Exhibit 10.1
NORDSTROM 401(k) PLAN & PROFIT SHARING
(2008 RESTATEMENT)
Includes All Amendments Approved by the Company
since the 2004 Restatement, including:
Amendment 2005-1
Amendment 2005-2
Amendment 2007-1
Lane Powell PC
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-1383
Telephone: (503) 778–2100
Facsimile: (503) 778-2200

 

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Exhibit 10.1
NORDSTROM 401(k) PLAN & PROFIT SHARING
TABLE OF CONTENTS

              Page  
ARTICLE I. NAME AND PURPOSE OF PLAN
    1  
 
       
1.1 Name and Purpose of Plan
    1  
1.2 Effective Date
    2  
 
       
ARTICLE II. DEFINITIONS
    2  
 
       
2.1 Administrator
    2  
2.2 Anniversary Date
    2  
2.3 Break in Vesting Service
    2  
2.4 Code
    2  
2.5 Company
    2  
2.6 Compensation
    2  
2.7 Disability
    3  
2.8 Eligible Employee
    4  
2.9 Employee
    4  
2.10 Employer and Employers
    4  
2.11 Employment Commencement Date
    4  
2.12 ERISA
    5  
2.13 Highly Compensated Employee and Non-Highly Compensated Employee
    5  
2.14 Hour of Service
    6  
2.15 Leased Employee
    7  
2.16 Named Fiduciary
    7  
2.17 Participant
    7  
2.18 Payroll Year
    7  
2.19 Permanent Break in Eligibility Service
    7  
2.20 Plan
    7  
2.21 Plan Year
    7  
2.22 Retirement
    8  
2.23 Retirement Committee
    8  
2.24 Severance from Employment Date
    8  
2.25 Taxable Year
    8  
2.26 Trustee
    8  
2.27 Trust Fund
    8  
2.28 Valuation Date
    8  
2.29 Year of Service
    8  
 
       
ARTICLE III. ADMINISTRATION OF PLAN
    8  
 
       
3.1 Plan Administrator
    8  
3.2 Enumerated Administrative Powers
    9  
3.3 Administrative Records
    10  

 

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              Page  
3.4 Employer Records
    10  
3.5 Duties of Participant
    10  
3.6 Administrator Expenses
    10  
3.7 Individuals Indemnified
    10  
3.8 Administrator Continues Until Trust Exhausted
    10  
3.9 Plan Expenses
    11  
 
       
ARTICLE IV. ELIGIBILITY OF EMPLOYEES TO PARTICIPATE
    11  
 
       
4.1 Initial Participation
    11  
4.2 Break in Eligibility Service—Reemployment After Break
    12  
4.3 Information from Employer
    12  
 
       
ARTICLE V. CONTRIBUTIONS
    13  
 
       
5.1 Employer Profit Sharing Contribution
    13  
5.2 Elective Deferral Contributions
    15  
5.3 Designated Roth Contributions
    17  
5.4 Employer Matching Contributions
    18  
5.5 Time of Payment of Contributions
    19  
5.6 Plan Qualification
    19  
5.7 Return of Mistaken and Nondeductible Contributions
    19  
5.8 Military Leave Obligations
    20  
5.9 Rollover Contributions
    21  
5.10 Qualified Non-Elective Contributions
    22  
 
       
ARTICLE VI. ALLOCATION OF CONTRIBUTIONS AND VALUATION OF TRUST FUND
    24  
 
       
6.1 Allocation of Contributions and Forfeitures
    24  
6.2 Valuation and Allocation of Trust Fund
    24  
6.3 Investment of Contributions
    24  
6.4 Allocation Does Not Vest Rights
    25  
6.5 Forfeiture Suspense Account
    25  
6.6 Limitation on Annual Additions
    25  
6.7 Allocation of Excess Additions
    26  
6.8 Contribution Limits for Highly Compensated Employees
    27  
6.9 Correcting Excess Contributions
    29  
 
       
ARTICLE VII. INVESTMENT IN INSURANCE CONTRACTS
    30  
 
       
7.1 Purchase of Insurance
    30  
7.2 Trustee Shall Own the Policy
    31  
7.3 Premiums, etc.
    31  
7.4 Proceeds and Benefits of Policy
    31  
7.5 Disposition of Policy
    32  
 
       
ARTICLE VIII. VESTING OF BENEFITS
    33  
 
       
8.1 Vested Interest
    33  
8.2 Forfeiture of Benefits for Certain Causes
    34  

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              Page  
8.3 Forfeiture of Nonvested Portion of Account
    35  
8.4 Reinstatement of Nonvested Portion of Account
    35  
8.5 Service After Severance from Employment
    36  
8.6 Forfeiture Reallocation
    37  
8.7 Maternity/Paternity/Family Absences
    37  
8.8 Special Vesting on Store or Facility Closure
    37  
 
       
ARTICLE IX. ELIGIBILITY TO RECEIVE BENEFITS
    38  
 
       
9.1 Normal Retirement Benefits
    38  
9.2 Disability Benefits
    38  
9.3 Death Benefits
    39  
9.4 Benefits on Severance from Employment
    40  
9.5 Accelerated Benefit Option
    40  
9.6 In-Service Withdrawals
    40  
9.7 Hardship Withdrawals
    40  
9.8 Restriction on Distributions of Elective Deferrals
    43  
 
       
ARTICLE X. METHOD OF PAYMENT OF BENEFITS
    43  
 
       
10.1 Distribution of Benefits
    43  
10.2 Valuation of Account
    44  
10.3 Time of Distribution
    44  
10.4 Form of Payment
    45  
10.5 Qualified Domestic Relations Orders
    46  
10.6 Partial Withdrawals
    46  
10.7 Rollovers
    46  
10.8 Administration of Unclaimed Benefits
    48  
 
       
ARTICLE XI. MINIMUM DISTRIBUTION REQUIREMENTS
    48  
 
       
11.1 General Rules
    48  
11.2 Time and Manner of Distribution
    49  
11.3 Required Minimum Distributions During Participant’s Lifetime
    50  
11.4 Required Minimum Distributions After Participant’s Death
    50  
11.5 Definitions
    52  
 
       
ARTICLE XII. TOP HEAVY PLANS
    53  
 
       
12.1 Effective Date
    53  
12.2 Effect of Top Heavy Plan Status
    53  
12.3 Determination of Top Heavy Status
    53  
12.4 Minimum Employer Contributions to Top Heavy Plans
    56  
 
       
ARTICLE XIII. PARTIES RESPONSIBLE FOR IMPLEMENTING THE PLAN
    58  
 
       
13.1 Plan Sponsor
    58  
13.2 Plan Fiduciaries
    61  
13.3 Plan Committees
    62  
13.4 Limitation of Individual Liability
    63  

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              Page  
ARTICLE XIV. SPENDTHRIFT PROVISIONS
    63  
 
       
14.1 Prohibition Against Assignment
    63  
14.2 Effect of Assignment
    64  
14.3 QDRO Exception
    64  
 
       
ARTICLE XV. AMENDMENT AND TERMINATION OF PLAN
    64  
 
       
15.1 Future of the Plan
    64  
15.2 Company Right to Amend the Plan
    64  
15.3 Company Right To Terminate the Plan
    65  
15.4 Partial Termination
    66  
15.5 Procedure for Plan Amendment or Termination
    66  
 
       
ARTICLE XVI. CLAIMS AND REVIEW PROCEDURE
    67  
 
       
16.1 Claims for Benefits and Inquiries
    67  
16.2 Denial of Claims
    67  
16.3 Review of Denied Claims
    67  
16.4 Decision on Review
    68  
16.5 Rules and Procedures on Review
    68  
16.6 Exhaustion of Remedies
    68  
 
       
ARTICLE XVII. MISCELLANEOUS PROVISIONS
    69  
 
       
17.1 No Right of Continued Employment
    69  
17.2 Discretion
    69  
17.3 Separability
    69  
17.4 Participant and Others Bound by Plan
    69  
17.5 Applicable Law
    69  
17.6 Text Controls
    69  
17.7 Effective Date
    69  
17.8 Expenses
    69  
17.9 Plan Document is Controlling
    69  
 
