Exhibit 10.4
NORDSTROM
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(2008 Restatement)
Lane Powell PC
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200

 

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TABLE OF CONTENTS

              Page
ARTICLE I. TITLE, PURPOSE AND EFFECTIVE DATE
    1  
1.01 Title
    1  
1.02 Purpose
    1  
1.03 Effective Date
    1  
 
       
ARTICLE II. ELIGIBILITYAND PARTICIPATION
    1  
2.01 Eligibility
    1  
2.02 Participation
    3  
2.03 Disability
    4  
2.04 Leave of Absence
    4  
 
       
ARTICLE III. BENEFITS
    4  
3.01 Retirement Benefit
    4  
3.02 Tier I Executive Retirement Benefit
    5  
3.03 Tier II Executive Retirement Benefit
    5  
3.04 1999 and Transition Plan Executive Retirement Benefit
    5  
3.05 Normal Retirement Benefits
    6  
3.06 Early Retirement Benefits
    6  
3.07 Deferred Retirement Benefits
    7  
3.08 Disability Retirement Benefits
    7  
3.09 Death Benefit
    7  
3.10 Payment of Benefits
    7  
 
       
ARTICLE IV. RIGHTS OF PARTICIPANTS IN THE PLAN
    8  
4.01 Vesting
    8  
4.02 Exceptions to Vesting
    9  
4.03 Application of Clawback Policy
    10  
4.04 Rights in Plan are Unfunded and Unsecured
    11  
4.05 Discretion to Grant Years of Service or Increase Age
    11  
 
       
ARTICLE V. DEATH BENEFITS
    11  
5.01 Death Benefit Payable
    11  
5.02 50% Joint and Survivor Annuity
    12  
5.03 Acknowledgment
    12  
5.04 Surviving Beneficiary
    12  
5.05 Doubt as to Beneficiary
    12  
 
       
ARTICLE VI. TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN
    13  
6.01 Plan Amendments and Termination
    13  

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              Page
6.02 Change In Control — Protected Benefits
    13  
 
       
ARTICLE VII. CLAIMS PROCEDURES
    14  
7.01 Submission of Claim
    14  
7.02 Denial of Claim
    14  
7.03 Review of Denied Claim
    14  
7.04 Decision upon Review of Denied Claim
    14  
 
       
ARTICLE VIII. TRUST
    14  
8.01 Establishment of the Trust
    14  
8.02 Interrelationship of the Plan and the Trust
    15  
8.03 Funding on Change in Control
    15  
8.04 Administration of Trust Assets
    15  
 
       
ARTICLE IX. PLAN ADMINISTRATION
    15  
9.01 Plan Sponsor and Administrator
    15  
9.02 Authority of Committee
    15  
9.03 Exercise of Authority
    16  
9.04 Delegation of Authority
    16  
9.05 Reliance on Opinions
    16  
9.06 Information
    16  
9.07 Indemnification
    16  
 
       
ARTICLE X. MISCELLANEOUS
    17  
10.01 No Employment Contract
    17  
10.02 Employee Cooperation
    17  
10.03 Illegality and Invalidity
    17  
10.04 Required Notice
    17  
10.05 Interest of Participant’s Beneficiary
    17  
10.06 Tax Liabilities from Plan
    17  
10.07 Benefits Nonexclusive
    18  
10.08 Discharge of Company Obligation
    18  
10.09 Costs of Enforcement
    18  
10.10 Gender and Case
    18  
10.11 Titles and Headings
    18  
10.12 Applicable Law
    18  
10.13 Counterparts
    18  
10.14 Definitions
    18  

