shown in the table for ~~Blake Nordstrom, Michael Koppel, Peter~~Erik Nordstrom and ~~Erik~~Peter Nordstrom are the present values of their SERP benefits, reduced for early commencement, ~~for Blake Nordstrom, Peter Nordstrom and Erik Nordstrom,~~ payable in semi-monthly installments, assuming the payments would begin as of the last day of fiscal year ~~2016. Blake Nordstrom, Peter Nordstrom and Erik Nordstrom~~2018. These Named Executive Officers have met the minimum retirement age of 53 with at least 10 years of service and would be eligible for early retirement with prior approval from the Board. If the Board approved early retirement, they would be entitled to a reduced SERP benefit, as described in the Pension Benefits section on page ~~46.~~

51.

Qualifying Termination Following a Change in Control

No benefits are paid solely due to a change in control, although a change in control triggers immediate vesting and an obligation for the Company to fully fund accrued benefits through a trust. If an executive was separated from the Company after a change in control, a deferred annuity would be payable upon the executive reaching retirement age. If the separation occurred before the executive’s retirement age of 58, the benefit would be paid as a reduced early retirement benefit at age 53, or the executive’s actual age, if older. In this case, the requirement for Board approval of the early retirement is waived. ~~Assuming the earliest retirement age without benefit reduction for age or service, the present value of this benefit at fiscal year-end would be as~~

The amounts shown in the ~~Fiscal Year 2016 Pension Benefits Table on page 47, column (c), “Present Value~~table for Erik Nordstrom and Peter Nordstrom are the present values of ~~Accumulated Benefit.”~~

their SERP benefits, reduced for early commencement, payable in semi-monthly installments, assuming the payments would begin as of the last day of fiscal year 2018. These Named Executive Officers have met the minimum retirement age of 53 with at least 10 years of service and would be eligible for early retirement.

The Compensation Committee has discretion to discontinue payment of benefits under the SERP if the retired executive is found to have engaged in misconduct or in competitive behavior against the Company.

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~~(c)~~

~~Executive Deferred Compensation Plan Survivor Benefit~~

Under the EDCP, if a participant dies while employed by the Company, the beneficiary receives the participant’s undistributed account balance plus two times any deferrals, excluding any earnings on the deferrals, made by the participant through December 31, 2007. The pre-retirement death benefit is paid in a lump sum.

The amount shown is the death benefit equal to two times Michael Koppel’s deferrals made through December 31, 2007. The amount does not include Michael Koppel’s undistributed account balance of $2,841,908. His beneficiary is entitled to receive this account balance in the event of his death, but the amount is not shown in this table as it is already shown in the Fiscal Year 2016 Nonqualified Deferred Compensation Table on page 48, column (c), “Aggregate Balance at Last Fiscal Year-End.”

~~(d)~~(c)

Life Insurance Proceeds

The Company provides life insurance for the Named Executive Officers of approximately 1.25 times annual base salary.

The amounts reported in the table represent the life insurance proceeds that would be payable if the Named Executive Officers had died as of the last day of the fiscal year. The premiums paid for the Company-provided life insurance are included in column ~~(a)~~(d) in the All Other Compensation in Fiscal Year ~~2016~~2018 table on page ~~38.~~

44.

~~(e)~~
(d)	Retiree Health Care Benefit

The Company provides continued health care coverage for the eligible Named Executive Officers if they separate from the Company after age 55 with at least 10 years of service. These benefits include medical, behavioral health/substance abuse, vision, prescription drug and dental coverage. The Named Executive Officers and their spouses or life partners and eligible dependents would be covered under the retiree health plan, and the executive and the Company would continue to share in the cost of the insurance premium. Coverage and cost sharing would continue for the surviving spouse or life partner and eligible dependents after the executive’s death. Effective November 1, 2013, the retiree health plan was closed to new entrants.

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~~Death, Disability, Retirement or Termination without Cause~~

The amounts in the table for ~~Blake~~Erik Nordstrom and ~~Michael Koppel~~Peter Nordstrom are the present values of the health care cost that would be payable by the Company if they had separated on the last day of the fiscal year. ~~Blake~~Erik Nordstrom and ~~Michael Koppel~~Peter Nordstrom have met the minimum retirement age of 55 with at least 10 years of service and would be eligible for retirement. Assumptions used in determining these amounts include a discount rate of ~~4.38%~~4.33% and the RP2014 White Collar, Fully Generational Mortality Table with projection scale ~~MP2016.~~

MP2018.

An executive who is terminated for cause, as determined by the Company in the exercise of its discretion in accordance with the Plan, is not eligible to receive the ~~Retiree Health Care~~retiree health care benefit.

~~(f)~~
(e)	Separation Benefit

Under the Leadership Separation Plan, ~~Michael Koppel~~Anne Bramman, Kenneth Worzel and ~~Kenneth Worzel~~Christine Deputy are eligible to receive benefits upon involuntary termination of employment by the Company due to job elimination. ~~Blake Nordstrom, Peter~~Erik Nordstrom and ~~Erik~~Peter Nordstrom are not eligible for separation benefits under the Plan. The benefits for eligible employees are based on leadership level and years of service, and include:

•	lump sum cash payment for severance: one month of base salary per year of service, with a minimum of 6 months up to a maximum of 12 months. This is reduced by an amount equal to the participant’s ~~gross monthly SERP benefit multiplied by the number of months used to calculate the severance payment;~~

•	lump sum cash payment for health coverage: the cost of the Company-paid portion of the employee’s currently elected health coverage for 12 months, unless the employee is eligible for and elects the retiree health care benefit, as described in footnote (e) on page 51; and

•	~~up to six months of outplacement services.~~

~~The potential separation benefits for the Named Executive Officers are shown below.~~

Company-Paid Cost of
Separation Portion of Outplacement Total Separation
Payment Medical Benefits Services Benefit
Name ($) ($) ($) ($)
Blake W. Nordstrom — — — —
Michael G. Koppel 199,227 — 4,200 203,427
Peter E. Nordstrom — — — —
Erik B. Nordstrom — — — —
Kenneth J. Worzel 375,000 11,520 4,200 390,720

~~Michael Koppel’s estimated separation payment shown above is reduced by an amount equal to his estimated~~ gross monthly SERP benefit multiplied by the number of months used to calculate ~~his separation payment. No amount is included~~the severance payment, if applicable;

lump sum cash payment for health coverage: the cost of the Company-paid portion of ~~medical benefits as it~~the employee’s currently elected health coverage for 12 months, unless the employee is ~~assumed he would elect~~eligible for and elects the ~~Company’s~~ retiree health care ~~benefit.~~

benefit, as described in footnote (d) above; and

six months of outplacement services.

The potential separation benefits for the Named Executive Officers are shown below.



Name	Separation Payment ($)	Company-Paid Portion of Medical Benefits ($)	Cost of Outplacement Services ($)	Total Separation Benefit ($)
Erik B. Nordstrom	—	—	—	—
Anne L. Bramman	387,500	8,864	4,200	400,564
Peter E. Nordstrom	—	—	—	—
Kenneth J. Worzel	533,333	11,922	4,200	549,455
Christine F. Deputy	292,500	11,922	4,200	308,622

Under the Leadership Separation Plan, the Company may provide the executive with additional separation benefits, in cash or in kind, to assist the executive in the transition from active employee status. To receive any benefits under the Leadership Separation Plan, the Named Executive Officer must sign a release in which the executive agrees, among other things, not to disclose to anyone at any time any confidential information acquired during employment with the Company, and not to publish any statement, or instigate, assist or participate in the making or publication of any statement which is disparaging or detrimental in any way to the ~~Company.~~

Company, except in each case as required by applicable law.

~~(g)~~
(f)	Disability Insurance Benefit

The Company provides long-term disability insurance for the Named Executive Officers. The amount reported in the table for each Named Executive Officer is the long-term disability benefit provided of ~~$35,000~~up to $35,000 per ~~month.~~month. The premiums for the Company-provided disability insurance are included in column ~~(a)~~(d) in the All Other Compensation in Fiscal Year ~~2016~~2018 table on page ~~38.~~

44.

NORDSTROM, INC. - 2019 Proxy Statement 59

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~~(h)~~
(g)	Executive Management Bonus

The performance period under the Executive Management Bonus Plan is the fiscal year. Therefore, a termination event that occurred on the last day of the fiscal year would not result in any additional or accelerated benefits under this Plan. However, if an employee died, became disabled or retired (after having met certain age and years of service requirements) during the fiscal year, the Compensation Committee would have the sole discretion to determine what amounts, if any, an executive would remain eligible to receive as a performance-based bonus award.

Any bonus award would be prorated to reflect the period of service during the fiscal year.

Pay Ratio Disclosure

In August 2015, the SEC issued final rules implementing the provision of the Dodd-Frank Act that requires U.S. publicly traded companies to disclose the ratio of their Principal Executive Officer’s compensation to that of their median employee. For this required disclosure, Erik Nordstrom, Co-President, is considered to be our Principal Executive Officer (“PEO”).

For fiscal year 2018:

the annual total compensation of Erik Nordstrom was $4,451,746; and

the estimated median of the annual total compensation of all employees of our Company, other than Erik Nordstrom, was $34,454.

Based on this information, for 2018 the ratio of the annual total compensation of Erik Nordstrom, our Co-President and PEO, to the median of the annual compensation of all employees was 129to 1.

The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies and assumptions, to apply certain exclusions and to make reasonable estimates that reflect their employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio that we have reported.

To identify the median employee, we used the total compensation as reported on the 2018 W-2 for all of our U.S. employees, excluding our PEO, and the Canadian equivalent T4 for all of our Canadian employees, who were employed by us on February 2, 2019, the last day of our fiscal year. We included full-time, part-time, seasonal and temporary employees and did not annualize the compensation for our permanent full-time and part-time employees who were not employed with us for the entire fiscal year. We applied a Canadian to U.S. dollar exchange rate to the compensation elements paid in Canadian currency. Similar to other large retail companies, a significant portion of our workforce is employed on a part-time and seasonal basis. As of the end of fiscal year 2018, approximately 38,000 of our 67,000 employees – or 57% of our workforce – were either part-time or seasonal.

After identifying the median employee, we calculated annual total compensation for the median employee using the same methodology we used for determining total compensation for our Named Executive Officers as shown in the 2018 Summary Compensation Table on page 42.

60 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement52

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PROPOSAL 3

ADVISORY VOTE REGARDING EXECUTIVE ~~COMPENSATION: SAY ON PAY~~COMPENSATION

The Board recommends a vote FOR this proposal.

The Company is providing shareholders with an advisory (nonbinding) vote on the compensation program of our Named Executive Officers as disclosed in this Proxy Statement. At the ~~2016~~2017 Annual Meeting of Shareholders, over ~~96% of the votes cast were in favor of our Say-on-Pay proposal.~~

~~At the 2011 Annual Meeting, over 93%~~95% of the votes cast approved our Board’s recommendation to hold advisory votes on an annual basis.

At the 2018 Annual Meeting of Shareholders, over 90% of the votes cast were supportive of our compensation program. The Compensation Committee recognizes this support of the compensation program for our Named Executive Officers and continues to apply the same ~~guiding principles~~pay and benefits philosophy which ~~underlie~~underlies our pay-for-performance philosophy.

~~Compensation Program Highlights~~

Compensation Program Highlights

As described in the Compensation Discussion and Analysis beginning on page ~~27,~~29, our Named Executive Officers are rewarded when defined performance milestones are achieved and when value is created for our shareholders. Our Compensation Committee and Board believe that our compensation program is effective in implementing our executive compensation philosophy and establishing a solid link between compensation and shareholder interests. Highlights of our compensation program include the following:

•

~~We deliver the majority of compensation through a pay-for-performance framework where incentives are based on achieving results. Over eighty percent~~

We deliver the majority of compensation through a pay-for-performance framework where incentives are based on achieving results. At least 70% of the value of the targeted compensation package for each of our Named Executive Officers is weighted toward pay-for-performance and variable compensation to reinforce our philosophy of compensating our executives when they and the Company are successful in ways that support shareholder interests.

Each year, the Compensation Committee establishes the performance-based bonus measures that focus executives on the most important Company objectives. In 2018, Named Executive Officers had the following measures:



•	Each year, the Compensation Committee establishes the performance-based bonus measures that focus executives on the most important Company objectives. In 2016, Named Executive Officers each had the following measures:

–

Incentive Adjusted Return on Invested Capital (“Incentive Adjusted ROIC”) to ensure our overall performance aligns directly with shareholder returns over the long term. The measure is expressed as a threshold that must be met before any payout can be made on Incentive EBIT results to ensure our executives are rewarded only after earnings generate a meaningful ~~return~~returns for our ~~shareholders;~~shareholders;



	–	Incentive Earnings Before Interest and Income ~~Taxes~~Tax Expense (“Incentive EBIT”) to emphasize the importance of earnings and its role in driving shareholder value. ~~Each Named Executive Officer’s performance-based bonus was weighted~~Erik Nordstrom, Peter Nordstrom and Blake Nordstrom each had this performance measure weighed at 100% ~~on this measure,~~, subject to the achievement of the Incentive Adjusted ROIC ~~threshold;~~threshold. Anne Bramman, Kenneth Worzel and Christine Deputy each had this performance measure weighed at 67%, again subject to the achievement of the Incentive Adjusted ROIC threshold; and


–	Individual Measure to enable differentiation in bonus payout opportunity based on individual contributions and execution against goals. This measure was added for fiscal year 2018 for Anne Bramman, Kenneth Worzel and Christine Deputy. The individual bonus measure accounted for 33% of the total bonus opportunity for these Named Executive Officers.

The Committee references the 50th percentile of our retail peer group when assessing the Named Executive Officers’ targeted level of total direct compensation (base salary + performance-based bonus + long-term incentives). The market information is considered a reference point rather than policy for reviewing competitiveness.

We maintain meaningful executive stock ownership guidelines so that our executives’ interests, as shareholders, are aligned with our broader shareholder base.

We have an executive compensation clawback policy that applies to performance-based compensation.

Our Compensation Committee has retained and directs an independent compensation consultant.

We do not have employment agreements with our executives.

We do not provide tax gross-ups, except those related to relocation expenses when an executive must move to assume Company responsibilities.

We do not allow stock option grant repricing or backdating, nor do we grant options below 100% of fair market value.

We have a derivative and hedging policy that prohibits Directors and Executive Officers (as well as other key insiders and their immediate families) from engaging in hedging transactions with respect to any equity securities of the Company held by them.

We have restrictions on pledging of Common Stock.

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	–	Strategic Bonus Measure to use as a bonus payout modifier (up or down) by up to 25%, not to exceed the maximum payout under the Executive Management Bonus Plan, which is 2.5 times an executive’s target bonus opportunity. The Strategic Bonus Measure considered objective progress in expanding: 1) market share, 2) customer count, and 3) customer engagement.

•	~~The Committee references the 50~~^thpercentile of our retail peer group when assessing the Named Executive Officers’ targeted level of total direct compensation (base salary + performance-based bonus + long-term incentives). The market information is considered a reference point rather than policy for reviewing competitiveness.

•	~~We maintain meaningful executive stock ownership guidelines so that our executives’ interests, as shareholders, are aligned with our broader shareholder base.~~

•	~~We have an executive compensation clawback policy that applies to performance-based compensation.~~

•	~~Our Compensation Committee has retained and directs an independent compensation consultant.~~

•	~~We do not have employment agreements with our executives.~~

•	~~We do not provide tax gross-ups, except those related to relocation expenses when an executive must move to assume Company responsibilities.~~

•	~~We do not allow stock option grant repricing or backdating, nor do we grant options below 100% of fair market value.~~

•	We have a derivative and hedging policy that prohibits Directors and Executive Officers (as well as other key insiders and their immediate families) from engaging in hedging transactions with respect to any equity securities of the Company held by them.

•	~~We have restrictions on pledging of Common Stock.~~Shareholder Support

~~Shareholder Support~~

We are asking our shareholders to indicate their support for our Named Executive Officers’ compensation as described in this Proxy Statement.

This proposal gives our shareholders the opportunity to express their views on the compensation of our Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the ~~2017~~2019 Annual Meeting: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure in this Proxy Statement.”

Our Board has adopted a policy of annual ~~Say-on-Pay~~executive compensation advisory votes. As an advisory vote, this proposal is not binding on the Company. However, our Compensation Committee and Board value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions regarding the Company’s Named Executive Officers.

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~~PROPOSAL 4~~

~~ADVISORY VOTE REGARDING THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION~~

~~The Board recommends a vote FOR “1 YEAR” for this proposal.~~

~~In addition~~ to providing shareholders with the opportunity to cast an advisory vote on executive compensation, we are providing shareholders with an advisory vote on how frequently we should seek an advisory vote on the compensation of our Named Executive Officers.

~~By voting on this Proposal 4, shareholders may indicate whether they would prefer an advisory vote on Named Executive Officer compensation once every 1, 2, or 3 years.~~

The Board of Directors has determined that holding an advisory vote on executive compensation every year is the most appropriate policy for the Company at this time, and recommends that shareholders vote for future advisory votes on executive compensation to occur every year. Many elements of our executive compensation program are reviewed and determined annually, including base salary, performance-based cash awards under the Company’s Executive Management Bonus Plan, and long-term incentive grants under the 2010 Equity Incentive Plan. Holding an annual advisory vote on executive compensation would more closely coincide with these decisions, promote corporate transparency and shareholder awareness of the Company’s compensation policies and practices and also provides the Company with more direct and immediate feedback on our compensation disclosures and practices.

Shareholders will be able to specify one of four choices for this proposal on the proxy card: 1 year, 2 years, 3 years, or abstain. Shareholders are not being asked to approve or disapprove the Board of Director’s recommendation, but rather to indicate their own choice from among the frequency options. The option of 1 year, 2 years or 3 years that receives the highest number of votes cast by shareholders will be the frequency for future advisory votes on executive compensation that has been selected by shareholders. Because this vote is advisory, it is not binding on the Board of Directors or the Company. However, the Board of Directors value the opinions of our shareholders and will consider the outcome of the vote when setting the frequency of future advisory votes on executive compensation.

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EQUITY COMPENSATION PLANS

The following table provides information as of the fiscal year ended ~~January 28, 2017~~February 2, 2019 about Common Stock that may be issued upon the exercise of options and rights that have been or may be granted to employees and members of the Board under all of the Company’s existing equity compensation plans.

Number of Securities Weighted-Average Number of Securities Remaining
to be Issued Upon Exercise Price of Available for Future Issuance
Exercise of Outstanding Outstanding Options, Under Equity Compensation Plans
Options, Warrants and Warrants and (excluding securities to be issued
Rights Rights as reflected in column (1))
Plan Category (1) (#) (2) ($) (3) (#)
Equity compensation plans approved by the Company’s shareholders^(a) 16,198,976 ^(b) 49 11,739,123 ^(c)
Equity compensation plans not approved by the Company’s shareholders^(d) 198,022 4 —
TOTAL 16,396,998 48 11,739,123



Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (#)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (2) ($)	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities to be issued as reflected in column (1)) (3) (#)
Equity compensation plans approved by the Company’s shareholders ^(a)	12,581,984	^(b)	53	14,615,907	^(c)
Equity compensation plans not approved by the Company’s shareholders ^(d)	8,092		5	—
TOTAL	12,590,076		53	14,615,907

~~(a)~~
(a)	Consist of the 2004 and 2010 Equity Incentive Plans, the Employee Stock Purchase Plan and the 2002 Nonemployee Director Stock Incentive Plan. Performance share units and restricted stock units do not have an exercise price and therefore have been excluded from the weighted average exercise price calculation in column (2).


(b)	Includes ~~138,436~~43,910 of deferred Director awards and ~~143,266~~110,631 related to deferred performance share units.


(c)	Includes ~~8,737,613~~12,541,502 shares from the 2010 Equity Incentive Plan, ~~2,586,234~~1,814,978 shares from the Employee Stock Purchase Plan and ~~415,276~~259,427 shares from the 2002 Nonemployee Director Stock Incentive Plan.


(d)	Consist of plans created in connection with our subsidiaries.

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PROPOSAL 5 4

APPROVAL ~~OF THE AMENDMENT AND RESTATEMENT~~ OF THE NORDSTROM, INC. ~~2010~~2019 EQUITY INCENTIVE PLAN

The Board recommends a vote FOR this proposal.

Shareholders are being asked to vote on a proposal to approve the ~~amendment and restatement~~adoption of the Nordstrom, Inc. 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan is intended to be a successor to the existing 2010 plan (the “2010 Equity Incentive Plan”) for employees, which expires in 2020, and the existing 2002 Nonemployee Director Stock Incentive Plan for directors (“2002 Director Plan” and together with the 2010 Equity Incentive Plan, ~~(the “Plan”~~“Prior Plans”). ~~The purposes of amending and restating~~If the 2019 Plan ~~are to:~~

•	~~increase the number of shares of Common Stock available for issuance under the Plan by 6,200,000;~~

•	allow the Compensation Committee (the “Committee”) to delegate to one or more senior executive officers of the Company the authority to make equity-based awards under the Plan to individuals who are not officers or directors of the Company; and

•	~~implement a one-year minimum vesting period requirement on awards made under the Plan.~~

~~The Plan, as amended and restated, has been~~is approved by the ~~Committee and~~shareholders, no future grants will be made under the ~~Board.~~

Prior Plans.

The ~~following description of the Plan is qualified in its entirety by reference to the applicable provisions of the Plan document, as amended and restated, which is attached as Appendix A.~~

~~Purpose of Amendment and Restatement~~

As discussed in the Compensation Discussion and Analysis beginning on page 27, the Company believes that equity compensation is integral to its philosophy of pay-for-performance and for establishing a competitive total compensation package necessary to recruit, retain and incent talented employees. Consistent with that belief, the Company has granted equity awards to its employees and directors under Nordstrom equity compensation plans since 1977. All of these plans, with the exception of the Prior Plans, have expired. The Company wishes to ~~amend and restate~~replace the ~~Plan at this time~~Prior Plans to ensure that the Company has sufficient shares available to continue its long-held approach to ~~pay-for-performance~~pay for performance through granting equity to ~~employees.~~

~~Considerations~~

~~To determine~~its employees and nonemployee directors, and to incorporate terms for future grants that reflect current best practices in executive compensation. The Company’s pay for performance philosophy is described in the ~~number of shares to request,~~Compensation Discussion and Analysis beginning on page 29.