       
ARTICLE XVIII. LOANS TO PARTICIPANTS
    70  
 
       
18.1 Loans to Participants
    70  

iv 

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NORDSTROM 401(k) PLAN & PROFIT SHARING
W I T N E S S E T H:
     WHEREAS, certain of the Employers, and their predecessors, entered into a
Profit Sharing Plan (“Plan”) and Trust Agreement on December 31, 1952; and
     WHEREAS, the parties in 1988 amended and restated the Plan and Trust
Agreement to adopt separate provisions regarding § 401(k) of the Code in a
document referred to as the Nordstrom Employee Deferral Retirement Plan, which
was subsequently renamed the Nordstrom 401(k) Plan (“401(k) Plan”); and
     WHEREAS, the parties in 2003 amended and restated the Plan and Trust
Agreement to incorporate the terms of the 401(k) Plan into the Plan to avoid
redundancies in maintaining separate plan documents; and
     WHEREAS, the parties have amended and restated the Plan in 1993, 1995,
1998, 2000, 2003, and 2004; and
     WHEREAS, in 2004, the Company changed the Plan’s name to the “Nordstrom
401(k) Plan & Profit Sharing” to emphasize the importance employees should place
on taking initiative for their own retirement savings; and
     WHEREAS, the Company desires to amend and restate this Plan to incorporate
amendments adopted since the 2004 restatement, certain substantive provisions
reflecting changes in Plan design, changes in legal rules governing the Plan,
and other administrative modifications reflecting changes in the Plan’s
operation;
     NOW, THEREFORE, the Company does hereby adopt the Nordstrom 401(k) Plan &
Profit Sharing as amended and restated herein.
ARTICLE I. NAME AND PURPOSE OF PLAN
     1.1 Name and Purpose of Plan. Since January 1, 2004, this Plan has been
known as the Nordstrom 401(k) Plan & Profit Sharing. The Plan is maintained for
the exclusive benefit of the Employees of Employers who have adopted the Plan.
The terms of the Plan are intended to comply with § 401(a) of the Code and
Treasury Department regulations promulgated in connection therewith, in order
that the Trust or Trusts, funded by this Plan may continue to qualify as tax
exempt Trusts pursuant to §§ 401(a) and 501(a) of the Code.
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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     1.2 Effective Date.
          1.2-1 2008 Restatement. Unless another effective date is specified
herein or in a prior Plan amendment, this 2008 Restatement is effective
January 1, 2008, and shall govern rights with respect to employment with the
Employers on and after January 1, 2008. Rights and benefits with respect to
employment prior to 2008 shall be governed by the prior version of the Plan as
amended and in effect at the time of reference, unless otherwise specifically
provided herein.
          1.2-2 Retroactive Effective Date. Provisions herein that are needed to
comply with the Economic Growth and Tax Relief Reconciliation Act of 2001, the
Pension Protection Act of 2006, and subsequent legislation and regulations shall
be effective retroactively as of the earliest compliance date required by law.
Unless otherwise indicated, such retroactivity shall not change the effective
date or amount of any Employer contribution made under Article V or other
benefit provisions implemented for reasons other than compliance with the law
and regulations.
ARTICLE II. DEFINITIONS
     When used herein, the following words shall have the following meanings
unless the context clearly indicates otherwise:
     2.1 Administrator means the Company.
     2.2 Anniversary Date means December 31st of each year.
     2.3 Break in Vesting Service means a Payroll Year in which the Participant
has failed to complete more than five hundred (500) Hours of Service.
     2.4 Code means the Internal Revenue Code of 1986, as amended.
     2.5 Company means Nordstrom, Inc.
     2.6 Compensation means that portion of compensation received from an
Employer that is described in this Section 2.6 and that appears on an Employee’s
IRS Form W-2 as taxable wages for the Payroll Year ending with any Plan Year.
Compensation includes all monies paid to an Employee for services rendered in
the form of salary and wages, including bonuses and commissions, and those
amounts which are part of the Employee’s basic compensation scheme and paid
regularly in accordance with any agreed formula.
          2.6-1 Items Specifically Included. Except as specifically provided
herein, Compensation shall include Employer contributions made pursuant to a
salary reduction agreement which are not includible in the gross income of an
Employee under Code §§ 125 or 402(g)(3). For Plan Years commencing on and after
January 1, 1998, Compensation shall also include Employees’ pre-tax
contributions for qualified transportation fringe benefits under
Code § 132(f)(4).
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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          2.6-2 Items Specifically Excluded. Except as specifically provided
herein, the term “Compensation” shall not include any amounts paid outside of
the regularly occurring payment for services (as described above) including, but
not limited to, any reimbursements or other expense allowances, employee awards,
taxable fringe benefits (and non-taxable fringe benefits not described in
2.6-1), moving expenses, severance pay, disability pay under the employer’s
separately written disability program, amounts received as stock or under any
stock-based compensation program (such as stock awards, option gains or
performance share units) and their equivalent cash value, amounts cashed out
after severance of employment for accrued but unused paid-time off, and other
deferred compensation and welfare benefits.
          2.6-3 Timing of Payment. Amounts paid after severance of employment
will be included in Compensation provided that all of the following conditions
are satisfied:
               (a) the amount would qualify as Compensation under this Plan if
paid before employment ended;
               (b) for compensation other than bonuses, the amount is paid by
the later of (1) two and one-half months after the Employee’s severance of
employment, or (2) the last day of the Plan Year in which the Employee severs
employment;
               (c) for bonuses, the amount is paid by the last day of the Plan
Year in which the Employee severs employment;
               (d) the payment represents compensation for services actually
performed by the Employee; and
               (e) the payment would have been made to the Employee prior to
severance of employment if the Employee had continued in employment with the
Employer.
          2.6-4 Yearly Maximum. The annual Compensation of each Participant to
be taken into account under the Plan for any year shall not exceed the maximum
compensation limit in effect under Code § 401(a)(17) as adjusted by the
Secretary of the Treasury at the same time and in the same manner as under Code
§ 415(d). For the Plan Year beginning January 1, 2008, the limit is $230,000.
          2.6-5 Compensation for Testing Purposes. For purposes of the
nondiscrimination tests under Code Sections 401(a)(4), 401(k) and (m), the
Administrator may use any definition of compensation permitted by Code
Section 414(s) in lieu of the definition in this 2.6. Also, if an Employee is a
common-law employee of two or more corporations (or other business entities)
that must be treated as a single employer under Code Sections 414(b), (c), (m),
or (o), the term Compensation for testing purposes includes compensation from
all such corporations and business entities, regardless of whether the
corporation or other business entity has a qualified plan.
     2.7 Disability means inability on the part of the Participant to engage in
any substantial gainful activity on behalf of an Employer by reason of any
medically determinable physical or
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than eighteen
(18) months as certified by a physician who is mutually acceptable to the
Participant and the Retirement Committee.
     2.8 Eligible Employee means each Employee except the following:
          2.8-1 An Employee covered by a collective bargaining agreement that
does not provide for participation in the Plan.
          2.8-2 A Leased Employee treated as an employee for pension purposes
solely because of Code Section 414(n).
          2.8-3 An individual classified by the Employer as either an
independent contractor or employee of a nonaffiliated entity rather than as a
common law employee of the Employer, regardless of whether such individual is
later determined by a court or a governmental administrative agency to be a
common law employee of an Employer.
          2.8-4 Non-resident aliens who receive no earned income from sources
within the United States.
          2.8-5 An Employee who, prior to his or her earliest participation date
under 4.1, makes a one-time irrevocable election not to participate in the Plan,
in accordance with procedures established by the Administrator. An Employee is
not eligible to receive anything of value from any Employer, from the
Administrator, or from any other person associated with the Employer or the Plan
in consideration of the Employee’s election not to participate in the Plan.
          2.8-6 An individual who is not paid through Nordstrom payroll and who
does not receive a Form W-2 from Nordstrom, regardless of whether such
individual is later determined by a court or a governmental administrative
agency to be a common law employee of an Employer.
     Notwithstanding the above, 2.8-2, 2.8-3, 2.8-5, and 2.8-6 are not intended
to exclude such individuals from consideration for the purposes of coverage
testing under Code Section § 410(b), and, to the extent required,
non-discrimination testing under Code Sections 401(a), 401(k) and 401(m) even
though they are not eligible to participate in the Plan.
     2.9 Employee means, for purposes of this Plan any person employed as a
common-law employee by an Employer or by any other employer required to be
aggregated with an Employer under Code §§ 414(b), (c), (m) or (o).
     2.10 Employer and Employers mean the Company and any other entity required
to be aggregated with an Employer under Code §§ 414(b), (c), (m) or (o),
provided the Company has authorized and such entity has specifically acted to
adopt this Plan.
     2.11 Employment Commencement Date means the first day on which an Employee
performs an Hour of Service for the Employer.
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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     2.12 ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
     2.13 Highly Compensated Employee and Non-Highly Compensated Employee
          2.13-1 Highly Compensated Employee. “Highly Compensated Employee” is
defined in section 414(q) of the Code and related Treasury Regulations. In
determining which Employees are Highly Compensated Employees, the following
shall apply:
               (a) Subject to (b) through (d) below, Highly Compensated
Employees for a Plan Year are persons who perform services for an Employer
during the Plan Year or the preceding Plan Year and are one or more of the
following:
                    (1) An owner of greater than 5 percent of an Employer (a
“5-percent owner”) during either the current or the preceding Plan Year. For
this purpose, a 5-percent owner is defined as any person who owns (or is
considered as owning by applying the constructive ownership rules of Code § 318)
more than 5 percent of the outstanding stock of the corporation or stock
possessing more than 5 percent of the total combined voting power of all stock
of the corporation.
                    (2) An Employee receiving Compensation from the Employer
over $80,000 for the preceding Plan Year who is among the highest paid
20 percent of Employees of the Employer during the preceding Plan Year,
aggregating Employees of all Employers and excluding Employees to the extent
provided by applicable Regulations.
               (b) The dollar amount in (a)(2) above shall be adjusted in
accordance with Treasury Regulations for changes in cost of living. For the Plan
Year commencing January 1, 2008, the Commissioner of Internal Revenue has
adjusted this dollar amount to $100,000. When determining whether an Employee is
a Highly Compensated Employee in a Plan Year, the (a)(2) dollar amount in effect
for the preceding Plan Year is determinative.
               (c) Former Employees shall be taken into account in accordance
with applicable Regulations. A former Employee shall be treated as a Highly
Compensated Employee if:
                    (1) such Employee was a Highly Compensated Employee when
such employee severed employment; or
                    (2) such employee was a Highly Compensated Employee at any
time after attaining age fifty-five (55).
               (d) “Compensation” for purposes of this Section 2.13 shall mean
Compensation under 2.6-5.
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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          2.13-2 Non-Highly Compensated Employee. “Non-Highly Compensated
Employee” means any Employee who is not a Highly Compensated Employee.
     2.14 Hour of Service means:
          2.14-1 Paid for Work. Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period.
          2.14-2 Paid Nonwork Time. Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a period of time during which
no duties are performed (irrespective of whether the Employee’s employment has
severed) due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. Notwithstanding the
preceding sentence,
               (a) No more than five hundred one (501) Hours of Service are to
be credited under this paragraph to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period);
               (b) An hour for which an Employee is directly or indirectly paid,
or entitled to payment, on account of a period during which no duties are
performed, is not to be credited to the Employee if such payment is made or due
under a plan maintained solely for the purpose of complying with applicable
workers’ compensation, or unemployment compensation or disability insurance
laws; and
               (c) Hours of Service are not to be credited for a payment which
solely reimburses an Employee for medical or medically related expenses incurred
by the Employee.
               For purposes of this paragraph, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
          2.14-3 Back Pay. Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under 2.14-1 or 2.14-2, as the case
may be, and under this 2.14-3.
          2.14-4 Determination Rules. The determination of Hours of Service for
reasons other than the performance of duties, and the crediting of Hours of
Service to computation periods, shall be in accordance with Department of Labor
regulations 29 CFR § 2530.200b-2(b) and (c), which is incorporated by this
reference.
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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          2.14-5 Certain Time Lost Due to Hurricanes. Notwithstanding anything
in 2.14 to the contrary, for any Employee whose regular workplace during the
period September 1, 2005, through November 30, 2005, was within 100 miles of
either the Houston, Texas or Miami, Florida, metropolitan areas, such Employee’s
Hours of Service during this September 1, 2005 through November 30, 2005 period
shall include any regularly scheduled hours that the Employee was unable to work
due to circumstances related to either Hurricane Rita or Hurricane Wilma,
regardless of whether such hours are paid or unpaid.
     2.15 Leased Employee means any person (other than an Employee of an
Employer) who pursuant to an agreement between an Employer and any other person
(“leasing organization”) has performed services for the Employer (or for the
Employer and related persons determined in accordance with § 414(n)(6) of the
Code) on a substantially full-time basis for a period of at least one (1) year,
and such services are performed under the primary direction and control of the
Employer.
     The requirements applicable to Leased Employees shall not apply if:
(i) such Leased Employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least ten percent (10%) of
compensation, as defined in § 414(n) of the Code; (2) immediate participation,
and (3) full and immediate vesting; and (ii) Leased Employees do not constitute
more than twenty percent (20%) of the Employer’s Non-Highly Compensated work
force.
     2.16 Named Fiduciary means the appropriate party, parties or entities
appointed or delegated such named fiduciary functions pursuant to Articles III
and XIII.
     2.17 Participant means a current or former Eligible Employee who has an
account in the Plan. An “active” Participant is one whose employment with the
Employer continues and who has completed one thousand (1,000) or more hours in a
Payroll Year. An “inactive” Participant is one whose employment has severed but
who has not received a complete distribution of his or her account or one who
has completed more than five hundred (500) but less than one thousand (1,000)
hours in a Payroll Year.
     2.18 Payroll Year means the period of fifty-two (52) consecutive weeks for
which an Employee’s IRS Form W-2 compensation is calculated. The Plan’s
Limitation Year shall be the Payroll Year.
     2.19 Permanent Break in Eligibility Service means the sixty (60) month
period during which an Employee has no Hours of Service, as measured from the
date of the Employee’s most recent Severance from Employment Date.
     2.20 Plan means the Nordstrom 401(k) Plan & Profit Sharing set forth in
this document and all subsequent amendments thereto.
     2.21 Plan Year means the 12-month period commencing on January 1 and ending
on December 31.
NORDSTROM 401(k) PLAN & PROFIT SHARING
2008 RESTATEMENT

