Nordstrom 2003 Annual Report Download - page 44

NORDSTROM, INC. and SUBSIDIARIES
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Nonemployee Director Stock Incentive Plan
The Nonemployee Director Stock Incentive Plan authorizes the grant of
stock awards to nonemployee directors. These awards may be deferred
or issued in the form of restricted or unrestricted stock, nonqualified
stock options or stock appreciation rights. We issued 15,849 and 18,981
shares of common stock for a total expense of $318 and $405 for the years
ended January 31, 2004 and 2003. An additional 10,672 shares were
deferred for a total expense of $183 in 2003. At January 31, 2004, we had
404,498 remaining shares available for issuance.
Nordstrom.com
Nordstrom.com had two stock option plans, the "1999 Plan" and the
"2000 Plan," as well as warrants issued to vendors in exchange for
services. In the third quarter of 2002, we purchased 3,608,322 options and
470,000 warrants in connection with the purchase of the minority interest
in Nordstrom.com (see Note 20) for a total cash payment of $11,802. At
January 31, 2004 and 2003, there are no outstanding options or warrants
for Nordstrom.com.
Employee Stock Purchase Plan
We offer an Employee Stock Purchase Plan as a benefit to our employees.
Employees participate through payroll deductions in amounts related to
their base compensation. At the end of each offering period, the participants
purchase shares at 85% of the lower of the fair market value at the
beginning or the end of the offering period, usually six months. We issued
647,480, 596,351 and 541,677 shares under this plan in 2003, 2002 and 2001.
As of January 31, 2004 and 2003, we had payroll deductions totaling
$3,728 and $3,000 for the purchase of shares. We have 1,548,650 shares
available for issuance at January 31, 2004.
Pacesetter Stock Plan
We granted 9,528, 10,653 and 6,687 shares of common stock to key
employees under the Pacesetters stock plan in 2003, 2002 and 2001. The
Pacesetter stock plan was established in 1997 to provide additional
incentive to employees, officers, consultants or advisors to promote the
success of the business. The related expense of $164, $240 and $130 was
recorded in 2003, 2002 and 2001. An additional 1,527 shares were deferred
for a related expense of $26 in 2003. As of January 31, 2004, there are
no remaining shares available for issuance.
Grants To Executive Officers
Options and performance share units granted to our president and the other
four most highly compensated individuals were 9.3%, 8.3% and 7.9% as
a percent of total options and performance share units granted in 2003,
2002 and 2001.
SFAS No. 123
The following table illustrates the effect on net income and earnings per
share if we had applied the fair value recognition provisions of SFAS No.
123, “Accounting for Stock-Based Compensation.”
Fiscal Year 2003 2002 2001
Net earnings, as reported $242,841 $90,224 $124,688
Add: stock-based compensation
expense included in reported
net income, net of tax 9,898 2,240 2,598
Deduct: stock-based compensation
expense determined under fair
value, net of tax (23,749) (21,914) (19,850)
Pro forma net earnings $228,990 $70,550 $107,436
Earnings per share:
Basic — as reported $1.78 $0.67 $0.93
Diluted — as reported $1.76 $0.66 $0.93
Basic — pro forma $1.68 $0.52 $0.80
Diluted — pro forma $1.67 $0.52 $0.80
notes to consolidated financial statements