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ARTICLE I.
TITLE, PURPOSE AND EFFECTIVE DATE
     1.01 Title. This plan shall be known as the Nordstrom Supplemental
Executive Retirement Plan, and any reference in this instrument to the “Plan” or
“SERP” shall include the plan as described herein and as amended from time to
time.
     1.02 Purpose. The Plan is intended to constitute an unfunded plan
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees of Nordstrom, Inc., a
Washington corporation (“Company”), and its affiliates as designated by the
Board (collectively the “Employers”), within the meaning of Section 201(2),
301(a)(3) and 401(a)(4) of the Employee Retirement Income Security Act of 1974
(“ERISA”). In addition, the Plan is an unfunded, nonqualified plan that is not
intended to satisfy the qualification requirements set forth in Section 401(a)
of the Internal Revenue Code of 1986, as amended (“Code”). The benefits provided
to a Participant under this Plan are in addition to any other benefits available
to such Participant under any other plan or program for employees of the
Employers. The Plan shall supplement and shall not supersede, modify or amend
any other such plan or program except as may otherwise be expressly provided.
     1.03 Effective Date. The Plan was originally effective as of July 18, 1988.
The Plan was subsequently amended on a number of occasions and, in order to
provide a number of Plan design changes, to make changes in Plan administration
and to otherwise clarify certain Plan provisions, the Company adopted a
restatement of the Plan, effective January 1, 1999. Subsequent to the 1999
Restatement, the Company undertook a complete review of the competitive nature
of the Plan’s benefit structure, revisited the initial goals and objectives of
the Plan and, in making a number of other administrative changes, adopted the
2002 Restatement. After an internal review of the 2002 Restatement and the
structure of the benefit formula and its impact on specific participant groups,
a number of modifications were proposed, which were included in a 2003
Restatement. The 2008 Restatement is adopted effective January 1, 2009 to
document compliance with Section 409A of the Code. For the period from
January 1, 2005 to December 31, 2008, the Plan observed operational compliance
with Section 409A of the Code, in accordance with transitional guidance issued
by the Internal Revenue Service.
ARTICLE II.
ELIGIBILITYAND PARTICIPATION
     2.01 Eligibility. Eligibility for this Plan shall be limited to Executives
as that term is defined herein.
          (a) Executive Defined. For purposes of this Plan, the term “Executive”
means the officers of Nordstrom, Inc., as selected by the Board, and any other
management or highly compensated employee of the Company or an Employer, who has
been specifically designated
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by the Committee and approved by the Board as eligible to become a Participant
in this Plan. When designating such individual as an “Executive,” the Board or
Committee shall have the discretion to categorize Executives as any one of the
following:
               (i) 1999 Plan Executives. A “1999 Plan Executive” is any
Executive who, as of January 1, 2003, was both: (1) designated as eligible under
the Plan (either because he or she was a corporate officer or as a result of
Board or Committee designation), and (2) eligible for, or within one year of
being eligible for, Early Retirement under the Plan.
               (ii) Transition Plan Executives. A “Transition Plan Executive” is
any Executive who, as of January 1, 2003, met all of the following requirements:
(1) was designated as eligible under the Plan (either because he or she was a
corporate officer or as a result of Board or Committee designation), (2) had
more than 15 Years of Credited Service under the Plan, (3) was not eligible for,
and was not within one year of being eligible for, Early Retirement under the
Plan, and (4) was not specifically designated as a Tier I or Tier II Executive.
               (iii) Tier I Executives. A “Tier I Executive” is any Executive
designated by the Board or the Committee as a Tier I Executive and who is not a
1999 Plan Executive or a Transition Plan Executive.
               (iv) Tier II Executives. A “Tier II Executive” is any Executive
designated by the Board or Committee as a Tier II Executive and who is not a
1999 Plan Executive or a Transition Plan Executive.
               (v) Change in Designation. The Committee and the Board shall have
the discretion and authority to change an Executive’s designation, provided that
the time and form of payment of a benefit under this Plan shall be determined
based on the Executive’s category when he or she was first designated as
eligible for this Plan.
          (b) Revocation of Designation. Notwithstanding the foregoing, the
Board may, in its sole and exclusive discretion, revoke an employee’s
designation as an Executive hereunder at any time. An Executive whose
designation has been revoked shall be entitled to only those benefits, if any,
which have vested as of the date of revocation, and the revocation shall not
change the time or form of payment of benefits.
          (c) Certain Executive Transfers. An Executive pursuant to subparagraph
(a) who has terminated employment with an Employer or the Company as a result of
an employment transfer to an affiliate that is not an Employer, shall continue
to be considered an eligible Executive solely for purposes of determining
whether the Executive has separated from active employment (including for
purposes of determining eligibility for Early Retirement under 3.06), but shall
not accrue any additional benefits while not actively employed by the Company or
an Employer. Any subsequent designation of such individual’s Executive status
under the Plan may include benefit credit for years of service with such
organization as the Committee deems appropriate.
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     2.02 Participation. An Executive becomes a “Participant” in the Plan, when
such Executive retires under 2.02(a), with the appropriate approval under
2.02(b) and 2.02(c), as follows:
          (a) “Retirement” Defined. An Executive retires under the terms of the
Plan when such Executive separates from active employment with the Company and
each and every subsidiary and affiliate of the Company, on or after a retirement
date specified in this section. For purposes of this Plan, an Executive
separates from active employment on the date when the Company and the Executive
reasonably anticipate that the Executive’s level of bona fide services will be
permanently reduced to 49 percent or less of the level of bona fide services
performed during the immediately preceding period of 36 consecutive months. An
Executive’s termination of employment with the Company as a result of such
Executive’s transfer to a subsidiary or affiliate of the Company shall not, by
itself, constitute a separation from active employment for purposes of this
section. The retirement dates are:
               (i) Normal Retirement Date. The Executive’s Normal Retirement
Date shall be (a) a 1999 Plan Executive’s sixtieth (60th) birthday, (b) a
Transition Plan Executive’s fifty-fifth (55th) birthday, or (c) a Tier I or Tier
II Executive’s fifty-eighth (58th) birthday.
               (ii) Early Retirement Date. The Executive’s Early Retirement Date
shall be the date that the Executive has both:
                    (1) completed at least ten (10) Years of Credited Service
(as defined under 3.01(a)); and
                    (2) in the case of a 1999 Plan Executive, attained age 50,
or in the case of a Tier I, Tier II or Transition Plan Executive, attained age
53.
               (iii) Disability Retirement Date. The Executive’s Disability