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     2.22 Retirement means a Participant’s severance from employment after the
Normal Retirement Date as defined in 9.1.
     2.23 Retirement Committee means the Nordstrom Profit Sharing Retirement
Committee, established by the Board of Directors of the Company under 13.1-2(e),
and charged with those powers and duties under 13.1-5.
     2.24 Severance from Employment Date means the earlier of (a) the date an
Employee quits, retires, is discharged, or dies, whichever occurs first, or
(b) the first anniversary of the first date that the Employee is continually
absent from work for any other reason (except where such absence is attributable
to a Company-approved leave of absence).
     2.25 Taxable Year means the twelve (12) month period adopted by the Company
for its tax purposes. Currently, the Company’s Taxable Year ends on the Saturday
closest to each January 31.
     2.26 Trustee means the person or persons holding the assets of the Plan
pursuant to the terms of one (1) or more Trust Agreements entered into by the
Employer.
     2.27 Trust Fund means those funds and assets of the Plan held by the
Trustee.
     2.28 Valuation Date means any day that the New York Stock Exchange is open
for business and trading.
     2.29 Year of Service means a Payroll Year in which an Employee is credited
with one thousand (1,000) or more Hours of Service.
ARTICLE III. ADMINISTRATION OF PLAN
     3.1 Plan Administrator. The Company as Administrator, in conjunction with
the Retirement Committee, has the general powers and authority to administer
provided below in 3.1-1 to 3.1-3:
          3.1-1 Complete Administrative Power. The complete power and authority,
in its sole discretion, to implement and delegate all functions necessary or
desirable for the proper administration of the Plan, including but not limited
to powers set forth in this Article III.
          3.1-2 Actions Binding. Any action taken in good faith in the exercise
of authority conferred by this Plan shall be conclusive and binding upon the
Participants and their beneficiaries.
          3.1-3 Discretion is Absolute. All discretionary powers conferred upon
the Administrator and Retirement Committee, as applicable, shall be absolute,
provided, however, that no discretionary power shall be exercised in a manner
that results in discrimination in favor of Employees who are officers,
shareholders or Highly Compensated Employees of an Employer.
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     3.2 Enumerated Administrative Powers. Without limitation of its general
powers under the Plan, the Company and Retirement Committee, as applicable,
shall have the following enumerated powers:
          3.2-1 Control Administration. Full power and authority to control and
manage the operation and administration of the Plan.
          3.2-2 Plan Interpretation. To construe and apply all Plan and Trust
provisions, including the specific power and authority to interpret the Plan and
Trust, to remedy or resolve ambiguities, inconsistencies or omissions and to
decide any questions about the rights of Participants and their beneficiaries.
          3.2-3 Benefit Eligibility. To decide all questions relating to an
individual’s status as an Employee, the eligibility of Employees to become
Participants, the amount of service of any Employee or Participant, and the
amount of benefits to which any Participant may be entitled by reason of service
prior to or after the effective date hereof.
          3.2-4 Benefit Payment. To approve the payment of all benefits as they
become payable under the Plan and to pursue the recovery of any payment made
which exceeds the amount to which an individual is entitled to receive under the
terms of the Plan.
          3.2-5 Service Providers. To engage such professional consultants,
assistants and service providers as the Administrator, in its discretion, deems
advisable, necessary or appropriate, including (but not limited to) accountants,
actuaries, consultants, legal counsel, medical practitioners and clerical
assistants to perform services with regard to any of its responsibilities under
the Plan, and to rely on opinions and advice given by any such third party.
          3.2-6 Records. To ensure that all records necessary for proper
operation of the Plan are kept.
          3.2-7 Reports and Disclosures. To ensure compliance with all
reporting, filing and disclosure requirements imposed on the Plan
“administrator” by ERISA and any other applicable law.
          3.2-8 Inspection of Records. During business hours to make available
to service providers and any Participant or beneficiary any records relating to
the Plan as required by law, provided that a Participant or beneficiary shall be
entitled to examine only such records as pertain exclusively to him or her,
including (but not limited to) the Plan and Trust Agreement and all amendments
thereto.
          3.2-9 Indemnity Bond. To arrange for all bonds required by law, but
the amount thereof need not exceed the minimum requirements imposed by law.
          3.2-10 Legal Process. To designate an agent for service of legal
process in any suit or action involving the Plan.
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          3.2-11 Fees and Expenses. To negotiate and fix the compensation or
fees, as the case may be, of all officers, agents, counsel, the Trustee, or
other person retained or employed by the Administrator or other party designated
to carry out administrative duties under the Plan.
          3.2-12 Other. To perform or cause to be performed such further acts as
it may deem necessary, appropriate or convenient for the efficient
administration of the Plan.
     3.3 Administrative Records. Each party having responsibility for any Plan
administration function under the Plan shall keep such records as shall be
appropriate for the orderly and efficient performance of such functions, and
shall permit any other party having Plan administration responsibility to
examine any of such records which are appropriate to the latter’s functions.
     3.4 Employer Records. The records of the Employers shall be conclusive
evidence as to all matters forming the basis for participation in the Plan and
for the calculation of benefits thereunder. Any individual or entity shall be
entitled to rely upon a certificate of an officer of the Company as to any
Employee’s Years of Service, age, Compensation and cause for the severance of
service, and as to any other information pertinent to the calculation or
determination of the Employee’s interest under the Plan.
     3.5 Duties of Participant. The Administrator may require a Participant to
furnish to it such information and instruments or documents as it may deem
necessary in the administration of the Plan. Compliance with such requirements
shall be a condition of a Participant’s receipt of benefits.
     3.6 Administrator Expenses. No Company employee who performs administrative
functions under the Plan shall receive any compensation for such service beyond
his or her compensation as an Employee of the Company, but shall be entitled to
reimbursement from the Company for any reasonable expenses actually and properly
incurred in the performance of such duties.
     3.7 Individuals Indemnified. The Company hereby indemnifies any Company
Employee or Director who carries out any responsibilities under the Plan, and
holds them harmless from the effects, consequences, expenses, attorney fees and
damages arising from their acts or conduct in such capacity, except to the
extent that such consequences are the result of their own willful misconduct or
breach of good faith. Such indemnification shall be in addition to any other
rights each may have as a matter of law, or by reason of any insurance or other
indemnification.
     3.8 Administrator Continues Until Trust Exhausted. If the Company shall
cease to exist and no successor adopts or continues the Plan, the members of the
Retirement Committee at that time (and their successors) shall remain in office
until final termination of the Trust, and shall assume any and all powers and
duties not otherwise previously delegated. The remaining member or members shall
fill any vacancies caused by death, resignation, disability or other cause.
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     3.9 Plan Expenses.
          3.9-1 Expenses Paid by Trust Fund. The following shall be paid by the
Trust Fund:
               (a) Operating Expenses. All expenses of the Administrator and the
Trust, as the case may be, attributable to the operation of the Plan and Trust,
to the extent they constitute reasonable expenses of administering the Plan and
are not paid by the Company under 3.9-2.
               (b) Taxes. Any taxes and related interest and penalties assessed
against the Trust Fund.
          3.9-2 Payment by Company Without Reimbursement. Except for the
reimbursement to the Company of direct expenses consistent with 17.8, the
obligation of the Trust to pay any expenses charged to the Trust shall cease to
exist to the extent such charges are paid by the Company.
          3.9-3 Administrator Protest. Payment under 3.9-1 or 3.9-2 may be
withheld pending resolution of any objection by the Administrator.
ARTICLE IV. ELIGIBILITY OF EMPLOYEES TO PARTICIPATE
     4.1 Initial Participation.
          4.1-1 Profit Sharing Contributions. Eligible Employees with Employment
Commencement Dates on or after January 1, 2004, begin participation for purposes
of eligibility to receive an allocation of Profit Sharing Contributions on the
first day of the calendar month coinciding with or next following the first
anniversary of their Employment Commencement Date, if still employed on that
date. In the event an Employee is not still employed on that date but is
subsequently rehired before incurring a Permanent Break in Eligibility Service,
the Employee will become a Participant for purposes of eligibility to receive
Profit Sharing Contributions on the first day of the calendar month coincident
with or next following his or her reemployment date, if still employed on that
date. Notwithstanding the foregoing, Profit Sharing Contribution participation
for Eligible Employees with Employment Commencement Dates before January 1,
2004, shall continue to be determined under the 2003 Restatement of this Plan.
          4.1-2 Elective Deferral Contributions. An Eligible Employee with an
Employment Commencement Date on or after March 1, 2007, begins participation for
purposes of making Elective Deferrals and designated Roth contributions
(including Catch-up Contributions, if applicable) immediately upon his or her
Employment Commencement Date. An Eligible Employee with an Employment
Commencement Date before March 1, 2007, begins participation for purposes of
making Elective Deferrals (including Catch-up Contributions, if
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applicable) on the first day of the calendar month coinciding with or next
following three (3) continuous months of employment.
          4.1-3 Matching Contributions. Eligible Employees with Employment
Commencement Dates on or after January 1, 2004, begin participation for purposes
of receiving an allocation of Matching Contributions on the first day of the
calendar month coinciding with or next following the first anniversary of their
Employment Commencement Date, if still employed on that date. In the event an
Employee is not still employed on that date but is subsequently rehired before
incurring a Permanent Break in Eligibility Service, the Employee will become a
Participant for purposes of eligibility to receive an allocation of Matching
Contributions on the first day of the calendar month coincident with or next
following his or her reemployment date, if still employed on that date.
Notwithstanding the foregoing, Matching Contribution allocation eligibility for
Eligible Employees with Employment Commencement Dates before January 1, 2004,
shall continue to be determined under the 2003 Restatement of this Plan.
          4.1-4 Latest Participation Date. Notwithstanding the participation
criteria set forth in 4.1-1, 4.1-2 and 4.1-3, Eligible Employees who have
attained age 21 and completed 1,000 Hours of Service during the 12-month period
immediately following their Employment Commencement Date (or during a Plan Year
containing the anniversary date of the Employment Commencement Date, if the
Eligible Employee does not complete 1,000 Hours of Service during the first
12 month period) shall commence participation in the Plan not later than the
earlier of (a) the first day of the Plan Year following the date the Employee
meets those requirements, or (b) the date which is 6 months after the date the
Employee meets those requirements.
     4.2 Break in Eligibility Service—Reemployment After Break. An Employee who
becomes a Participant in this Plan remains a Participant until he or she
receives a distribution of his or her entire vested account balance. If the
Employee incurs a Permanent Break in Eligibility Service and subsequently is
reemployed by the Employer, for Plan eligibility purposes the Participant’s
Employment Commencement Date shall be his or her most recent reemployment date.
If an Employee severs employment and is subsequently reemployed by the Employer
prior to incurring a Permanent Break in Eligibility Service, the Severance from
Employment Date shall be disregarded for eligibility purposes and he or she will
enter the Plan as provided in 4.1 following his or her rehire date. However, if
the Employee incurs a Permanent Break in Eligibility Service prior to his or her
reemployment date, the period of service prior to the Permanent Break in
Eligibility Service is disregarded for Plan eligibility purposes.
     4.3 Information from Employer. As of each Anniversary Date or such other
period as the Company deems appropriate, the Employer will provide the
Administrator or its designated agent with the appropriate information necessary
to ascertain all Eligible Employees, their dates of employment, Hours of
Service, Compensation, and dates of termination.
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ARTICLE V. CONTRIBUTIONS
     5.1 Employer Profit Sharing Contribution.
          5.1-1 Generally. For each Plan Year, the Employer may make a
discretionary profit-sharing contribution in an amount to be determined by the
Board of Directors of each Employer pursuant to 5.1-2, which shall be termed the
“Employer Profit Sharing Contribution.” The Employer’s Contribution for any Plan
Year shall be made out of current or accumulated net profit for the Employer’s
Taxable Year in which the Plan Year ends. The Employer’s determination of such
contributions (if any) shall be binding on Participants, the Employer, and the
Trustee. The Trustee shall have no right or duty to inquire into the amount of
the Employer Contributions or the method used in determining the amount of the
Employer Contributions, but shall be accountable only for funds actually
received by the Trustee.
          5.1-2 Allocation of Employer Profit Sharing Contributions. The portion
of the Employer Profit Sharing Contribution that is not treated as a QNEC under
5.1-6 and 5.10 shall be allocated pursuant to this 5.1-2. The Employer Profit
Sharing Contribution for each Plan Year shall be allocated as of the Anniversary
Date among those Participants who have completed one Year of Service and who
also either (i) are employed on the Anniversary Date, or (ii) have severed
employment during the Plan Year due to death, Disability or Retirement and
qualify under 5.1-3 unless 5.1-5 applies. Such contributions, while allocable to
Participants as described in this section, shall be credited to a Participant’s
account only when actually received by the Trustee. Such contributions shall be
allocated to an eligible Participant’s account based on such Participant’s
Compensation and Years of Service. A Participant’s Years of Service for
Hypothetical Allocation Contribution purposes shall be the same as the
Participant’s Years of Service used for vesting purposes, as determined in
Article VIII. The allocation shall be determined as follows:
               (a) Step One: Determine Hypothetical Allocation. The
Administrator, or its delegated third party administrative service provider,
shall first determine the total Employer Profit Sharing Contribution necessary
to fund a hypothetical contribution allocation for each Participant who is
eligible to receive a profit-sharing contribution, based on the Participant’s
Years of Service and Compensation, according to the following table (“Table
5.1-2(a)”):

          Contribution as a Percentage Years of Service   Of Compensation
1 or 2
  1% 3 or 4   2% 5 or more   3%