The 2019 Plan was approved by the ~~factors considered included~~Board on February 27, 2019 and will become effective upon its adoption by the ~~following:~~

•	~~Burn Rate and Acceptable Dilution:~~ ~~Burn rate measures the Company’s usage of shares as a percentage of its outstanding stock.~~ shareholders. The average annual burn rate over the last five years is 2.1%, and the future burn rate is expected to track this usage trend. The Company grants equity on an ongoing basis to key employees and executives. The Company has been advised by independent consultants that its average burn rate over the last five years is considered reasonable for a company of its size and its industry. Burn rate referred to in this section represents the sum of options, restricted stock units, and unrestricted shares granted and performance share units earned and vested in each fiscal year divided by the weighted average common shares outstanding. Pursuant to the terms ~~of the Plan, each restricted stock unit, unrestricted share, and performance share unit is counted as one point six (1.6) shares, while options are counted as one (1).~~

•	~~Anticipated Future Share Utilization:~~ To determine the Company’s projected share utilization, the Board Compensation Committee considered the following factors: (i) annual future grants for all employees; (ii) potential share needs for retention of key employees or inducement of needed talent; (iii) fluctuation in future stock price; (iv) the Plan’s expiration date in 2020, which will require a 2019 Proposal for shareholders to approve a new plan and will provide another opportunity to increase the shares reserved for issuance; and (v) the number of shares currently remaining available for issuance under the Plan.

•	~~ISS Guidelines:~~ In amending the Plan, the Board Compensation Committee considered the guidelines of the proxy advisor Institutional Shareholder Services for reasonable share usage and equity plan features and grant practices.

•	~~Compensation Consultant:~~ ~~The Board Compensation Committee considered the advice of the Company’s compensation consultant.~~

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~~Shares Available and Outstanding under Plans~~

As of the ~~Record Date, 7,613,748~~2019 Plan will:

reserve for issuance by the Company 9,500,000 shares;

require each share issued as part of a full-value award, such as a grant of unrestricted shares, restricted shares, restricted stock units or performance share units, and dividend equivalents to count as 1.6 shares for purposes of ~~Common Stock were remaining available for future issuance under the Plan.~~

~~In addition to~~determining shares remaining available for ~~grant~~grant. Under the 2010 Equity Incentive Plan, full-value awards were counted as 1.6 shares, while under the 2002 Director Plan ~~we also~~such awards were counted as 1 share;

prohibit liberal share recycling as shares not issued as a result of the net settlement of an outstanding stock appreciation right or stock option; shares used to pay the exercise price or withholding taxes related to an outstanding award; or shares repurchased on the open market with the proceeds of a stock option exercise price will not be returned to the 2019 Plan;

provide for “double trigger” rather than “single trigger” accelerated vesting, meaning awards will be accelerated as the result of a change in control where the participant’s employment is involuntarily terminated or the participant terminates for “good reason” within 12 months following a change of control and with respect to performance-based awards allow for acceleration of vesting at target if actual performance cannot be determined upon a qualifying termination;

establish one year as the minimum period for vesting of all awards, provided that the Compensation Committee (“Committee”) may grant awards that vest in less than one year if the total number of such shares does not exceed 5% of the available shares authorized for issuance under the 2019 Plan. Under the 2010 Equity Incentive Plan, this 5% limit applied only to grants of Unrestricted Shares;

prohibit the issuance of dividends or dividend equivalents on stock options and stock appreciation rights and prohibit delivery of dividends or dividend equivalents on all other types of awards unless such awards are earned and vested;

subject all awards to the Company’s clawback policy as described on page 40; and

prohibit the transfer of awards, except in the context of death or otherwise required by law, or as approved by the Committee.

Shares Available under Plans

We currently have shares available for grant under ~~our~~ two existing equity incentive plans:

2002 Nonemployee Director Stock Incentive Plan ~~(the “Director Plan”). As~~ with 257,883 shares available as of our record date, March 15, 2019. Once the ~~Record Date, there were 415,276~~2019 Plan is approved by the shareholders, the 2002 Director Plan will be terminated, and therefore no additional shares ~~remaining~~will be granted from it.

2010 Equity Incentive Plan with 9,103,009 shares available as of March 15, 2019. Once the 2019 Plan is approved by the shareholders, the 2010 Equity Incentive Plan will be terminated, and therefore no additional shares will be granted from it.

2019 Equity Incentive Plan Upon approval by the shareholders, the 2019 Plan will have 9,500,000 shares available for ~~issuance~~grant, plus the additional shares that may become available if outstanding awards are forfeited under the ~~Director~~2010 Equity Incentive Plan and the expired 2004 Equity Incentive Plan. ~~We will continue~~

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The following table shows information regarding outstanding options and full-value awards as of March 15, 2019 under the ~~Record Date.~~

Range of Exercise Prices Outstanding Options Weighted Average
Exercise Price Weighted Average
Remaining Years of
Contractual Life Unvested
Full Value Awards
$ 2.59 – 6.25^(a) 87,356 4.377 4.515
$ 12.58 – 35.51^(b) 2,220,362 24.840 2.142
$ 38.01 – 75.23^(c) 11,291,882 53.407 6.517
TOTAL 13,599,600 48.428 5.790 4,089,949^(d)
Company’s 2002 Nonemployee Director Stock Incentive Plan, 2004 Equity Incentive Plan and the 2010 Equity Incentive Plan.



Outstanding Options (#)	Weighted Average Exercise Price ($)	Weighted Average Remaining Years of Contractual Life (#)	Unvested Full Value Awards (#)
9,245,495	52.34	4.93	4,606,812*

~~(a)~~	~~Includes stock options awarded pursuant to Trunk Club’s equity plan, assumed by Nordstrom upon acquisition.~~
~~(b)~~	~~Includes stock options awarded and outstanding under the Company’s 2004 Equity Incentive Plan.~~
~~(c)~~	~~Includes stock options awarded and outstanding under the Company’s 2010 Equity Incentive Plan.~~
~~(d)~~*	Includes restricted stock units and performance share units granted at maximum, and unvested restricted stock awards pursuant to Trunk Club’s equity plan. No amounts are shown for the Range of Exercise Prices as exercise price is not applicable for full value awards. Pursuant to the terms of the Plan, eachmaximum. Each outstanding full value award ~~share granted after May 2010 will reduce~~reduces the shares available for grant under the 2010 Equity Incentive Plan by 1.6 shares.

~~Shares Requested~~

~~If this amendment and restatement of the Plan is approved by shareholders, the number of shares of Common Stock available for future grants would increase by 6,200,000.~~

~~Summary of Plan Terms~~

Summary of 2019 Plan Terms

The following is a summary of the 2019 Plan, a complete copy of which has been filed with the Securities and Exchange Commission ~~(“SEC”)~~ as Appendix ~~A to this Proxy Statement. The copy of the Plan attached~~B to this Proxy Statement ~~has been marked to show~~and is also available on the ~~changes made pursuant to the amendment and restatement.~~SEC’s website at www.sec.gov. This summary ~~of the Plan~~ is qualified in its entirety by the actual ~~text~~terms of the 2019 Plan, ~~as appended to~~which are incorporated herein by this ~~Proxy Statement.~~

reference.

Participants

Eligible participants include the Company’s and its subsidiaries’:

•	~~employees; and~~

•	~~nonemployee directors.~~

employees; and

nonemployee directors

The 2019 Plan is broad enough to cover all of the Company’s and its subsidiaries’ approximately 67,000 full- or part-time ~~employees. During 2016, the Company employed approximately 72,500~~ employees ~~on a full- or part-time basis.~~and nonemployee directors. The Company currently grants equity to approximately ~~2,200 leadership-level~~650 eligible employees, approximately 480 of our highest-performing sales people and ~~500 of~~ its highest-performing salespeople. Agreements with respect to awards under the Plan generally prohibit transferability by the participants, except in accordance with the laws of descent and distribution. The Company has not made grants to the Nordstrom Board nonemployee ~~directors under this Plan.~~

directors.

Purpose ~~of the Plan~~

The purpose of the 2019 Plan is to promote the long-term success of the Company and its subsidiaries and the creation of shareholder value by:

•	~~motivating participants to focus on the Company’s critical long-range objectives;~~

•	~~encouraging the attraction and retention of employees and nonemployee directors; and~~

•	~~aligning participant and shareholder interests through stock ownership.~~

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motivating participants to focus on the Company’s critical long-range objectives;

encouraging the attraction and retention of employees and nonemployee directors; and

aligning participant and shareholder interests through stock ownership.

Administration

The Committee ~~administers~~will administer the 2019 Plan, except that it ~~has delegated authority to the Company’s Principal Executive Officer~~may also appoint a secondary Board committee or one or more senior executive officers to administer the 2019 Plan with respect to ~~participants~~employees who are not considered executive officers ~~or directors~~under Section 16 of the ~~Company. In addition, the~~Securities Exchange Act of 1934, as amended (“Exchange Act”). The Committee ~~has delegated~~may delegate certain day-to-day administrative duties under the 2019 Plan to the Company’s Leadership Benefits department. The Plan, as amended and restated, permits the Committee to delegate to one or more senior executive officers of the Company the authority to make equity-based awards under the Plan to individuals who are not executive officers or directors of the Company.

Compensation department (or similar department).

Awards

The types of awards that may be made under the 2019 Plan are:

•	~~options to purchase shares of Common Stock;~~

•	~~stock appreciation rights;~~

•	~~unrestricted shares of Common Stock;~~

•	~~restricted shares of Common Stock;~~

•	~~restricted stock units; and~~

•	~~performance share units.~~

options to purchase shares of Common Stock;

stock appreciation rights;

unrestricted shares of Common Stock;

restricted shares of Common Stock;

restricted stock units; and

performance share units.

Share Limits

~~There is a~~ and Vesting Requirements

The limit on the number of shares of Common Stock that may be delivered ~~through options, stock appreciation rights, unrestricted shares, restricted shares, restricted stock units or performance share units awarded~~ under the ~~Plan. Currently, that aggregate number~~Plan through the issuance of any type of award may not exceed (i) ~~29,556,446~~9,500,000 plus (ii) any shares currently underlying awards outstanding under the ~~Company’s~~2010 Equity Incentive Plan and 2004 Equity Incentive Plan ~~(the “Prior Plan”),~~ but which are forfeited or which expire without exercise during the term of the Plan (“Recaptured Shares”). By approving this amendment and restatement of the Plan, the aggregate number of shares of Common Stock that may delivered as a result of awards under the Plan will be increased2019 Plan.

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The maximum number of shares that ~~are~~will be available for grant under the 2019 Plan is subject to reduction by ~~one point six (1.6)~~1.6 shares for each share that is delivered in settlement of an award of unrestricted shares, restricted shares, restricted stock units, or performance share ~~units.~~units, dividends and dividend equivalents. When a share is delivered in settlement of one of the foregoing types of awards, the maximum is reduced by 1.6 shares and when a share is delivered in settlement of an option or a stock appreciation right, the maximum is reduced by one ~~(1)~~ share.

~~There is a further sublimit~~

All awards granted under the Plan shall vest no earlier than the first anniversary of the date of grant provided that up to 5% of the authorized shares under the Plan (including all unrestricted shares of Common Stock) may be granted without this limit.

The 2019 Plan sets forth limits on the number of ~~unrestricted~~ shares of Common Stock that may be granted ~~under the Plan. That limit is 5% of the total shares approved for issuance under the Plan.~~

~~There are also limits on awards that may be granted under the Plan~~pursuant to an award to any participant in a single fiscal year, as follows. No participant may receive:

•	~~options to purchase more than 500,000 shares of Common Stock;~~

•	~~more than 500,000 stock appreciation rights;~~

•	~~more than 100,000 unrestricted shares of Common Stock;~~

•	~~more than 500,000 restricted shares of Common Stock;~~

•	~~more than 500,000 restricted stock units; or~~

•	~~more than 500,000 performance share units.~~

options to purchase more than 500,000 shares of Common Stock;

more than 500,000 stock appreciation rights;

more than 100,000 unrestricted shares of Common Stock;

more than 500,000 restricted shares of Common Stock;

more than 500,000 restricted stock units; or

more than 500,000 performance share units.

Options

Options may be incentive stock options that qualify for favorable tax treatment for the optionee under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or nonqualified stock options not designed to qualify for favorable tax treatment. Incentive stock options may only be granted to employees. Each option agreement will specify the type of option and the date or event when all or any installment of the option is to become exercisable. ~~By approving this amendment and restatement of the Plan, options granted under the Plan will be subject to a one-year minimum vesting period requirement.~~ The Company has historically granted nonqualified options with ~~three to four year~~a four-year vesting ~~conditions, and currently all options outstanding to employees are scheduled to vest over a period of three or four years.~~period. The option agreement will also specify the term of the option, provided, however, that the term of an option will in no event exceed 10 years from the date of grant. An option agreement may provide for accelerated exercisability in the event of the optionee’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the optionee’s service.

The exercise price of an option may not be less than 100% of the fair market value of Common Stock on the date of grant. Options may not be repriced.

At the Committee’s discretion, the exercise price of an option may be paid with:

•	~~cash;~~

•	~~cash equivalents;~~

•	~~the delivery of outstanding shares of Common Stock;~~

•	~~the cashless exercise method through a broker; and~~

•	~~a pledge of shares to a broker.~~

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cash;

cash equivalents;

the delivery of outstanding shares of Common Stock;

the cashless exercise method through a broker;

a net exercise method through a broker; or

a combination of these methods.

No dividend or dividend equivalent rights shall accrue or be paid with respect to options.

Stock Appreciation Rights

~~The Committee~~

Stock appreciation rights may ~~grant stock appreciation rights~~be granted with such terms and conditions as may be determined by the ~~Committee.~~Committee provided, however, that the term of a stock appreciation right may not exceed 10 years from the date of grant. Each grant will be evidenced by a stock appreciation rights agreement, which will specify the number of shares of Common Stock to which the right pertains. The agreement will also specify the exercise price, the date when all or any installment is to become exercisable and the term of the stock appreciation right, provided, however, that the term of a stock appreciation right may not exceed 10 years from the date of grant. By approving this amendment and restatement of the Plan, stock appreciation rights granted under the Plan will be subject to a one-year minimum vesting period requirement. The Company has not historically granted stock appreciation rights.right. The agreement may provide for accelerated exercisability in the event of the ~~participant’s~~optionee’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the ~~participant’s~~optionee’s service. Stock appreciation rights may be awarded in combination with options, and such an award may provide that the stock appreciation rights will not be exercisable unless the related options are forfeited.

At the Committee’s discretion, upon exercise of a stock appreciation right, the participant (or person having the right to exercise the right after his or her death) will receive:

•	~~cash;~~

•	~~shares of Common Stock; or~~

•	~~any combination of cash and shares of Common Stock.~~

cash;

shares of Common Stock; or

any combination of both.

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The exercise price of a stock appreciation right may not be less than 100% of the fair market value of Common Stock on the date of grant. Stock appreciation rights may not be repriced.

No dividend or dividend equivalent rights shall accrue or be paid with respect to stock appreciation rights.

Unrestricted Shares

~~The Plan permits the Committee~~

Shares not subject to grant up to 5% of the total shares authorized under the Plan as shares of Common Stock that have no restrictions. As of the Record Date, March 7, 2017, there were 1,198,235 shares of Common Stock available for grant in the form of unrestricted shares. These sharesvesting may be awarded for such consideration, consisting of any tangible or intangible property or benefit to the Company, including services performed and contracts for services, as the Committee may determine.

Restricted Shares

~~The Committee~~

Restricted shares may ~~grant restricted shares~~be granted with such terms and conditions as the Committee may determine. These restricted shares may be awarded for such consideration, consisting of any tangible or intangible property or benefit to the Company, including services performed and contracts for services, as the Committee may determine.

Each award of restricted shares will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the restricted share agreement. By approving this amendment and restatement of the Plan, any restricted shares granted under the Plan which vest solely on the basis of the lapse of time will be subject to a one-year minimum vesting period. The Company has not historically granted restricted shares. The Committee may include among ~~any vesting~~such conditions the requirement that the performance of the Company or a business unit of the Company ~~for at least a one-year period~~ equal or exceed a target determined in advance by the ~~Committee, as described under Performance Criteria/ Section 162(m) on page 60.~~Committee. A restricted share agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the recipient’s service.

The holders of restricted shares will have the ~~same~~ voting, dividend and other rights as set forth in their restricted share agreement, and may have the same voting, dividend or other rights as the Company’s other shareholders provided ~~however,~~ that any dividends accrued on restricted shares shall be held in escrow by the Company and shall only be paid if and when restricted shares vest, in cash or in shares of unrestricted Common Stock having a fair market value equal to the amount of such dividends. Common Stock distributed to the holder of restricted shares on account of a stock split or stock dividend will be subject to restrictions and risk of forfeiture to the same extent as the restricted shares with respect to which such Common Stock has been distributed.

Restricted Stock Units

~~The Committee~~

Restricted stock units may ~~grant restricted stock units~~be granted with such terms and conditions as the Committee may determine. Each award of restricted stock units will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the restricted stock unit agreement. By approving this amendment and restatement of the Plan, restricted stock units granted under the Plan which vest solely on the basis of the lapse of time will be subject to a one-year minimum vesting period. The Company has historically granted restricted stock units with three, four or five year vesting conditions, and currently all units outstanding to employees are scheduled to vest over a period of three, four or five years. The Committee may include among ~~any vesting~~such conditions the requirement that the performance of the Company or a business unit of the Company ~~for at least a one-year period equal or~~ exceed a target determined in advance by the ~~Committee, as described under Performance Criteria/ Section 162(m) on page 60.~~Committee. A restricted stock unit agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the recipient’s service.

The holders of restricted stock units will not have voting or dividend rights. Prior to settlement or forfeiture, any restricted stock unit may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right will entitle the holder to be paid an amount in cash or stock equal to the dividends that would have been paid if the restricted stock units had been issued and outstanding shares of Common Stock as of the record date for the payment of dividends, subject to applicable withholding ~~taxes.~~

taxes, if and when the restricted stock units vest.

At the discretion of the Committee, settlement of vested units may be made in the form of:

•	~~cash;~~

•	~~shares of Common Stock (unrestricted or restricted shares); or~~

•	~~any combination of cash and shares of Common Stock.~~

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cash;

shares of Common Stock (unrestricted or restricted shares); or

any combination of both.

Performance Share Units

~~The Committee~~

Performance share units may ~~grant performance share units~~be granted with such terms and conditions as the Committee may determine. Performance share units are designated in shares of Common Stock.

Each award of performance share units will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the performance share unit agreement. By approving this amendment and restatement of the Plan, performance share units granted under the Plan which vest solely on the basis of the lapse of time will be subject to a one-year minimum vesting period. The Company has historically granted performance share units with three year vesting conditions, and currently all performance units outstanding to employees are scheduled to vest over a period of three years. The Committee may include among ~~any vesting~~such conditions the requirement that the performance of the Company or a business unit of the Company ~~for at least a one-year period equal or~~ exceed a target determined in advance by the ~~Committee, as described under Performance Criteria/Section 162(m) on page 60.~~Committee. A performance share unit agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of the performance period in the event of the termination of the recipient’s service.

~~Holders~~

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A holder of performance share units will have no rights to dividends and ~~are~~will not be entitled to vote such units. Prior to settlement or forfeiture, any performance share unit may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right will entitle the holder to receive, if and when the applicable performance share units vest, an amount in cash or stock equal to the dividends that would have been paid if the performance share units had been settled in shares of Common Stock on or before the record date for any dividends declared on the Company’s Common Stock, subject to applicable withholding taxes.

At the discretion of the Committee, settlement of vested performance share units may be made in the form of:

•	~~cash;~~

•	cash; shares ~~of Common Stock; or~~

•	~~any combination of cash and shares of Common Stock.~~

~~Performance Criteria/Section 162(m)~~

~~Code Section 162(m) precludes a publicly held corporation from claiming a deduction for compensation in excess~~ of $1 million paid to its “covered employees,” who are the Company’s Named Executive Officers, except the Chief Financial Officer, who is not subject to Section 162(m). Compensation is exempt from this limitation if it satisfies the requirements for “qualified performance-based compensation.” To comply with the exemption from Code Section 162(m), awards that are intended to qualify as performance-based compensation to covered employees are subject to annual limits, as described on page 58, and are conditioned on certain performance measures, as described below.

~~In order to be considered “qualified performance-based compensation,” restricted shares, restricted stock units~~Common Stock; or performance share units will be subject to vesting that is based on pre-established performance criteria over a specified performance cycle. A target under an award shall be based on the achievement of a specified percentage increase or quantitative level in

any ~~one or~~ combination of ~~the following performance criteria:~~

•	~~the Company’s total shareholder return;~~

•	~~the trading price of Common Stock;~~

•	the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit or return on investment (including return on equity, return on capital employed or return on assets);

•	~~earnings before or after taxes, interest, depreciation and/or amortization, and including/excluding capital gains and losses;~~

•	~~other financial results, such as profit margins, operational efficiency, expense reduction or asset management goals; or~~

•	~~the internal or external market share of a product or line of products.~~

Each of the foregoing performance measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular participant, department, business unit, subsidiary, or other segment to which a particular participant is assigned. The Committee may establish different performance measures and milestones for individual participants or groups of participants. For each participant, each performance measure will be weighted to reflect its relative significance to the Company for the performance cycle.

~~Except as otherwise specified in an individual award, applicable performance measures shall be adjusted to exclude the following items that occur during a given performance cycle:~~

•	~~extraordinary, unusual or non-recurring items of gain or loss;~~

•	~~gains or losses on the disposition of a business, a segment of a business, or significant assets outside the ordinary course of business;~~

•	~~changes in tax or accounting standards, principles, regulations or laws;~~

•	the effect of a merger or acquisition, including all financial results derived therefrom during the period from the merger or acquisition date through the end of the performance cycle in which the merger or acquisition occurred;

•	gains or losses due to non-cash adjustments which relate to the valuation of long-term assets rather than current-year performance (including but not necessarily limited to gain or loss recognized or store closures, lease terminations, pension adjustments and mark to market adjustments); and

•	the impact of other similar occurrences outside of the Company’s core, on-going business activities (including but not necessarily limited to litigation or tax reserves, financing activities, foreign exchange rate fluctuations and restructuring charges).

In all other respects, performance measures comprising performance criteria for an award shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles (GAAP), or under a non-GAAP methodology established by the Committee prior to the issuance of an award. The method of calculating performance measurements shall be consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report or proxy statement.

~~The Committee shall identify such performance criteria and related conditions not later than the 90~~^thday of a performance cycle, and before 25% of such performance cycle has elapsed. The Committee shall certify in writing prior to payout that such conditions and any other material terms were in fact satisfied.

