Nordstrom 2013 Annual Report Download - page 56

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56
HauteLook
As discussed in Note 2: HauteLook, consideration for our acquisition of HauteLook payable in Nordstrom stock includes ongoing vesting
requirements for HauteLook’s employees. These amounts are recorded as compensation expense as the related service is performed over
the respective employee vesting periods of up to four years after the acquisition date.
A summary of the nonvested restricted stock award activity related to HauteLook for 2013 is as follows:
Fiscal year 2013
Shares
Weighted-
average grant-
date fair value
Outstanding, beginning of year 0.3 $42
Vested (0.2) 42
Outstanding, end of year 0.1 $42
The total fair value of restricted stock vested during 2013 was $7. As of February 1, 2014, the total unrecognized stock-based compensation
expense related to HauteLook nonvested restricted stock awards was $1, which is expected to be recognized over a weighted-average
period of three months.
Performance Share Units
We grant performance share units to executive officers as one of the ways to align compensation with shareholder interests. Performance
share units are earned after a three-year performance cycle only when our total shareholder return (reflecting daily stock price appreciation
and compounded reinvestment of dividends) is positive and outperforms companies in a defined group of competitors determined by the
Compensation Committee of our Board of Directors. The percentage of units that are earned depends on our relative position at the end of
the performance cycle and can range from 0% to 175% of the number of units granted.
Performance share units are payable in either cash or stock as elected by the employee; therefore, they are classified as a liability award.
The liability is remeasured, with a corresponding adjustment to earnings, at each fiscal quarter-end during the performance cycle. The
performance share unit liability is remeasured using the estimated percentage of units earned multiplied by the closing market price of our
common stock on the current period-end date and is pro-rated based on the amount of time passed in the vesting period. The price used to
determine the amount of cash received for the performance share units upon vesting is the closing market price of our common stock on the
last day of the performance cycle.
Following is a summary of performance share unit activity:
Fiscal year 20131
Outstanding units, beginning of year 104,908
Granted 69,361
Vested —
Cancelled (4,244)
Outstanding units, end of year2170,025
1 Assumes performance share units at 100% of the number of units granted.
2 On February 26, 2014, the Compensation Committee of our Board of Directors determined that 53,767 performance share units granted in 2011 and outstanding as of February
1, 2014 were not earned based on the defined performance criteria above. Accordingly, those performance share units were cancelled as of that date.
No performance share units were earned and vested in 2013 and as of February 1, 2014, no grants currently meet the minimum vesting
thresholds.
Table of Contents
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and unit amounts