Retirement Date shall be the date on which: (1) a 1999 Plan Executive becomes
eligible for unreduced Early Retirement Benefits under Section 3.06, provided
that the Executive continues to be permanently Disabled on such date, or (2) a
Tier I, Tier II or Transition Plan Executive becomes eligible for Normal
Retirement Benefits under 3.05, provided that the Executive continues to be
permanently Disabled through his or her Normal Retirement Date.
          (b) Committee Approval. As a condition to payment, the Committee must
approve all Retirement Benefits under Article III.
          (c) Board Approval for Early Retirement. An Executive who separates
from active employment on or after his or her Early Retirement Date (but prior
to Normal Retirement Date) must receive the consent and approval of the Board
for such early retirement. If the Executive elects to separate from active
employment without Board approval of early retirement, the Executive’s entire
benefit under the Plan shall be forfeited.
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     2.03 Disability. An Executive who becomes Disabled while employed by the
Company or an Employer shall be deemed to be an Executive in active service with
the Company during the period of such Disability and shall continue to accrue
Years of Credited Service for such period whether or not such Executive actually
performs services for the Company during such period; provided, however, that
accrual of service under this section shall cease upon the earlier of the
Disabled Executive’s: (i) recovering from such Disability; or (ii) Disability
Retirement Date. An Executive who recovers from such Disability, but who does
not thereafter return to active service with an Employer shall be treated as
though he or she terminated employment prior to reaching a Retirement Date and
his or her Plan benefit shall be forfeited. For purposes of this Plan, an
Executive is Disabled if, due to a medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of at least 12 months, the Executive is receiving income
replacement benefits for a period of at least three months under the Company’s
Disability Program.
     2.04 Leave of Absence. The Board shall determine, on an individual basis
and in its sole and absolute discretion, the treatment under the Plan of an
Executive who takes a leave of absence from the Company or an Employer for
reasons other than Disability, provided that the Board shall not change the time
or form of payment of benefits set forth in this Plan solely because of the
Executive’s leave of absence. An Executive on a leave of absence for reasons
other than Disability will be considered to have experienced a termination of
employment for purposes of this Plan if the period of leave exceeds six months,
unless the Executive retains a right to be reinstated to employment with the
Company or an Employer under an applicable law or contract after the six-month
period ends.
ARTICLE III.
BENEFITS
     3.01 Retirement Benefit. An Executive’s “Retirement Benefit” shall mean the
benefit payable to the Executive as a Participant, pursuant to this Article III,
expressed and payable as a monthly benefit in the form of a 50% Joint and
Survivor Annuity, commencing on the Retirement Date. An Executive’s Retirement
Benefit depends on the Executive’s eligibility category as designated by the
Board or Committee as a 1999 Plan Executive, Transition Plan Executive, Tier I
Executive, or Tier II Executive, with the following provisions and definitions
applying to each of those categories:
          (a) Year of Credited Service. A “Year of Credited Service” shall have
the same meaning as “Years of Service” under the Nordstrom 401(k) Plan & Profit
Sharing (and any predecessor or successor thereto) (“Profit Sharing Plan”).
Service with a subsidiary or other corporation controlled by the Company shall
not be considered “Credited Service” unless the Committee specifically agrees to
credit such service. In addition, Years of Credited Service may be granted by
the Committee under 4.05. In no case, however, will more than twenty five
(25) Years of Credited Service be counted for any purpose under the Plan.
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          (b) Final Average Compensation. For purposes of this Plan, Final
Average Compensation shall mean the monthly compensation resulting from the
average of the highest thirty-six (36) months of the Executive’s Covered
Compensation, measured over the Averaging Period:
               (i) Covered Compensation. For purposes of determining an
Executive’s Final Average Compensation, Covered Compensation shall include base
salary and the cash bonus accrued for a fiscal year, divided by the number of
full and partial months the Executive worked in the fiscal year. Covered
Compensation shall not include any other items of remuneration such as
reimbursements, allowances, fringe benefits or gains on the exercise of stock
options, regardless of whether such amounts are included in the taxable income
of the Executive. Unless specifically agreed to by the Committee, Covered
Compensation shall not include any remuneration provided by a subsidiary or an
affiliate.
               (ii) Averaging Period. The Executive’s Averaging Period shall be
the longer of: (a) the final sixty (60) months of the Executive’s employment; or
(b) the entire period of service (measured in months) after either (1) a 1999
Plan Executive’s fiftieth (50th) birthday, or (2) a Transition Plan or Tier I or
II Executive’s fifty-third (53rd) birthday. Unless the Committee decides
otherwise, periods of employment with a subsidiary or affiliate that is not an
Employer shall not be considered for purposes of determining the Averaging
Period.
     3.02 Tier I Executive Retirement Benefit. A Tier I Executive’s Retirement
Benefit shall be equal to one and six-tenths percent (1.6%) of such Executive’s
Final Average Compensation, multiplied by the Executive’s Years of Credited
Service.
     3.03 Tier II Executive Retirement Benefit. A Tier II Executive’s Retirement
Benefit shall be equal to eight-tenths percent (0.8%) of such Executive’s Final
Average Compensation, multiplied by the Executive’s Years of Credited Service.
     3.04 1999 and Transition Plan Executive Retirement Benefit. A 1999 Plan
Executive’s Retirement Benefit and a Transition Plan Executive’s Retirement
Benefit shall be equal to two and four-tenths percent (2.4%) of such Executive’s
Final Average Compensation, multiplied by the Executive’s Years of Credited
Service, but reduced by the Executive’s Annuity Value of Profit Sharing,
determined as follows:
          (a) Annuity Value of Profit Sharing. The Executive’s Annuity Value of
Profit Sharing means the actuarially equivalent monthly amount of the
Executive’s Company contribution account balances as of the date such Executive
retires, if the account balances were paid in the form of a 50% Joint and
Survivor Annuity, as follows:
               (i) Profit Sharing Plan. Company-provided profit sharing and
matching contributions (and income thereon) under the Profit Sharing Plan; plus
               (ii) Other Qualified Plans. The amount of any Company-provided
benefits to the Executive under any other qualified plan of the Company or its
affiliates; plus
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               (iii) Distributions. The amount of any previous withdrawals or
other distributions of any type (regardless of the payee) from the previously
described plans (without adjustment for imputed earnings for any period
following the actual date of withdrawal or distribution), other than
(1) distributions of life insurance policies from the Profit Sharing Plan; and
(2) the excess (if any) of premiums paid with respect to life insurance policies
prior to such date over the cash surrender value used in computing the account