The amount necessary to fund such contribution shall be known for purposes of
this 5.1-2 as the “Hypothetical Allocation Contribution.”
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               (b) Step Two: Determine Adjustment to Hypothetical Allocation.
After performing this hypothetical allocation under 5.1-2(a), the actual
Employer Contribution for the Plan Year (as declared by the Board under 5.1 and
adjusted for forfeitures under 5.1-4) shall be divided by the Hypothetical
Allocation Contribution (determined in (a) above), to determine a ratio that,
for purposes of this 5.1-2, shall be known as the “Adjustment Factor.”
               (c) Step Three: Determine Participant Contribution Allocation.
The Participant’s profit sharing allocation for the Plan year shall be
determined under this 5.1-2 by first multiplying the Participant’s Compensation
by the Contribution Percentage in Table 5.1-2(a) (based on his or her Years of
Service) and then multiplying this result by the Adjustment Factor determined in
5.1-2(b).
          5.1-3 Mid-year Terminations. A Participant whose mid-year severance of
employment is on account of death, Disability or Retirement, who accumulated a
Year of Service in such year prior to such severance, and whose entire Plan
account remains undistributed as of the last day of the Plan Year of severance,
shall share in the Employer Profit Sharing Contribution allocation for that
year. Any other Participant whose employment with the Employer terminates during
a Plan Year, and any year-end active Participant who fails to meet the Year of
Service requirement, shall not share in the Employer Profit Sharing Contribution
or forfeiture allocation for that year, unless required by 12.4 if the Plan is
“top heavy.”
          5.1-4 Forfeitures. To the extent not used to restore amounts
previously forfeited under section 10.8-2, forfeitures under section 8.3 for the
then completed Plan Year shall be used to reduce the Employer Matching
Contribution obligation under section 5.4, to reduce Employer Profit Sharing
Contributions under section 5.1, or to pay expenses of Plan administration, as
determined by the Retirement Committee in its sole discretion.
          5.1-5 Highly Compensated Employee Allocation Restrictions. Effective
for Plan Years commencing on and after January 1, 2002 and notwithstanding
anything in Section 5.1 to the contrary, any Participant who is a Highly
Compensated Employee and who is characterized as being “otherwise excludible”
under Code § 410(b)(4) (i.e., one who has not met the requirements of Code
§ 410(a)(1)(A)) as of the last day of the Plan Year) shall not share in the
Employer contribution or forfeiture allocation for that Plan Year, unless
required by 12.4 if the Plan is top heavy.
          5.1-6 Treatment as QNEC. To the extent necessary to pass the
non-discrimination tests under 6.8 and subject to provisions of 5.10, the Board
may direct the Committee to treat and allocate a portion of the Employer Profit
Sharing Contribution declared under 5.1-2 as a QNEC
          5.1-7 Nordstrom Family Member Allocation Restrictions. Effective for
Plan Years beginning on and after January 1, 2007 and notwithstanding anything
in section 5.1 to the contrary, any Participant who is both a Nordstrom family
member and is reported as a “named executive officer” in the Summary
Compensation Table of the Company’s Proxy Statement filed with the U.S.
Securities and Exchange Commission for the Company’s fiscal year ending during
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the Plan Year shall not share in the Employer Profit Sharing Contribution
allocation for that Plan Year, unless required by section 12.4 if the Plan is
top heavy.
     5.2 Elective Deferral Contributions.
          5.2-1 Deferral Amount. Each Participant who is a Non-Highly
Compensated Employee may elect to defer a portion of his or her Compensation for
any Plan Year in a whole percentage between one percent (1%) and fifty percent
(50%). Each Participant who is a Highly Compensated Employee may elect to defer
a portion of his or her Compensation for any Plan Year in a whole percentage
between one percent (1%) and fifteen percent (15%). However, no Participant
shall be permitted to have Elective Deferral Contributions made to this Plan, or
any other qualified plan maintained by the Employer during any taxable year, in
excess of the dollar limitation contained in Code § 402(g) in effect at the
beginning of such taxable year, except to the extent permitted under
Section 5.2-3 of the Plan and Code § 414(v) relating to Catch-up Contributions.
The Plan Administrator may, at any time, reduce the Elective Deferral
Contributions for any Participant if it determines that reduction is necessary
in order to avoid exceeding the limits imposed by this subsection or Article VI.
          5.2-2 Automatic Enrollment. Subject to a Participant’s ability to
modify his or her Elective Deferral Contributions under 5.2-4, and to such
limitations as shall apply to Elective Deferral Contributions elsewhere under
the Plan:
               (a) Application of Automatic Enrollment Rules. Each Participant
with an Employment Commencement Date on or after January 1, 2004, but who has
not otherwise made an affirmative election to make (or not to make) Elective
Deferrals under section 5.2-1, shall automatically be enrolled in the Plan on
his or her Automatic Enrollment Date. However, Eligible Employees with
Employment Commencement Dates before January 1, 2004, shall be subject to the
automatic enrollment provisions of the 2003 Restatement of this Plan and not to
the provisions of this 5.2-2. These automatic enrollment provisions shall not
apply to rehired Participants who have been subject to the automatic enrollment
rule in conjunction with a previous re-hire.
               (b) Automatic Enrollment Date. For purposes of this 5.2-2, a
Participant’s “Automatic Enrollment Date” is the later of: (i) the first day of
the calendar month coinciding with or next following the first anniversary of
such Participant’s Employment Commencement Date, if still employed as an
Eligible Employee on that date, or (ii) the first day of the calendar month
coincident with or next following that date which is sixty (60) days from the
date the Participant is rehired following a severance from employment if still
employed as an Eligible Employee on that date.
               (c) Default Elective Deferral Contribution Rate. An
automatically-enrolled Participant shall be deemed to have elected an Elective
Deferral Contribution rate equal to two percent (2%) of Compensation earned
during the portion of the Plan Year subsequent to the date of automatic
enrollment during which such individual is a Participant.
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               (d) Automatic Enrollment Notice Requirement. The Administrator,
or its delegate, shall provide Eligible Employees with notice of such automatic
enrollment (and an opportunity to revoke such automatic enrollment) within a
reasonable period of time prior to the Participant’s Automatic Enrollment Date
under this 5.2-2 and within a reasonable period before the beginning of each
Plan Year.
               (e) Investment of Contributions. Contributions made pursuant to
automatic enrollment will be invested in a qualified default investment
alternative, as defined in regulations promulgated by the U.S. Department of
Labor.
          5.2-3 Catch-up Contributions. Effective for Plan Years beginning after
December 31, 2001, each Participant who:
               (a) is eligible to make Elective Deferral Contributions under
this Plan; and
               (b) has attained or will attain age fifty (50) before the last
day of the Plan Year,
is eligible to make Catch-up Contributions in accordance with, and subject to,
Code § 414(v). Catch-up contributions are those Elective Deferral Contributions,
up to the applicable dollar limit set forth in Code § 414(v)(2)(B)(i), as
adjusted for cost of living, that would exceed a contribution limit under the
Code or the Plan if the provisions of Code § 414(v) were not applicable. Each
Participant described in this Section 5.2-3 shall have the same right to elect
Catch-up Contributions under this Plan. Catch-up Contributions must be allocated
to separate Catch-up Contribution Accounts and will not be taken into account
for purposes of the provisions of this Plan implementing Code §§ 401(a)(4)
regarding nondiscrimination, 401(k)(3) regarding limits on elective deferrals by
Highly Compensated Employees, 402(g) regarding limits on elective deferrals, or
416 regarding contributions by Key Employees (except as specifically provided in
Article XII.)
          5.2-4 Changes to Deferral Election. During employment, a Participant
may modify, suspend or resume Elective Deferral Contributions by any telephonic,
electronic or written means established by the Administrator. Any such change
shall be effective as of the first day of the next payroll cycle following
processing of the change notification received by the Administrator; provided,
however, that if the Administrator is not able to administratively process the
change by such payroll date, the change shall be effective as soon as the
administrative processing is complete. A Participant’s Elective Deferral
Contributions election will be automatically suspended upon a Participant’s
severance from employment with an Employer. A rehired Participant must
reinitiate an Elective Deferral Contribution election in the manner specified by
the Administrator.
          5.2-5 Excess Deferrals. “Excess Deferral” means, for a given calendar
year, that amount by which each Participant’s total elective deferrals (as
defined in Code § 402(g)(3)) under all plans of all employers exceeds the sum of
the dollar limits in effect under Code § 402(g) for the calendar year and under
Code § 414(v) for the taxable year, as annually indexed by the Secretary of the
Treasury. For the Plan Year beginning on January 1, 2008, the Code § 402(g)
dollar limit is
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$15,500, and the Code § 414(v) dollar limit is $5,000. The Plan Administrator
will distribute any Excess Deferral, adjusted for investment gains and losses,
to the Participant no later than April 15 of the calendar year immediately
following the close of the calendar year for which the Excess Deferral is made.
For Plan Years beginning on and after January 1, 2007, the adjustment for
investment gains and losses shall include gains and losses from the close of the
Plan Year in which the Excess Deferral arose through a date not more than seven
days before the actual distribution date. If an Excess Deferral occurs because
of deferral amounts under plans maintained by an Employer combined with
deferrals under one or more plans not maintained by an Employer, the excess
shall be distributed if the following conditions are satisfied:
     FIRST, the Participant notifies the Plan Administrator of the Excess
Deferral by March 1 following the close of the year, unless the Plan
Administrator waives the deadline; and
     SECOND, the notice specifies how much of the Excess Deferral is to be
distributed from this Plan.
          5.2-6 Deferral and Catch-up Contributions Accounts. The amount by
which Compensation is reduced, after adjustment for Excess Deferrals under
Section 5.2-5, shall be that Participant’s Elective Deferral Contribution. The
portion of the Elective Deferral Contribution that does not exceed the Plan
provisions implementing Code § 401(k)(3) regarding limits on elective deferrals
by Highly Compensated Employees, § 402(g) regarding limits on elective deferrals
for all Participants, or § 415 regarding limits on annual additions shall be
called the Basic Elective Deferral Contribution and shall be allocated to that
Participant’s Basic Elective Deferral Account. The remainder of the Elective
Deferral Contribution shall be called the Catch-up Contribution and shall be
allocated to a Participant’s Catch-up Contributions Account.
     5.3 Designated Roth Contributions.
          5.3-1 Designation of Contributions. Beginning September 1, 2007, each
Participant may make designated Roth contributions to the Plan. A designated
Roth contribution is an Employee Contribution that is (a) designated irrevocably
by the Participant at the time of deferral as a designated Roth contribution;
(b) made in lieu of all or a portion of the pre-tax Elective Deferral
Contributions the Participant is otherwise eligible to make under the Plan;
(c) treated by the Employer as includible in the Participant’s income at the
time the Participant would have received that amount in cash if the Participant
had not contributed the amount to the Plan. The Plan provisions set forth in
5.2-1 and 5.2-4 shall apply to designated Roth contributions by substituting
“designated Roth contribution” for “Elective Deferral Contribution” each place
that the latter term appears. In addition, designated Roth contributions are
eligible for treatment as Catch-Up Contributions for Participants who will have
attained age 50 by the last day of the calendar year in which the contribution
is made.
          5.3-2 Separate Accounting. Designated Roth contributions, and gains,
losses, and other credits or charges will be credited and debited to a separate
designated Roth contributions account maintained for each Participant. No
contributions other than designated Roth contributions
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(including designated Roth rollover contributions) and properly attributable
earnings will be credited to each Participant’s designated Roth contributions
account.
          5.3-3 Correction of Excess Amounts. In case it is necessary to make a
distribution to a Participant due to a failure of the Plan to pass the ADP test
set forth in 6.8, due to an excess deferral under Code Section 402(g), or due to
an excess annual addition under Code Section 415(c), the Plan first will
distribute a Participant’s pre-tax Elective Deferral Contributions plus earnings
for the Plan Year and will distribute designated Roth contributions only to the
extent necessary after distribution of the Elective Deferral Contributions. If
the Plan re-characterizes and retains excess Elective Deferral Contributions
that are treated as Catch-up Contributions in order to satisfy the ADP test, the
Plan shall first re-characterize designated Roth contributions as Catch-up
Contributions and shall then re-characterize pre-tax Elective Deferral
Contributions, up to the limit for Catch-up Contributions in effect for the
applicable Plan Year. If it is necessary to make a corrective distribution of
designated Roth contributions, earnings attributable to the corrective
distribution of designated Roth contributions shall be distributed to the same
extent that a distribution of earnings on Elective Deferral Contributions would
be required to effect a full corrective distribution of Elective Deferral
Contributions.
     5.4 Employer Matching Contributions. Employer Matching Contributions on
behalf of a Participant shall be made at a rate of $1.00 for each $1.00 of
Eligible Elective Deferral Contributions made by that Participant during the
Plan Year, as determined under 5.4-1.
          5.4-1 Eligible Elective Deferral Contributions. Only Elective Deferral
Contributions for the Plan Year of less than or equal to the first four percent
(4%) of a Participant’s Compensation that remain in the Plan through the
Anniversary Date (the “Matchable Contributions”) shall be eligible to be matched
by Employer Matching Contributions. Catch-up Contributions are not eligible for
Employer Matching Contributions under any circumstances.
          5.4-2 Requirements For Match. A Participant may receive an Employer
Matching Contribution only if such Participant completes at least one Year of
Service and also either (i) is employed on the Anniversary Date, or (ii) has
severed employment during the Plan Year due to death, Disability or Retirement
and qualifies under 5.4-3 unless 5.4-4 applies. Such contributions, while
allocable to Participants as described in this section, shall be credited to a
Participant’s account only when actually received by the Trustee.
          5.4-3 Mid-year Terminations. A Participant whose mid-year severance of
employment is on account of death, Disability or Retirement, who accumulated a
Year of Service in such year prior to such severance, and whose entire Plan
account remains undistributed as of the last day of the Plan Year of severance,
shall share in the Employer Matching Contribution allocation for that year. Any
other Participant whose employment with the Employer terminates during a Plan
Year, and any year-end active Participant who fails to meet the Year of Service
requirement, shall not share in the Employer Matching Contribution.
          5.4-4 Company Right to Modify. The Company reserves the right to
increase the rate of Matching Contributions at any time prior to the end of a
Plan Year and to otherwise modify,
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prior to any Plan Year, both the rate of Employer Matching Contributions and the
level of Matchable Contributions for that Plan Year. The Company shall notify
Participants in writing within a reasonable period of time for any Plan Year for
which a change is effected.
          5.4-5 Highly Compensated Employee Allocation Restrictions. Effective
for Plan Years commencing on and after January 1, 2002 and notwithstanding
anything in 5.4 to the contrary, any Participant who is a Highly Compensated
Employee and who is characterized as being “otherwise excludible” under Code
section 410(b)(4) (i.e., one who has not met the requirements of Code section
410(a)(1)(A)) as of the last day of the Plan Year shall not receive an Employer
Matching Contribution for that Plan Year, unless required by 12.4 if the Plan is
“top heavy.”
     5.5 Time of Payment of Contributions. The Employer shall pay to the Trustee
Employer Contributions for each Plan Year within the time prescribed by law,
which may extend beyond the end of the Plan Year in accordance with Code
§ 404(a)(6). On or about the date of the payment, the Administrator shall be
advised of the amount of the payment upon which the allocation shall be
calculated.
     5.6 Plan Qualification. Notwithstanding any provisions in this Plan to the
contrary, contributions to this Plan are made upon the condition precedent that
this amended and restated Plan must be approved and qualified as meeting the
requirements of Code § 401(a). Accordingly, the Employer reserves the right to
amend this Plan, retroactively or otherwise, as may be required in order to
obtain approval of the Plan from the Internal Revenue Service. If the amended
Plan does not receive a favorable determination from the Internal Revenue
Service and is thereafter terminated, all contributions made by the Employer and
earnings thereon made after the effective date of this restatement shall be
recovered by the Employer, provided that they are returned to the Employer
within one (1) year after the date of denial of qualification of the Plan. No
Participant or beneficiary has any vested right or claim to any asset of the
Plan or to any benefit under the Plan before the Internal Revenue Service
determines that the Plan qualifies under § 401(a) of the Code.
     5.7 Return of Mistaken and Nondeductible Contributions.
          5.7-1 Mistake of Fact. In the event that an Employer shall make an
excessive contribution due to a mistake of fact, then pursuant to § 403(c)(2)(A)
of ERISA, an Employer may demand repayment of such excessive contribution at any
time within one (1) year following the time of payment and Trustee shall return