The descriptions of the annual limits, the individuals eligible to participate in the Plan, and this description of performance measures upon which awards may be conditioned are material terms of the Plan. Material terms are required to be disclosed to and approved by shareholders for purposes of meeting the requirements for performance-based compensation under Code Section 162(m).

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Change in Control

~~Award agreements under~~

Under the 2019 Plan ~~may provide that~~ the vesting and exercisability of the awards will accelerate, in whole or in part, upon (i) a “qualifying termination” within 12 months following (ii) a change in control. A “qualifying termination” means an involuntary, employer-initiated termination without cause or a voluntary termination for good reason. Upon a change in control, the Committee may also allow for a cash payment or for the assumption, substitution or exchange of any or all outstanding awards.

Federal Income Tax Consequences

The tax consequences of the 2019 Plan are complex, and the following discussion deals only with general tax principles applicable to the 2019 Plan under federal law.

Incentive stock options are options which under certain circumstances and subject to certain tax restrictions, have special tax benefits for employees under the Internal Revenue Code. Nonqualified stock options are options which do not receive such special tax treatment.

When the Committee grants an incentive stock option and when the participant exercises an incentive stock option and acquires Common Stock, the participant realizes no taxable income and the Company can claim no ~~deduction (however,~~deduction. (However, the differences between the fair market value of the shares upon exercise and the exercise price is an item of tax preference subject to the possible application of the alternative minimum ~~tax).~~tax.) If the participant disposes of the stock before two years from grant or one year from ~~the~~ exercise of the incentive stock option (a disqualifying disposition), any gain will be deemed compensation and taxed as ordinary income to the extent of the lesser of:

•	~~the spread between the option price and the fair market value of the stock at exercise (the spread); or~~

•	~~the difference between the sale price and the exercise price.~~

the spread between the option price and the fair market value of the stock at exercise; or

the difference between the sale price and the exercise price.

If a disqualifying disposition occurs, the Company can claim a deduction equal to the amount treated as compensation. If one- and two-year holding periods are satisfied, any gain realized when the shares are sold will be treated as capital gain, and the Company will receive no corresponding tax deduction.

When the Committee grants a nonqualified stock option, the participant realizes no taxable income and the Company can claim no deduction. ~~Upon~~On exercise of a nonqualified stock option, the participant realizes ordinary income to the extent of the spread and the Company can claim a tax deduction for the same amount.

When the Committee grants a stock appreciation right, the participant realizes no taxable income and the Company can claim no deduction. The cash or fair market value of stock received on a stock appreciation right exercise is taxed to the participant at ordinary income rates. The Company can claim a tax deduction in the same amount at such time.

Upon grant of unrestricted shares, the participant realizes ordinary income equal to the fair market value of the Common Stock on the date of grant and the Company can generally claim a tax deduction for the same amount.

Grants of restricted shares are generally not taxable to participants at the time of grant and the Company generally claims no deduction at that time. The Company receives a deduction and the participant recognizes taxable income equal to the fair market value of the stock at the time the restrictions lapse (i.e., at the time the restricted shares vest), unless the participant elects, within thirty days of notification of the award, to recognize the income on the award date, in accordance with Code Section 83(b) (an “83(b) election”). If the participant makes an 83(b) election, the Company receives a corresponding deduction at the time of grant. Any dividends received on restricted shares prior to the date the participant recognizes income on the stock are taxable compensation income when received and the Company is entitled to a corresponding tax deduction at such time.

The grant of restricted ~~shares, restricted~~ stock units orand performance share units ~~that are subject to performance measures~~ generally does not result in taxable income to the participant. ~~Following~~Upon vesting, the ~~completion~~number of ~~the performance period, the award is determined and~~shares issued or cash paid ~~or distributed. The full value paid or distributed~~ is treated as ordinary income, and the Company is entitled to a corresponding tax deduction at such time.

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New Plan Benefits

~~Participants~~

The Committee has full discretion to determine the number and amount of options, stock appreciation rights, unrestricted and restricted shares, and restricted share units and performance share units to be granted to participants, subject to the annual limitations described on page 66. Therefore, the benefits and amounts that will be received by each of the Named Executive Officers, the executive officers as a group, nonemployee directors and all other employees under the 2019 Plan are ~~eligible to receive awards~~not presently determinable. The fair market value as ~~determined~~of the close of trading on March 15, 2019 was $43.74 per share.

Term, Termination and Amendment

The 2019 Plan will remain in effect for a period of 10 years unless earlier terminated by the ~~Committee. All employees~~Board. The Board may, at any time and for any reason, amend the 2019 Plan. An amendment of ~~the Company and its subsidiaries and nonemployee directors of the Company are eligible to receive awards under the Plan. Awards under~~ the Plan will ~~generally~~ be ~~made at~~subject to the ~~discretion~~approval of the ~~Committee and are therefore not determinable at this time. Please refer~~Company’s shareholders to the ~~Grants of Plan-Based Awards Table on pages 40 and 41~~extent required by applicable laws, regulations or rules.

NORDSTROM, INC. - 2019 Proxy Statement 69

Back to ~~review equity awards made to our Named Executive Officers in fiscal year 2016.~~

~~NORDSTROM, INC.~~ -~~2017 Proxy Statement~~61

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Ownership Table

The following table shows the amount of Common Stock beneficially owned (unless otherwise indicated) by holders of more than 5% of the outstanding shares of Common Stock, by our Directors, by the Named Executive Officers, and by all Directors and ~~executive officers~~Executive Officers of the Company as a group. Except as otherwise noted, all information is as of March ~~7, 2017.~~

Name of Beneficial Owner Amount and Nature of
Beneficial Ownership
(#) Percent of
Ownership
(%)
Bruce A. Nordstrom
(a) 1617 Sixth Avenue
Seattle, Washington 98101-1707 25,697,712 15.40
Anne E. Gittinger (b)
1617 Sixth Avenue
Seattle, Washington 98101-1707 15,403,464 9.23
Blake W. Nordstrom (c) 3,538,121 2.11
Peter E. Nordstrom (d) 3,305,382 1.97
Erik B. Nordstrom (e) 3,259,261 1.95
Michael G. Koppel (f) 343,908 *
Kenneth J. Worzel (g) 165,892 *
Robert D. Walter (h) 81,645 *
Enrique Hernandez, Jr. (i) 80,236 *
Philip G. Satre (j) 70,693 *
B. Kevin Turner (k) 25,915 *
Brad D. Smith (l) 10,321 *
Shellye L. Archambeau (m) 8,503 *
Gordon A. Smith (n) 7,343 *
Bradley D. Tilden (o) 6,480 *
Tanya L. Domier (p) 5,759 *
Directors and Executive Officers as a group (22 persons) (q) 12,446,042 7.32
Other >5% Security Holders
The Vanguard Group (r)
100 Vanguard Blvd.
Malvern, PA 19355 12,896,056 7.73

15, 2019.



Name of Beneficial Owner		Amount and Nature of Beneficial Ownership (#)	Percent of Ownership (%)
(a)	Bruce A. Nordstrom 1617 Sixth Avenue Seattle, Washington 98101-1707	25,241,278	16.29
(b)	Anne E. Gittinger 1617 Sixth Avenue Seattle, Washington 98101-1707	15,403,689	9.94
(c)	Peter E. Nordstrom	3,389,278	2.18
(d)	Erik B. Nordstrom	3,177,793	2.04
(e)	Kenneth J. Worzel	153,852	*
(f)	Anne L. Bramman	18,396	*
(g)	Christine F. Deputy	61,212	*
(h)	Philip G. Satre	87,196	*
(i)	B. Kevin Turner	36,720	*
(j)	Brad D. Smith	18,585	*
(k)	Gordon A. Smith	17,779	*
(l)	Shellye L. Archambeau	17,175	*
(m)	Bradley D. Tilden	12,783	*
(n)	Tanya L. Domier	12,062	*
(o)	Stacy Brown-Philpot	8,100	*
(p)	Kirsten A. Green	772	*
(q)	Glenda G. McNeal	772	*
(r)	Directors and Executive Officers as a group (21 persons)	8,164,921	5.21
	Other >5% Security Holders
(s)	The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355	13,686,020	8.83

*
*	Does not exceed 1% of the Company’s outstanding Common Stock.

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(a)	Bruce A. Nordstrom

Amount and nature of beneficial ownership includes:

10,243,647 shares owned by him directly;

355 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events;

261,776 shares owned by his wife individually;

8,490,560 shares held by trusts of which he is a trustee and beneficiary; and

6,244,940 shares held by trusts of which he is a co-trustee and for which he has shared voting and dispositive power. Mr. Nordstrom is a contingent remainderman with respect to these trusts, but disclaims any beneficial ownership with respect to the shares of Common Stock held in the trusts.

•	~~6,199,062 shares owned by him directly;~~

•	~~1,066 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events;~~

•	~~261,776 shares owned by his wife individually;~~

•	~~12,990,868 shares held by trusts of which he is a trustee and beneficiary; and~~

•	6,244,940 shares held by trusts of which he is a co-trustee and for which he has shared voting and dispositive power. Mr. Nordstrom is a contingent remainderman with respect to these trusts, but disclaims any beneficial ownership with respect to the shares of Common Stock held in the trusts.

(b)	Anne E. Gittinger

Amount and nature of beneficial ownership includes:

•	~~13,842,861 shares owned by her directly;~~

•	~~5,403 shares held by her in the Company’s 401(k) Plan; and~~

•	~~1,555,200 shares held by a trust of which she is a trustee and beneficiary.~~

13,844,023 shares owned by her directly;

4,466 shares held by her in the Company’s 401(k) Plan; and

1,555,200 shares held by a trust of which she is a trustee and beneficiary.

Does not include:

5,501,520 shares held by a trust of which she is the beneficiary, but over which she holds no voting or investment power and which are reported as beneficially owned by her brother, Bruce A. Nordstrom.

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~~(c)~~

~~Blake W. Nordstrom~~

Amount and nature of beneficial ownership includes:

•	~~2,086,311 shares owned by him directly;~~

•	~~89,847 shares held by him in the Company’s 401(k) Plan;~~

•	~~603,493 shares that may be acquired by him through stock options exercisable within 60 days after March 7, 2017;~~

•	~~377,626 shares owned by his wife individually;~~

•	~~32,794 shares held by trusts of which he is a trustee;~~

•	~~199,595 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership; and~~

•	~~148,455 shares held by trusts of which he is a co-trustee, as to which he shares voting and dispositive power with Peter Nordstrom and for which he disclaims beneficial ownership.~~

~~(d)~~

~~Peter E. Nordstrom~~

2,471,488 shares owned by him directly, of which 230,000 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging;

32,330 shares held by him in the Company’s 401(k) Plan;

502,727 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019;

175,533 shares owned by his wife individually;

445 shares held by his wife in the Company’s 401(k) Plan;

49,060 shares held by trusts of which he is the trustee; and

157,695 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership.

(d) Erik B. Nordstrom

Amount and nature of beneficial ownership includes:

•	~~2,261,247 shares owned by him directly, of which 230,000 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging;~~

•	~~29,982 shares held by him in the Company’s 401(k) Plan;~~

•	~~573,862 shares that may be acquired by him through stock options exercisable within 60 days after March 7, 2017;~~

•	~~175,533 shares owned by his wife individually;~~

•	~~419 shares held by his wife in the Company’s 401(k) Plan;~~

•	~~49,060 shares held by trusts of which he is the trustee;~~

•	~~66,824 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership; and~~

•	~~148,455 shares held by trusts of which he is a co-trustee, as to which he shares voting and dispositive power with Blake Nordstrom and for which he disclaims beneficial ownership.~~

~~(e)~~

~~Erik B. Nordstrom~~

2,583,088 shares owned by him directly, of which 457,582 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging;

24,802 shares held by him in the Company’s 401(k) Plan;

502,727 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019;

42,646 shares owned by his wife individually; and

24,530 shares held by a trust of which he is the trustee.

(e) Kenneth J. Worzel

Amount and nature of beneficial ownership includes:

•	~~2,373,819 shares owned by him directly, of which 457,582 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging;~~

•	~~23,014 shares held by him in the Company’s 401(k) Plan;~~

•	~~573,862 shares that may be acquired by him through stock options exercisable within 60 days after March 7, 2017;~~

•	~~42,646 shares owned by his wife individually;~~

•	~~53,132 shares held by trusts of which he is the trustee; and~~

•	~~192,788 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership.~~

~~(f)~~

~~Michael G. Koppel~~

19,923 shares owned by him directly;

5,671 nonvoting stock units held under the Company’s Executive Deferred Compensation Plan;

4,222 shares held by him in the Company’s 401(k) Plan; and

124,036 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019.

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(f) Anne L. Bramman

Amount and nature of beneficial ownership includes:

•	~~45,320 shares owned by him directly;~~

•	~~29,014 nonvoting stock units held under the Company’s Executive Deferred Compensation Plan;~~

•	~~7,016 shares held by him in the Company’s 401(k) Plan; and~~

•	~~262,558 shares that may be acquired by him through stock options exercisable within 60 days after March 7, 2017.~~

~~(g)~~

~~Kenneth J. Worzel~~

•	~~12,266 shares owned by him directly;~~

•	~~5,338 nonvoting stock units held under the Company’s Executive Deferred Compensation Plan;~~

•	~~3,523 shares held by him in the Company’s 401(k) Plan; and~~

•	~~144,765 shares that may be acquired by him through stock options exercisable within 60 days after March 7, 2017.~~

~~(h)~~

~~Robert D. Walter~~

18,396 shares owned by her directly.

(g) Christine F. Deputy

Amount and nature of beneficial ownership includes:

•	~~54,926 shares owned by him directly; and~~

•	~~26,719 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including his retirement from the Board.~~

~~(i)~~

~~Enrique Hernandez, Jr.~~

13,124 shares owned by her directly; and

48,088 shares that may be acquired by her through stock options exercisable within 60 days after March 15, 2019.

(h) Philip G. Satre

Amount and nature of beneficial ownership includes:

•	~~3,772 shares owned by him directly; and~~

•	~~76,464~~ 20,366 nonvoting deferred stock units. The stock units are convertible into Common Stock ~~and payable upon the occurrence of certain events, including his retirement from the Board.~~

~~(j)~~

~~Philip G. Satre~~

~~Amount~~ and ~~nature~~payable upon the occurrence of ~~beneficial ownership includes:~~

•	~~19,171 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of~~ certain events, including his retirement from the Board; ~~and~~

•	~~51,522 shares held by a family trust, of which he is a trustee and beneficiary.~~

~~(k)~~

~~B. Kevin Turner~~

~~Amount~~ and ~~nature of beneficial ownership includes:~~

~~25,915 shares owned by him directly.~~

~~(l)~~

~~Brad D. Smith~~

~~Amount and nature of beneficial ownership includes:~~

~~10,321~~66,830 shares held by a family trust, of which he is a trustee and beneficiary.

~~(m)~~

~~Shellye L. Archambeau~~

(i) B. Kevin Turner

Amount and nature of beneficial ownership includes:

•	~~2,296 shares owned by her directly; and~~

•	~~6,207 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including her retirement from the Board.~~

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36,720 shares owned by him directly.

~~(n)~~

~~Gordon A. Smith~~

(j) Brad D. Smith

Amount and nature of beneficial ownership includes:

~~7,343~~18,585 shares ~~owned~~held by ~~him directly.~~a family trust, of which he is a trustee and beneficiary.

~~(o)~~

~~Bradley D. Tilden~~

(k) Gordon A. Smith

Amount and nature of beneficial ownership includes:

~~6,480~~17,779 shares owned by him directly.

~~(p)~~

~~Tanya L. Domier~~

(l) Shellye L. Archambeau

Amount and nature of beneficial ownership includes:

~~5,759~~2,296 shares owned by her directly; and

14,879 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including her retirement from the Board.

(m) Bradley D. Tilden

Amount and nature of beneficial ownership includes:

12,783 shares held by a family trust, of which he is a trustee and beneficiary.

(n) Tanya L. Domier

Amount and nature of beneficial ownership includes:

12,062 shares owned by her directly.

~~(q)~~

~~Directors and executive officers as a group (22 persons)~~

(o) Stacy Brown-Philpot

Amount and nature of beneficial ownership includes:

3,444 shares owned by her directly; and

4,656 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including her retirement from the Board.

(p) Kirsten A. Green

Amount and nature of beneficial ownership includes:

772 shares owned by her directly.

(q) Glenda M. McNeal

Amount and nature of beneficial ownership includes:

772 shares owned by her directly.

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(r) Directors and executive officers as a group (21 persons)

Collectively, the combined amount and nature of beneficial ownership for the Directors and all executive officers include:

•	~~7,651,125 shares owned directly, of which 692,382 shares are pledged as collateral for third party obligations;~~

•	~~1,482,627 shares owned by spouses and trusts of which the respective Director or executive officer is a trustee, or a trustee and beneficiary;~~

•	~~128,561 nonvoting stock units held by participating Directors under the Directors Deferred Compensation Plan;~~

•	~~62,440 nonvoting stock units held by participating executive officers under the Company’s Executive Deferred Compensation Plan;~~

•	~~199,878 shares held by participating executive officers and their eligible spouses in the Company’s 401(k) Plan; and~~

•	~~2,921,411 shares that may be acquired by the executive officers as a group through stock options exercisable within 60 days after March 7, 2017.~~

~~(r)~~

~~The Vanguard Group~~

5,698,405 shares owned directly, of which 705,977 shares are pledged as collateral for third party obligations;

730,713 shares owned by spouses and trusts of which the respective Director or executive officer is a trustee, or a trustee and beneficiary;

39,902 nonvoting stock units held by participating Directors under the Directors Deferred Compensation Plan;

5,671 nonvoting stock units held by participating executive officers under the Nordstrom Deferred Compensation Plan;

81,410 shares held by participating executive officers and their eligible spouses in the Company’s 401(k) Plan; and

1,608,820 shares that may be acquired by the executive officers as a group through stock options exercisable within 60 days after March 15, 2019.

(s) The Vanguard Group

Pursuant to a Schedule 13G filing made with the SEC, as of December 31, ~~2016,~~2018, the aggregate amount beneficially owned by The Vanguard Group includes:

•	~~12,687,713 shares for which it has sole power to vote or to dispose or to direct disposition; and~~

•	~~208,343 shares for which it has shared power to dispose or to direct disposition.~~

13,502,343 shares for which it has sole power to vote or to dispose or to direct disposition; and

183,677 shares for which it has shared power to dispose or to direct disposition.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon a review of reports filed with the SEC and written representations that no other reports were required, the Company believes that during the fiscal year ended ~~January 28, 2017~~February 2, 2019 all of our Directors, Executive Officers and owners of in excess of 10% of Common Stock complied with the filing requirements of Section 16(a) of the Exchange Act, except that ~~Daniel F. Little~~Bruce Nordstrom filed one report on Form 4 late relating to the ~~correction~~distribution of shares from the ~~total number of options exercised and sold under a 10b5-1 Trading~~Directors Deferred Compensation Plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Review and Approval Process

We maintain policies and procedures regarding the identification, review and approval of related party transactions. In compliance with SEC rules, the Corporate Governance and Nominating Committee reviews and approves or disapproves any transaction or series of related transactions in which: (1) the amount involved exceeds $120,000, (2) the Company or any of its subsidiaries is a participant, and (3) a related party (a Director or Executive Officer of the Company, any nominee for director, any greater than 5% shareholders and any immediate family member of such persons) has a direct or indirect material interest. When considering a transaction, the Committee will review all relevant factors including the Company’s rationale for entering into a related party transaction, alternatives to the transaction, whether the transaction is on terms at least as fair to the Company as would be the case if the transaction were entered with a third party, and the potential of an actual or apparent conflict of interest. After reviewing the information, the Committee will approve or ratify the transaction or transactions only if the Committee determines that the transaction is reasonable and fair to the Company.

Related Party Transactions

Property Sublease. The Company leases a parcel of land from King County, Washington at the King County International Airport and operates its flight department from that location. The size of the Company’s flight department is such that the Company does not require access to or use of the entire parcel, and is able to sublease a portion of the property to Hangar Three LLC (“LLC”) without affecting the Company’s flight operations. LLC is owned by the estate of Blake W. Nordstrom, James F. Nordstrom, Jr. and John N. Nordstrom. LLC constructed a hangar for storage of the owners’ personal aircraft on the subleased property. All architectural, project management and construction costs for the hangar, utilities and landscaping improvements were borne by LLC and not by the Company. Upon expiration or termination of the sublease, the hangar improvements will be surrendered to the Company. The material terms of the sublease are as follows:

•	The current sublease carries a term through July 2020, with the Company having the right to terminate it at any time upon 90 days’ notice to LLC, and payment to LLC of the unamortized portion of the construction cost of the hangar.

•	LLC pays the Company a monthly base rent and estimated real estate tax in the form of reimbursement to the Company of its pro rata share of ground rent paid by the Company under the primary lease with King County, currently $11,270 per month.

•	LLC also pays the Company additional rent in the form of reimbursement to the Company of its pro rata share of maintenance costs of the common areas, currently $900 per month, plus a monthly management fee of $135.

•	LLC paid a one-time security deposit in August 2007 in the amount of $10,463, plus an additional sum of $6,069 was paid in August 2009 and $3,141 was paid in August 2015 to increase the security deposit amount to the required two times the current base rent of $9,836.

•	~~In total, LLC paid the Company rent of $147,949 during the fiscal year ended January 28, 2017.~~

The current sublease carries a term through July 2020, with the Company having the right to terminate it at any time upon 90 days’ notice to LLC, and payment to LLC of the unamortized portion of the construction cost of the hangar.

LLC pays the Company a monthly base rent and estimated real estate tax in the form of reimbursement to the Company of its pro rata share of ground rent paid by the Company under the primary lease with King County, currently $11,082 per month.

LLC also pays the Company additional rent in the form of reimbursement to the Company of its pro rata share of maintenance costs of the common areas, currently $900 per month, plus a monthly management fee of $135.

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LLC paid a one-time security deposit in August 2007 in the amount of $10,463, plus an additional sum of $6,069 was paid in August 2009, $3,141 was paid in August 2015, and $491 was paid in August 2018 to increase the security deposit amount to the required two times the current base rent of $10,082.

In total, LLC paid the Company rent of $143,685 during the fiscal year ended February 2, 2019 (total rent is inclusive of the month of February).

Venture Investment. On February 26, 2019, Kirsten Green was appointed to serve as a member of the Company’s Board of Directors. Ms. Green is the Founder and Managing Partner of Forerunner Ventures Management, LLC (“Forerunner”), a venture capital firm. During the fiscal year ended February 2, 2019, the Company made aggregate investments of $1,800,276 in Forerunner limited partnerships for which Ms. Green, or certain of her affiliates, served as the general partner and in which Ms. Green may be deemed to have a pecuniary interest. On January 30, 2019, prior to Ms. Green’s appointment to the Board of Directors, the Company divested itself of all of its Forerunner Ventures investments.