balances in the Profit Sharing Plan as of such date expressed and payable as a
monthly benefit commencing on the applicable payment date in the form of a 50%
Joint and Survivor Annuity.
          (b) 50% Joint and Survivor Annuity. For purposes of determining the
reductions under Section 3.04(a), a 50% Joint and Survivor Annuity means the
annuity defined in Section 5.02, with the following modifications to take into
account the determination of such annuity value upon the Participant’s (as
opposed to the Beneficiary’s) commencement of benefits under the Plan:
               (i) Beneficiary. A Participant’s joint annuitant in this context
is the individual who would be considered the Participant’s Beneficiary under
5.01(a) (for purposes of the Plan’s pre-retirement survivor annuity) on the date
the Participant retires. In the event that there is no Beneficiary on such date,
the survivor annuity shall be calculated as though the Participant had a
Beneficiary of the same age as the Participant.
               (ii) Actuarial Equivalent. The Actuarial Equivalent used for this
section shall be the same as that defined and used by the Committee in
Section 5.02(b), except that the interest rate used shall be the IRS Long Term
Applicable Federal Rate (AFR) stated for the month prior to the month in which
the Executive retires.
     3.05 Normal Retirement Benefits. An Executive who retires on or after
Normal Retirement Date shall be entitled, upon approval of the Committee, to a
Retirement Benefit under either 3.02, 3.03 or 3.04 (as appropriate) determined
as of the actual date the Executive retires.
     3.06 Early Retirement Benefits. Subject to 3.06(c), an Executive who
retires (with the consent and approval of the Board) on or after his or her
Early Retirement Date shall be entitled, upon approval of the Committee, to an
Early Retirement Benefit as follows:
          (a) Retirement Benefit. The Executive’s Retirement Benefit under 3.02,
3.03 or 3.04 (as appropriate) determined on the actual date the Executive
retires, reduced by the Early Retirement Reduction Factor.
          (b) Early Retirement Reduction Factor.
               (i) 1999 Plan Executives. For 1999 Plan Executives, three percent
(3%) for each year the sum of the Participant’s age and Years of Credited
Service is less than 75.
               (ii) Transition Plan Executives. For Transition Plan Executives,
twelve and one-half percent (12.5%) for each year prior to the Executive’s
Normal Retirement
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Date, with such reduction percentage to be prorated for any applicable fraction
of a year, based on the number of full months worked in such year.
               (iii) Tiers I and II Executives. For any Tier I or Tier II
Executive, ten percent (10%) for each year prior to the Executive’s Normal
Retirement Date, with such reduction percentage to be prorated for any
applicable fraction of a year, based on the number of full months worked in such
year.
          (c) Transition Plan Executives. If a Transition Plan Executive’s Early
Retirement Benefit calculated as though they were a Tier I Executive (under 3.02
and 3.06(b)(iii)), is greater than the Early Retirement Benefit calculated as a
Transition Plan Executive (under 3.04 and 3.06(b)(ii)), then such Transition
Plan Executive shall be entitled to receive such greater Early Retirement
Benefit calculated as though they were a Tier I Executive.
     3.07 Deferred Retirement Benefits. An Executive who retires after his or
her Normal Retirement Date shall be entitled to a Deferred Retirement Benefit
equal to the Normal Retirement Benefit under this Article III, but increased
with interest for each Year of Post-Normal Retirement Date Service, up to a
maximum of ten (10) Years of Post-Normal Retirement Date Service. A Year of
Post-Normal Retirement Date Service means the period of twelve (12) consecutive
complete calendar months beginning with the first of the month following a
Participant’s Normal Retirement Date, and each successive period of twelve
(12) consecutive complete calendar months, prior to the Participant’s date of
Retirement (as defined in 2.02(a)). Partial Years of Post-Normal Retirement Date
Service shall be disregarded. An interest rate of five percent (5%) per Year of
Post-Normal Retirement Date Service, compounded annually, shall be used to
calculate the increase under this section.
     3.08 Disability Retirement Benefits. A Disabled Executive continuing to
accrue service credit under Section 2.03 shall be treated, for purposes of the
Plan, as an active Executive for such period, and the Retirement Benefit under
this Article III shall be determined as of such Disabled Executive’s Disability
Retirement Date. A Disabled Executive may not receive Retirement Benefits prior
to the Disability Retirement Date, even if, for example, the Executive qualifies
for Early Retirement before his or her Disability Retirement Date. In addition,
a Disabled Executive who receives Retirement Benefits while also receiving
long-term disability or other disability income benefits pursuant to any other
Employer-sponsored plan, fund or program that covers a substantial number of
employees (excluding disability income paid by Social Security), shall have the
monthly Retirement Benefit payable under this Plan reduced (but not below zero)
by the monthly benefit actually paid or payable under such other plan. The
amount by which the disability retirement benefit is reduced due to other
payments shall be permanently forfeited.
     3.09 Death Benefit. The Death Benefit under this Plan, whether payable
before or after Retirement, shall consist solely of a survivor annuity, payable
for the life of the Beneficiary (if any), as described in Article V.
     3.10 Payment of Benefits. The following shall apply to the payment of
benefits under Article III:
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          (a) Payment Commencement.
               (i) General Rule. Payment of benefits under this Article III
shall commence within 90 days after the date the Executive retires. The
Participant may not designate the taxable year in which payments will begin.
               (ii) Key Employees. If the Executive is a Key Employee, in order
to comply with Code Section 409A, payments during the six-month period beginning
on the Retirement Date shall be suspended. The first payment after expiration of
the six-month waiting period shall include all periodic payments that were
suspended during the six-month waiting period. For purposes of the Plan, Key
Employee has the same meaning as under Code Section 416(i)(1)(A)(i), (ii), or
(iii) (and disregarding Code Section 416(i)(5)). An Executive’s status as a Key
Employee is determined as of each September 30, and the Executive is treated as
a Key Employee under the Plan for the next calendar year.
          (b) Semi-Monthly Payment. Periodic payments of benefits shall be paid
in equal monthly amounts on a semi-monthly basis through the Company’s normal
payroll system.
          (c) Withholding.
               (i) Income Tax and Other Withholding. The Company shall withhold
from any and all benefit payments made under the Plan and this Article III, all
federal, state and local income taxes the Company reasonably determines are
required to be withheld in connection with the benefits hereunder, and any other
amounts due, owing and unpaid by the Participant to the Company, to be
determined in the sole discretion of the Company. In the event the amounts due
under this 3.10(c)(i) exceed the amount of benefits currently payable, the
Participant shall be required to contribute to the Company an amount necessary
to meet such obligations.
               (ii) Employment Taxes. At the time of Retirement, the Company
shall calculate the employment taxes (i.e., Social Security and Medicare taxes)