that amount to the Employer within the one (1) year period. Earnings of the Plan
attributable to the excess contributions may not be returned to the Employer,
but any losses attributable thereto must reduce the amount so returned.
          5.7-2 Disallowed Deduction. Employer contributions hereunder are made
on the condition that such contributions are deductible under § 401(a) and § 404
of the Code. In the event that a deduction for any contribution hereto is
disallowed and found not to be deductible by the Internal Revenue Service, or
any other regulatory agency, the Employer may recover all or any portion of such
contribution, provided it is returned to the Employer within one (1) year after
the denial of the deduction.
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          5.7-3 No Participant Interest. No Participant or beneficiary has any
vested right or claim to any asset of the Plan or to any benefit under the Plan
that may be returned pursuant to 5.7 of this Plan.
     5.8 Military Leave Obligations. Notwithstanding any provision of this Plan
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. Additionally, effective with respect to periods of qualified military
service commencing on and after January 1, 2004, a Participant’s obligation to
make loan repayments will be suspended under this Plan as permitted under
Section 414(u)(4) of the Code.
          5.8-1 Returning Participant with Re-Employment Rights. The following
provisions apply to each Participant who, immediately following a period of
qualified military service, returns to employment with an Employer with
reemployment rights protected by law.
               (a) Employer Profit Sharing Contribution. The Employer shall make
Employer Profit Sharing Contributions for the period of the Participant’s
qualified military service, based on a rate derived from the amount of
contribution made to the Plan for each Plan Year in such period, and on the
Compensation for the Participant (as determined in 5.8-2).
               (b) Elective Deferral Contributions. A Participant may make
Elective Deferral Contributions to the Plan attributable to the period of
qualified military service. Such contributions shall be paid within a period
starting on the date of reemployment and continuing for the shorter of (1) three
(3) times the length of the qualified military service that resulted in the
reemployment rights or (2) five (5) years.
               (c) Matching Contributions. The Employer shall make Matching
Contributions for a Participant who is reemployed from qualified military
service based on the amount of Elective Deferral Contributions made by the
Participant under 5.8-1(b).
          5.8-2 Compensation. Compensation for purposes of contributions under
5.8-1 shall be the amount described in 2.6 that the Participant would have
received from the Employer during the period of qualified military service if
employment had continued. Such amount shall be based on the rate of pay the
Participant would have received in such period or, if such rate was not
reasonably certain, the Participant’s average pay rate during the 12-month
period of employment preceding the period of qualified military service or the
entire period of employment if less than 12 months.
          5.8-3 Limitations. Contributions provided under 5.8-1 shall be subject
to the limits provided in Article VI based on the Plan Years within the period
of qualified military service to which the contributions relate in accordance
with applicable law and regulations.
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     5.9 Rollover Contributions.
          5.9-1 General Rule. Subject to the approval of the Administrator, this
Plan may accept an eligible rollover distribution on behalf of a Participant who
is an Eligible Employee from any of the following:
               (a) a qualified plan described in Code § 401(a) or § 403(a);
               (b) an annuity contract described in Code § 403(b);
               (c) an eligible plan under Code § 457(b) that is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state;
               (d) an individual retirement account or retirement annuity
described in Code § 408(a) or (b) that is eligible to be rolled over and would
otherwise be includible in gross income.
For purposes of this Section 5.9, the plans and arrangements described in
(a) through (d) are referred to as “the other plan.”
          5.9-2 Eligible Rollover Distribution. The rollover must be an eligible
rollover distribution, as defined in Section 10.7 paid to or on behalf of the
Participant either:
               (a) pursuant to participation of the Participant or the
Participant’s deceased spouse in the other plan; or
               (b) pursuant to a qualified domestic relations order to the
spouse or former spouse of a participant in the other plan.
In addition, with respect to rollover of any after-tax contributions, it must be
possible for the Administrator to determine the amounts that would be includible
and would not be includible in the distributee’s gross income (disregarding the
rollover provisions of the Code) so that the separate accounting requirement of
8.6-2(a)(ii) can be satisfied.
          5.9-3 Qualified Transfer. The rollover must be paid in cash to the
Trustee either:
               (a) by a direct transfer from the trustee(s) of the other plan or
IRA; or
               (b) by payment from the Participant on or before the sixtieth
(60th) day following the Participant’s receipt of the distribution from the
other plan or IRA.
However, rollovers of after-tax contribution amounts described in section
10.7-2(a)(2) must be paid by means of a direct transfer from the other plan.
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          5.9-4 Rollover Account. The transferred amount accepted by the Plan
shall be placed in the Participant’s Rollover Account, and shall be at all times
fully vested and subject to the investment and distribution provisions of
section 5.2, but shall not be considered a Participant Elective Deferral
Contribution for purposes of the Employer Matching Contribution, contribution
limits, or nondiscrimination requirements and limitations of this Plan and the
Code, or as part of a Participant’s total account balance for purposes of the
consent requirement under Section 10.1-1 for involuntary distribution of account
balances. Rollovers of after-tax contribution amounts described in 10.7 will be
accounted for separately.
          5.9-5 Designated Roth Rollover Contributions. Beginning September 1,
2007, the Plan will accept a rollover contribution to a Participant’s designated
Roth contributions account only if it is a direct rollover from another Roth
contributions account under an applicable retirement plan described in Code
Section 402A(e)(1) and only to the extent the rollover is permitted under the
rules of Code Section 402(c). The rollover contribution will be accounted for in
the Participant’s designated Roth contributions account and not as part of the
Participant’s Rollover Account.
     5.10 Qualified Non-Elective Contributions.
          5.10-1 Generally. A “Qualified Non-Elective Contribution” (QNEC) means
a non-elective contribution which is 100% non-forfeitable at all times, is
subject to the distribution restrictions under 9.8, is allocated to the
Participant’s QNEC Account as of a date within the Plan Year being tested, and
is actually contributed to the Plan within the 12 month period immediately
following such Plan Year. A QNEC under this 5.10 shall include Employer Profit
Sharing Contributions treated as QNECs pursuant to 5.1-6 and shall be considered
an Employer contribution for purposes of the Employer’s minimum employer
contribution obligations under 12.4.1.
          5.10-2 Allocation of QNECs. QNECs will be allocated to the QNEC
Account of each Participant who meets the eligibility requirements under 5.10-4
in reverse order of Compensation as provided for herein, subject to the
limitations under 5.10-3. The QNEC will be allocated to the eligible Participant
with the lowest Compensation until all of the QNEC has been allocated. If two or
more eligible Participants have the same Compensation, the QNEC will be
allocated equally to each eligible Participant until all of the QNEC has been
allocated. If any QNEC remains unallocated, this process is repeated for the
eligible Participant(s) with the next lowest level of Compensation in accordance
with this paragraph until all of the QNEC is allocated, within the limits
provided under 5.10-3. The portion of any QNEC that cannot be allocated due to
the limitations under 5.10-3 shall be treated as an additional Employer Profit
Sharing Contribution and allocated pursuant to 5.1.
          5.10-3 QNEC Allocation Limits. The maximum QNEC allocated to any
eligible Participant shall not exceed the least of:
               (a) the amount sufficient to satisfy the ADP or ACP test(s) under
6.8;
               (b) the Participant’s Annual Addition Limitation for the Plan
Year under 6.6; or
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               (c) the amount equal to the Participant’s Compensation multiplied
by the greater of:
                    (1) five percent (5%); or
                    (2) two times the Plan’s Representative Contribution Rate.
          5.10-4 QNEC Eligibility. Eligibility to receive QNEC allocations for a
Plan Year is limited to Participants who, as of the last day of such Plan Year,
are: (a) Non-Highly Compensated Employees; (b) eligible to receive Employer
Matching Contributions pursuant to 5.3-2; and (c) not included in the “otherwise
excludible” testing group under 6.8-2.
          5.10-5 Representative Contribution Rate. The “Representative
Contribution Rate” for purposes of 5.10-3(c)(2) is the lowest Applicable
Contribution Rate of any eligible Participant among a group of eligible
Participants that consists of half (50%) of all eligible Participants for the
Plan Year or, if greater, the lowest Applicable Contribution Rate of any
eligible Participant in the group of all eligible Participants for the Plan Year
and who is employed by the Employer on the last day of the Plan Year.
          5.10-6 Applicable Contribution Rate. The “Applicable Contribution
Rate” under 5.10-5 for an eligible Participant equals the Participant’s QNEC
allocation for a Plan Year divided by the Participant’s Compensation for the
same period.
          5.10-7 Compensation for QNEC Purposes. Compensation for purposes of
this 5.10 is Compensation under 6.8-2(d).
          5.10-8 Investment of QNEC Accounts. A Participant’s QNECs will be
invested in the same manner as his or her election for future Elective Deferral
Contributions.
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     ARTICLE VI. ALLOCATION OF CONTRIBUTIONS AND VALUATION OF TRUST FUND
     6.1 Allocation of Contributions and Forfeitures.
          6.1-1 Participant Accounts. The Company, or its delegated third party
administrative service provider, under the supervision of the Retirement
Committee, shall keep such separate accounts for each Participant as may be
necessary to administer the Plan properly and to accurately reflect the value of
the account of each Participant or Beneficiary in the Plan. Such accounts and
records may be kept in dollars or units or both, as determined appropriate by
the Company so that there may be determined as of any Valuation Date the
(a) current value of the Participant’s account in the Trust Fund and
(b) adjustments from the previous Valuation Date that have produced such value.
The Company, or its delegate, shall furnish each Participant a statement showing
contributions to date, account balances and vested interests. Such statement
shall be furnished no less frequently than annually.
          6.1-2 Valuation Changes. Each Participant’s account shall be adjusted
to reflect net income, gain or loss, since the previous Valuation Date, as
provided in 6.2. For this purpose, Participant accounts are determined on a cash
basis, not an accrual basis. Any appreciation or depreciation in the value of a
Participant’s account will apply only to amounts actually invested under that
Participant’s account.
     6.2 Valuation and Allocation of Trust Fund. The Trust Fund shall be valued
and allocated on each Valuation Date. As of the close of trading on each
Valuation Date, the fair market value of each Participant’s account shall be
determined as follows:
FIRST, credit or charge, as appropriate, to the proper accounts all
contributions, transfers, payments, fees, forfeitures, withdrawals or other
distributions made to or from such accounts since the last Valuation Date and
that have not been previously credited or charged.
SECOND, credit or charge, as applicable, each account with its share of the
appreciation or depreciation in the fair market value of the investments held in
each account since the previous Valuation Date. Such appreciation or
depreciation will reflect investment income, unrealized gains and losses, other
investment transactions and expenses paid from the Plan Assets and other charges
properly payable by the Plan in accordance with 17.8.
     6.3 Investment of Contributions. All Contributions and investment earnings,
gains or losses thereon, credited to a Participant’s account shall be invested
and reinvested in one or a combination of investment funds to be established by
the Trustee as provided in the Nordstrom Retirement Plan Participant Investment
Appendix attached hereto and incorporated into this 6.3 by this reference.
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     6.4 Allocation Does Not Vest Rights. The fact that an allocation is made
and credited to the account of a Participant does not vest in the Participant
any right, title or interest in and to any assets except at the time or times
and upon the terms and conditions expressly set forth in this Plan.
     6.5 Forfeiture Suspense Account.
          6.5-1 Assets Pending Allocation. Any amounts forfeited pursuant to
sections 8.2, 8.3 or 10.8 shall be held in an account to be known as the
“forfeiture suspense account” until allocated pursuant to section 6.5-3.
          6.5-2 Investment of the Forfeiture Suspense Account. The forfeiture
suspense account referred to in this section shall be invested in a liquid form
of investment as determined appropriate by the Company.
          6.5-3 Allocation of Forfeitures held in the Forfeiture Suspense
Account. The forfeiture suspense account will be used first to restore any
previously forfeited amounts under section 10.8-2, and then to reduce Company
contributions as provided under section 5.1-4.
     6.6 Limitation on Annual Additions.
          6.6-1 Annual Maximum for All DC Plans. Notwithstanding any provisions
of this Plan to the contrary, when taking into consideration all defined
contribution Plans maintained by Employer, the maximum “annual addition” that
may be contributed or allocated to a Participant’s account or accounts for any
Limitation Year may not exceed the lesser of (1) $40,000 or (2) one hundred
percent (100%) of the Participant’s Compensation. The $40,000 “dollar
limitation” shall be adjusted for increases in the cost of living in accordance
with regulations prescribed by the Secretary of the Treasury. For the Plan Year
beginning January 1, 2008, the limit is $46,000.
          6.6-2 Annual Addition. With respect to each Participant, “annual
addition” means the sum of the following amounts allocated to a Participant for
the Limitation Year: (1) Employer contributions (including Elective Deferral
Contributions and Designated Roth Contributions, but excluding Catch-up
Contributions), (2) the amount of the Participant’s contributions determined
without regard to any Rollover Contributions or loan repayments, and
(3) forfeitures. In addition, contributions to the following types of
arrangements are considered contributions to defined contribution plans for
purposes of Code § 415: (1) amounts allocated to an individual medical account
of a pension or annuity plan established pursuant to Code § 401(h), and
(2) amounts attributable to post-retirement medical benefits allocated pursuant
to § 419(A)(d)(2) of the Code to the separate account of individual who is or
was a Key Employee during the Plan Year or any preceding Plan Year.
          6.6-3 Combined Employers. For purposes of applying the limitations
under 6.6, all members of a controlled group of corporations (as defined by
Internal Revenue Code § 414(b) but modified by Code § 415(h)) or of an
affiliated service group (as defined by Internal Revenue Code § 414(m)) of which
Employer is a member, and all employers which are under common control with
Employer (as defined by Internal Revenue Code § 414(c) but modified by Internal
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Revenue Code § 415(h), and any other entity required to be aggregated with the
Employer pursuant to regulations under Code § 414(o), will be considered a
single employer.
          6.6-4 Compensation for 6.6. For the sole purpose of determining the
contribution limitation under 6.6, an Employee’s compensation for a Limitation
Year shall be defined to include earned income, wages, salaries and fees for
professional services and other amounts paid or includible in gross income for
the Limitation Year for personal services actually rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
for sales, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), excluding the following
(a) and (b), but including (c), as applicable:
               (a) Deferred Compensation Excluded. Contributions to a qualified
or nonqualified plan of deferred compensation which are not includible in the
Employee’s gross income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any distributions from a plan
of deferred compensation are excluded from compensation for 6.6.
               (b) Stock Benefits Excluded. Amounts realized from the exercise
of a nonqualified stock option; or when restricted stock (or property) held by
the Employee either becomes freely transferable or no longer is subject to a
substantial risk of forfeiture; or amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option are excluded
from compensation for 6.6.
               (c) Certain Other Non-Taxable Amounts Included. For Plan Years
beginning after December 31, 1997, any elective deferral (as defined in Code
Section 402(g)(3)), and any amounts contributed by the Employer at the election
of the Employee which are not includible in the gross taxable income of the
Employee by reason of Code Section 125 or 132(f) are included in compensation
for 6.6.
     6.7 Allocation of Excess Additions. If an allocation would have been made
to a Participant’s account, but for a limitation in Section 6.6, then any such
excess shall be disposed of in a manner permitted under the Employee Plans
Compliance Resolution System, or similar program, which may include the
following:
          6.7-1 Excess Attributable to Elective Deferrals. If the excess is
attributable to amounts contributed by the employee as Elective Deferrals, then
any Elective Deferrals, and any income attributable thereto, to the extent they
would reduce the excess amount, may be returned to the Participant.
          6.7-2 Remainder to Suspense Account. Any excess addition that is not
attributable to Elective Deferrals and remaining after the application of 6.7-1,
may be allocated to a suspense account as forfeitures and held therein until the
next succeeding date on which forfeitures could be applied under the Plan. In
the event of termination of the Plan, the suspense account shall revert to the
Employer to the extent that it may not then be allocated to any Participants’
accounts.
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          6.7-3 Multiple DC Accounts. In the event that Employer maintains two
