Nordstrom 2010 Annual Report Download - page 62

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Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and unit amounts
NOTE 10: SHAREHOLDERS’ EQUITY
Share Repurchase Program
In August 2010, our Board of Directors authorized a program to repurchase up to $500 of our outstanding common stock, through January 28, 2012.
The following is a summary of the activity related to our share repurchase programs in 2008, 2009 and 2010:
Period Shares
Average price
per share Amount
Capacity at February 2, 2008 $1,364
Shares repurchased 6.9 $34.29 (238)
Capacity at January 31, 2009 $1,126
Shares repurchased - - -
Unused capacity upon program expiration in August 2009 (1,126)
Capacity at January 30, 2010 -
August 2010 authorization 500
Shares repurchased 2.3 $39.12 (89)
Capacity at January 29, 2011 $411
The actual number and timing of future share repurchases, if any, will be subject to market conditions and applicable Securities and Exchange
Commission rules.
Dividends
We paid dividends of $0.76 per share in 2010 and $0.64 per share in each of 2009 and 2008.
NOTE 11: STOCK COMPENSATION PLANS
We currently have three stock-based compensation plans: the 2010 Equity Incentive Plan (“2010 Plan”), our Employee Stock Purchase Plan and the
2002 Nonemployee Director Stock Incentive Plan.
In 2010, our shareholders approved the adoption of the 2010 Plan, which replaced the 2004 Equity Incentive Plan (“2004 Plan”). The 2010 Plan
authorizes the grant of stock options, performance share units, restricted stock units, stock appreciation rights and both restricted and unrestricted
shares of common stock to employees. The aggregate number of shares to be issued under the 2010 Plan may not exceed 11.6 plus any shares currently
outstanding under the 2004 Plan, which are forfeited or which expire during the term of the 2010 Plan. No future grants will be made under the 2004
Plan. As of January 29, 2011, we have 54.4 shares authorized, 27.4 shares issued and outstanding and 11.8 shares available for grant.
Under the Employee Stock Purchase Plan (“ESPP”), employees may make payroll deductions of up to ten percent of their base and bonus
compensation. At the end of each six-month offering period, participants may apply their accumulated payroll deductions toward the purchase of
shares of our common stock at 90% of the fair market value on the last day of the offer period. As of January 29, 2011, we had 9.4 shares authorized
and 1.3 shares available for issuance under the ESPP. We issued 0.4 shares under the ESPP during 2010. At the end of 2010 and 2009, we had current
liabilities of $5 and $4, respectively, for future purchases of shares under the ESPP.
The 2002 Nonemployee Director Stock Incentive Plan authorizes the grant of stock awards to our nonemployee directors. These awards may be
deferred or issued in the form of restricted or unrestricted stock, non-qualified stock options or stock appreciation rights. As of January 29, 2011,
we had 0.9 shares authorized and 0.6 remaining shares available for issuance. In 2010, we deferred shares with a total expense of $1.
The following table summarizes our stock-based compensation expense:
Fiscal year 2010 2009 2008
Stock options $35 $26 $24
Performance share units 3 3 -
Employee stock purchase plan 2 1 2
Other 2 2 2
Total stock-based compensation expense before income tax benefit 42 32 28
Income tax benefit (16) (12) (10)
Total stock-based compensation expense, net of income tax benefit $26 $20 $18