OTHER MATTERS

The Board knows of no other matters that will be presented at the ~~2017~~ Annual ~~Meeting of Shareholders.~~Meeting. However, if any other matters are properly presented at the Annual Meeting or any convening or reconvening of the Annual Meeting upon an adjournment or postponement of the Annual Meeting, it is the intention of the persons named as proxies to vote in accordance with their best judgment.

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~~2018~~

2020 ANNUAL MEETING OF SHAREHOLDERS INFORMATION

Requirements and Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders

If a shareholder wants usthe Company to include a shareholder proposal in our Proxy Statement for the ~~2018~~2020 Annual Meeting of Shareholders pursuant to SEC Rule 14a-8 promulgated under the Securities Exchange Act of 1934, (“Exchange Act”) our Corporate Secretary must receive the proposal at our principal executive offices no later than December ~~6, 2017.~~11, 2019. Any such proposal must comply with all the requirements of Rule 14a-8.

Under our Bylaws, shareholders must follow certain procedures to nominate a person for election as a director at an annual or special meeting, or to introduce an item of business at an annual meeting. Under these advance-notice procedures, shareholders must submit the proposed nominee or item of business by delivering a notice to the Corporate Secretary of the Company at our principal executive offices. We must receive notice as follows:

•	We must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s meeting. Assuming that the 2017 Annual Meeting of Shareholders is held on schedule, we must receive notice pertaining to the 2018 Annual Meeting of Shareholders no earlier than January 16, 2018 and no later than February 15, 2018.

•	However, if we hold the 2018 Annual Meeting of Shareholders on a date that is not within 30 days before or after such anniversary date, we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly.

•	If we hold a special meeting to elect directors, we must receive a shareholder’s notice of intention to introduce a nomination no later than ten days following the day on which notice of the annual meeting was mailed to shareholders.

We must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s meeting. Assuming that the Annual Meeting is held on schedule, we must receive notice pertaining to the 2020 Annual Meeting of Shareholders no earlier than January 24, 2020 and no later than February 23, 2020.

However, if we hold the 2020 Annual Meeting of Shareholders on a date that is not within 30 days before or after such anniversary date, we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly.

If we hold a special meeting to elect directors, we must receive a shareholder’s notice of intention to introduce a nomination no later than ten days following the day on which notice of the annual meeting was mailed to shareholders.

Our Bylaws provide that notice of a proposed nomination must include certain information about the shareholder and the nominee, as well as a written consent of the proposed nominee to serve if elected. A notice of a proposed item of business must include a description of and the reasons for bringing the proposed business to the meeting, any material interest of the shareholder in the business and certain other information about the shareholder. Any notice (other than a proposal pursuant to Rule 14a-8) that is received after the times specified herein for proposed items of business will be considered untimely under Rule 14a-4c under the Exchange Act. The persons named in the proxy for the meeting may exercise their discretionary voting power with respect to all such matters, including voting against them. All director nominations and shareholder proposals, other than shareholder proposals made pursuant to Rule 14a-8 under the Exchange Act, must comply with the requirements of the Company’s Bylaws. You may obtain a copy of the Company’s Bylaws at no cost from the Company’s Corporate Secretary or online atinvestor.nordstrom.com ~~under~~by selecting the Corporate ~~Governance.~~Governance item in the Investor Relations drop-down menu. The contact information for the Company’s Corporate Secretary is on page ~~70.~~

79.

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FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

1.

1.	Why am I receiving these materials?

The Company has made these materials available to you on the Internet or, upon your request, delivered printed versions of these materials to you by mail, because you were a shareholder of Nordstrom, Inc. as of March ~~7, 2017,~~15, 2019, the Record Date, and were entitled to receive notice of the ~~2017~~2019 Annual Meeting of Shareholders and to vote on matters that will be presented at the Annual Meeting.

2.

2.	What items will be voted on at the Annual Meeting?



Shareholders will vote on the following matters at the Annual Meeting:		Board Recommendation:		Page Reference (for more detail)
Proposal 1	To elect the 1211 nominees to the Board named in this Proxy Statement		FOR each Director Nominee		19
Proposal 2	To ratify the appointment of Deloitte & Touche as our IndependentRegistered Public Accounting Firm	FOR	~~FOR~~		24 25
Proposal 3	To conduct an advisory vote regarding the compensation ofour Named Executive ~~Officers: Say on Pay~~Officers	FOR	~~FOR~~		53 61
Proposal 4	~~To conduct an advisory vote regarding the frequency of futureadvisory votes on the compensation of our Named Executive Officers~~		~~FOR “1 YEAR”~~		54
~~Proposal 5~~	To approve the ~~Amendment and Restatement of the~~ Nordstrom, Inc.~~2010~~ 2019 Equity Incentive Plan	FOR	~~FOR~~		5664
Other	Such other business as may properly come before the Annual Meetingand any adjournments or postponements thereof

3.

3.	How can I view the webcast? Where is the Annual Meeting being held?

You can view the live webcast of the Annual Meeting atinvestor.nordstrom.com. Select ~~Webcasts & Presentations~~Events, and follow the instructions given. If you would like to attend the Annual Meeting in person, it is being held in the John W. Nordstrom Room, ~~which is~~5th floor, located in the Nordstrom Downtown Seattle ~~Nordstrom,~~Store, 1617 Sixth Avenue, 5^th~~Floor,~~ Seattle, Washington ~~98101-1707.~~

98101.

4.

4.	Why did I receive a Notice instead of a full set of proxy materials? How can I access the proxy materials online?

We are furnishing proxy materials to our shareholders primarily via the Internet as many of our shareholders prefer that method. By doing so, we increase the convenience of our proxy materials, reduce the environmental impact of our Annual Meeting, and save costs. On April ~~5, 2017,~~12, 2019, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders who had not previously requested printed materials.

The Notice contains instructions about how to access our proxy materials and vote online. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice. If you have previously chosen to receive our proxy materials electronically, you will receive access to these materials via email unless you elect otherwise.

5.

5.	What is a proxy and what is the purpose of this Proxy Statement?

If you designate another person to vote your ~~stock,~~shares, that other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. If you vote online or complete the proxy card enclosed with the materials sent by mail to give us your proxy, you will have designated ~~Blake W. Nordstrom,~~Anne L. Bramman, our ~~Co-President,~~Chief Financial Officer, and ~~Robert B. Sari, an Executive Vice President and~~Kelley Hall, our ~~General Counsel and Corporate Secretary,~~Chief Accounting Officer, as your proxies to vote your shares as you have directed. This Proxy Statement provides information about the matters to be voted on by shareholders at the Annual Meeting, along with other information regarding the governance of ~~Nordstrom,~~the Company, including our Board Committee structure and executive compensation.

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6.	What is the difference between a shareholder of record and a street name shareholder?

Many ~~Nordstrom~~Company shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own names. As summarized below, there are some distinctions between shares held as a shareholder of record and those held in street name.

•

~~Shareholders of record:~~ If your shares are registered directly in your name with Nordstrom’s transfer agent, Computershare, you are considered the “shareholder of record” or a “registered shareholder,” and the Notice or proxy materials are being sent directly to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to Nordstrom

Shareholders of record: If your shares are registered directly in your name with the Company’s transfer agent, Computershare, you are considered the “shareholder of record” or a “registered shareholder,” and the Notice or proxy materials are being sent directly to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the Annual Meeting.

Street name shareholders: If your shares are held in a stock brokerage account or by a bank, trustee or nominee, you are considered the beneficial owner of shares held in “street name,” and the Notice or proxy materials are being forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record. As the street name shareholder you have the right to direct your broker, bank or other holder of record on how to vote your shares and you are invited to attend the Annual Meeting. Your broker, bank, trustee or nominee is obligated to provide you with a voting instruction form for you to use.



•7.	*~~Street name shareholders:~~* If your shares are held in a stock brokerage account or by a bank, trustee or nominee, you are considered the beneficial owner of shares held in “street name,” and the Notice or proxy materials are being forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record. As the street name shareholder you have the right to direct your broker, bank or other holder of record on how to vote your shares and you are invited to attend the Annual Meeting. Your broker, bank, trustee or nominee is obligated to provide you with a voting instruction form for you to use.

7.	How do I cast my vote?

We encourage you to vote on the Internet or by telephone. It is convenient, and it saves us significant postage and processing costs. In addition, when you vote on the Internet or by telephone, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted. The method by which you vote your proxy will not limit your right to vote at the Annual Meeting if you decide to attend in person.

Shareholders of record: The Internet and telephone voting procedures are designed to verify that you are a shareholder of record by using a control number and allowing you to confirm that your voting instructions have been properly recorded. Internet and telephone voting for shareholders of record are available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on May ~~15, 2017.~~

22, 2019.



	*Voting on the Internet.* You may vote on the Internet by using the voting portal found atwww.proxyvote.com. You can thenconfirm that your instructions have been properly recorded.

	*Voting by Telephone.* If you request printed materials, you may vote by telephone using the toll-free number listed on your proxycard. Voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.

*	*Voting by Mail.* If you request printed materials, you may vote by signing, dating and returning your proxy card.

	*Voting in Person.* You may vote your shares at the Annual Meeting.

Street name shareholders: You may vote by the method explained on the proxy card or the information you receive from the bank, broker or other record holder. If you are a street name shareholder, you must obtain a proxy, executed in your favor, from the bank, broker or other holder of record to be able to vote in person at the Annual Meeting.

Shareholders holding shares invested in the Company’s 401(k) Plan: If you participate in the Company’s 401(k) Plan, the number of shares of Common Stock in your account as of the Record Date are reflected on your proxy notice and may be voted as described above for shareholders of record. However, if your vote on those shares is not received by 11:59 p.m. Eastern Daylight Time on May ~~11, 2017,~~19, 2019, then the ~~Nordstrom, Inc.~~Company’s Retirement Committee will vote those shares in the same proportion as all other 401(k) Plan shares that have been voted.

Shareholders holding shares purchased through the Company’s Employee Stock Purchase ~~Plan:~~Plan: If you hold Common Stock that you acquired through the Company’s Employee Stock Purchase Plan, you are the beneficial owner of those shares and your shares may be voted as described above for street name shareholders.

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8.

8.	What does it mean if I receive more than one Notice or package of proxy materials?

This means that you have multiple accounts holding Nordstrom shares. These may include: accounts with our transfer agent, Computershare; shares held in the Nordstrom 401(k) Plan or purchased through the Employee Stock Purchase Plan; and accounts with a broker, bank or other holder of record. Please vote all Notices, voting instruction forms and proxy cards that you receive to ensure that all of your shares are voted.

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9.	What is a quorum and what is the voting requirement to approve each of the proposals?

We will have a quorum and will be able to conduct the business of the Annual Meeting if at least ~~83,425,627~~77,476,378 shares, a majority of the outstanding shares of Common Stock as of the Record Date, are present at the Annual Meeting, either in person or by proxy. Your shares will be counted toward the number needed for a quorum if you: (i) vote on the Internet or by telephone; (ii) submit a valid proxy card or voting instruction form; or (iii) in the case of a shareholder of record, attend the Annual Meeting and vote your shares in person.

To elect directors and adopt the other proposals, the following votes are required:

~~Proposal~~

			Discretionary
Proposal	Vote Required		~~Discretionary~~ Voting Allowed?
Election of Directors		Majority of Votes Cast		No
Ratification of the Appointment of Independent Registered Public Accounting Firm		Majority of Votes Cast		Yes
Advisory Vote Regarding Executive ~~Compensation: Say on Pay~~	Compensation	Majority ~~of Votes Cast~~		No
~~Advisory Vote Regarding the Frequency of Future Advisory Votes on Executive Compensation~~		~~Plurality~~ of Votes Cast		No
Approval of the ~~Amendment and Restatement of the~~ Nordstrom, Inc. ~~2010~~2019 Equity Incentive Plan		Majority of Votes Cast		No

Under Washington corporation law and our Articles of Incorporation and Bylaws, the approval of any corporate action taken at a shareholder meeting is based on votes cast. “Votes cast” means votes actually cast “for” or “against” a particular proposal, whether by proxy or in person. Broker nonvotes (broker nonvotes and discretionary voting are explained in the answer to Question 12) and abstentions are not considered “votes cast” and have no effect on the proposals.

•

Election of Directors; Majority Vote Policy:~~Election of Directors; Majority Vote Policy:~~ In the election of Directors, the Company has adopted a majority voting standard as described in more detail on page 13 under Director Elections. Because this is an uncontested election, an incumbent director nominee will be elected if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee. If a director nominee does not receive the requisite votes, that Director’s term will end on the date on which an individual is selected by the Board to fill the position held by such Director or 90 days after the date the election results are determined, whichever occurs first. You may vote “for,” “against” or “abstain” with respect to the election of each nominee.

Ratification of the Appointment of Independent Registered Public Accounting Firm: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2019. You may vote “for,” “against” or “abstain” on this proposal.

Advisory Vote Regarding Executive Compensation: The votes cast “for” must exceed the votes cast “against” to approve, on an advisory basis, the Company’s executive compensation program. You may vote “for,” “against” or “abstain” on this proposal.

Approval of the Nordstrom, Inc. 2019 Equity Incentive Plan: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the Nordstrom, Inc. 2019 Equity Incentive Plan. You may vote “for,” “against” or “abstain” on this proposal.



•10.	*~~Ratification of the Appointment of Independent Registered Public Accounting Firm:~~* Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending February 3, 2018. You may vote “for,” “against” or “abstain” on this proposal.

•	*~~Advisory Vote Regarding Executive Compensation:~~* The votes cast “for” must exceed the votes cast “against” to approve, on an advisory basis, the Company’s executive compensation program. You may vote “for,” “against” or “abstain” on this proposal.

•	*~~Advisory Vote Regarding the Frequency of Future Advisory Votes on Executive Compensation:~~* ~~A plurality of votes cast means the highest number of “for” votes will be the advisory vote of the shareholders. You may vote “1 Year,” “2 Years,” “3 Years,” or abstain.~~

•	*~~Approval of the Amendment and Restatement of the Nordstrom, Inc. 2010 Equity Incentive Plan:~~* Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to approve the amendment and restatement of the Nordstrom, Inc. 2010 Equity Incentive Plan. The NYSE rules require that the total votes cast on this proposal must represent greater than 50% of all the shares entitled to vote on this proposal (the “Outstanding Shares”). That is, the total number of votes cast “for” and “against” the proposal (collectively, the “Shares Voted”) must exceed 50% of the Outstanding Shares. For purposes of this proposal, the NYSE considers an abstention as a vote against approval. Because your bank, broker or other holder of record does not have discretionary voting authority to vote your shares on this proposal absent specific instructions from you, broker nonvotes could create a situation where the Shares Voted do not exceed 50% of the Outstanding Shares. It is therefore important that you vote, or direct the holder of record to vote, on this proposal. You may vote “for,” “against” or “abstain” on this proposal.

~~10.~~

Can I change my mind after I vote?

Yes, if you vote by proxy, you may revoke that proxy at any time before it is voted at the Annual Meeting. You may do this by:

•

voting again on the Internet or by telephone prior to the Annual Meeting;

signing another proxy card with a later date and mailing it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, prior to the Annual Meeting; or

attending the Annual Meeting in person and delivering your proxy or casting a ballot.

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•11.	~~signing another proxy card with a later date and mailing it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, prior to the Annual Meeting; or~~

•	~~attending the Annual Meeting in person and delivering your proxy or casting a ballot.~~

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~~11.~~

What if I do not return my proxy card or voting instruction form or do not provide voting instructions?

•

Shareholders of record:~~Shareholders of record:~~ If you are a registered shareholder and do not vote by Internet or phone or return your voted proxy card, your shares will not be voted. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted for the ratification of Deloitte, but not on any of the other proposals.

Street name shareholders: If you are a beneficial owner whose shares are held by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares for the ratification of Deloitte even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on the election of Directors, the advisory vote regarding executive compensation or on any shareholder proposal without instructions from you, in which case a broker nonvote will occur. Since shares that constitute broker nonvotes will not be included in vote totals and have no effect on the outcome of the election of Directors, the advisory vote regarding executive compensation or any other matters properly brought before the meeting, it is important that you instruct your broker on how to vote your shares.

Shareholders with shares invested in the Company’s 401(k) Plan: If your vote of shares held through the Company’s 401(k) Plan is not received by 11:59 p.m. Eastern Daylight Time on May 19, 2019, then the Company’s Retirement Committee will vote your shares in the same proportion as shares that have been voted in the 401(k) Plan. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted by the Retirement Committee “for” all proposals. If any additional proposals are properly presented at the Annual Meeting and any adjournment thereof, the Retirement Committee will vote on the additional proposals in accordance with its discretion.



•12.	*~~Street name shareholders:~~* If you are a beneficial owner whose shares are held by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares for the ratification of Deloitte even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on the election of Directors, the advisory vote regarding executive compensation, the advisory vote regarding the frequency of future advisory votes on executive compensation, the approval of the Amendment and Restatement of the Nordstrom, Inc. 2010 Equity Incentive Plan or on any shareholder proposal without instructions from you, in which case a broker nonvote will occur. Since shares that constitute broker nonvotes will not be included in vote totals and have no effect on the outcome of the election of Directors, the approval of the Amendment and Restatement of the Nordstrom, Inc. 2010 Equity Incentive Plan, the advisory vote regarding executive compensation, the advisory vote regarding the frequency of future advisory votes on executive compensation or any other matters properly brought before the meeting, it is important that you instruct your broker on how to vote your shares.

•	*~~Shareholders with shares invested in the Company’s 401(k) Plan:~~*If your vote of shares held through the Company’s 401(k) Plan is not received by 11:59 p.m. Eastern Daylight Time on May 11, 2017, then the Company’s Retirement Committee will vote your shares in the same proportion as shares that have been voted in the 401(k) Plan. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted by the Retirement Committee “for” all proposals. If any additional proposals are properly presented at the Annual Meeting and any adjournment thereof, the Retirement Committee will vote on the additional proposals in accordance with its discretion.

~~12.~~

Will abstentions or broker nonvotes affect the voting results?

If you abstain from voting on a proposal, or if a broker or bank indicates it does not have discretionary authority to vote on a proposal, the shares will be counted for the purpose of determining if a quorum is present, but will have no effect on the other proposals to be considered at the Annual Meeting since these actions do not represent votes cast by shareholders.

~~13.~~

13.	Who will count the vote?

Broadridge Investor Communication Services (“Broadridge”) was appointed by the Board to tabulate the vote and act as Inspector of Election. Information about Broadridge is available atbroadridge.com. Proxies and ballots that identify the votes of individual shareholders are kept confidential from the Company’s management and Directors. Only Broadridge, as the proxy tabulator and the Inspector of Election, has access to the ballots, proxy forms and voting instructions. Broadridge will disclose information taken from the ballots, proxy forms and voting instructions only in the event of a proxy contest or as otherwise required by law.

~~14.~~

14.	Where can I find the voting results of the Annual Meeting?

We intend to announce preliminary voting results at the Annual Meeting and publish final results on a current report on Form 8-K within four business days of the Annual Meeting. The Form 8-K will be available online under the “SEC Filings” tab atinvestor.nordstrom.com.

~~15.~~

15.	Who will bear the cost of this proxy solicitation?

~~Nordstrom~~

The Company will bear the cost of this proxy solicitation, including reimbursing banks and brokers for reasonable expenses of sending out proxy materials to street name shareholders.

~~16.~~

16.	What if I have additional questions that are not addressed here?

You may call Nordstrom Investor Relations at 206-303-3200, e-mail Investor Relations atinvrelations@nordstrom.com,, or call the Corporate Secretary’s Office at 206-303-2541.

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~~Appendix A~~

~~Nordstrom, Inc. 2010 Equity Incentive Plan, As Amended and Restated February 16, 2017~~

~~This Plan is being amended to:~~

•	~~increase the number of shares of Common Stock available for issuance under the Plan by 6,200,000;~~

•Appendix A	allow the Compensation Committee (the “Committee”) to delegate to one or more senior executive officers of the Company the authority to make equity-based awards under the Plan to individuals who are not officers or directors of the Company; and

•	~~implement a one-year minimum vesting period requirement on awards made under the Plan.~~

~~This summary is qualified in its entirety by reference to the provisions of the Plan, as amended, a marked copy of which is below for your ease of reference.~~

~~ARTICLE I~~

~~Introduction~~

The purpose of the Plan is to promote the long-term success of the Company and its Subsidiaries. Specific objectives are intended to encourage the attraction and retention of Employees and Nonemployee Directors, focus such individuals’ results on the Company’s critical, long-range goals and align such individuals’ interests with those of the Company’s shareholders.

The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute incentive stock options (ISOs) or nonqualified stock options (NSOs)), stock appreciation rights (SARs), Unrestricted Shares, Restricted Shares, Restricted Stock Units and Performance Share Units.

~~The Plan shall be governed by, and construed in accordance with, the laws of the State of Washington (except their choice of law provisions).~~

~~ARTICLE II~~

~~Administration~~

~~2.1~~	~~Committee Composition.~~ ~~The Committee shall administer the Plan. The Committee shall consist exclusively of two (2) or more Directors of the Company, who shall be appointed by the Board.~~

~~2.2~~	~~Committee Responsibilities.~~ The Committee, in its absolute and sole discretion, shall (a) select the Employees and Nonemployee Directors who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan and (d) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee may delegate its authority hereunder to one or more Subcommittees~~or Company officers, to the extent permitted under Code section 162(m), the Treasury Regulations thereunder and any applicable exchange rules; actions taken by any Subcommitteeor officersshall be subject to review by the full Committee. The Committee’s determinations under the Plan shall be final and binding on all persons.~~

~~2.3~~	~~Committee for Non-Officer/Non-Director Awards.~~ ~~The Board may also appoint a secondary committee of the Board orone or more~~a ~~senior executive officersof the Company~~ to administer the Plan with respect to Employees who are not considered officers or Directors of the Company under Section 16 of the Exchange Act. That committee or senior executive officer may grant Awards under the Plan to such Employees and may determine all features and conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee or senior executive officer, as the case may be.

