Nordstrom 2000 Annual Report Download - page 33

Cyan Mag Yelo Blk
20100444 Nordstrom
2001 Annual Report • 44pgs. + 4 covers pg. 31
8.375 x 10.875 • PDF • 150 lpi
PMS
5773
PMS
5503
31
NORDSTROM, INC. AND SUBSIDIARIES
and expire ten years after the date of grant.
In addition to option grants, the Committee granted
355,072, 272,970 and 185,201 performance share units in
2000, 1999 and 1998, which will vest over three years if
certain financial goals are attained. Employees may elect to
receive common stock or cash upon vesting of these
performance shares. The Committee also granted 30,069
and 180,000 shares of restricted stock in 1999 and 1998,
with weighted average fair values of $32.09 and $27.75,
respectively, which vest over five years. No monetary
consideration is paid by employees who receive performance
share units or restricted stock. At January 31, 2001,
$2,741 was recorded in accrued salaries, wages and related
benefits for these performance shares. In September 2000,
the Company accelerated the vesting of 144,000 shares of
restricted stock resulting in compensation expense of
$3,039, and also cancelled 14,175 shares of restricted
stock as a result of management changes.
In May 2000, the Company’s shareholders approved an
8,000,000 share increase in the number of shares of the
Company’s common stock authorized for issuance under its
option plan. At January 31, 2001, 10,150,579 shares are
reserved for future stock option grants pursuant to the Plan.
The Company applies APB No. 25 and FIN No. 44 in
measuring compensation costs under its stock-based
compensation programs. Accordingly, no compensation cost
has been recognized for stock options issued under the Plan.
For performance share units, compensation expense is
recorded over the performance period at the fair market
value of the stock at the date when it is probable that such
shares will be earned. For restricted stock, compensation
expense is based on the market price on the date of grant
and is recorded over the vesting period. Stock-based
compensation expense for 2000, 1999 and 1998 was
$7,594, $3,331 and $10,037, respectively.
Stock option activity for the Plan was as follows:
Year ended January 31, 2001 2000 1999
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding, beginning of year 8,135,301 $28 5,893,632 $27 3,401,602 $21
Granted 2,470,169 21 2,926,368 31 3,252,217 31
Exercised (181,910) 20 (341,947) 23 (599,593) 18
Cancelled (1,550,218) 28 (342,752) 30 (160,594) 27
Outstanding, end of year 8,873,342 $27 8,135,301 $28 5,893,632 $27
Options exercisable at end of year 3,833,379 $26 3,145,393 $25 2,544,092 $23
The following table summarizes information about stock options outstanding for the Plan as of January 31, 2001:
Options Outstanding Options Exercisable
Weighted-
Average Weighted- Weighted-
Remaining Average Average
Range of Contractual Exercise Exercise
Exercise Prices Shares Life (Years) Price Shares Price
$13 - $22 3,659,001 7 $20 1,446,456 $20
$23 - $32 2,855,785 7 27 1,590,360 28
$33 - $40 2,358,556 8 36 796,563 35
8,873,342 7 $27 3,833,379 $26