due on the Participant’s benefit under the Plan. The Company shall pay the
Company’s share and the Participant’s share of the employment taxes directly to
the appropriate taxing authority. To the extent that the Company’s payment
creates an additional tax liability for the Participant, the Company shall pay
the Participant an additional amount to satisfy this additional tax liability.
The Company’s payment to the Participant must be made no later than the last day
of the Participant’s taxable year next following the Participant’s taxable year
in which the Company makes the employment tax payment on behalf of the
Participant.
ARTICLE IV.
RIGHTS OF PARTICIPANTS IN THE PLAN
     4.01 Vesting. Except as otherwise provided in this Section and elsewhere in
Article IV and Section 6.02, no Executive, Participant or Beneficiary shall have
any vested interest in any
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Plan benefits. The Benefits in which such Participant or Beneficiary has a
vested interest under this Section (subject to forfeiture in 4.02) shall be
determined as follows:
          (a) Years in Position. In addition to the other requirements of this
Section 4.01, an Employee must have been a designated Tier II Executive under
the Plan for a period of at least seven Years of Credited Service in order to
become vested in a benefit under this Plan.
          (b) Early Retirement. A Participant entitled to Early Retirement
Benefits under Section 3.06 shall have a vested interest in such benefits after
the Board consents to and approves the Participant’s Early Retirement Date.
          (c) Normal Retirement. A Participant entitled to Normal Retirement
benefits under Section 3.05 shall have a vested interest in Normal Retirement
benefits on the Participant’s Normal Retirement Date.
          (d) Deferred Retirement. An Executive who retires after Normal
Retirement Date shall have a vested interest in Retirement Benefits granted
under Section 3.05 on the Participant’s Normal Retirement Date, and shall have a
vested interest in the additional benefits under Section 3.07 on such
Participant’s Deferred Retirement Date.
          (e) Death Benefit. The Beneficiary of a Participant who is entitled to
a survivor annuity under Article V shall have a vested interest in any
applicable survivor annuity which is actually payable in accordance with the
terms of Article V, on and after the date of the Participant’s death.
     4.02 Exceptions to Vesting. Notwithstanding any other provision of this
Plan, an Executive’s benefit shall be forfeited in the following situations:
          (a) Tier II Executives. No benefits shall be paid to a Tier II
Executive who terminates employment with less than seven Years of Credited
Service as a designated Tier II Executive under the Plan.
          (b) Suicide or Self-Inflicted Injury. No benefits shall be paid to an
Executive or to any Beneficiary of such Executive as a result of suicide or
self-inflicted injury by the Executive within three (3) years after such
Executive becomes an “Executive” under the Plan.
          (c) Termination for Good Cause. If an Executive is terminated for
“cause” or if an Executive is found by the Company at any time to have engaged
in any acts as would have constituted “cause” for termination, the Executive and
any Beneficiary of the Executive shall immediately forfeit any and all rights to
benefits under this Plan. Accordingly, any benefits in pay status shall cease
immediately, and no future benefits shall be payable to the Executive or to his
or her Beneficiary. For purposes of this Plan, “cause” shall mean that the
Executive has or had:
               (i) misappropriated, stolen or embezzled funds of the Company or
an affiliate;
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               (ii) committed an act of deceit, fraud, dereliction of duty or
gross or willful misconduct;
               (iii) been convicted of either a felony or a crime involving
moral turpitude or entered a plea of no contest in response to an indictment for
such crime or felony;
               (iv) intentionally disclosed confidential information of the
Company or an affiliate (except when such disclosure is made pursuant to the
direction of the Company or in accordance with legal, administrative or judicial
process); or
               (v) engaged in competitive behavior against, actions inimical to
the interests of, purposely aided a competitor of, or has misappropriated or
aided in the misappropriation of a material opportunity of the Company or its
affiliates.
     (d) Cessation of Benefits for Competition. Retirement Benefits currently in
pay status to a Participant shall cease, and no further benefits shall be
payable, to the Participant (or Beneficiary) to the extent the Participant
competes, directly or indirectly, with the Company. For purposes of this Plan,
“competing, directly or indirectly, with the Company” shall mean (without
limitation) a determination, in the sole discretion of the Committee, of any of
the following: (i) engaging in the operation of any type of business or
enterprise in any way competitive with the business of the Company or its
subsidiaries or affiliates, (ii) holding an interest, either directly or
indirectly, as owner, director, officer, employee, partner, shareholder (other
than as the owner of less than two percent (2%) of the outstanding stock of a
publicly owned company), in any type of business or enterprise in any way
competitive with the business of the Company or its subsidiaries or affiliates;
or (iii) investing capital in, lending money or property to or rendering
services to any type of business or enterprise in any way competitive with the
business of the Company or its subsidiaries or affiliates. In the event of a
dispute as to the application of this paragraph, the Committee may waive or
modify its right to discontinue payment to any Participant or to any Beneficiary
of such Participant by written agreement.
     4.03 Application of Clawback Policy. This section applies if the Board
elects to apply the Company’s clawback policy to a Participant and application
of the clawback policy results in a reduction in the Participant’s Final Average
Compensation. The Participant’s Plan benefit shall be recalculated, and the
Participant’s future payments shall be adjusted automatically beginning with the
first payment after the recalculation is completed. To the extent that the
Participant has already received payments under the Plan and those payments are
greater than the recalculated benefit (i.e., an overpayment), the Plan
Administrator shall recover the overpayment by reducing the next payment due
under the Plan (but not below zero) and applying it to the overpayment. To the
extent that there continues to be an overpayment after reduction of the first
recalculated payment, each successive payment shall be reduced (but not below
zero) and the reduction shall be applied to the overpayment until the
overpayment has been repaid in full. Once the overpayment has been repaid in
full, the Participant shall receive the recalculated benefit as if the
recalculated benefit had been the initial benefit calculated under the Plan. The
provisions of this section for recovery of overpayments shall also apply to the
Beneficiary of a Participant after the Participant’s death.
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     4.04 Rights in Plan are Unfunded and Unsecured. The Company’s obligation
under the Plan shall in every case be an unfunded and unsecured promise to pay.
A Participant’s right to Plan distributions shall be no greater than the rights
of general, unsecured creditors of the Company. The Company may establish one or
more grantor trusts (as defined in Code Section 671 et seq.) to facilitate the
payment of benefits hereunder; however, the Company shall not be obligated under