~~2.4~~	~~Leadership Benefits Powers and Duties.~~ Until such time as the Committee shall modify, revoke or rescind such authority, the Company’s Leadership Benefits department, or such other Company department as the Committee shall designate, has the powers and duties set forth below. Determinations made by the Leadership Benefits department (or other department) under this Section 2.4 shall be final and binding on all persons, but may, in the Committee’s absolute and sole discretion, be reviewed by the Committee. The powers and duties delegated by the Committee hereunder are to:

	~~(a)~~	~~work with Plan service providers to ensure the effective administration of the Plan;~~

	~~(b)~~	determine whether a Participant’s disability, as defined by a qualified medical professional acceptable to the Company’s Leadership Benefits department (or other department), qualifies as Disability as defined under the Plan; and

	~~(c)~~	~~perform any and all tasks, duties, and responsibilities delegated by the Company or the Committee.~~

	~~The Company’s Leadership Benefits department (or other department) has authority to interpret the terms of the Plan and any Award in carrying out the powers and duties as set forth above.~~

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~~ARTICLE III~~

~~Shares Available for Awards~~

~~3.1~~	~~Basic Limitation.~~ Shares issued pursuant to the Plan shall be authorized but unissued shares. The aggregate number of Shares available for Awards of Options, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units granted under the Plan shall not exceed (a) 35,756,446 Shares plus (b) the additional shares of Common Stock described in Section 3.3. The limitations of this Section 3.1 and Sections 3.2 and 3.3 shall be subject to adjustment pursuant to Article 12. The aggregate number of Shares available for issuance as Plan Awards shall be reduced by 1.6 (one point six) Shares for each Share delivered in settlement of any Award of Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units, and by 1 (one) Share for each Share delivered in settlement of any Option Award or SAR. Awards that are required to be settled in cash will not reduce the number of Shares available for delivery under the Plan.

~~3.2~~	~~Additional Shares.~~ If any Shares covered by an Award of Options, SARs, Restricted Shares, Restricted Stock Units or Performance Share Units terminate, lapse or are forfeited or cancelled, or such Award is otherwise settled without the delivery of the full number of Shares underlying the Award, then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture, termination, lapse, cancellation, etc., shall again be, or shall become, available for issuance under the Plan; provided, however, that Shares (a) delivered in payment of the exercise price of an Award, (b) not issued upon the net settlement or net exercise of SARs, or (c) delivered to or withheld by the Company to pay withholding taxes related to an Award, shall not become available again for issuance under this Plan. Shares that again become available for issuance under the Plan pursuant to this Section 3.2 shall be added to the number of Shares available under Section 3.1 in the same ratios as applied to them at the time they were originally granted (e.g., 1.6 (one point six) Shares for each Share attributable to previously granted Awards of Restricted Shares, Restricted Stock Units or Performance Share Units and 1 (one) Share for each Share attributable to previously granted Option Awards or SARs).

~~3.3~~	~~Additional Shares from Prior Plan.~~ Shares available for issuance under the Plan shall be increased by any shares of Common Stock subject to outstanding awards under the Prior Plan on the effective date of the Plan, May 18, 2010, that later cease to be subject to such awards for any reason other than the exercise or vesting of such awards (as the case may be), including any amounts withheld from such awards by the Company for taxes on the awards, which Shares shall, as of the date such Shares cease to be subject to such awards, cease to be available for grant and issuance under the Prior Plan, but shall be available for issuance under the Plan under Section 3.1. However, this Section 3.3 specifically excludes Common Stock subject to outstanding awards granted as Incentive Stock Options under the Prior Plan; no shares of Common Stock subject to such Prior Plan Incentive Stock Option awards shall again become available for issuance under the Plan.

~~ARTICLE IV~~

~~Eligibility~~

~~4.1~~	~~Awards.~~ ~~Employees and Nonemployee Directors shall be eligible for the grant of Awards of NSOs, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units.~~

~~4.2~~	~~Incentive Stock Options.~~ Only Employees who are common-law employees of the Company or a Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in section 422(c)(6) of the Code are satisfied.

~~ARTICLE V~~

~~Options~~

~~Options granted under the Plan are subject to the following terms and conditions:~~

~~5.1~~	~~Stock Option Agreement.~~ Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The Stock Option Agreement shall specify whether the Option is an NSO or an ISO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

~~5.2~~	~~Number of Shares.~~ Each Stock Option Agreement shall specify the number of shares of Common Stock subject to the Option, which shall be subject to adjustment in accordance with Article 12. Options granted to any Employee in a single fiscal year of the Company shall not cover more than 500,000 shares of Common Stock. Prior to exercise, holders of Options shall have no right to dividend equivalents. The limitation set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

~~5.3~~	~~Exercise Price.~~ Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under an Option shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.

~~5.4~~	~~Exercisability and Term.~~ ~~Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become exercisable, provided that no Option shall become exercisable in less than one (1) year from the date of grant~~. The Stock Option Agreement shall also specify the term of the Option; provided that the term shall in no event exceed ten (10) years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Options may be granted in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited.

~~5.5~~	~~Effect of Change in Control.~~ In the event that the Optionee experiences a Qualifying Termination within twelve (12) months following a Change in Control then, unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Option for the cash, securities or property deliverable to the

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holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control, or (ii) the Option would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such Option shall automatically become fully vested and exercisable. However, in the case of an ISO, the acceleration of exercisability shall not occur without the Optionee’s written consent. In addition, acceleration of exercisability may be required pursuant to Article 12.

~~ARTICLE VI~~

~~Payment for Option Shares~~

~~6.1~~	~~General Rule.~~ The entire Exercise Price of shares of Common Stock issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such shares of Common Stock are purchased, except as follows:

	~~(a)~~	In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6.

	~~(b)~~	~~In the case of an NSO, the Committee may at any time accept payment in any form(s) described in this Article 6.~~

~~6.2~~	~~Stock Swap.~~ To the extent specifically provided in an Option Agreement, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common Stock that are already owned by the Optionee. Such shares of Common Stock shall be valued at their Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan.

~~6.3~~	~~Exercise/Sale.~~ To the extent that this Section 6.3 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (in a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the shares of Common Stock being purchased under the Plan and to deliver all or part of the sales proceeds to the Company.

~~6.4~~	~~Exercise/Pledge.~~ To the extent that this Section 6.4 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (in a form prescribed by the Company) an irrevocable direction to pledge all or part of the shares of Common Stock being purchased under the Plan to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company.

~~ARTICLE VII~~

~~Stock Appreciation Rights~~

~~SARs granted under the Plan are subject to the following terms and conditions:~~

~~7.1~~	~~SAR Agreement.~~ Each SAR granted under the Plan shall be evidenced by an SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical.

~~7.2~~	~~Number of Shares.~~ Each SAR Agreement shall specify the number of shares of Common Stock to which the SAR pertains and shall provide for the adjustment of such number in accordance with Article 12. SARs granted to any Participant in a single calendar year shall in no event pertain to more than 500,000 shares of Common Stock. The limitation set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

~~7.3~~	~~Exercise Price.~~ Each SAR Agreement shall specify the Exercise Price; provided that the Exercise Price under an SAR shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.

~~7.4~~	~~Exercisability and Term.~~ ~~Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable, provided that no SAR shall become exercisable in less than one (1) year from the date of grant~~. The SAR Agreement shall also specify the term of the SAR; provided, however, that the term shall in no event exceed ten (10) years from the date of grant. An SAR Agreement may provide for accelerated exercisability in the event of the~~Optionee’sParticipant’s~~ ~~Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the~~~~Optionee’sParticipant’s~~ ~~Service. SARs may be granted in combination with Options, and such an SAR Agreement may provide that the SARs will not be exercisable unless the related Options are forfeited.~~

~~7.5~~	~~Effect of Change in Control.~~ In the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then, unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such SAR for the cash, securities or property deliverable to the holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control, or (ii) the SAR would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such SAR shall automatically become fully vested and exercisable. In addition, acceleration of exercisability may be required pursuant to Article 12.

~~7.6~~	~~Exercise of SARs.~~ Upon exercise of an SAR, the Participant (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) shares of Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of shares of Common Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the shares of Common Stock subject to the SARs exceeds the Exercise Price.

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~~ARTICLE VIII~~

~~Unrestricted Shares~~

~~Unrestricted Shares granted under the Plan are subject to the following terms and conditions:~~

~~8.1~~	~~Unrestricted Shares.~~ The Committee may grant up to 5% of the total shares approved for issuance under the Plan, as shares of Common Stock that have no restrictions. Such Unrestricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. In no event shall the number of Unrestricted Shares that are granted to any Participant in a single fiscal year exceed 100,000 Shares, subject to adjustment in accordance with Article 12.~~For purposes of this Section 8.1, each Unrestricted Share granted under Section 3.1 shall reduce the foregoing limit by one (1) Share.~~

~~8.2~~	~~Payment for Awards.~~ Unrestricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, promissory notes, services performed and contracts for services to be performed.

~~ARTICLE IX~~

~~Restricted Shares~~

~~Restricted Shares granted under the Plan are subject to the following terms and conditions:~~

~~9.1~~	~~Restricted Share Agreement.~~ Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Agreements entered into under the Plan need not be identical.

~~9.2~~	~~Payment for Awards.~~ Restricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, promissory notes, services performed and contracts for services to be performed.

~~9.3~~	~~Vesting Conditions.~~ Each Award of Restricted Shares shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Agreement. If the only restriction on an Award of Restricted Shares is vesting based on the lapse of time, the minimum period for full vesting shall be~~three (3) yearsone (1) year~~. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.

	~~With respect to Restricted Shares that are subject to performance-based vesting conditions and are intended to meet the qualified performance-based compensation requirements of Code Section 162(m):~~

	~~(a)~~	The Committee shall identify such conditions not later than the ninetieth (90th) day following the commencement of the applicable Performance Cycle and before twenty-five percent (25%) of such Performance Cycle has elapsed; and

	~~(b)~~	The Committee shall certify in writing prior to payout that such conditions and any other material terms were in fact satisfied. Approved minutes of a meeting of the Committee may be treated as such written certification. In no event shall the number of Restricted Shares which are subject to performance-based vesting conditions and which are granted to any Participant in a single fiscal year exceed 500,000 Shares, subject to adjustment in accordance with Article 12.

	If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Shares that were being earned during the Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a “Performance Cycle” by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Restricted Shares that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Share Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Share Agreement shall include specific provisions regarding any tax withholding requirements, as required). Notwithstanding the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control, then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Restricted Shares for the cash, securities, or property deliverable to the holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; (ii) the Restricted Share Agreement would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control; or (iii) the Restricted Shares are subject to performance-based vesting criteria and the acceleration of vesting of such Restricted Shares would be prohibited under the provisions of Code section 162(m) and the Treasury Regulations promulgated thereunder, such Restricted Shares shall automatically vest and any restrictions thereon shall lapse at the time of such Change in Control.

~~9.4~~	~~Voting and Dividend Rights.~~ The holders of Restricted Shares granted under the Plan shall have the voting, dividend and other rights as set forth in their Restricted Share Agreement, and may have the same voting, dividend and other rights as the Company’s other shareholders. Any dividends paid on Restricted Shares shall be paid at the dividend payment date, in cash or in shares of unrestricted Common Stock having a Fair Market Value equal to the amount of such dividends. Common Stock distributed in connection with a stock split or stock dividend, and distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Shares with respect to which such Common Stock has been distributed.

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~~ARTICLE X~~

~~Restricted Stock Units~~

~~Restricted Stock Units granted under the Plan are subject to the following terms and conditions:~~

~~10.1~~	~~Restricted Stock Units.~~ ~~Restricted Stock Units are designated in shares of Common Stock.~~

~~10.2~~	~~Restricted Stock Unit Agreement.~~ Each grant of Restricted Stock Units under the Plan shall be evidenced by a Restricted Stock Unit Agreement between the recipient and the Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms of the applicable Restricted Stock Unit Agreement that are not inconsistent with the Plan. The provisions of the various Restricted Stock Unit Agreements entered into under the Plan need not be identical.

~~10.3~~	~~Payment for Awards.~~ ~~To the extent that an Award is granted in the form of Restricted Stock Units, no cash consideration shall be required of the Award recipients.~~

~~10.4~~	~~Vesting Conditions.~~ Each Award of Restricted Stock Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Agreement. If the only restriction on an Award of Restricted Stock Units is vesting based on the lapse of time, the minimum period for full vesting shall be~~three (3)one (1)~~ ~~year~~s. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.

	With respect to Restricted Stock Units that are subject to performance-based vesting conditions and are intended to meet the qualified performance-based compensation requirements of Code Section 162(m) and are granted to Participants who have Covered Employees under Code Section 162(m):

	~~(a)~~	~~The Committee shall identify such conditions not later than the ninetieth (90~~^th~~) day following the commencement of the applicable Performance Cycle, and before twenty-five percent (25%) of such Performance Cycle has elapsed; and~~

	~~(b)~~	The Committee shall certify in writing prior to payout that such conditions and any other material terms were in fact satisfied. Approved minutes of a meeting of the Committee may be treated as such written certification.

	In no event shall the number of Restricted Stock Units which are subject to performance-based vesting conditions and which are granted to any Participant in a single fiscal year exceed 500,000, subject to adjustment in accordance with Article 12.

	If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Stock Units that were being earned during that Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any shares of Restricted Stock Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Stock Unit Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Stock Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A). Notwithstanding anything to the contrary contained in the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Restricted Stock Units for the cash, securities, or property deliverable to the holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; (ii) the award of Restricted Stock Units would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control; or (iii) the Restricted Stock Units are subject to performance-based vesting criteria and the acceleration of vesting of such Restricted Stock Units would be prohibited under the provisions of Code section 162(m) and the Treasury Regulations promulgated thereunder, such Restricted Stock Units shall automatically vest and any restrictions thereon shall lapse at the time of such Change in Control.

~~10.5~~	~~Dividend Rights.~~ Shares underlying an Award of Restricted Stock Units shall not be entitled to dividends or dividend equivalents with respect to such Restricted Stock Units except to the extent otherwise provided under a Restricted Stock Unit Agreement. If a Restricted Stock Unit Agreement includes rights to dividends or dividend equivalents, an amount equal to the dividends that would have been paid if the Restricted Stock Units had been issued and outstanding shares of Common Stock as of the record date for the dividends shall be paid to the holder of such Restricted Stock Units in cash, subject to applicable withholding taxes unless otherwise determined by the Committee. Any dividend equivalents payable pursuant to this Section 10.5 shall be paid no later than March 1 of the calendar year after the calendar year in which the applicable dividend record date occurs, except as otherwise provided in the applicable Restricted Stock Unit Agreement.

~~10.6~~	~~Form and Time of Settlement of Restricted Stock Unit Awards.~~ Settlement of vested Restricted Stock Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Restricted Stock Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Restricted Stock Units shall be settled in a lump sum before the later of (i) two and one half (2^1/2) months after the end of the Company’s fiscal year during which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed or (ii) March 15 following the calendar year in which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment pursuant to Article 12.

~~10.7~~	~~Creditors’ Rights.~~ A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Unit Agreement.

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~~ARTICLE XI~~

~~Performance Share Units~~

~~Performance Share Units granted under the Plan are subject to the following terms and conditions:~~

~~11.1~~	~~Performance Share Units.~~ ~~Performance Share Units are designated in shares of Common Stock.~~

~~11.2~~	~~Agreement.~~ Each grant of Performance Share Units under the Plan shall be evidenced by an Agreement between the recipient and the Company, shall be subject to all applicable terms of the Plan, and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Performance Share Unit Agreements entered into under the Plan need not be identical. Performance Share Units may be granted in consideration of a reduction in the recipient’s other compensation.

~~11.3~~	~~Payment for Awards.~~ ~~To the extent that an Award is granted in the form of Performance Share Units, no cash consideration shall be required of the Award recipients.~~

~~11.4~~	~~Vesting Conditions.~~ Each Award of Performance Share Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Performance Share Unit Agreement. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.~~Under no circumstances shall the Performance Cycle for an Award of Performance Share Units be less than one (1) year~~.

	With respect to Performance Share Units that are subject to performance-based vesting conditions and are intended to meet the qualified performance-based compensation requirements of Code Section 162(m) and are granted to Participants who are Covered Employees under Code Section 162(m):

	~~(a)~~	The Committee shall identify such conditions not later than the ninetieth (90th) day following the commencement of the Performance Cycle, and before twenty-five percent (25%) of the Performance Cycle has elapsed; and

	~~(b)~~	The Committee shall certify in writing prior to payout that such conditions and any other material terms were in fact satisfied. Approved minutes of a meeting of the Committee may be treated as such written certification.

	In no event shall the number of Performance Share Units which are subject to performance-based vesting conditions and which are granted to any Participant in a single fiscal year exceed 500,000, subject to adjustment in accordance with Article 12.

	If the Participant’s employment with the Company or Subsidiary is terminated before the date that Performance Share Units vest, the participant shall forfeit all rights with respect to any unvested Performance Share Units. However, with respect to Performance Share Units subject to performance-based vesting conditions, the Committee, in its absolute and sole discretion at the time an Award of Performance Share Units is made, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Performance Share Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Performance Share Unit Agreement may provide for accelerated service-based vesting in the event of a Participant’s Disability, death or Retirement (provided, in the case of Retirement, that such Performance Share Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A). Notwithstanding anything to the contrary contained in the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Performance Share Units for the cash, securities, or property deliverable to the holder of any or all outstanding share-based awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; (ii) the award of Performance Share Units would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control; or (iii) the acceleration of vesting of such Performance Share Units would be prohibited under the provisions of Code section 162(m) and the Treasury Regulations promulgated thereunder, such Performance Share Units shall automatically vest and any restrictions thereon shall lapse at the time of such Change in Control. In addition, acceleration of vesting may be required pursuant to Article 12.

~~11.5~~	~~Form and Time of Settlement of Units.~~ Settlement of vested Performance Share Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Performance Share Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Performance Share Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Performance Share Units shall be settled in a lump sum by the last day of the calendar year in which all vesting conditions applicable to the Performance Share Units have been satisfied or have lapsed. Until an Award of Performance Share Units is settled, the number of such Share Units shall be subject to adjustment pursuant to Article 12.

~~11.6~~	~~Creditors’ Rights.~~ A holder of Performance Share Units shall have no rights other than those of a general creditor of the Company. Performance Share Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Performance Share Unit Agreement.

~~ARTICLE XII~~

~~Protection Against Dilution~~

~~12.1~~

~~Modification or Assumption of Awards.~~ Except in connection with a corporate transaction involving the Company (a “Strategic Transaction” which shall include, without limitation any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares or the sale of all or substantially all of the Company’s assets), the terms of outstanding Awards may not be amended to reduce any exercise price associated with such Awards or to cancel any outstanding Awards in exchange for cash, other Awards or other securities with an exercise price that is less than the

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	exercise price of the original Awards without shareholder approval. The foregoing and the provisions of this Article 12 notwithstanding, no modification of an Award shall, without the consent of the Award recipient, alter or impair his or her rights or obligations under such Award.

~~12.2~~	~~Adjustments.~~ ~~Upon or in contemplation of any Strategic Transaction, the Committee shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances:~~

	~~(a)~~	proportionately adjust any or all of (i) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of Awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (ii) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding Awards, (iii) the grant, purchase, or exercise price of any or all outstanding Awards, (iv) the securities, cash or other property deliverable upon exercise of any or all outstanding Awards, or (v) the performance standards appropriate to any or all outstanding Awards, or

	~~(b)~~	make provision for a cash payment or for the assumption, substitution or exchange of any or all outstanding share-based Awards or the cash, securities or property deliverable to the holder of any or all outstanding share-based Awards, based upon the distribution or consideration payable to holders of the outstanding shares of Common Stock upon or in respect of such event.

	For the avoidance of doubt, this Article 12 does not apply to normal cash dividends with respect to Company Stock other than extraordinary dividends or to stock issued in lieu of such dividends. The Committee may adopt such valuation methodologies for outstanding Awards as it deems reasonable in the event of a cash or property settlement and, in the case of Options, SARs or similar rights, but without limitation on other methodologies, may base such settlement solely upon the excess, if any, of the per share amount payable upon or in respect of such event over the grant price of the Award, unless otherwise provided in, or by authorized amendment to, the Award or provided in another applicable agreement with the Participant. With respect to any ISO, in the absolute and sole discretion of the Committee, the adjustment may be made in a manner that would cause the Option to cease to qualify as an ISO.

~~12.3~~	~~Dissolution or Liquidation.~~ ~~To the extent not previously exercised, settled or assumed, Options, SARs, and Performance Share Units shall terminate immediately prior to the dissolution or liquidation of the Company.~~

~~ARTICLE XIII~~

~~Awards Under Other Plans~~

~~The Company may grant awards under other equity plans or programs. Such awards may be settled in the form of shares of Common Stock issued under this Plan.~~

~~ARTICLE XIV~~

~~Limitation on Rights~~

~~14.1~~	~~Retention Rights.~~ Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee or Nonemployee Director. The Company and its Subsidiaries reserve the right to terminate the Service of any Employee or Nonemployee Director at any time, with or without cause, subject to applicable laws, the Company’s Restated Articles of Incorporation and Bylaws and a written employment agreement (if any).

~~14.2~~	~~Shareholders’ Rights.~~ Unless otherwise provided in this Plan or in any Award, a Participant shall have no dividend rights, voting rights or other rights as a shareholder with respect to any shares of Common Stock covered by his or her Award prior to the time when a stock certificate for such shares of Common Stock is issued or, if applicable, the time when he or she becomes entitled to receive such shares of Common Stock by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made for normal cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.

~~14.3~~	~~Regulatory Requirements.~~ Any other provision of the Plan notwithstanding, the obligation of the Company to issue shares of Common Stock under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of shares of Common Stock pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such shares of Common Stock related to their registration, qualification or listing or to an exemption from registration, qualification or listing.

~~14.4~~	~~Compliance with Code Section 409A.~~ Awards under the Plan are intended to comply with Code Section 409A and all Awards shall be interpreted in a manner that results in compliance with Section 409A, Department of Treasury regulations, and other interpretive guidance under Section 409A. Notwithstanding any provision of the Plan or an Award to the contrary, if the Committee determines that any Award does not comply with Code Section 409A, the Company may adopt such amendments to the Plan and the affected Award (without consent of the Participant) or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary and appropriate to (a) exempt the Plan and the Award from application of Code Section 409A and/or preserve the intended tax treatment of amounts payable with respect to the Award, or (b) comply with the requirements of Code Section 409A.

~~NORDSTROM, INC.~~ - ~~2017 Proxy Statement~~ ~~A-7~~

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~~ARTICLE XV~~

~~Withholding Taxes~~

~~15.1~~	~~General.~~ To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any shares of Common Stock or make any cash payment under the Plan until such obligations are satisfied.