(2) or more defined contribution plans and the total annual additions to all
plans exceeds the limitation contained in Section 6.6 above, the provisions of
6.6 shall be applied to all profit sharing plans to the extent necessary to
comply with Section 6.6.
          6.7-4 Code Section 415. The intent of 6.6 and 6.7 is to set forth the
basic rule implementing Code section 415 so that, for each Plan Year, the Plan
satisfies the contribution limitations of the Code and applicable regulations.
The provisions of 6.6 and 6.7 shall be applied in a manner consistent with Code
§ 415 and applicable guidance.
     6.8 Contribution Limits for Highly Compensated Employees.
          6.8-1 Non-Discrimination Tests. For each Plan Year, the Plan shall
satisfy the nondiscrimination tests in Code sections 401(k)(3) and 401(m) in
accordance with Treasury Regulation sections 1.401(k)-2 and 1.401(m)-2. The
applicable Code and Regulation sections are incorporated by this reference. The
following provisions shall be applied in a manner consistent with such Code and
Regulation sections.
          6.8-2 Determining the ADP and ACP. For each Plan Year, the Committee
shall determine the Actual Deferral Percentage (“ADP”) and the Actual
Contribution Percentage (“ACP”) of the Eligible Employees who are Highly
Compensated Employees under 2.13 and the ADP and ACP of the remaining Eligible
Employees in two separate groups. Employees under age 21 or who have less than
one Year of Service as of the end of the Plan Year are one group (the “otherwise
excludable group”), and all other Employees are the other group. The “otherwise
excludable group” shall not consist of any Highly Compensated Employees. The ADP
and ACP shall be determined as follows:
               (a) The ADP (and ACP) for the Highly Compensated Employees and
for the remaining Employees is the average of the Actual Deferral Rates (or
Actual Contribution Rates) for all eligible Employees within their respective
groups. The ADP (and ACP) for a group of eligible Employees shall be calculated
to the nearest hundredth of a percentage point.
               (b) An Employee’s Actual Deferral Rate (“ADR”) is the sum of that
individual’s Basic Elective Deferral Contributions and QNECs for the Plan Year,
divided by such Employee’s Compensation under (d). The ADR is calculated to the
nearest hundredth of a percentage point. Notwithstanding anything in the
foregoing to the contrary:
                    (1) Elective Deferral Contributions made pursuant to
5.8-1(b) (relating to Employees returning from qualified military service) shall
not be taken into account when determining an Employee’s ADR for the Plan Year
for which the Basic Elective Deferral Contributions are made or for any other
Plan Year.
                    (2) Excess Deferrals which exceed the limitations under Code
§ 402(g)(3) shall be taken into account as Basic Elective Deferral Contributions
when determining a
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Highly Compensated Employee’s ADR for the Plan Year, even if those Excess
Deferrals are distributed pursuant to 5.2-5.
                    (3) Excess Deferrals which exceed the limitations under Code
§ 402(g)(3) shall not be taken into account as Basic Elective Deferral
Contributions when determining a Non-Highly Compensated Employee’s ADR for the
Plan Year, to the extent such deferrals are prohibited under Code § 401(a)(30).
However, to the extent such amounts are not prohibited under Code § 401(a)(30),
they shall be taken into account for ADR purposes, whether or not distributed
pursuant to 5.2-5.
               (c) An Employee’s Actual Contribution Rate (“ACR”) is that
individual’s Employer Matching Contributions for the Plan Year, divided by such
Employee’s Compensation under (d), subject to (e). The ACR is calculated to the
nearest hundredth of a percentage point. Notwithstanding anything in the
foregoing to the contrary:
                    (1) Employer Matching Contributions made pursuant to
5.8-1(c) (relating to Employees returning from qualified military service) shall
not be taken into account when determining an Employee’s ACR for the Plan Year
for which the Employer Matching Contributions are made or for any other Plan
Year.
                    (2) Any Employer Matching Contributions that are forfeited
because the Elective Deferral Contributions to which they relate are treated as
Excess Contributions or Excess Deferrals shall not be taken into account when
determining an Employee’s ACR for the Plan Year.
               (d) Compensation for ADR and ACR purposes is Compensation under
2.6, or such other definition of compensation permitted by Code section 414(s)
in lieu thereof. Only Compensation earned while an Eligible Employee shall be
considered for this purpose.
               (e) The Committee may for any Plan Year treat Basic Elective
Deferral Contributions or QNECs not needed to pass the ADP test as Employer
Matching Contributions for purposes of the ACP test. No single contribution may
be used in both tests.
               (f) The following shall be aggregated to determine the ADR and
the ACR:
                    (1) All Plans that are aggregated with this Plan under Code
sections 401(a)(4) and 410(b) (other than for purposes of the average benefit
percentage test).
                    (2) All cash and or deferred arrangements sponsored by the
Employer in which the same Highly Compensated Employee is eligible to
participate.
          6.8-3 ADP and ACP Limitations. Neither the ADP nor the ACP of the
Highly Compensated Employees may exceed the greater of the following:
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               (a) 1.25 times the ADP or ACP of the remaining employees for the
appropriate Plan Year.
               (b) 2 percentage points higher than the ADP or ACP of the
remaining employees, up to 2 times such ADP or ACP for the appropriate Plan
Year.
          6.8-4 ADP and ACP Testing Methodology.
               (a) Generally. The Plan elects to use the current year testing
method in computing the ADP and ACP for Non-Highly Compensated Employees under
the nondiscrimination rules of Code sections 401(k) and 401(m).
               (b) Incorporation of Regulations. For purposes of the limitations
under this 6.8, the provisions of Code sections 401(k)(3) and 401(m)(3) together
with their specific underlying Treasury Regulations and subsequent Internal
Revenue Service guidance are hereby incorporated into this Plan by reference.
     6.9 Correcting Excess Contributions.
          6.9-1 Determine the Excess Contribution Amounts. If the ADP or ACP of
the Highly Compensated Employees exceeds the limits in 6.8-3, the Committee
shall adjust the contributions for certain Highly Compensated Employees, as
follows:
               (a) Correcting for ADP Failures. If the ADP limit is exceeded,
Basic Elective Deferral Contributions shall be reduced taking the highest
individual dollar amount first. Basic Elective Deferral Contributions reduced
under this provision shall not be eligible for Employer Matching Contributions.
               (b) Correcting for ACP Failures. If the ACP limit is exceeded,
Employer Matching Contributions shall be reduced taking the highest individual
dollar amount first.
          6.9-2 Excess Contribution Reductions. Amounts reduced under 6.9-1
shall be forfeited, withheld or distributed as follows:
               (a) Any amount reduced from Employer Matching Contributions shall
be forfeited, with related earnings, as follows:
                    (1) Any amount reduced under 6.9-1(b) shall be forfeited to
the extent of any unvested balance in the Employer Matching Contribution account
of the Highly Compensated Employee to whom it applies. The unvested balance
shall be determined before the reduction.
                    (2) Amounts forfeited shall be treated in accordance with
6.5.
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               (b) Any Employer Matching Contribution for which eligibility is
lost under 6.9-1(a) because a Basic Elective Deferral Contribution was reduced
shall not be contributed and thus shall neither be forfeited nor distributed.
               (c) Subject to (d) and (e), any contributed amount not forfeited
under (a) shall be distributed to the Highly Compensated Employees to whom it
applies. The distribution shall be adjusted for allocable gain or loss,
determined under applicable Regulations, for the Plan Year in which the excess
arose (“Plan Year income”). Distribution of such amounts generally may be made
within two and one-half (21/2) months after the end of the Plan Year to which
the excess applies (six months for any Plan Year beginning after December 31,
2007 in which the Plan is determined to include an eligible automatic
contribution arrangement as defined in Code § 414(w)(3)) and in any event by the
end of the following Plan Year.
               (d) A distribution under (c) because of an ADP limitation shall
be reduced by the amount of any Excess Deferral previously withdrawn under 5.2-5
for the same Plan Year.
               (e) In addition to adjustment for Plan Year income under (c), for
the Plan Years beginning January 1, 2006 and January 1, 2007, the distribution
shall be further adjusted for gain or loss for the “gap period” (the period
after the close of the Plan Year and prior to the distribution) (“gap period
income”). Gap period income shall be determined using the “safe harbor method”
prescribed under Treas. Reg. sections 1.401(k)-2(a)(2)(iv)(D) and
1.401(m)-2(a)(2)(iv)(D). Specifically, gap period income on Excess Contribution
Amounts shall be equal to ten percent (10%) of the Plan Year income as
determined in (c) above, multiplied by the number of calendar months that have
elapsed since the end of the Plan Year. When calculating the number of calendar
months that have elapsed for purposes of this paragraph, a corrective
distribution that is made on or before the fifteenth day of a month is treated
as made on the last day of the preceding month and a corrective distribution
that is made after the fifteenth day of a month is treated as made on the last
day of the month. The gap period income provisions shall not apply to Plan Years
beginning after December 31, 2007.
ARTICLE VII. INVESTMENT IN INSURANCE CONTRACTS
     7.1 Purchase of Insurance. Effective from and after February 1, 1992, no
additional policies of life insurance will be purchased by the Plan. Policies of
ordinary or whole life insurance purchased prior to February 1, 1992, may be
continued in effect, subject to the limitations contained elsewhere in this
Article VII. The Administrator shall continue to direct payment of premiums on
such previously purchased policies for all Participants until such time as a
Participant affirmatively elects to surrender or cancel the policy. The
Administrator will pay premiums from assets held in the Participant’s Plan
account, or, if the assets in the Participant’s Plan account are not sufficient
to pay the premiums required to keep the policy in force, the Administrator will
use the policy’s cash surrender value to the extent necessary to pay policy
premiums. If a Participant affirmatively elects to purchase, surrender or cancel
an insurance policy, the Administrator shall transfer, surrender or cancel the
policy and allocate the proceeds to the Participant’s other investment accounts.
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     In no event may any premiums on whole life insurance be paid under this
Plan for a Participant, if the aggregate premiums for that insurance exceed
forty-nine percent (49%) of the aggregate of the contributions allocated to such
Participant at any time.
     7.2 Trustee Shall Own the Policy. Each contract issued shall provide, and
the application therefor shall request, that a Trustee, subject to the terms and
conditions of a Trust Agreement entered into by Employer, shall be the owner of
the contract. Any and all rights provided under the contract or policy, or
permitted by the insurance company, shall be reserved to that Trustee. Such
rights shall include the right to surrender, reduce or split the policy, the
right to name and change the payee to receive policy benefits on the happening
of any contingency specified in the policy, the right to exercise any loan
provisions to pay the policy premium or for any other reason, and such other
rights as may be reserved to the owner of the policy. The listing of rights
above shall not be construed as a limitation on the Trustee. However, the
exercise of the rights reserved to the Trustee as owner of the policy shall be
subject to and pursuant to the direction of the Administrator.
     7.3 Premiums, etc. The Trustee shall maintain possession of any policy
purchased and shall pay the premiums as each premium falls due, unless the
Administrator directs otherwise. Dividends may be used in reduction of any such
premium, may be applied in any other manner permitted by the insurance company
or may be taken in cash by the Trustee, as the Administrator determines from
time to time. If, at any time, the Administrator shall decide as an investment
matter that the premium on any policy is not to be paid in cash from the
Participant’s account, the Administrator, in its sole discretion, shall direct
the Trustee whether such premium is to be paid by policy loan (if the policy
contains such a provision), whether the policy is to be continued as a paid-up
policy, whether use is to be made of any extended insurance option available
under the policy, or whether some other action is to be taken under the policy.
Any policy loans shall be proportionate to the loan values of the insurance
contracts. In any determination of the Administrator, all Participants similarly
situated shall be treated the same. Before directing a Trustee to take any
action other than payment of premiums in cash, the Administrator must give the
Participant an opportunity either to pay the premium in cash from his or her own
funds or to purchase the policy from the Trustee for its fair market value. Any
premium received by the Trustee from the Participant shall be paid to the
insurance company. If the Participant purchases the policy, the Trustee shall
transfer the policy to him/her free and clear and shall add to his or her
account the amount paid by such Participant.
     7.4 Proceeds and Benefits of Policy. Upon the death of a Participant on
whose life the Trustee holds a policy payable to it, the Trustee may collect the
proceeds, in which case such proceeds shall be turned over to the Participant’s
beneficiary, or the Trustee may assign to such beneficiary the policy and all
rights thereunder, or the Trustee may direct the insurance company to make
payment to such beneficiary in such manner as may be permitted by the insurance
contract. The action taken by the Trustee shall be as directed by the
Administrator, in its sole discretion, after consideration of the needs of the
beneficiary and the intention of the Participant as indicated in the last
direction filed with the Administrator and the Trustee by the Participant prior
to his or her death. Such intention or direction, however, shall not of itself
create in any
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way a vested right, either in the Participant or his or her beneficiary, nor
shall it alter the provisions of this Agreement.
     7.5 Disposition of Policy. When any Participant whose policy is held
hereunder reaches his or her retirement age, or severs employment, or if this
Plan and Trust Fund terminates, the Administrator shall direct the Trustee as to
the disposition of the policy so that the provisions of this Plan covering
disposition of the account of the Participant in the happening of any such
event, may be effected. If a Participant elects to receive a distribution of
benefits as provided in Article X, the Participant may elect one of the
following options with respect to the policy:
          7.5-1 Distribution. The Participant may elect a distribution of the
policy, free and clear of any lien or interest of the Trust, the Trustee, or the
Plan.
          7.5-2 Surrender. The Participant may instruct the Administrator to
direct the Trustee to surrender or cancel the policy, and the cash surrender
value of the policy will be distributed to the Participant.
          7.5-3 Purchase. The Participant may purchase the policy from the
Trustee by paying the policy’s fair market value to the Trust. The Participant
must use non-Plan funds to purchase the policy. Upon the Trust’s receipt of the
full purchase price, the policy will be transferred to the Participant, free and
clear of any lien or interest of the Trust, the Trustee, or the Plan.
If the Participant elects to receive a distribution without specifying
distribution, surrender, or purchase of the policy, the Trustee shall surrender
or cancel the policy, and the cash surrender value of the policy will be
distributed to the Participant.
If the Participant reaches his or her retirement age and does not elect to
receive a distribution of Plan benefits, the Trustee shall continue to hold any
insurance policy for the benefit of the Participant (provided that that the
policy premiums can be paid from the Participant’s account as provided in 7.1),
unless the Participant (1) elects to purchase the policy by paying to the
Trustee the policy’s fair market value, or (2) elects to surrender or cancel the
policy under 7.1. If the policy premiums cannot be paid from the Participant’s
account for any reason, the policy will be surrendered or canceled, unless the
Participant affirmatively elects to purchase the policy from the Plan. Any
amount received by the Trustee as a result of any purchase, cancellation or
surrender of the policy shall be added to the account of the Participant and
disposition or distribution made as provided elsewhere in this Plan.
     7.6 Insurer’s Responsibility. No insurance company that issues a policy
under the Plan will thereby become a party to the Plan or the related Trust
Agreements. The liability of any such insurance company shall be only as
provided in any policy it may issue. The insurance company shall be fully
protected from all liability in accepting premium payments from the Trustee and
in making payments to the Trustee, or on direction of the Trustee or the
Administrator, without liability as to the application of such payments.
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ARTICLE VIII. VESTING OF BENEFITS
     8.1 Vested Interest. A Participant is always 100 percent vested in Elective
Deferral and Rollover Contributions to the Plan and is also 100 percent vested
upon reaching the Normal Retirement Date under Section 9.1 while still an
Employee. When a Participant’s employment is severed for reasons other than
Retirement, Disability, death, or cause (as defined in 8.2) he or she will
receive a percentage of the amount in his or her account derived from Employer
Profit Sharing Contributions and Employer Matching Contributions based on his or
her completed Years of Service.
          8.1-1 Vesting Service. For purposes of determining a Participant’s
vested interest, the applicable computation period shall be the Plan Year for
years commencing prior to January 31, 1986, and the Payroll Year thereafter. A
Participant shall receive a Year of Service for vesting for the Plan Year ending
January 31, 1986, and for the Payroll Year ending December 31, 1987.
          8.1-2 Vesting Schedules.
               (a) Pre-2000 Profit Sharing Contributions. A Participant’s vested
interest in Employer Profit Sharing Contributions attributable to Years of
Service before January 1, 2000 will be determined in accordance with the
following schedule:

      Years of Service   Vested Interest Less than 3 years  
0
3 years  
20
4 years  
40
5 years  
60
6 years  
80
7 or more years  
100

               (b) Post-1999 Profit-Sharing Contributions. A Participant shall
be immediately one hundred percent (100%) vested in Employer Profit Sharing
Contributions attributable to Years of Service after December 31, 1999.
               (c) Matching Contribution — Employed Before Certain Dates. Each
Participant credited with at least one Hour of Service prior to January 1, 2000,
and each Participant who was an employee of Nordstrom Direct, Inc. on
December 31, 2002, shall be one hundred percent (100%) vested in the Employer
Matching Contribution accounts.
               (d) Matching Contribution — Employed After Certain Dates. The
vested interest of each Participant who does not have at least one (1) Hour of
Service earned prior to
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January 1, 2000 and for each Participant whose first Hour of Service is with
Nordstrom Direct, Inc. after December 31, 2002, is determined under the
following table:

      Years of Service   Vested Interest Less than 1 year  
0%
1 year  
33%
2 years  
67%
3 or more years  
100%

               (e) Top Heavy Plan. For each Plan Year in which the Plan is
considered top heavy under Article XII, the schedule in Section 12.4 will be
substituted for the schedules set forth in this section if the Section 12.4
schedule would result in a greater vesting percentage.
          8.1-3 Participant Election if Vesting Schedule Amended. If the Plan’s
vesting schedule is amended, whether by this amended and restated Plan, or by
subsequent amendment, or the Plan is amended in any way that directly or
indirectly affects the computation of the nonforfeitable percentage of a
Participant’s account, or if the Plan is deemed amended by an automatic change
to or from a top heavy vesting schedule under Article XII, each Participant with
at least three (3) Years of Service with the Employer may elect, within the
period described below, to have the nonforfeitable percentage computed under the
Plan without regard to such amendment or change. Notwithstanding the foregoing,
for Participants who do not have at least one (1) Hour of Service in any Plan
Year beginning after December 31, 1988, the preceding sentence shall be applied
by substituting “five (5) Years of Service” for “three (3) Years of Service”
above.
               The period during which the election of the prior vesting
schedule may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the latest of:
               (a) Sixty (60) days after the amendment is adopted;
               (b) Sixty (60) days after the amendment becomes effective; or
               (c) Sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Administrator.
     8.2 Forfeiture of Benefits for Certain Causes. Notwithstanding any other
provisions of this Plan to the contrary, the right of any Participant or former
Participant to receive or to have paid to any other person and the right of any
such other person to receive Employer Profit Sharing or Employer Matching
Contributions hereunder shall terminate and shall be forever forfeited if such
Participant’s employment with the Employer is severed because of his or her
fraud, embezzlement or dishonesty or any willful act which injures the Employer
or the Employee’s fellow workers. This section shall be inapplicable as of the
earliest of the following dates:
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          8.2-1 the date the Participant meets the requirements for normal
retirement benefits under 9.1;
          8.2-2 the date the Participant completes three (3) Years of Service
(five (5) Years of Service with respect to Employer Profit Sharing Contributions
made before January 1, 2007);
          8.2-3 the date the Plan terminates; or
          8.2-4 the date contributions to the Plan have been completely
discontinued.
Notwithstanding the provisions of 8.2, if the Plan becomes a top heavy plan as
defined in 12.2, only that portion of a Participant’s account which is not
vested under the vesting schedule set forth at 12.4 of this Plan shall be
subject to forfeiture.
     8.3 Forfeiture of Nonvested Portion of Account. Except as provided herein,
if a Participant severs employment with an Employer, the nonvested portion of
the severed Participant’s account will be forfeited at the earlier of:
               (a) the date the entire vested portion of the Participant’s
account is distributed; or
               (b) the date on which the Participant completes five
(5) consecutive one-year Breaks in Vesting Service.
The forfeited amount will initially be held in the “forfeiture suspense account”
referred to in Section 6.5. For purposes of this section, if the vested value or
vested percentage of a Participant’s account balance is zero (0) on the date of
such Participant’s severance of employment, the Participant shall be deemed to
have received a distribution of his or her entire account on the date of
severance.
     8.4 Reinstatement of Nonvested Portion of Account. If a Participant who
ceases to be an Employee is subsequently reemployed as an Employee before
incurring five (5) consecutive one-year Breaks in Vesting Service, any amount
forfeited pursuant to 8.3(a) shall be restored to the Participant’s account, and
Years of Service before the Break in Vesting Service will be taken into account
to determine the vesting percentage in the reinstated benefit; provided that the
Participant repays the amount previously distributed before the earlier of
(1) the fifth (5th) anniversary of his or her reemployment date or (2) the close
of the first period of five (5) consecutive one-year Breaks in Vesting Service
following the withdrawal.
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     8.5 Service After Severance from Employment.
          8.5-1 Service After a Break in Vesting Service.
               (a) Account Before the Break. Years of Service after five
(5) consecutive one-year Breaks in Vesting Service shall not increase the
Participant’s vested interest in his or her account for benefits accrued before
such Breaks in Vesting Service.
               (b) Account After the Break. No service prior to a Break in
Vesting Service will be taken into account in determining a Participant’s vested
interest in his or her account after the Break in Vesting Service until the
Participant has completed one Year of Service after such break.
                    (1) General Crediting Rule. Upon completing a Year of
Service after reemployment, the Participant shall be credited with all Years of
Service, including Years of Service prior to the Break in Vesting Service which
have not been forfeited under (b)(2) below, in determining such Participant’s
vested interest in that portion of the Participant’s account balance
attributable to contributions, earnings and losses after the Break in Vesting
Service. This 8.5-1(b)(1) shall apply to any Participant who, at the time of
severance of employment, either was vested in his or her Employer Profit Sharing
or Employer Matching Contribution Accounts or had an account that was subject to
the limitations of 9.8 (i.e., an Elective Deferral Account or a QNEC Account).
                    (2) Exclusion of Forfeited Service. This provision applies
to a Participant who experiences a Break in Vesting Service prior to acquiring a
nonforfeitable interest under the Plan, and who subsequently is reemployed by an
Employer. This paragraph does not apply to a Participant who at the time of
severance of employment had an Elective Deferral Account or a QNEC Account
because such a Participant is deemed to have acquired a nonforfeitable interest
under the Plan for purposes of this 8.5-1(b)(2). If this paragraph applies to a
Participant and the Participant’s number of consecutive one (1) year Breaks in
Vesting Service equals or exceeds the greater of (i) five (5), or (ii) the
aggregate number of his of her Years of Service, whether or not consecutive,
completed prior to such Break in Vesting Service (other than Years of Service
which may be disregarded on account of a prior Break in Vesting Service), Years
of Service before the Break in Vesting Service shall not be counted for the
purpose of determining the vested percentage of the Participant’s account
balance derived from Employer contributions to the Plan on the Participant’s
behalf after such Break in Vesting Service.
          8.5-2 Return to Service Before a Break in Vesting Service. If a
Participant severs employment with an Employer and subsequently returns to the
service of an Employer without having incurred a Break in Vesting Service, those
Years of Service prior to a Participant’s severance from employment shall be
credited on behalf of the Participant in determining the Participant’s vested
interest under the Plan.
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          8.5-3 Prior Plan Forfeitures and Exclusions. Notwithstanding anything
to the contrary in this Article VIII, Years of Service permitted to be
disregarded under the terms of a prior version of the Plan while then in effect,
shall continue to be disregarded under the terms of this Plan.
     8.6 Forfeiture Reallocation. Notwithstanding anything herein to the
contrary, in the event of a severance for cause pursuant to 8.2, the
Participant’s entire account shall be forfeited immediately and allocated as of
the next valuation date as provided in 6.5. In the event of severance other than
pursuant to 8.2, the forfeited portion of a Participant’s account shall be
allocated as of the Anniversary Date next following the date of severance, as
provided in 6.5.
     8.7 Maternity/Paternity/Family Absences. If a Participant is absent from
employment due to a “qualified family absence” then the Participant will be
credited with certain Hours of Service on account of such absence to the extent
necessary, and only to the extent necessary, to avoid a Break in Vesting Service
and a Permanent Break in Eligibility Service. The term “qualified family
absence” shall mean absence (a) by reason of a Participant’s pregnancy, (b) by
reason of the birth of a child to the Participant, (c) by reason of the
placement of a child for adoption by the Participant, (d) for purposes of caring
for a child during a period immediately following the birth or placement by
adoption of that child, or (e) by reason of circumstances which qualify as
family leave under the Family and Medical Leave Act of 1993 (PL 103-3) and the
regulations thereunder. All absences on account of a single child shall be
aggregated and treated as a single absence. The Participant shall be credited
with the number of Hours of Service equal to the Hours of Service that the
Participant would have been credited on account of the normal work schedule of
such Participant prior to the absence, but in no event will Participant be
credited with more than five hundred one (501) hours on account of a single
absence. In the event that a Participant’s normal working schedule is unknown or
cannot be determined, Participant shall be credited with eight (8) Hours of
Service for each regular working day.
          8.7-1 Hours of Service. Hours of Service on account of a qualified
absence shall be credited to the Participant during the Plan Year in which the
absence begins if necessary to prevent a Break in Vesting Service in that Plan
Year, or if such hours are not necessary to prevent a Break in Vesting Service
in that Plan Year, such hours shall be credited to the Participant in the next
succeeding Plan Year. Hours of Service on account of a qualified absence shall
also be credited if necessary to prevent a Permanent Break in Eligibility
Service.
          8.7-2 Uniform Rules. The Plan Administrator shall adopt uniform and
reasonable rules for verification of the purpose of absences as well as
determination of the number of days for which there was such an absence. Failure
of a Participant to submit appropriate documentation in a timely manner pursuant
to such rules will result in no credit being given for the period of the
absence.
     8.8 Special Vesting on Store or Facility Closure. Effective during and
after 1994, whenever a store or facility is completely closed, the following
8.8-1 through 8.8-3 shall apply to those Participants employed at the store or
facility at the time of closure who, after the closure, do not become employed
by Employer in another capacity:
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          8.8-1 Administrator Determinations. The Administrator shall have
complete discretion and power to determine whether a closure has occurred under
(a) below, and, if so, whether either or both of the following (b) or (c) shall
apply to each such former employee. The written terms of such Administrator
determination hereby are incorporated by this reference as part of this Plan.
               (a) Closure Defined. Closure means the stoppage of all functions
at a particular location as determined by the Administrator in its discretion,
taking into account such facts and circumstances as the Administrator deems
appropriate.
               (b) Vesting. The Administrator has discretion whether or not to
increase the vesting percentage, as applied to the pre-closure account
attributable to Employer contributions, for (1) the year of closure or (2) such
individual’s total period of pre-closure service.
               (c) Contribution. The Company has discretion to decide whether or
not former employees who have an account balance at the end of the year of
closure will receive a contribution for the year of closure based on
Compensation earned during such year, notwithstanding the fact that they are not
employed on the Anniversary Date.
          8.8-2 Severance Defined. A Participant is deemed to have severed
employment as a result of the closure if such Participant was employed by such
store or facility on the date of the closure, and is not employed at another
store or facility of the Employer within ninety (90) days after the date of
Participant’s severance of employment connected with the closed store or
facility. A Participant will not be treated as having commenced work for an
Employer if the Participant works less than forty (40) hours during such ninety
(90) day period.
          8.8-3 Reemployment. Participants reemployed after receiving closure
benefits under 8.8-1 in their pre-severance account nonetheless will be subject
to the vesting schedule contained at 8.1, disregarding any special vesting
credit under 8.8-1, with respect to the amount of the account attributable to
contributions made for service after reemployment.
ARTICLE IX. ELIGIBILITY TO RECEIVE BENEFITS
     9.1 Normal Retirement Benefits. A Participant shall be eligible for normal
retirement benefits upon attaining age sixty (60), which is the Normal
Retirement Date under the Plan. Distribution of benefits on severance of
employment at or after the Normal Retirement Date shall be made in accordance
with the provisions of Article X. Any Participant who continues to work for an
Employer after the Normal Retirement Date may, pursuant to 10.3, direct the
Administrator to defer distribution of the Participant’s account until after the
Participant’s actual severance of employment.
     9.2 Disability Benefits. Upon a Participant’s Disability, prior to his or
her Normal Retirement Date or other severance of employment, the Participant
shall be entitled to a distribution of benefits hereunder upon written
notification to the Administrator and verification of the Participant’s
Disability by the Administrator. All amounts credited to a Participant’s account
shall
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become fully vested upon the Participant’s Disability prior to his or her Normal
Retirement Date or other severance of employment. Distribution of benefits on
account of Disability shall be made in accordance with the provisions of
Article X.
     9.3 Death Benefits. Upon a Participant’s death before his or her Normal
Retirement Date, or other severance of employment, the Participant’s designated
beneficiary shall be entitled to a distribution of benefits hereunder upon
written notification to the Administrator and verification of the Participant’s
death by the Administrator. All amounts credited to a Participant’s account
shall become fully vested upon the Participant’s death prior to his or her
Normal Retirement Date or other severance of employment. Distribution of
benefits on account of Participant’s death shall be made to the surviving
beneficiary or beneficiaries designated by the Participant or determined as
provided herein, in accordance with the provisions of Article X.