any circumstances (other than a Change of Control, as described in 6.02) to fund
its financial obligations under the Plan. Any assets which the Company may
acquire or set aside to defray its financial liabilities shall be general assets
of the Company, and such assets, as well as any assets set aside in a grantor
trust, shall be subject to the claims of its general creditors in the event of
the Company’s insolvency.
     4.05 Discretion to Grant Years of Service or Increase Age. If circumstances
warrant (in order to attract or retain a qualified Executive), and it is decided
it is in the best interests of the Company, the Committee shall have the
authority and discretion to grant to certain individuals additional Years of
Credited Service or to treat such individuals as having attained a certain age
for purposes of this Plan, provided, however, that no such action may alter the
time or form of payment of Plan benefits. Such circumstances may
include (a) providing Executives with a recruiting incentive, or (b) such other
circumstances that the Committee deems appropriate. The Committee may condition
the receipt of such additional benefits (to which the Executive is not otherwise
entitled) on the Participant’s execution of an election of increased benefits
under this Plan and a general release of all claims. The Committee’s granting of
Years of Credited Service and/or treating the Executive as attaining a certain
age may affect the amount of the Executive’s benefit under this Plan, but shall
not alter, and shall not be construed as altering, the Executive’s actual age or
years of service with the Employer under any other plan of the Employer or for
purposes of determining the time or form of payment under this Plan.
ARTICLE V.
DEATH BENEFITS
     5.01 Death Benefit Payable. Each Executive’s Retirement Benefit is
expressed and payable as a monthly benefit in the form of a 50% Joint and
Survivor Annuity under this Plan. Accordingly, the sole death benefit payable
under this Plan on behalf of an Executive or a Participant is as follows:
          (a) Pre-Retirement Death Benefit. If a Participant dies while actively
employed as an Executive, a pre-retirement death benefit shall be payable under
the Plan upon the death of the Executive. The pre-retirement death benefit shall
be a Survivor Annuity payable for the life of the Executive’s Beneficiary,
calculated as though the Executive had retired as a Participant and had begun
receiving Early, Normal or Deferred Retirement Benefits under the Plan based on
his or her actual age and Years of Credited Service on the day before his or her
death. The periodic payment to the Beneficiary is 50% of the periodic payment
that would have been paid to the Executive if the Executive had not died prior
to Retirement. If the Executive
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dies before reaching a Retirement Date under the Plan, the survivor annuity
shall commence on the earliest date the Executive would have been eligible to
retire under the Plan.
          (b) Post-Retirement Death Benefit. The Post-Retirement Death Benefit
payable on behalf of a Participant shall be a 50% Survivor Annuity payable for
the life of the Participant’s Beneficiary, based on the actual Retirement
Benefit the Participant was receiving at the time of his or her death,
calculated in accordance with the provisions of Section 5.02.
     5.02 50% Joint and Survivor Annuity. A 50% Joint and Survivor Annuity means
an annuity for the life of the Participant and, after his or her death, a
survivor annuity for the life of the Participant’s Beneficiary in an amount that
is fifty percent (50%) of the original annuity amount paid to the Participant;
provided, however, that if the Beneficiary is more than five years younger than
the Participant, such survivor annuity will be calculated so that it is the
Actuarial Equivalent of the 50% survivor annuity for a Beneficiary five years
younger than the Participant.
          (a) Beneficiary. A Participant’s Beneficiary is the individual to whom
the Participant is legally married or the Participant’s Life Partner on the date
of the Participant’s death. For this purpose, the term “Life Partner” has the
same meaning as is used under the Nordstrom Welfare Benefit Plan; provided,
however, that the Committee may, in its discretion, substitute a less
restrictive definition than is used in the Nordstrom Welfare Benefit Plan.
          (b) Actuarial Equivalent. The Committee shall have the authority to
periodically determine and change the appropriate factors used to determine
Actuarial Equivalence under the Plan. As of the Effective Date of this
Restatement, the mortality table shall be the 1983 Group Annuity Mortality Table
for males (GAM 83) and the interest rate shall be the IRS Long Term Applicable
Federal Rate (AFR) stated for the month of the Executive’s death.
     5.03 Acknowledgment. The Committee shall have the sole and exclusive
discretion to determine the identity of any Beneficiary, and no person shall
have a right to any death benefit under this Plan in the absence of a
determination that he or she is the Beneficiary of the Executive or Participant.
     5.04 Surviving Beneficiary. For purposes of determining whether the
Beneficiary predeceases the Executive, the individual is considered to survive
the Executive if such Beneficiary is alive seven (7) days after the date of the
Executive’s death.
     5.05 Doubt as to Beneficiary. If the Plan Administrator has any doubt as to
the proper individual to receive payments pursuant to this Plan, the Plan
Administrator shall have the right, exercisable in its discretion, to cause the
Executive’s Employer to withhold such payments until this matter is resolved to
the Plan Administrator’s satisfaction.
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ARTICLE VI.
TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN
     6.01 Plan Amendments and Termination.
          (a) Board of Directors. The Plan may be amended or terminated by the
Board of Directors at any time. Except as provided in 6.02, such amendment or
termination may modify or eliminate any benefit hereunder other than a benefit
that is in pay status, or the vested portion of a Retirement Benefit that is not
in pay status.
          (b) Compensation Committee. The Committee has the authority on behalf
of the Board to review, finalize, approve and adopt amendments to the Plan,
other than amendments relating to Plan eligibility. Except as provided in 6.02,
such amendment may modify or eliminate any benefit hereunder other than a
benefit that is in pay status, or the vested portion of a Retirement Benefit
that is not in pay status. The Committee shall notify the Board of all
amendments adopted under this provision.
          (c) Officer in Charge of Human Resources. The Company’s senior officer
with responsibility for Human Resources has the authority on behalf of the Board
to review, finalize, approve and adopt technical, legal, administrative, and
compliance amendments recommended by the Company’s legal counsel. The Company’s
senior officer with responsibility for Human Resources shall notify the Board of
all amendments adopted under this provision.
          (d) Benefits on Termination. If the Plan is terminated, benefit
payments may be accelerated only to the extent permitted in final regulations
under Code Section 409A.
     6.02 Change of Control – Protected Benefits. In the event of a Change of
Control (as defined in the Trust), the following additional provisions shall
apply.
          (a) No Amendment or Termination. No amendment (or termination) of the
Plan can occur that would reduce or otherwise eliminate the monthly benefit
payable under the Plan to any person with respect to a Participant who retired
prior to such Change of Control, nor shall any Plan amendment reduce the benefit
to be paid with respect to an Executive (who has not retired) below the amount