~~15.2~~	~~Share Withholding.~~ To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any shares of Common Stock that otherwise would be issued to him or her or by surrendering all or a portion of any shares of Common Stock that he or she previously acquired. Such shares of Common Stock shall be valued at their Fair Market Value on the date when they are withheld or surrendered, and shall be deemed to have been issued for purposes of identifying any shares which may become available for grant pursuant to Section 3.3 above.

~~ARTICLE XVI~~

~~Future of the Plan~~

~~16.1~~	~~Term of the Plan.~~ The Plan, as set forth herein, became effective on the date of shareholder approval, May 18, 2010, and shall remain in effect for a period of ten (10) years unless earlier terminated under Section 16.2.

~~16.2~~	~~Amendment or Termination.~~ The Board may, at any time and for any reason, amend, alter or terminate the Plan. Notwithstanding the foregoing and except as provided in Section 14.4, no amendment, alteration or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s express written consent. An amendment of the Plan shall be subject to the approval of the Company’s shareholders for any amendment that would (a) require shareholder approval in order to satisfy the applicable requirements of Code Section 162(m), Code section 422, or other applicable laws, regulations or rules, including but not limited to any stock exchange rules; (b) increase amounts payable under the Plan to Participants (provided that shareholder approval shall not be required for increases that are not material and do not require such approval under applicable law or stock exchange rules); (c) increase the number of shares of Common Stock authorized to be issued under the Plan; (d) permit the repurchase by the Company of any outstanding Awards with an Exercise Price greater than the then-current Fair Market Value of Common Stock; or (e) modify the Plan’s eligibility provisions. No Awards shall be granted under the Plan after the termination thereof.

~~ARTICLE XVII~~

~~Definitions~~

~~17.1~~	~~“Award” means any grant of an Option, an SAR, an Unrestricted Share, a Restricted Share, a Restricted Stock Unit or a Performance Share Unit under the Plan.~~

~~17.2~~	~~“Award Agreement” means the written agreement between the Company and the recipient that contains the terms, conditions and restrictions pertaining to a particular Award.~~

~~17.3~~	~~“Board” means the Company’s Board of Directors, as constituted from time to time.~~

~~17.4~~	“Cause” means (a) the unauthorized use or disclosure of the confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company, (b) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State thereof, (c) gross negligence, (d) willful misconduct or (e) a failure to perform assigned duties that continues after the Participant has received written notice of such failure. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or the Parent or Subsidiary employing the Participant) may consider as grounds for the discharge of the Participant without Cause.

~~17.5~~	~~“Change in Control” means the happening of any of the following:~~

	~~(a)~~	the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization fifty percent (50%) or more of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity;

	~~(b)~~	~~the sale, transfer or other disposition of all or substantially all of the Company’s assets;~~

	~~(c)~~	a change in the composition of the Board as a result of which fewer than fifty percent (50%) of the incumbent Directors are Directors who either (i) had been Directors of the Company on the date twenty-four (24) months prior to the date of the event that may constitute a Change in Control (the “original Directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original Directors who were still in office at the time of the election or nomination and the Directors whose election or nomination was previously so approved, but excluding, for this purpose, any such Director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation; or

	~~(d)~~	any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least thirty percent (30%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (d), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d)

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		of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary and (ii) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

	A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

~~17.6~~	~~“Code” means the Internal Revenue Code of 1986, as amended.~~

~~17.7~~	~~“Committee” means the Compensation Committee of the Company’s Board.~~

~~17.8~~	~~“Common Stock” means shares of the common stock of the Company.~~

~~17.9~~	~~“Company” means Nordstrom, Inc., a Washington corporation.~~

~~17.10~~	“Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

~~17.11~~	~~“Employee” means a common-law employee of the Company, a Parent or a Subsidiary.~~

~~17.12~~	~~“Exchange Act” means the Securities Exchange Act of 1934, as amended.~~

~~17.13~~	“Exercise Price,” in the case of an Option, means the amount for which one share of Common Stock may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one share of Common Stock in determining the amount payable upon exercise of such SAR.

~~17.14~~	“Fair Market Value” means the market price of a share of Common Stock, determined by the Committee in good faith on such basis as it deems appropriate. Whenever possible, the determination of Fair Market Value by the Committee shall be based on the closing price on the date of the Award as reported by the New York Stock Exchange, or the primary exchange or quotation system on which the Common Stock is then trading. Such determination shall be conclusive and binding on all persons.

~~17.15~~	~~“Good Reason” means the occurrence of one or more of the following without the Participant’s express written consent and within twelve (12) months following a Change in Control:~~

	~~(a)~~	~~a material diminution in the Participant’s base salary;~~

	~~(b)~~	~~a material diminution in the Participant’s authority, duties, or responsibilities;~~

	~~(c)~~	a material change in the geographic location at which the Participant must perform his or her services to a place that is more than fifty (50) miles from where the Participant was based immediately prior to the Change in Control; and

	~~(d)~~	~~any other action or inaction that constitutes a material breach by the Company of this Plan with respect to a Participant’s Award.~~

	The event or events described above shall constitute Good Reason only if the Company (or the Parent or Subsidiary employing the Participant) fails to cure such event or events within ninety (90) days after receipt from the Participant of written notice of the event or events which constitutes Good Reason. Such notice must be provided to the Company (or the Parent or Subsidiary employing the Participant) and must provide a reasonably detailed description of the facts that the Participant believes constitute a Good Reason event. Good Reason shall cease to exist for an event on the ninetieth (90^th~~) day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given written notice to the Company thereof prior to such date.~~

~~17.16~~	~~“ISO” means an incentive stock option described in Section 422(b) of the Code.~~

~~17.17~~	~~“NSO” means a stock option not described in Sections 422 or 423 of the Code.~~

~~17.18~~	“Nonemployee Director” means a member of the Company’s Board or the Board of Directors of a Subsidiary who is not an Employee. Service as a Nonemployee Director shall be considered employment for all purposes of the Plan, except as provided in Section 4.2.

~~17.19~~	~~“Option” means an NSO or an ISO granted under Article 5 of the Plan and entitling the holder to purchase shares of Common Stock pursuant to an Award.~~

~~17.20~~	~~“Optionee” means an individual or estate who holds an Option.~~

~~17.21~~	~~“Participant” means an individual or estate who holds an Award.~~

~~17.22~~	~~“Performance Criteria” shall mean a specified percentage or quantitative level in one or more of the following performance measures:~~

	~~(a)~~	~~the Company’s shareholder return as compared to any designated industry or other comparator group;~~

	~~(b)~~	~~the trading price of the Company’s common stock;~~

	~~(c)~~	the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit, or return on investment (including return on equity, return on capital employed, or return on assets);

	~~(d)~~	~~earnings before or after taxes, interest, depreciation and/or amortization, and including /excluding capital gains and losses;~~

	~~(e)~~	~~other financial results, such as profit margins, operational efficiency, expense reduction, or asset management goals; and~~

	~~(f)~~	~~the internal or external market share of a product or line of products.~~

		Each of the foregoing performance measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular Participant, department, business unit, subsidiary, or other segment to which a particular Participant is assigned. The Committee may establish different performance measures and milestones for individual Participants or groups of Participants. For each Participant, each performance measure will be weighted to reflect its relative significance to the Company for the Performance Cycle.

		~~Except as otherwise specified in an individual Award, applicable performance measures shall be adjusted to exclude the following items that occur during a given Performance Cycle:~~

		~~(i)~~	~~Extraordinary, unusual or non-recurring items of gain or loss;~~

		~~(ii)~~	~~Gains or losses on the disposition of a business, a segment of a business, or significant assets outside the ordinary course of business;~~

		~~(iii)~~	~~Changes in tax or accounting standards, principles, regulations or laws;~~

		~~(iv)~~	The effect of a merger or acquisition, including all financial results derived therefrom during the period from the merger or acquisition date through the end of the Performance Cycle in which the merger or acquisition occurred;

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		~~(v)~~	Gains or losses due to non-cash adjustments which relate to the valuation of long-term assets rather than current-year performance (including but not necessarily limited to gain or loss recognized for store closures, lease terminations, pension adjustments and mark to market adjustments); and

		~~(vi)~~	The impact of other similar occurrences outside of the Company’s core, on-going business activities (including but not necessarily limited to litigation or tax reserves, financing activities, foreign exchange rate fluctuations and restructuring charges).

		In all other respects, performance measures comprising Performance Criteria for an Award shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles (GAAP), or under a non-GAAP methodology established by the Committee prior to the issuance of an Award. The method of calculating performance measurements shall be consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report.

~~17.23~~	~~“Performance Cycle” means a predetermined period of time, not less than one year, over which Performance Criteria will be measured with respect to an Award.~~

~~17.24~~	~~“Performance Share Unit” means a bookkeeping entry representing the equivalent of one (1) share of Common Stock, as granted under the Plan pursuant to an Award.~~

~~17.25~~	“Performance Share Unit Agreement” means the written agreement between the Company and the recipient of a Performance Share Unit that contains the terms, conditions and restrictions pertaining to such Performance Share Unit.

~~17.26~~	~~“Plan” means this Nordstrom, Inc. 2010 Equity Incentive Plan, as amended from time to time.~~

~~17.27~~	~~“Prior Plan” means the Nordstrom 2004 Equity Incentive Plan, as subsequently amended in 2007 and 2008.~~

~~17.28~~	“Qualifying Termination” means (a) the Participant’s employment is involuntarily terminated by the Company (or the Parent or Subsidiary employing the Participant) without Cause, or (b) the Participant terminates employment from the Company (or the Parent or Subsidiary employing the Participant) for Good Reason. The twelve-month period will be extended by one (1) additional month if the thirty-day cure period in Section 17.15 is triggered in the eleventh or twelfth month following a Change in Control. It is intended that any Qualifying Termination shall be an “involuntary Separation from Service,” as that term is defined in Treasury Regulation Section 1.409A-1(n).

~~17.29~~	~~“Restricted Share” means a share of Common Stock granted under Article 9 pursuant to an Award, with such restrictions as set forth in the applicable Restricted Share Agreement.~~

~~17.30~~	“Restricted Stock Unit” means a right granted under Article 10 to receive Common Stock or cash at the end of a specified deferral period pursuant to an Award, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain performance goals).

~~17.31~~	“Restricted Share Agreement” means the written agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share.

~~17.32~~	“Restricted Stock Unit Agreement” means the written agreement between the Company and the recipient of a Restricted Stock Unit that contains the terms, conditions and restrictions pertaining to such Restricted Stock Unit.

~~17.33~~	~~“Retirement” means Participant’s termination from Service on or after his or her Retirement Date.~~

~~17.34~~	~~“Retirement Date” shall have the meaning as set forth in a particular Award Agreement.~~

~~17.35~~	~~“SAR” means a stock appreciation right granted under Article 7 of the Plan pursuant to an Award.~~

~~17.36~~	~~“SAR Agreement” means the written agreement between the Company and a Participant that contains the terms, conditions and restrictions pertaining to his or her SAR.~~

~~17.37~~	~~“Service” means service as an Employee or Nonemployee Director.~~

~~17.38~~	~~“Stock Option Agreement” means the written agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.~~

~~17.39~~	~~“Subcommittee” means a separate committee established by and consisting of members of the Committee.~~

~~17.40~~	“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

~~17.41~~	~~“Unrestricted Share” means a share of Common Stock granted under Article 8 of the Plan pursuant to an Award.~~

~~NORDSTROM, INC.~~ - ~~2017 Proxy Statement~~ ~~A-10~~

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~~Appendix B~~

Reconciliation of GAAP and Non-GAAP Financial Measures

Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”) and Incentive Adjusted Return on Invested Capital (“Incentive Adjusted ROIC”)

We believe that Incentive ~~Earnings before Interest~~Adjusted ROIC is a useful financial measure for investors in evaluating the efficiency and ~~Income Tax Expense (“~~effectiveness of the capital we have invested in our business to generate returns. Incentive ~~EBIT”)~~Adjusted ROIC adjusts our operating leases as if they met the criteria for capital leases or we had purchased the properties. This provides additional supplemental information that reflects the investment in our off-balance sheet operating leases, controls for differences in capital structure between us and ~~Incentive Return on Invested Capital (“Incentive ROIC”)~~

Weour competitors and provides investors and credit agencies with another way to comparably evaluate the efficiency and effectiveness of our capital investments over time. In addition, we incorporate Incentive ~~EBIT and Incentive~~Adjusted ROIC ininto our executive incentive ~~compensation measures. These~~ measures ~~contemplate nonoperating related adjustments.~~

and it is an important indicator of shareholders’ return over the long term.

Incentive EBIT represents net earnings before income tax expense, interest expense and interest income, and contemplates ~~nonoperating~~non-operating related adjustments. We define Incentive Adjusted ROIC as our adjusted net operating profit after tax divided by our average invested capital using the trailing 12-month ~~average, and contemplates nonoperating related adjustments.~~average. These metrics are not measures of financial performance under generally accepted accounting principles (“GAAP”) and should be considered in addition to, and not as a substitute for, net earnings, return on assets, total assets or other financial measures prepared in accordance with GAAP. Our method of determining non-GAAP financial measures may differ from other companies’ methods and therefore may not be comparable to those used by other companies. Estimated depreciation on capitalized operating leases and average estimated asset base of capitalized operating leases are not calculated in accordance with, or an alternative for, GAAP and should not be considered in isolation or as a substitution of our results as reported under GAAP. The financial measures calculated under GAAP which are most directly comparable to Incentive EBIT and Incentive Adjusted ROIC are net earnings and return on assets which are reconciled below.

12 Fiscal Months Ended
($ in millions) January 28, 2017 January 30, 2016
Net earnings $ 354 $ 600
Add: income tax expense 330 376
Add: interest expense, net 121 125
Earnings before interest and income tax expense 805 1,101
Add: nonoperating related adjustments 271 145
Incentive EBIT 1,076 1,246
Add: interest income 1 —
Incentive ROIC earnings before interest and income tax expense 1,077 1,246
Add: rent expense 202 176
Less: estimated depreciation on capitalized operating leases^(a) (108 ) (94 )
Net operating profit 1,171 1,328
Less: estimated income tax expense (444 ) (512 )
Net operating profit after tax $ 727 $ 816
Average total assets $ 7,917 $ 9,076
Less: average non-interest-bearing current liabilities^(b) (3,012 ) (2,993 )
Less: average deferred property incentives and deferred rent liability^(b) (644 ) (548 )
Add: average estimated asset base of capitalized operating leases^(c) 1,512 1,236
Add: nonoperating related adjustments 90 623
Average invested capital $ 5,863 $ 7,394
Return on assets 4.5 % 6.6 %
Incentive ROIC 12.4 % 11.0 %
The following is a reconciliation of the components of Incentive Adjusted ROIC and return on assets:



	12 Fiscal Months Ended
($ in millions)	February 2, 2019			February 3, 2018			January 28, 2017			January 30, 2016			January 31, 2015
Net earnings	$	564		$	437		$	354		$	600		$	720
Add: income tax expense	169			353			330			376			465
Add: interest expense, net	104			136			121			125			138
Earnings before interest and income tax expense	837			926			805			1,101			1,323
Add: non-operating related adjustments	72			26			271			145			68
Incentive EBIT	909			952			1,076			1,246			1,391
Add: interest income	15			5			1			—			1
Incentive Adjusted ROIC earnings before interest and income tax expense	924			957			1,077			1,246			1,392
Add: rent expense	251			250			202			176			137
Less: estimated depreciation on capitalized operating leases*	(134		)	(133		)	(108		)	(94		)	(74		)
Net operating profit	1,041			1,074			1,171			1,328			1,455
Less: estimated income tax expense	(248		)	(480		)	(444		)	(512		)	(561		)
Net operating profit after tax	$	793		$	594		$	727		$	816		$	894
Average total assets	$	8,282		$	8,055		$	7,917		$	9,076		$	8,860
Less: average non-interest-bearing current liabilities**	(3,479		)	(3,261		)	(3,012		)	(2,993		)	(2,730		)
Less: average deferred property incentives and deferred rent liability^(b)	(616		)	(644		)	(644		)	(548		)	(502		)
Add: average estimated asset base of capitalized operating leases^(a)	2,018			1,805			1,512			1,236			1,058
Add (Less): non-operating related adjustments	4			3			90			623			(100		)
Average invested capital	$	6,209		$	5,958		$	5,863		$	7,394		$	6,586
Return on assets	6.8		%	5.4		%	4.5		%	6.6		%	8.1		%
Incentive Adjusted ROIC	12.8		%	10.0		%	12.4		%	11.0		%	13.6		%

~~(a)~~
*	Capitalized operating leases is our best estimate of the asset base we would record for our leases that are classified as operating if they had met the criteria for a capital lease or we had purchased the property. ~~Asset~~The asset base is calculated ~~as described in footnote (c) below.~~
~~(b)~~	~~Balances associated with our deferred rent liability have been classified as long-term liabilities in the current period.~~
~~(c)~~	~~Based~~based upon the trailing 12-month average of the monthly asset base. The asset base for each month is calculated as the trailing 12 months of rent expense multiplied by eight. The multiple of eight times rent expense is a commonly used method of estimating the asset base we would record for our capitalized operating ~~leases described in footnote (a).~~leases. We do not expect the adoption of the new Lease Standard to have a material impact on our Incentive Adjusted ROIC.

** Balances associated with our deferred rent liability have been classified as long-term liabilities as of January 28, 2017.

A-1 NORDSTROM, INC. - ~~2017~~2019 Proxy Statement ~~B-1~~

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Appendix B	Nordstrom, Inc. 2019 Equity Incentive Plan



ARTICLE 1	Introduction

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~~This page~~The purpose of the Plan is ~~intentionally left blank.~~

to promote the long-term success of the Company and its Subsidiaries. Specific objectives are intended to encourage the attraction and retention of Employees and Nonemployee Directors, focus such individuals’ results on the Company’s critical, long-range goals and align such individuals’ interests with those of the Company’s shareholders.

The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute incentive stock options (ISOs), for Employees only, or nonqualified stock options (NSOs)), stock appreciation rights (SARs), Unrestricted Shares, Restricted Shares, Restricted Stock Units and Performance Share Units.

The Plan replaces the Nordstrom, Inc. 2010 Equity Incentive Plan (as amended and restated February 16, 2017) and the Nordstrom, Inc. 2002 Nonemployee Director Stock Incentive Plan (as amended on November 14, 2007).



ARTICLE 2	Administration

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2.1Committee Composition. The Compensation Committee shall administer the Plan.

2.2Committee Responsibilities. The Committee, in its absolute and sole discretion, shall (a) select the Employees and Nonemployee Directors who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan and (d) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee may delegate its authority hereunder to one or more Subcommittees or Company officers, to the extent permitted under the Code, applicable laws and regulations and any applicable exchange rules; actions taken by any Subcommittee or officers shall be subject to review by the full Committee. The Committee’s determinations under the Plan shall be final and binding on all persons.

2.3Committee for Non-Officer/Non-Director Awards. The Board may also appoint a secondary committee of the Board or one or more senior executive officers of the Company to administer the Plan with respect to Employees who are not considered officers or Directors of the Company under Section 16 of the Exchange Act. That committee or senior executive officer may grant Awards under the Plan to such Employees and may determine all features and conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee or senior executive officer, as the case may be.

2.4Compensation Department Powers and Duties. Until such time as the Committee shall modify, revoke or rescind such authority, the Company’s Compensation department, or any successor department within the Company, regardless of name, has the powers and duties set forth below. Determinations made by the Compensation department (or other department) under this Section 2.4 shall be final and binding on all persons, but may, in the Committee’s absolute and sole discretion, be reviewed by the Committee. The powers and duties delegated by the Committee hereunder are to:

(a) work with Plan service providers to ensure the effective administration of the Plan;

(b) determine whether a Participant’s disability, as defined by a qualified medical professional acceptable to the Company’s Compensation department (or other department), qualifies as Disability as defined under the Plan; and

The Company’s Compensation department has authority to interpret the terms of the Plan and any Award in carrying out the powers and duties as set forth above.



ARTICLE 3	Shares Available for Awards and General Vesting Requirements

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3.1Basic Limitation. Shares issued pursuant to the Plan shall be authorized but unissued shares. The aggregate number of Shares available for Awards of Options, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units granted under the Plan shall not exceed (a) 9,500,000 Shares plus (b) the additional shares of Common Stock described in Section 3.3. The limitations of this Section 3.1 and Sections 3.2 and 3.3 shall be subject to adjustment pursuant to Article 12. The aggregate number of Shares available for issuance as Plan Awards shall be reduced by 1.6 (one point six) Shares for each Share delivered in settlement of any Award of Unrestricted Shares, Restricted Shares, Restricted Stock Units, Performance Share Units, dividends, or dividend equivalents, and by 1 (one) Share for each Share delivered in settlement of any Option Award or SAR. Awards that are required to be settled in cash will not reduce the number of Shares available for delivery under the Plan.

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3.2Additional Shares. If any Shares covered by an Award of Options, SARs, Restricted Shares, Restricted Stock Units or Performance Share Units terminate, lapse or are forfeited or cancelled, or such Award is otherwise settled without the delivery of the full number of Shares underlying the Award, then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture, termination, lapse, cancellation, etc., shall again be, or shall become, available for issuance under the Plan; provided, however, that Shares (a) delivered in payment of the exercise price of an Award, (b) not issued upon the net settlement or net exercise of SARs, (c) delivered to or withheld by the Company to pay withholding taxes related to an Award, or (d) purchased in the open market using option proceeds, shall not become available again for issuance under this Plan. Shares that again become available for issuance under the Plan pursuant to this Section 3.2 shall be added to the number of Shares available under Section 3.1 in the same ratios as applied to them at the time they were originally granted (e.g., 1.6 (one point six) Shares for each Share attributable to previously granted Awards of Restricted Shares, Restricted Stock Units or Performance Share Units and 1 (one) Share for each Share attributable to previously granted Option Awards or SARs).

3.3Additional Shares from Prior Plan. Shares available for issuance under the Plan shall be increased by any shares of Common Stock subject to outstanding Awards under the Prior Plans on the effective date of the Plan, May 23, 2019, that later cease to be subject to such Awards for any reason other than the exercise, or vesting of such Awards (as the case may be), or any amounts withheld from such Awards by the Company for taxes on the Awards, which Shares shall, as of the date such Shares cease to be subject to such Awards, cease to be available for grant and issuance under the Prior Plans, but shall be available for issuance under the Plan under Section 3.1. Shares that become available for issuance under the Plan pursuant to this Section 3.3, shall become available for issuance under the Plan in such amount as they previously reduced the number of Shares available for issuance under the Prior Plans.

