Nordstrom 2015 Annual Report Download - page 57

A summary of stock option activity for 2015, which includes awards issued as part of the Trunk Club acquisition in 2014, is presented below:
Fiscal year 2015
Shares
Weighted-
average
exercise€price
Weighted-average
remaining€
contractual
life (years)
Aggregate€
intrinsic€
value€
Outstanding, beginning of year 12.7 $46
Granted 1.8 75
Special dividend adjustment 0.9 N/A
Exercised (1.8)41
Forfeited or cancelled (0.4)58
Outstanding, end of year 13.2 $47 6 $88
Exercisable, end of year 7.5 $39 5 $81
Vested or expected to vest, end of year 12.8 $47 6 $88
The aggregate intrinsic value of options exercised during 2015, 2014 and 2013 was $62, $97 and $89. The total fair value of stock options
vested during 2015, 2014 and 2013 was $44, $41 and $34. As of January•30, 2016, the total unrecognized stock-based compensation
expense related to nonvested stock options was $57, which is expected to be recognized over a weighted-average period of 27 months.
Restricted Stock Units
In 2014 and 2015, we granted our employees restricted stock units that were approved by the Compensation Committee of our Board of
Directors, and determined based upon a percentage of the recipients€ base salaries and the fair value of the restricted stock units. Restricted
stock units typically vest over four years.
A summary of restricted stock unit activity for 2015, which includes awards issued as part of the Trunk Club acquisition in 2014, is presented
below:
Fiscal year 2015
Shares
Weighted-average
grant date fair value
per unit
Outstanding, beginning of year 0.9 $66
Granted 0.5 77
Special dividend adjustment 0.1 N/A
Vested (0.3) 66
Forfeited 0.0 71
Outstanding, end of year 1.2 $71
The total fair value of restricted stock units vested during 2015 was $24. As of January•30, 2016, the total unrecognized stock-based
compensation expense related to nonvested restricted stock units was $56, which is expected to be recognized over a weighted-average
period of 29 months.
Performance Share Units
We generally 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) outperforms companies in a defined group of competitors determined by the
Compensation Committee of our Board of Directors. Performance share units granted in 2013 also require the total shareholder return to be
positive for any payout. 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.Because performance share units are payable in either cash or stock as elected by
the employee, 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 that
has passed in the vesting period. The price used to determine the amount of cash or stock settled for the performance share units upon
vesting is the closing market price of our common stock on the last day of the performance cycle.
Table of Contents
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and per unit amounts
Nordstrom, Inc. and subsidiaries 57