which such Executive has accrued and would have received (upon reaching Normal
Retirement Date) had he or she retired the day before such Change of Control
(the “Change of Control Benefit”).
          (b) Full Vesting in Accrued Benefit. Upon the occurrence of a Change
of Control, each active Executive shall be fully vested in his or her Change of
Control Benefit under this Plan through the date of the Change of Control; in
the event of termination of employment after a Change of Control and before the
Executive’s Normal Retirement Date, the terminated Executive shall receive a
reduced Early Retirement benefit commencing on his or her Early Retirement Date
(with reductions based upon the age attained on the actual Early Retirement Date
and without the need for Board approval of the Early Retirement Date).
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          (c) Full Funding. Notwithstanding the provisions of Section 4.04 and
the unfunded status of the Plan, in the event of a Change of Control, the
Company shall fully fund the Trust as provided in Article VIII.
ARTICLE VII.
CLAIMS PROCEDURES
     7.01 Submission of Claim. Benefits shall be paid in accordance with the
provisions of this Plan. The Participant, or any person claiming through the
Participant (“Claiming Party”), shall make a written request for benefits under
this Plan, mailed or delivered to the Committee. Such claim shall be reviewed by
the Committee or its delegate.
     7.02 Denial of Claim. If a claim for payment of benefits is denied in full
or in part, the Committee or its delegate shall provide a written notice to the
Claiming Party within ninety (90) days setting forth: (a) the specific reasons
for denial; (b) any additional material or information necessary to perfect the
claim; (c) an explanation of why such material or information is necessary; and
(d) an explanation of the steps to be taken for a review of the denial. A claim
shall be deemed denied if the Committee or its delegate does not take any action
within the aforesaid ninety (90) day period.
     7.03 Review of Denied Claim. If the Claiming Party desires Committee review
of a denied claim, the Claiming Party shall notify the Committee or its delegate
in writing within sixty (60) days after receipt of the written notice of denial.
As part of such written request, the Claiming Party may request a review of the
Plan document or other non-privileged documents relevant to the claim, may
submit any written issues and comments, and may request an extension of time for
such written submission of issues and comments.
     7.04 Decision upon Review of Denied Claim. The decision on the review of
the denied claim shall be rendered by the Committee within sixty (60) days after
receipt of the request for review. If circumstances require, the Committee may
take up to an additional sixty (60) days to render its decision. The decision
shall be in writing and shall state the specific reasons for the decision,
including reference to specific provisions of the Plan on which the decision is
based.
ARTICLE VIII.
TRUST
     8.01 Establishment of the Trust. The Company may establish a trust,
provided that any trust created by the Company, and any assets held by such
trust to assist the Company in meeting its obligations under this Plan, shall be
structured in a way to avoid immediate taxation to Participants in the Plan.
Except in the case of a Change of Control (as defined in the Trust), the
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Company reserves the absolute right, in its sole and exclusive discretion, to
direct (or refrain from directing) the transfer over to the Trust of such assets
to the extent the Company deems advisable, provided that no such transfer, Trust
or other arrangement entered into by the Company shall affect the status of the
Plan as unfunded for purposes of ERISA or the Code.
     8.02 Interrelationship of the Plan and the Trust. The provisions of the
Plan shall govern the rights of a Participant to receive distributions pursuant
to the Plan. The provisions of the Trust shall govern the rights of the Company,
Participants and the creditors of the Company to the assets transferred to the
Trust. The Company shall at all times remain liable to carry out its obligations
under the Plan. The Company’s obligations under the Plan may be satisfied with
Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Company’s obligations under this Plan.
     8.03 Funding on Change of Control. In the event of a Change of Control (as
defined in the Trust) at any time when the Trust has not been terminated and is
not fully funded (as defined below), the Company shall promptly transfer to the
trustee of the Trust assets sufficient to cause the Trust to be fully funded on
the date of such transfer. For purposes of this paragraph, the Trust shall be
“fully funded” on a given date if, on such date, the fair market value of the
assets held by the trustee of the Trust is at least equal to the Actuarial
Equivalent present value of: (i) all benefits under the Plan in pay status to
Participants or Beneficiaries on such date; plus (ii) the fully vested Change of
Control Benefit under 6.02. For purposes of this paragraph, Actuarial Equivalent
present value shall be determined using the interest and mortality assumptions
of the Article III Actuarial Equivalent in effect for the month prior to the
Change of Control.
     8.04 Administration of Trust Assets. Prior to a Change of Control, the
Company, acting through an Administrative Committee established for the purpose
of overseeing administration of the Company’s non-qualified deferred
compensation plans, shall direct the Trustee regarding the investment of Trust
assets. On and after a Change of Control, the authority of the Administrative
Committee shall cease, and the Trustee shall have the exclusive authority and
responsibility for the investment of Trust assets, subject to any investment
guidelines provided by the Company prior to the Change of Control.
ARTICLE IX.
PLAN ADMINISTRATION
     9.01 Plan Sponsor and Administrator. The Company is the “Plan Sponsor,” and
the Committee is the “Plan Administrator.” The Company’s senior officer with
responsibility for Human Resources and the Company’s Leadership Benefits
Department have been selected to assist the Committee in its day to day
responsibilities with respect to the Plan. The Committee, with the advice of
Leadership Benefits, will make such rules and computations and will take such
other actions to administer the Plan as the Committee may deem appropriate.
     9.02 Authority of Committee. As Plan Administrator, the Committee has the
sole and exclusive discretion, authority and responsibility to construe and
interpret the terms and provisions of the Plan, to remedy and resolve
ambiguities, to grant or deny any and all claims for
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benefits and to determine all issues relating to eligibility for benefits. All
actions taken by the Committee as Plan Administrator, or its delegate, will be
conclusive and binding on all persons having any interest under the Plan,
subject only to the provisions of Article VII. All findings, decisions and
determinations of any kind made by the Committee or its delegate shall not be
disturbed unless the Committee has acted in an arbitrary and capricious manner.
     9.03 Exercise of Authority. All resolutions or other actions taken by the
Committee shall either: (a) be taken by a vote of a majority of those present at
a meeting at which a majority of the members are present; or (b) be evidenced in
a writing adopted by a majority of all the members in office at the time the
action is taken if the Committee acts without a meeting.
     9.04 Delegation of Authority. The Committee may delegate all or part of its