3.4General Vesting Requirements. Awards granted under the Plan shall vest no earlier than the first anniversary of the date of grant. Notwithstanding the previous sentence, the Committee may grant Awards representing up to an aggregate maximum of five percent (5%) of the available Share reserve authorized for issuance under the Plan pursuant to Section 3.1 (subject to adjustment under Section 3.3) without regard to the foregoing minimum vesting requirement.



ARTICLE 4	Eligibility

4.1Awards. Employees and Nonemployee Directors shall be eligible for the grant of Awards of NSOs, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units.

4.2Incentive Stock Options. Only Employees who are common-law employees of the Company or a Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in section 422(c)(6) of the Code are satisfied.

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ARTICLE 5	Options

Options granted under the Plan are subject to the following terms and conditions:

5.1Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The Stock Option Agreement shall specify whether the Option is an NSO or an ISO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

5.2Number of Shares. Each Stock Option Agreement shall specify the number of shares of Common Stock subject to the Option, which shall be subject to adjustment in accordance with Article 12. Options granted to any Employee in a single fiscal year of the Company shall not cover more than 500,000 shares of Common Stock. Holders of Options shall have no right to dividend equivalents and prior to exercise, no rights to dividends. The limitation set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

5.3Exercise Price. Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under an Option shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.

5.4Exercisability and Term. Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become exercisable, subject to Section 3.4. The Stock Option Agreement shall also specify the term of the Option; provided that the term shall in no event exceed ten (10) years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Options may be granted in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited.

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5.5Effect of Change in Control. In the event that the Optionee experiences a Qualifying Termination within twelve (12) months following a Change in Control then, unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Option for the cash, securities or property deliverable to the holder of any or all outstanding share-based Awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control, or (ii) the Option would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such Option shall automatically become fully vested and exercisable. However, in the case of an ISO, the acceleration of exercisability shall not occur without the Optionee’s written consent. In addition, acceleration of exercisability may be required pursuant to Article 12.

5.6Dividend Rights. No dividends or dividend equivalent rights shall be paid or accrued with respect to Options.



ARTICLE 6	Payments For Option Shares

6.1General Rule. The entire Exercise Price of shares of Common Stock issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such shares of Common Stock are purchased, except as follows:

(a) In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6.

(b) In the case of an NSO, the Committee may at any time accept payment in any form(s) described in this Article 6.

6.2Stock Swap. To the extent specifically provided in an Option Agreement, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common Stock that are already owned by the Optionee. Such shares of Common Stock shall be valued at their Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan.

6.3Exercise/Sale. To the extent that this Section 6.3 is applicable and to the extent so provided in the Stock Option Agreement, all or any part of the Exercise Price and any withholding taxes may be paid by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a broker; (iii) Net Exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee.



ARTICLE 7	Stock Appreciation Rights

SARs granted under the Plan are subject to the following terms and conditions:

7.1SAR Agreement. Each SAR granted under the Plan shall be evidenced by an SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical.

7.2Number of Shares. Each SAR Agreement shall specify the number of shares of Common Stock to which the SAR pertains and shall provide for the adjustment of such number in accordance with Article 12. SARs granted to any Participant in a single calendar year shall in no event pertain to more than 500,000 shares of Common Stock. The limitation set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

7.3Exercise Price. Each SAR Agreement shall specify the Exercise Price; provided that the Exercise Price under an SAR shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant.

7.4Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable, subject to Section 3.4. The SAR Agreement shall also specify the term of the SAR; provided, however, that the term shall in no event exceed ten (10) years from the date of grant. A SAR Agreement may provide for accelerated exercisability in the event of the Participant’s Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. SARs may be granted in combination with Options, and such an SAR Agreement may provide that the SARs will not be exercisable unless the related Options are forfeited.

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7.5Effect of Change in Control. In the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then, unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such SAR for the cash, securities or property deliverable to the holder of any or all outstanding share-based Awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control, or (ii) the SAR would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such SAR shall automatically become fully vested and exercisable. In addition, acceleration of exercisability may be required pursuant to Article 12.

7.6Exercise of SARs. Upon exercise of an SAR, the Participant (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) shares of Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of shares of Common Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the shares of Common Stock subject to the SARs exceeds the Exercise Price.

7.7Dividend Rights. No dividends or dividend equivalent rights shall be paid or accrued with respect to SARS.



ARTICLE 8	Unrestricted Shares

Unrestricted Shares granted under the Plan are subject to the following terms and conditions:

8.1Unrestricted Shares. Unrestricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. In no event shall the number of Unrestricted Shares that are granted to any Participant in a single fiscal year exceed 100,000 shares of Common Stock, subject to adjustment in accordance with Article 12 or together with all other Awards the limits set forth in Section 3.4.

8.2Payment for Awards. Unrestricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, services performed and contracts for services to be performed.



ARTICLE 9	Restricted Shares

Restricted Shares granted under the Plan are subject to the following terms and conditions:

9.1Restricted Share Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Agreements entered into under the Plan need not be identical. In no event shall the number of Restricted Shares which are granted to any Participant in a single fiscal year exceed 500,000 shares of Common Stock, subject to adjustment in accordance with Article 12.

9.2Payment for Awards. Restricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, services performed and contracts for services to be performed.

9.3Vesting Conditions. Each Award of Restricted Shares shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.

If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Shares that were being earned during the Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Restricted Shares that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Share Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Share Agreement shall comply with the requirements of Code Section 409A and include specific provisions regarding any tax withholding requirements, as required). Notwithstanding the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control, then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Restricted Shares for the cash, securities, or property deliverable to the holder of any or all outstanding share-based Awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; or (ii) the Restricted Share Agreement would otherwise continue in accordance with its terms notwithstanding the occurrence

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of the Change in Control, such Restricted Shares shall automatically vest upon the date of such Qualifying Termination at such amount as would have been earned if the original payment date(s) of the Restricted Shares had been the date of the Qualifying Termination, or if such payment is indeterminable then one hundred percent (100%) of such Restricted Shares will vest and any restrictions thereon shall lapse at the time of such Change in Control.

9.4Voting and Dividend Rights. The holders of Restricted Shares granted under the Plan shall have the voting, dividend and other rights as set forth in their Restricted Share Agreement, and may have the same voting, dividend and other rights as the Company’s other shareholders. Any dividends paid on Restricted Shares shall not be paid at the dividend payment date and shall only be paid if and when Restricted Shares vest, in cash or in shares of unrestricted Common Stock having a Fair Market Value equal to the amount of such dividends. Common Stock distributed in connection with a stock split or stock dividend, and distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Shares with respect to which such Common Stock has been distributed.



ARTICLE 10	Restricted Stock Units

Restricted Stock Units granted under the Plan are subject to the following terms and conditions:

10.1Restricted Stock Units. Restricted Stock Units are designated in shares of Common Stock.

10.2Restricted Stock Unit Agreement. Each grant of Restricted Stock Units under the Plan shall be evidenced by a Restricted Stock Unit Agreement between the recipient and the Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms of the applicable Restricted Stock Unit Agreement that are not inconsistent with the Plan. The provisions of the various Restricted Stock Unit Agreements entered into under the Plan need not be identical. In no event shall the number of Restricted Stock Units which are granted to any Participant in a single fiscal year pertain to more than 500,000 shares of Common Stock, subject to adjustment in accordance with Article 12.

10.3Payment for Awards. To the extent that an Award is granted in the form of Restricted Stock Units, no cash consideration shall be required of the Award recipients.

10.4Vesting Conditions. Each Award of Restricted Stock Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.

If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Stock Units that were being earned during that Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any shares of Restricted Stock Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Stock Unit Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Stock Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A). Notwithstanding anything to the contrary contained in the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Restricted Stock Units for the cash, securities, or property deliverable to the holder of any or all outstanding share-based Awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; or (ii) the award of Restricted Stock Units would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such Restricted Stock Units shall automatically vest upon the date of such Qualifying Termination at such amount as would have been earned if the original payment date(s) of the Restricted Stock Units had been the date of the Qualifying Termination, or if such payment is indeterminable then one hundred percent (100%) of such Restricted Stock Units will vest and any restrictions thereon shall lapse at the time of such Change in Control.

10.5Dividend Rights. Shares underlying an Award of Restricted Stock Units shall not be entitled to dividends and shall be entitled to dividend equivalents with respect to such Restricted Stock Units only as set forth under a Restricted Stock Unit Agreement and in compliance with this Section 10.5. If a Restricted Stock Unit Agreement includes rights to dividend equivalents, an amount equal to the dividends that would have been paid if the Restricted Stock Units had been issued and outstanding shares of Common Stock on or before the record date for any declared dividend shall be paid to the holder of such Restricted Stock Units, in cash or stock, subject to applicable withholding taxes, only if and when the Restricted Stock Units vest. Any dividend equivalents payable pursuant to this Section 10.5 shall be paid no later than March 1 of the calendar year after the calendar year in which the underlying Restricted Stock Units vest as provided in the applicable Restricted Stock Unit Agreement.

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10.6Form and Time of Settlement of Restricted Stock Unit Awards. Settlement of vested Restricted Stock Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Restricted Stock Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Restricted Stock Units shall be settled in a lump sum before the later of (i) two and one half (2^1/2) months after the end of the Company’s fiscal year during which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed or (ii) March 15 following the calendar year in which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment pursuant to Article 12.

10.7Creditors’ Rights. A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Unit Agreement.



ARTICLE 11	Performance Share Units

Performance Share Units granted under the Plan are subject to the following terms and conditions:

11.1Performance Share Units. Performance Share Units are designated in shares of Common Stock.

11.2Agreement. Each grant of Performance Share Units under the Plan shall be evidenced by an Agreement between the recipient and the Company, shall be subject to all applicable terms of the Plan, and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Performance Share Unit Agreements entered into under the Plan need not be identical. Performance Share Units may be granted in consideration of a reduction in the recipient’s other compensation.

11.3Payment for Awards. To the extent that an Award is granted in the form of Performance Share Units, no cash consideration shall be required of the Award recipients.

11.4Vesting Conditions. Each Award of Performance Share Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Performance Share Unit Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria.

In no event shall the number of Performance Share Units which are subject to performance-based vesting conditions and which are granted to any Participant in a single fiscal year exceed 500,000, subject to adjustment in accordance with Article 12.

If the Participant’s employment with the Company or Subsidiary is terminated before the date that Performance Share Units vest, the Participant shall forfeit all rights with respect to any unvested Performance Share Units. However, with respect to Performance Share Units subject to performance-based vesting conditions, the Committee, in its absolute and sole discretion at the time an Award of Performance Share Units is made, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Performance Share Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Performance Share Unit Agreement may provide for accelerated service-based vesting in the event of a Participant’s Disability, death or Retirement (provided, in the case of Retirement, that such Performance Share Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A). Notwithstanding anything to the contrary contained in the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control then unless (i) the Committee shall have previously made provision for a cash payment in settlement of, or for the assumption, substitution or exchange of any or all of such Performance Share Units for the cash, securities, or property deliverable to the holder of any or all outstanding share-based Awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Company’s Common Stock in connection with the Change in Control; or (ii) the award of Performance Share Units would otherwise continue in accordance with its terms notwithstanding the occurrence of the Change in Control, such Performance Share Units shall automatically vest upon the date of such Qualifying Termination at such amount as would have been earned if the original payment date of the Performance Shares Units had been the date of the Qualifying Termination, or if such payment is indeterminable then one hundred percent (100%) of such Performance Share Units will vest and any restrictions thereon shall lapse at the time of such Change in Control. In addition, acceleration of vesting may be required pursuant to Article 12.

11.5Dividend Rights. Shares underlying an Award of Performance Share Units shall not be entitled to dividends and shall be entitled to dividend equivalents with respect to such Performance Share Units only as set forth under a Performance Share Unit Agreement and in compliance with this Section 11.5. If a Performance Share Unit Agreement includes rights to dividend equivalents, an amount equal to the dividends that would have been paid if the Performance Share Units had been settled shares of Common Stock on or before the record date for any declared dividend shall be paid to the holder of such Performance Share Units, in cash or stock, subject to applicable withholding taxes, only if and when such Performance Share Units actually vest and are settled in shares of Common Stock. Any dividend equivalents payable pursuant to this Section 11.5 shall be paid no later than March 1 of the calendar year after the calendar year in which the underlying Performance Share Units vest as provided in the applicable Performance Share Unit Agreement.

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11.6Form and Time of Settlement of Units. Settlement of vested Performance Share Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Performance Share Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Performance Share Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Performance Share Units shall be settled in a lump sum by the last day of the calendar year in which all vesting conditions applicable to the Performance Share Units have been satisfied or have lapsed. Until an Award of Performance Share Units is settled, the number of such Share Units shall be subject to adjustment pursuant to Article 12.

11.7Creditors’ Rights. A holder of Performance Share Units shall have no rights other than those of a general creditor of the Company. Performance Share Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Performance Share Unit Agreement.



ARTICLE 12	Protection Against Dilution

12.1Modification or Assumption of Awards. Except in connection with a corporate transaction involving the Company (a “Strategic Transaction” which shall include, without limitation any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares or the sale of all or substantially all of the Company’s assets), the terms of outstanding Awards may not be amended to reduce any exercise price associated with such Awards or to cancel any outstanding Awards in exchange for cash, other Awards or other securities with an exercise price that is less than the exercise price of the original Awards without shareholder approval. The foregoing and the provisions of this Article 12 notwithstanding, no modification of an Award shall, without the consent of the Award recipient, alter or impair his or her rights or obligations under such Award.

12.2Adjustments. Upon or in contemplation of any Strategic Transaction, the Committee shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances:

(a) proportionately adjust any or all of (i) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of Awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (ii) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding Awards, (iii) the grant, purchase, or exercise price of any or all outstanding Awards, (iv) the securities, cash or other property deliverable upon exercise of any or all outstanding Awards, or (v) the performance standards appropriate to any or all outstanding Awards, or

(b) make provision for a cash payment or for the assumption, substitution or exchange of any or all outstanding share-based Awards or the cash, securities or property deliverable to the holder of any or all outstanding share-based Awards, based upon the distribution or consideration payable to holders of the outstanding shares of Common Stock upon or in respect of such event.

For the avoidance of doubt, this Article 12 does not apply to normal cash dividends with respect to Company Stock other than extraordinary dividends or to stock issued in lieu of such dividends. The Committee may adopt such valuation methodologies for outstanding Awards as it deems reasonable in the event of a cash or property settlement and, in the case of Options, SARs or similar rights, but without limitation on other methodologies, may base such settlement solely upon the excess, if any, of the per share amount payable upon or in respect of such event over the grant price of the Award, unless otherwise provided in, or by authorized amendment to, the Award or provided in another applicable agreement with the Participant. With respect to any ISO, in the absolute and sole discretion of the Committee, the adjustment may be made in a manner that would cause the Option to cease to qualify as an ISO.

12.3Dissolution or Liquidation. To the extent not previously exercised, settled or assumed, Options, SARs, and Performance Share Units shall terminate immediately prior to the dissolution or liquidation of the Company.



ARTICLE 13	Awards Under Other Plans

The Company may grant Awards under other equity plans or programs. Such Awards may be settled in the form of shares of Common Stock issued under this Plan.



ARTICLE 14	Limitation on Rights

14.1Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee or Nonemployee Director. The Company and its Subsidiaries reserve the right to terminate the Service of any Employee or Nonemployee Director at any time, with or without cause, subject to applicable laws, the Company’s Restated Articles of Incorporation and Bylaws and a written employment agreement (if any).

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14.2Shareholders’ Rights. Unless otherwise provided in this Plan or in any Award, a Participant shall have no dividend rights, voting rights or other rights as a shareholder with respect to any shares of Common Stock covered by his or her Award prior to the time when a stock certificate for such shares of Common Stock is issued or, if applicable, the time when he or she becomes entitled to receive such shares of Common Stock by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made for normal cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.

14.3Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue shares of Common Stock under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of shares of Common Stock pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such shares of Common Stock related to their registration, qualification or listing or to an exemption from registration, qualification or listing.

14.4Compliance with Code Section 409A. Awards under the Plan are intended to comply with Code Section 409A and all Awards shall be interpreted in a manner that results in compliance with Section 409A, Department of Treasury regulations, and other interpretive guidance under Section 409A. Notwithstanding any provision of the Plan or an Award to the contrary, if the Committee determines that any Award does not comply with Code Section 409A, the Company may adopt such amendments to the Plan and the affected Award (without consent of the Participant) or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary and appropriate to (a) exempt the Plan and the Award from application of Code Section 409A and/or preserve the intended tax treatment of amounts payable with respect to the Award, or (b) comply with the requirements of Code Section 409A.

14.5Clawback Policy. Each award issued under the Plan is subject to the Company’s clawback policy, which is amended from time to time.

14.6Transferability. Except in the context of death of a Participant, or as otherwise required by law, or as approved by the Committee for no consideration, Awards issued under the Plan may not be transferred to any third party.

14.7Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of Washington, without giving effect to any conflicts of laws principles.



ARTICLE 15	Withholding Taxes

15.1General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any shares of Common Stock or make any cash payment under the Plan until such obligations are satisfied.

15.2Share Withholding. To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any shares of Common Stock that otherwise would be issued to him or her or by surrendering all or a portion of any shares of Common Stock that he or she previously acquired. Such shares of Common Stock shall be valued at their Fair Market Value on the date when they are withheld or surrendered, and shall be deemed to have been issued for purposes of identifying any shares which may become available for grant pursuant to Section 3.3 above.



ARTICLE 16	Future of the Plan

16.1Term of the Plan. The Plan, as set forth herein, became effective on the date of shareholder approval, May 23, 2019, and shall remain in effect for a period of ten (10) years unless earlier terminated under Section 16.2.

16.2Amendment or Termination. The Board may, at any time and for any reason, amend, alter or terminate the Plan. Notwithstanding the foregoing and except as provided in Section 14.4, no amendment, alteration or termination shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s express written consent. An amendment of the Plan shall be subject to the approval of the Company’s shareholders for any amendment that would (a) require shareholder approval in order to satisfy the applicable requirements of Code section 422, or other applicable laws, regulations or rules, including but not limited to any stock exchange rules; (b) increase amounts payable under the Plan to Participants (provided that shareholder approval shall not be required for increases that are not material and do not require such approval under applicable law or stock exchange rules); (c) increase the number of shares of Common Stock authorized to be issued under the Plan; (d) permit the repurchase by the Company of any outstanding Awards with an Exercise Price greater than the then-current Fair Market Value of Common Stock; or (e) modify the Plan’s eligibility provisions. No Awards shall be granted under the Plan after the termination thereof.

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ARTICLE 17	Definitions

17.1 “Award” means any grant of an Option, an SAR, an Unrestricted Share, a Restricted Share, a Restricted Stock Unit or a Performance Share Unit under the Plan.

17.2 “Award Agreement” means the written agreement between the Company and the recipient that contains the terms, conditions and restrictions pertaining to a particular Award.

17.3 “Board” means the Company’s Board of Directors, as constituted from time to time.

17.4 “Cause” means (a) the unauthorized use or disclosure of the confidential information or trade secrets of the Company, which use or disclosure causes material harm to the Company, (b) conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State thereof, (c) gross negligence, (d) willful misconduct or (e) a failure to perform assigned duties that continues after the Participant has received written notice of such failure. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or the Parent or Subsidiary employing the Participant) may consider as grounds for the discharge of the Participant without Cause.

17.5 “Change in Control” means the happening of any of the following:

(a) the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization in excess of fifty percent (50%) of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity;

(b) the sale, transfer or other disposition of all or substantially all of the Company’s assets;

(c) a change in the composition of the Board as a result of which fewer than fifty percent (50%) of the incumbent Directors are Directors who either (i) had been Directors of the Company on the date twenty-four (24) months prior to the date of the event that may constitute a Change in Control (the “original Directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original Directors who were still in office at the time of the election or nomination and the Directors whose election or nomination was previously so approved, but excluding, for this purpose, any such Director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation; or

(d) any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least thirty percent (30%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (d), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary and (ii) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

17.6 “Code” means the Internal Revenue Code of 1986, as amended.

17.7 “Committee” means the Compensation Committee of the Company’s Board.

17.8 “Common Stock” means shares of the common stock of the Company.

17.9 “Company” means Nordstrom, Inc., a Washington corporation.

17.10 “Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

17.11 “Employee” means a common-law employee of the Company, a Parent or a Subsidiary.

17.12 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

17.13 “Exercise Price,” in the case of an Option, means the amount for which one share of Common Stock may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one share of Common Stock in determining the amount payable upon exercise of such SAR.

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17.14 “Fair Market Value” means the market price of a share of Common Stock, determined by the Committee in good faith on such basis as it deems appropriate. Whenever possible, the determination of Fair Market Value by the Committee shall be based on the closing price on the date of the Award as reported by the New York Stock Exchange, or the primary exchange or quotation system on which the Common Stock is then trading. Such determination shall be conclusive and binding on all persons.

17.15 “Good Reason” means the occurrence of one or more of the following without the Participant’s express written consent and within twelve (12) months following a Change in Control:

(a) a material diminution in the Participant’s base salary;

(b) a material diminution in the Participant’s authority, duties, or responsibilities;

(c) a material change in the geographic location at which the Participant must perform his or her services to a place that is more than fifty (50) miles from where the Participant was based immediately prior to the Change in Control; and

(d) any other action or inaction that constitutes a material breach by the Company of this Plan with respect to a Participant’s Award.

The event or events described above shall constitute Good Reason only if the Company (or the Parent or Subsidiary employing the Participant) fails to cure such event or events within ninety (90) days after receipt from the Participant of written notice of the event or events which constitutes Good Reason. Such notice must be provided to the Company (or the Parent or Subsidiary employing the Participant) and must provide a reasonably detailed description of the facts that the Participant believes constitute a Good Reason event. Good Reason shall cease to exist for an event on the ninetieth (90^th) day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given written notice to the Company thereof prior to such date.

17.16 “ISO” means an incentive stock option described in Section 422(b) of the Code.

17.17 “Net Exercise” means in lieu of exercising an Option for cash, the Optionee may elect to receive shares equal to the value of the Option (or the portion thereof being exercised) by surrender of the Option. The Company shall issue to such Optionee a number of shares of Common Stock computed using the following formula:

X = Y (A - B)

Where

X = The number of shares to be issued to the Optionee pursuant to the Net Exercise.

Y = The number of shares purchasable under this Option or, if only a portion of the Option is being exercised, the portion of the Option being cancelled (at the date of such calculation).

A = The fair market value of one (1) share (at the date of such calculation).

B = The Exercise Price (as adjusted to the date of such calculations).