responsibilities, authority and discretion under the Plan to other persons. The
duties of the Committee under the Plan will be carried out in its name by the
officers, directors and employees of the Company. Any such delegation shall
carry with it the full discretion and authority vested in the Committee under
Section 9.02. The Committee has delegated the day-to-day administration of the
Plan to the Company’s Leadership Benefits Department under the direction of the
Company’s senior officer with responsibility for Human Resources.
     9.05 Reliance on Opinions. The members of the Committee and the officers
and directors of the Company, and any employee of the Company who is charged
with duties in connection with the administration of the Plan shall be entitled
to rely on all certificates and reports made by any duly appointed accountants,
and on all opinions given by any duly appointed legal counsel, including legal
counsel for the Company.
     9.06 Information. The Company shall supply full and timely information to
the Committee on all matters relating to the compensation of Participants, the
date and circumstances of the termination of employment or death of a
Participant and such other pertinent information as the Committee may reasonably
require.
     9.07 Indemnification. The Company shall indemnify and hold harmless each
Committee or Board member, and each Company employee performing services or
acting in any capacity, from and with respect to the Plan against any and all
expenses and liabilities arising in connection with services performed in regard
to this Plan. Expenses against which such individual shall be indemnified
hereunder shall include, without limitation, the amount of any settlement or
judgment, costs, counsel fees and related charges reasonably incurred in
connection with a claim asserted, or a proceeding brought or settlement thereof.
The foregoing right of indemnification shall be in addition to any other rights
to which any such individual may be entitled as a matter of law or other
agreement.
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ARTICLE X.
MISCELLANEOUS
     10.01 No Employment Contract. The terms and conditions of the Plan shall
not be deemed to constitute a contract of employment between the Company and an
Executive. Nothing in this Plan shall be deemed to give an Executive the right
to be retained in the service of the Company or to interfere with any right of
the Company to discipline or discharge the Executive at any time.
     10.02 Employee Cooperation. An Executive will cooperate with the Company by
furnishing any and all information reasonably requested by the Company and take
such other actions as may be requested to facilitate Plan administration and the
payment of benefits hereunder.
     10.03 Illegality and Invalidity. If any provision of this Plan is found
illegal or invalid, said illegality or invalidity shall not affect the remaining
parts hereof, but the Plan shall be construed and enforced as if such illegal
and invalid provision had not been included herein.
     10.04 Required Notice. Any notice which shall be or may be given under the
Plan shall be in writing and shall be mailed by United States mail, postage
prepaid. If notice is to be given to the Company, such notice shall be addressed
to the Company c/o Leadership Benefits, 1700 Seventh Avenue, Suite 900, Seattle,
Washington 98101-4407. If notice is to be given to a Participant, such notice
shall be hand-delivered to the Participant or may be mailed to the last known
address of the Participant on the Company’s Human Resources records. Any party
may, from time to time, change the address to which notices shall be mailed by
giving written notice of such new address.
     10.05 Interest of Participant’s Beneficiary. The interest in the benefits
hereunder of a spouse or Life Partner of a Participant who, at any time prior to
the death of the Participant, ceases to be the spouse or Life Partner of the
Participant (whether by death, dissolution, annulment, separation, divorce or,
in the case of a Life Partner, the termination of the life partnership), shall
automatically pass to the Participant unless the spouse is required to be
treated as the “Surviving Spouse” pursuant to a court order meeting the
requirements of a Qualified Domestic Relations Order, applying rules analogous
to those under Code Section 414(p). A former spouse may not transfer his or her
interest in the Plan in any manner, including but not limited to by his or her
will, nor shall such interest pass under the laws of intestate succession.
     10.06 Tax Liabilities from Plan. If an Executive’s participation in this
Plan generates a state or federal tax liability to the Participant prior to
commencement of benefit payments (including a tax liability under Section 409A
of the Code), the Committee may exercise its discretion to authorize a
distribution of funds in an amount not to exceed the amount needed to satisfy
such liability (including additions to tax, penalties and interest). A
distribution under this provision is solely at the discretion of the Committee,
and the Executive may not elect, directly or indirectly, to accelerate payment.
The Executive’s tax liability shall be measured by using that Executive’s then
current highest federal, state and local marginal tax rate, plus the rates or
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amounts for the applicable additions to tax, penalties and interest. Such a
distribution shall affect and reduce the benefits to be paid under Articles III
and V hereof.
     10.07 Benefits Nonexclusive. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits
available to such Participant under any other plan or program for employees of
the Company. The Plan shall supplement and shall not supersede, modify or amend
any other such plan or program except as may otherwise be expressly provided.
     10.08 Discharge of Company Obligation. The payment of benefits under the
Plan to a Participant or Beneficiary shall fully and completely discharge the
Company, the Board, and the Committee from all further obligations under this
Plan with respect to a Participant, and participation shall terminate upon such
full payment of benefits.
     10.09 Costs of Enforcement. If any action at law or in equity is necessary
by the Committee or the Company to enforce the terms of the Plan, the Committee
or the Company shall be entitled to recover reasonable attorneys’ fees, costs
and necessary disbursements in addition to any other relief to which that party
may be entitled.
     10.10 Gender and Case. Unless the context clearly indicates otherwise,
masculine pronouns shall include the feminine and singular words shall include
the plural and vice versa.
     10.11 Titles and Headings. Titles and headings of the Articles and Sections
of the Plan are included for ease of reference only and are not to be used for
the purpose of construing any portion or provision of the Plan document.
     10.12 Applicable Law. To the extent not preempted by federal law, the Plan
shall be governed by the laws of the State of Washington.
     10.13 Counterparts. This instrument may be executed in one or more
counterparts, each of which is legally binding and enforceable.
     10.14 Definitions:
          (a) “Board” means the board of directors of Nordstrom, Inc.
          (b) “Code” means the Internal Revenue Code of 1986, as amended.
          (c) “Committee” means the Compensation Committee of the Board.
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This Plan is signed and adopted, pursuant to proper authority, this 19th day of
November 2008.

                  NORDSTROM, INC.    
 
           
 
  By:   /s/ Delena Sunday
 
Delena Sunday    
 
           
 
  Title:   Executive Vice President    
 
      Human Resources and Diversity Affairs    

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