17.18 “NSO” means a stock option not described in Sections 422 or 423 of the Code.

17.19 “Nonemployee Director” means a member of the Company’s Board or the Board of Directors of a Subsidiary who is not an Employee. Service as a Nonemployee Director shall be considered employment for all purposes of the Plan, except as provided in Section 4.2.

17.20 “Option” means an NSO or an ISO granted under Article 5 of the Plan and entitling the holder to purchase shares of Common Stock pursuant to an Award.

17.21 “Optionee” means an individual or estate who holds an Option.

17.22 “Participant” means an individual or estate who holds an Award.

17.23 “Performance Criteria” shall mean a specified percentage or quantitative level in one or more of the following performance measures:

(a) the Company’s shareholder return as compared with any designated industry or other comparator group;

(b) the trading price of the Company’s common stock;

(c) the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit, or return on investment (including return on equity, return on capital employed, or return on assets);

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(d) earnings before or after taxes, interest, depreciation and/or amortization, and including /excluding capital gains and losses;

(e) other financial results, such as profit margins, operational efficiency, expense reduction, or asset management goals; and

(f) the internal or external market share of a product or line of products.

Each of the foregoing performance measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular Participant, department, business unit, subsidiary, or other segment to which a particular Participant is assigned. The Committee may establish different performance measures and milestones for individual Participants or groups of Participants. For each Participant, each performance measure will be weighted to reflect its relative significance to the Company for the Performance Cycle.

Except as otherwise specified in an individual Award, applicable performance measures shall be adjusted to exclude the following items that occur during a given Performance Cycle:

(i) Extraordinary, unusual or non-recurring items of gain or loss;

(ii) Gains or losses on the disposition of a business, a segment of a business, or significant assets outside the ordinary course of business;

(iii) Changes in tax or accounting standards, principles, regulations or laws;

(iv) The effect of a merger or acquisition, including all financial results derived therefrom during the period from the merger or acquisition date through the end of the Performance Cycle in which the merger or acquisition occurred;

(v) Gains or losses due to non-cash adjustments which relate to the valuation of long-term assets rather than current-year performance (including but not necessarily limited to gain or loss recognized for store closures, lease terminations, pension adjustments and mark to market adjustments); and

(vi) The impact of other similar occurrences outside of the Company’s core, on-going business activities (including but not necessarily limited to litigation or tax reserves, financing activities, foreign exchange rate fluctuations and restructuring charges).

In all other respects, performance measures comprising Performance Criteria for an Award shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles (GAAP), or under a non-GAAP methodology established by the Committee prior to the issuance of an Award. The method of calculating performance measurements shall be consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report.

17.24 “Performance Cycle” means a predetermined period of time, not less than one year, over which Performance Criteria will be measured with respect to an Award

17.25 “Performance Share Unit” means a bookkeeping entry representing the equivalent of one (1) share of Common Stock, as granted under the Plan pursuant to an Award.

17.26 “Performance Share Unit Agreement” means the written agreement between the Company and the recipient of a Performance Share Unit that contains the terms, conditions and restrictions pertaining to such Performance Share Unit.

17.27 “Plan” means this Nordstrom, Inc. 2019 Equity Incentive Plan, as amended from time to time.

17.28 “Prior Plans” mean the Nordstrom 2010 Equity Incentive Plan and 2004 Equity Incentive Plan, as subsequently amended in 2007 and 2008.

17.29 “Qualifying Termination” means (a) the Participant’s employment is involuntarily terminated by the Company (or the Parent or Subsidiary employing the Participant) without Cause, or (b) the Participant terminates employment from the Company (or the Parent or Subsidiary employing the Participant) for Good Reason. The twelve-month period will be extended by one (1) additional month if the thirty-day cure period in Section 17.15 is triggered in the eleventh or twelfth month following a Change in Control. It is intended that any Qualifying Termination shall be an “involuntary Separation from Service,” as that term is defined in Treasury Regulation Section 1.409A-1(n).

17.30 “Restricted Share” means a share of Common Stock granted under Article 9 pursuant to an Award, with such restrictions as set forth in the applicable Restricted Share Agreement.

17.31 “Restricted Stock Unit” means a right granted under Article 10 to receive Common Stock or cash at the end of a specified deferral period pursuant to an Award, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain performance goals).

17.32 “Restricted Share Agreement” means the written agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share.

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17.33 “Restricted Stock Unit Agreement” means the written agreement between the Company and the recipient of a Restricted Stock Unit that contains the terms, conditions and restrictions pertaining to such Restricted Stock Unit.

17.34 “Retirement” means Participant’s termination from Service on or after his or her Retirement Date.

17.35 “Retirement Date” shall have the meaning as set forth in a particular Award Agreement.

17.36 “SAR” means a stock appreciation right granted under Article 7 of the Plan pursuant to an Award.

17.37 “SAR Agreement” means the written agreement between the Company and a Participant that contains the terms, conditions and restrictions pertaining to his or her SAR.

17.38 “Service” means service as an Employee or Nonemployee Director.

17.39 “Stock Option Agreement” means the written agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.

17.40 “Subcommittee” means a separate committee established by and consisting of members of the Committee.

17.41 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

17.42 “Unrestricted Share” means a share of Common Stock granted under Article 8 of the Plan pursuant to an Award.

IN WITNESS WHEREOF, this instrument setting forth the terms and conditions of this NORDSTROM, INC. 2019 EQUITY INCENTIVE PLAN is executed this _________ day of June 2019.



NORDSTROM, INC.
By:
	Christine Deputy
Title:	Chief Human Resources Officer

B-12 NORDSTROM, INC. - 2019 Proxy Statement



þ	Filed by the Registrant	¨	Filed by a Party other than the Registrant



Check the appropriate box:
¨	Preliminary Proxy Statement
¨	CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
þ	Definitive Proxy Statement
¨	Definitive Additional Materials
¨	Soliciting Material Pursuant to §.240.14a-12



Payment of Filing Fee (Check the appropriate box):
þ	No fee required.
¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)	Title of each class of securities to which transaction applies:
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		(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
		(set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)	Proposed maximum aggregate value of transaction:
		(5)	Total fee paid:


~~Philip G. Satre~~	~~Blake W. Nordstrom~~
~~Chairman of the Board~~	~~Co-President~~


~~Peter E. Nordstrom~~Brad D. Smith	~~Erik B. Nordstrom~~
~~Co-President~~Chairman of the Board	~~Co-President~~



8NOTICE OF ANNUAL MEETING OF SHAREHOLDERS		5

~~CORPORATE GOVERNANCE~~PROXY SUMMARY		116

CORPORATE GOVERNANCE		10

Our Corporate Governance Framework		1110
Board Responsibilities, Leadership Structure and Role in Risk Oversight		11
Director Independence		12
Chairman of the Board and Presiding Director		12
Director Elections		13
Management Succession Planning		13
Communications with Directors		13
Board Committees and Charters		14
Board Meetings and Attendance		16
~~Attendance at the Annual Meeting of Shareholders~~		16
Director Compensation		16
Compensation Committee Interlocks and Insider Participation		18
Codes of Business Conduct and Ethics and Other Policies		18
Corporate Social Responsibility		18
Website Access to Corporate Governance Documents		18

PROPOSAL 1	ELECTION OF DIRECTORS	19

AUDIT AND FINANCE COMMITTEE REPORT		24

~~PROPOSAL 1~~	~~ELECTION OF DIRECTORS~~	19

~~AUDIT COMMITTEE REPORT~~		23

PROPOSAL 2	RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	2425

EXECUTIVE OFFICERS		2527

COMPENSATION OF EXECUTIVE OFFICERS		2729

Compensation Discussion and Analysis		2729
Compensation Committee Report		3641
Summary Compensation Table		3742
Grants of Plan-Based Awards in Fiscal Year ~~2016~~2018		4046
Outstanding Equity Awards at Fiscal Year-End ~~2016~~2018		4348
Option Exercises and Stock Vested in Fiscal Year ~~2016~~2018		4651
Pension Benefits		4651
Fiscal Year ~~2016~~2018 Pension Benefits Table		4752

~~NOTICE OF ANNUAL MEETING OF SHAREHOLDERS~~		7

~~PROXY SUMMARY~~

Peter E. Nordstrom	Erik B. Nordstrom
Co-President	Co-President

Nonqualified Deferred Compensation		4753
Fiscal Year ~~2016~~2018 Nonqualified Deferred Compensation Table		4853
Potential Payments Upon Termination or Change in Control		4854
Pay Ratio Disclosure		60



PROPOSAL 3	ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION	61

~~PROPOSAL 3~~EQUITY COMPENSATION PLANS		~~ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION: SAY ON PAY~~63	53

PROPOSAL 4	~~ADVISORY VOTE REGARDING~~APPROVAL OF THE ~~FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION~~NORDSTROM, INC. 2019 EQUITY INCENTIVE PLAN	5464

~~EQUITY COMPENSATION PLANS~~		55

~~PROPOSAL 5~~	~~APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE NORDSTROM, INC. 2010 EQUITY INCENTIVE PLAN~~	56

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		6270

Beneficial Ownership Table		6270
Section 16(a) Beneficial Ownership Reporting Compliance		6473

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		6573

Review and Approval Process		6573
Related Party Transactions		6573

OTHER MATTERS		6574

~~2018~~2020 ANNUAL MEETING OF SHAREHOLDERS INFORMATION		6675

Requirements and Deadlines for Submission of Proxy Proposals, Nomination of Directors and Other Business of Shareholders		6675

FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING		6776

~~APPENDIX A~~	~~NORDSTROM, INC. 2010 EQUITY INCENTIVE PLAN, AS AMENDED AND RESTATED FEBRUARY 16, 2017~~	~~A-1~~

APPENDIX BA	RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES	~~B-1~~A-1


1.	To elect 1211 Directors to serve until the ~~2018~~2020 Annual Meeting of Shareholders;


	6.5.	To transact any other business that may properly come before the Annual Meeting and any adjournment or postponement thereof.



IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ~~2017~~2019 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON ~~MAY 16, 2017~~May 23, 2019


	The accompanying Proxy Statement and the ~~2016~~2018 Annual Report on Form 10-K are available atinvestor.nordstrom.com



Date and Time:	May ~~16, 2017~~ ~~11:~~23, 2019 at 9:00 a.m. Pacific Daylight Time	Meeting Webcast:	investor.nordstrom.com,select ~~Webcasts~~Events & Presentations and follow the instructions given. The webcast will be archived and available for one year following the Annual Meeting.
~~Place:~~
Place:	John W. Nordstrom Room, 5th floor
	Nordstrom Downtown Seattle ~~Nordstrom~~ Store
	1617 Sixth Avenue 5^th~~Floor~~
	Seattle, ~~WA 98101-1707~~Washington 98101

	~~Board Vote~~ ~~Recommendation~~	~~Page Reference~~ ~~(for more detail)~~
~~1. Election of Directors~~	~~FOR each Director Nominee~~	19
~~2. Ratification of the Appointment of Independent Registered Public Accounting Firm~~	~~FOR~~	24
~~3. Advisory Vote Regarding Executive Compensation: Say On Pay~~	~~FOR~~	53
~~4. Advisory Vote Regarding the Frequency of Future Advisory Votes on Executive Compensation~~	~~FOR “1 YEAR”~~	54
~~5. Approval of the Amendment and Restatement of the Nordstrom, Inc. 2010 Equity Incentive Plan~~	~~FOR~~	56



		Board Vote Recommendation	Page Reference (for more detail)
1.	Election of Directors	FOR each Director Nominee	19
2.	Ratification of the Appointment of Independent Registered Public Accounting Firm	FOR	25
3.	Advisory Vote Regarding Executive Compensation	FOR	61
4.	Approval of the Nordstrom, Inc. 2019 Equity Incentive Plan	FOR	64

Name	Age	Director Since	Occupation	Committee Memberships	Other Public Company Boards
Shellye L. Archambeau*	54	2015	Chief Executive Officer of MetricStream, Inc.	Audit, Technology	Verizon, Inc.
Stacy Brown-Philpot*^(a)	41		Chief Executive Officer of TaskRabbit, Inc.	N/A	HP Inc.
Tanya L. Domier*	51	2015	Chief Executive Officer of Advantage Solutions	Audit, Compensation (Chair)
Blake W. Nordstrom	56	2005	Co-President of Nordstrom, Inc.	N/A
Erik B. Nordstrom	53	2006	Co-President of Nordstrom, Inc.	N/A
Peter E. Nordstrom	55	2006	Co-President of Nordstrom, Inc.	N/A
Philip G. Satre*	67	2006	Private Investor, Retired Chairman and Chief Executive Officer of Harrah’s Entertainment, Inc.	Compensation, Corporate Governance and Nominating	International Game Technology, PLC
Brad D. Smith*	52	2013	Chairman and Chief Executive Officer of Intuit, Inc.	Audit (Chair), Technology	Intuit, Inc.
Gordon A. Smith*	58	2015	Chief Executive Officer, Consumer and Community Banking of JPMorgan Chase & Co.	Compensation, Corporate Governance and Nominating	Choice Hotels International
Bradley D. Tilden*	56	2016	Chairman and Chief Executive Officer of Alaska Air Group, Inc.	Audit, Finance (Chair)	Alaska Air Group, Inc.
B. Kevin Turner*	52	2010	Private Investor, Former Chief Executive Officer of Citadel Securities and Vice Chairman of Citadel LLC	Finance, Technology (Chair)
Robert D. Walter*	71	2008	Private Investor, Founder and Retired Chairman and Chief Executive Officer of Cardinal Health, Inc.	Compensation, Corporate Governance and Nominating (Chair)	American Express Company, YUM! Brands, Inc.

*	~~Independent Director~~
~~(a)~~*	~~Nominee for the term commencing May 16, 2017.~~Independent Director

•	~~9 of 12 Director nominees are independent.~~

•	~~Independent Directors meet regularly in executive session.~~

•	~~The roles of Co-Presidents and Chairman of the Board are separate.~~

•	~~Only independent Directors are Committee members.~~

•	~~Director elections have a majority voting standard, and all Directors are elected annually.~~

•	~~The Board has stock ownership guidelines for Directors and Executive Officers.~~

•	~~Board, Committee and Director performance evaluations are conducted annually.~~

•	~~The Board and its Committees are responsible for risk oversight.~~

•	~~Co-President and management succession planning is one of the Board’s highest priorities.~~

•	~~Our expansion into Canada where we currently have five full-line stores, including two that opened last fall, contributed total sales of $300 million in 2016.~~

•	~~Nordstrom.com sales reached over $2.5 billion, representing approximately 25% of Nordstrom full-price sales.~~

•	Our off-price business reached $4.5 billion, with growth mainly driven by our online net sales increase of 32% and 21 new store openings. Off-price continues to be our largest source of new customers, gaining approximately 6 million in 2016.

•	Our expanded Nordstrom Rewards program, which launched in the second quarter, drove a strong customer response with 3.7 million customers joining through our non-tender offer, and we ended the year with a total of 7.8 million active Nordstrom Rewards customers.

•	~~Our working capital improvements contributed to the $1.6 billion in operating cash flow and $0.6 billion in free cash flow.~~

INCENTIVE COMPENSATION PAYOUTS	2012	2013	2014	2015	2016
Annual bonus (payout as % of Target)	85%	64%	83%	0%	80%
PSUs vesting (payout as % of Target)	75%	0%	75%	75%	0%
3-year TSR percentile ranking within comparator group	52%ile	50%ile	63%ile	53%ile	16%ile

GRANT REALIZABLE VALUES	2012	2013	2014	2015	2016
PSUs vested (realizable value as a % of grant stock price)	88%	0%	63%	60%	0%
RSUs granted (realizable value as a % of grant stock price)	N/A	N/A	70%	53%	93%
Stock options granted (% stock price is below exercise price)	-15%	-17%	-33%	-76%	-17%

•	~~selecting and evaluating the performance of the Co-Presidents;~~

•	~~planning for succession with respect to the positions of the Co-Presidents and monitoring management’s succession planning for other senior executives;~~

•	~~reviewing and approving our major financial objectives, our strategic and operational plans and other significant actions;~~

•	~~monitoring the conduct of our business and the assessment of our business risks to evaluate whether the business is being properly managed; and~~

•	~~overseeing the processes for maintaining our integrity with regard to our financial statements and other public disclosures, and compliance with laws and our Code of Business Conduct and Ethics.~~

•	~~considers and reviews the Company’s risk appetite, which is the amount of risk the organization is willing and able to accept;~~

•	oversees management’s implementation of an appropriate system to manage risks (i.e., to identify, assess, mitigate, monitor, and communicate these risks) and monitors the effectiveness of this process as the business environment changes;

•	~~provides risk oversight through the Board’s committee structure and processes; and~~

•	manages directly certain risks, in particular, the risks associated with the Company’s strategic direction, which are reviewed at an annual strategy planning meeting and periodically throughout the year.



Shellye L. Archambeau	Kirsten A. Green	~~Philip~~Gordon A. Smith
Stacy Brown-Philpot	Glenda G. ~~Satre~~	McNeal	Bradley D. Tilden
~~Stacy Brown-Philpot~~	Tanya L. Domier	Brad D. Smith		B. Kevin Turner
~~Tanya L. Domier~~		~~Gordon A. Smith~~		~~Robert D. Walter~~

•	~~presides at meetings of the Board;~~

•	~~assists in establishing the agenda for each Board and Board Committee meeting;~~

•	~~serves as the Presiding Director to lead regular executive sessions of the Board in which only independent Directors participate;~~

•	~~calls special meetings of the Board and/or the shareholders;~~

•	provides input and support to the Chair of the Corporate Governance and Nominating Committee on nominees to fill vacant Board seats and the selection of Committee Chairs and membership on Board Committees;

•	~~advises the Co-Presidents and other members of the Executive Team on such matters as strategic direction, corporate governance and overall risk assessment; and~~

•	~~performs such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities.~~



	Telephone: 206-303-2541

7	~~Internet:~~Email:board@nordstrom.com

*	Mail:	Nordstrom, Inc. 1700 Seventh Avenue, Suite 1500 Seattle, Washington 98101-4407 ~~Attn.~~ Attn: Corporate Secretary



Director		Audit and Finance Committee		Compensation Committee		Corporate Governance and Nominating Committee		~~Finance~~ ~~Committee~~		Technology Committee
Shellye L. Archambeau					ü		ü
Stacy Brown-Philpot	ü								ü
Tanya L. Domier		ü
Kirsten A. Green	ü						ü
~~Enrique Hernandez, Jr.~~^(a)Glenda G. McNeal			ü					ü
Philip G. ~~Satre~~Satre*	ü						ü
Brad D. Smith			ü		ü
Gordon A. Smith				ü
Bradley D. Tilden
B. Kevin Turner					ü

	~~Chair~~
~~(a)~~*		Mr. ~~Hernandez~~Satre is not seeking re-election and will be retiring from the Board at the end of his current term in May ~~2017.~~2019.

•	~~the integrity of the Company’s financial statements;~~

•	~~the accounting, auditing and financial reporting processes of the Company;~~

•	~~the management of business and financial risk and the internal controls environment;~~

•	the Company’s compliance with legal and regulatory requirements and ethics programs as established by management and the Board, in conjunction with any recommendations by the Corporate Governance and Nominating Committee with respect to corporate governance standards;

•	~~the reports resulting from the performance of audits by the independent auditor and the internal audit team;~~

•	~~the qualifications, independence and performance of the Company’s independent auditors; and~~

•	~~the performance of the Company’s internal audit team.~~

•	approve an overall compensation philosophy for the Company’s Executive Officers in light of the Company’s goals and objectives. The Executive Officers are referenced on pages 25 and 26 and include the Named Executive Officers shown in the Compensation Discussion and Analysis on page 27 and other business unit presidents and Company executives over major organizational functions reporting to the Co-Presidents or other senior executives;

•	~~select performance measures aligned with the Company’s business strategy;~~

•	~~review and approve the Company’s cash and equity-based compensation plans for executives;~~

•	~~review and approve any benefit plans, retirement and deferred compensation or other perquisites offered to the Executive Officers and other eligible employees; and~~

•	~~review the Company’s compensation practices so that they do not encourage imprudent risk taking.~~

•	~~review and recommend~~are: reviewing and recommending individuals ~~to the Board for nomination as members of the Board and its Committees;~~

•	~~review possible conflicts of interest of Board members and the Company’s Executive Officers;~~

•	~~develop and review the Company’s Corporate Governance Guidelines;~~

•	~~review and consider revisions to the corporate governance standards contained in the Company’s Codes of Business Conduct and Ethics;~~

•	~~review and recommend approval of the policies and practices of the Company in the area of corporate governance;~~

•	~~produce and provide to the Board an annual performance evaluation of the Board, the Directors and each Committee of the Board;~~

•	~~establish succession procedures in the case of an emergency or the retirement of one or more of the Co-Presidents;~~

•	~~recommend to the Board the form and amount of Director compensation; and~~

•	~~review the overall performance of the Co-Presidents on an annual basis.~~

•	assist the Board in fulfilling its oversight responsibilities with respect to the Company’s capital structure, financial policies, capital investments, business and financial planning and related matters;

•	~~review and discuss the Company’s tax strategies and the implications of actual or proposed tax law changes;~~

•	~~review and discuss the Company’s dividend payment and share repurchase strategies, banking relationships, borrowing facilities and cash management; and~~

•	~~monitor the rating assigned by rating agencies to the Company’s long-term debt.~~

•	~~assist~~are: assisting the Board ~~in its oversight with respect to the Company’s technology strategy;~~

•	~~review and discuss the Company’s technology acquisition and development process to assure ongoing business growth;~~

•	~~review and discuss the Company’s data management and automation processes, and measurement and tracking systems; and~~

•	~~review and discuss the Company’s policies and safeguards for information technology and data security.~~



Annual Compensation Elements for ~~2016~~2018	Amount ($)^(a)*
Director Retainer	85,000
Audit and Finance Committee Chair Retainer	20,000
Compensation Committee Chair Retainer	20,000
Corporate Governance and Nominating Committee Chair Retainer	15,000
~~Finance Committee Chair Retainer~~	~~15,000~~
Technology Committee Chair Retainer	15,000
~~Audit~~Special Committee ~~Liaison to Nordstrom fsb Board Retainer~~Member Retainer**	20,000
Special Committee Working Member Retainer**	35,000
Special Committee Chair Retainer**	100,000
Director Equity Grant of Common Stock having a grant date value of	140,000
Chairman of the Board Equity Grant of Common Stock having a grant date value of	200,000

~~(a)~~
*	Directors may elect to take some or all of their cash retainer fees in Common Stock.

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