          9.3-1 Designation of Beneficiary. At the time of hire an Employee may
designate the beneficiary of any benefits which may become payable to a
beneficiary of a deceased Participant in this Plan. Such designation shall be a
signed writing. Any such beneficiary designation may be revoked or changed by a
subsequent signed writing. If the Participant is married and the designated
beneficiary is not the Participant’s spouse, the spouse must consent to the
designation by a signed writing witnessed by a representative of the Plan or
notarized by a notary public. No beneficiary designation or revocation or change
thereof shall be effective until such writing is furnished to the Administrator
or its agent. The revocation of a beneficiary designation shall not require the
consent of any beneficiary. Any designation filed on a later date shall be
deemed to entirely revoke any designation filed on an earlier date unless
otherwise expressly stated in the later designation.
          9.3-2 Effect of Divorce. If a Participant and his or her named
beneficiary are or become married and thereafter their marriage is dissolved by
entry of a decree of dissolution or other court order having the effect of
dissolving the marriage, then such pre-divorce beneficiary designation shall be
deemed automatically revoked as to such beneficiary spouse as of the date of
such dissolution unless the death benefit rights of such former spouse are
subsequently reaffirmed by a qualified domestic relations order or the
Participant’s subsequent written designation. However, distribution of a
deceased Participant’s account in accordance with his or her latest beneficiary
designation filed with the Administrator shall completely discharge the
Employer, the Administrator and the Trustee and they shall have no duty to
inquire into, or act on any information concerning, whether a Participant’s
marriage has been dissolved and his or her beneficiary designation thereby
revoked as to his or her spouse.
          9.3-3 Alternate Payee. For purposes of this 9.3, an alternate payee
named in a qualified domestic relations order shall be treated as a Participant.
          9.3-4 Deemed Beneficiary. If no beneficiary designation has been made,
or if the designated beneficiary has predeceased the Participant, then the
Participant will be deemed to have designated the following as his or her
surviving beneficiaries and contingent beneficiaries with priority in the order
named below:
               (a) first, to his widow or her widower, as the case may be;
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               (b) next, to his or her children, in equal shares;
               (c) next, to his or her parents, in equal shares;
               (d) next, to his or her brothers and sisters, in equal shares; or
               (e) next, to his or her estate.
          9.3-5 Surviving Beneficiary. For purposes of determining the
appropriate named or deemed beneficiary or contingent beneficiary, an individual
is considered to survive the Participant if that individual is alive seven days
after the date of the Participant’s death.
     9.4 Benefits on Severance from Employment. Upon the severance of a
Participant’s employment with the Employer prior to his or her death, Disability
or Retirement, the Participant shall be entitled to distribution of his or her
vested account balance. Distribution of benefits on account of a Participant’s
severance from employment with the Employer as provided herein shall be made to
the Participant in accordance with the provisions of Article X. A change in
employment from Employee to Leased Employee status shall not be considered a
severance from employment for purposes of this 9.4.
     9.5 Accelerated Benefit Option. A terminally ill Participant, as defined
herein, shall be entitled to an early distribution of a portion of his or her
benefits upon written notification to the Administrator and verification of the
Participant’s terminal illness by the Administrator. The Participant entitled to
receive a distribution pursuant to this accelerated benefit option may receive a
distribution of any Rollover Account, in addition to any vested Employer Profit
Sharing Contributions and Employer Matching Contributions, including earnings
thereon, which have been held by the Plan for at least twenty-four (24) months.
Distribution of benefits on account of terminal illness shall be made in
accordance with the provisions of 10.6 as an in-service withdrawal, but without
the requirement that the Participant have attained age fifty-nine and one-half
(591/2). A Participant shall be deemed to be terminally ill when, by reason of a
medically determinable physical condition, the Participant’s life expectancy is
less than twenty-four (24) months. The Participant’s terminally ill condition
and probable life expectancy must be certified by a physician acceptable to both
the Participant and the Administrator.
     9.6 In-Service Withdrawals. A Participant who continues working after
attaining age fifty-nine and one-half (591/2) may elect partial in-service
withdrawals in accordance with Section 10.6.
     9.7 Hardship Withdrawals. At the direction of the Administrator and in
accordance with uniform rules consistently applied, the Administrator may direct
the Trustee to distribute a Participant’s Rollover Account, Elective Deferral
Contributions and Employer Profit Sharing Contributions to the Participant in
the case of “hardship” pursuant to 9.7-1 to -7 below. A Participant receiving a
hardship distribution after December 31, 2001, will be ineligible to make
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Salary Deferral Contributions (including Catch-up Contributions) for the period
of six (6) consecutive months following the hardship withdrawal.
          9.7-1 Maximum Amount. Withdrawals shall not exceed the lesser of:
               (a) the value of the Participant’s Rollover Account, Elective
Deferral Account and Employer Profit Sharing Contributions Account on the date
the withdrawal is processed; or
               (b) the sum of (1) the Participant’s total Elective Deferral
Contributions to the Plan, excluding any investment earnings, and (2) the
combined value of the Participant’s Employer Profit Sharing Contributions
Account and Rollover Account on the date the withdrawal is processed.
          9.7-2 Hardship. The term “hardship” as used herein shall mean an
immediate and heavy financial need resulting from any one or more of (a) through
(f), below:
               (a) uninsured expenses for (or necessary to obtain) medical or
dental care that would be deductible under Code section 213(d) (determined
without regard to whether the expenses exceed 7.5% of the Participant’s adjusted
gross income) incurred or to be incurred by the Participant or the Participant’s
spouse or dependents (where a Participant’s dependents include Participant’s
noncustodial children who are treated as dependents pursuant to Code section
213(d)(5), provided however that expenses with respect to any such noncustodial
children exclude nonprescription drugs or medicine, other than insulin);
               (b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
               (c) payment of tuition, related educational fees, and room and
board expenses for up to the next twelve (12) months of post-secondary education
for the Participant or the Participant’s spouse, children or dependents;
               (d) payments necessary to prevent the eviction of Participant
from his or her principal residence or to prevent foreclosure on the mortgage of
Participant’s principal residence;
               (e) payments for burial or funeral expenses for the Participant’s
deceased parent, spouse, children or dependents; or
               (f) uninsured expenses for the repair of damage to the
Participant’s principal residence that would qualify for the casualty deduction
under Code section 165 (determined without regard to whether the loss exceeds
10% of the Participant’s adjusted gross income).
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In addition, a hardship withdrawal may include an amount necessary to satisfy
any tax obligation which becomes payable on account of a distribution for any
hardship described in (a) through (f), above. For purposes of this 9.7-2, the
term “dependents” shall have the meaning prescribed under Code section 152,
without regard to subsections (b)(1), (b)(2) and (d)(1)(B).
          9.7-3 Representation that Distribution is Necessary to Satisfy
Financial Need. A distribution under 9.7 can only be made to the extent it is
necessary to satisfy an immediate and heavy financial need.
               (a) A distribution is necessary to satisfy an immediate and heavy
financial need only to the extent that:
                    (1) the amount of the distribution is not in excess of the
amount required to satisfy the financial need; and
                    (2) the financial need cannot be satisfied from other
resources reasonably available to the Participant, as determined by the
Administrator on the basis of all relevant facts and circumstances.
               (b) The Administrator shall require the Participant to provide
written certification of the facts and circumstances establishing that
Participant has met one of the hardship categories and may consider other
relevant evidence. Such written certification shall require the Participant to
represent that the financial need cannot reasonably be relieved: (1) through
reimbursement or compensation by insurance or otherwise; (2) by liquidation of
the Participant’s assets; (3) by cessation of Elective Deferrals under the Plan;
(4) by other currently available distributions and nontaxable loans under the
Plan and under any other plan maintained by the Employer or by any other
employer; or (5) by borrowing from commercial sources on reasonable commercial
terms in an amount sufficient to satisfy the need. A Participant’s need cannot
reasonably be relieved by taking one of the above actions (1) through (5) if the
effect would be to increase the amount of the need.
               (c) For purposes of (a)(2), the Administrator is entitled to rely
on the Participant’s representation made pursuant to (b), unless the
Administrator has actual knowledge to the contrary.
          9.7-4 Fee. The Administrator may charge a reasonable fee for
processing hardship withdrawals.
          9.7-5 Valuation. In the event a hardship withdrawal is made by a
Participant other than at a regular Valuation Date, the allocation of investment
gains and losses to the account shall be made as if such withdrawal had occurred
on the preceding Valuation Date, and no gains or losses allocable to the
withdrawn funds shall be credited therefor, except that a Participant’s
Nordstrom Stock Account, if any, shall be valued to the date of withdrawal.
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          9.7-6 Withdrawal Precludes Match. Notwithstanding anything in the Plan
to the contrary, Elective Deferral Contributions made with respect to any given
Plan Year are not treated as eligible for Employer Matching Contributions to the
extent such Elective Deferral Contributions are withdrawn during such Plan Year;
for purposes of this paragraph, hardship distributions withdrawn during a Plan
Year shall be deemed to be made from the most recent Elective Deferral
Contributions made by the Participant. There are no Employer Matching
Contributions on Catch-up Contributions under any circumstances.
          9.7-7 Ordering Rule. Hardship withdrawals are not available unless and
until the Participant has first exhausted all other sources of funds to satisfy
the hardship, including but not limited to Participant loans available from this
Plan. Hardship withdrawals of Elective Deferral Contributions are not available
unless and until the Participant has first exhausted hardship withdrawals of any
Rollover Account. In addition, hardship withdrawals of Employer Profit Sharing
Contributions are not available unless and until the Participant has first
exhausted hardship withdrawals of Elective Deferral Contributions.
          9.7-8 Designated Roth Contributions Not Eligible. No portion of the
designated Roth contributions account shall be eligible for hardship withdrawal.
     9.8 Restriction on Distributions of Elective Deferrals. Amounts
attributable to Elective Deferral Contributions and QNECs under this Plan may
not be distributed prior to the occurrence of one of the following events:
severance of employment with all Employers, the Participant’s death or
Disability, the Participant’s attaining age fifty-nine and one-half (591/2), or
the Participant’s establishment of a hardship under 9.7.
ARTICLE X. METHOD OF PAYMENT OF BENEFITS
     10.1 Distribution of Benefits.
          10.1-1 Lump Sum Payment. Upon the occurrence of any of the events
specified in Article IX requiring or permitting a distribution of benefits to a
Participant or his or her beneficiary, the Administrator shall instruct the
Trustee to distribute benefits, determined in accordance with 10.2, below, in a
single lump sum payment unless the Trustee receives a timely election for a
different form of benefit. If the present value of a Participant’s benefit
(excluding the balance in any rollover account) exceeds $1,000 ($5,000 prior to
March 28, 2005) and the benefit is Immediately Distributable (see 10.1-3), the
Administrator must obtain the consent of the Participant (and Participant’s
spouse, if married) for the distribution. Consent of both the Participant and
his or her spouse shall be written and in the case of the spouse either
notarized or witnessed by a plan representative.
          10.1-2 Consent to Distribution. The consent of the Participant and the
Participant’s spouse (if applicable) shall be obtained in writing within the one
hundred eighty (180) day period ending on the annuity starting date. The annuity
starting date is the first day of the first period for which an amount is paid
as an annuity or any other form. The Administrator shall notify the
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Participant and the Participant’s spouse of the right to defer any distribution
until the benefit is no longer Immediately Distributable and shall explain any
optional form of benefit under the Plan. Neither the consent of the Participant
nor the Participant’s spouse shall be required to the extent that a distribution
is permitted to be made without consent (under 10.1-1) or required to be made to
satisfy §§ 401(a)(9) or 415 of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option, the Participant’s account
balance may, without the Participant’s consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in § 4975(e)(7) of the Code) within the
same controlled group.
          10.1-3 Immediately Distributable. An account balance is immediately
distributable upon occurrence of a distribution event under Article IX prior to
the time the Participant attains the later of age 62 or the Normal Retirement
Date under Section 9.1.
          10.1-4 Scope and Revocation of Consent. Any consent by a spouse
obtained under this provision (or establishment that the consent of a spouse may
not be obtained by means of proof to the satisfaction of the Administrator that
there is no spouse or that the spouse cannot be located) shall be effective only
with respect to such spouse and no subsequent spouse. A consent that permits
designations by the Participant without any requirement of further consent by
such spouse must acknowledge that the spouse has the right to limit consent to a
specific beneficiary, and a specific form of benefit where applicable, and that
the spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the spouse at any time before the commencement of benefits. The number of
revocations shall not be limited.
          10.1-5 Social Security Not Relevant. Notwithstanding any other
provisions of this Plan, any benefits payable under this Plan shall not be
decreased by reason of any increase in the benefit levels payable under Title II
of the Social Security Act or any increase in the wage base under Title II.
     10.2 Valuation of Account. The benefit payable to a Participant or his or
her beneficiary in accordance with Article IX shall be determined as of the
Valuation Date immediately preceding the date of distribution. Contributions
allocated to a Participant under Articles V and VI, but which have not yet been
deposited to the Participant’s account as of the date of distribution, shall not
be payable to such Participant until such contributions have actually been
deposited.
     10.3 Time of Distribution.
          10.3-1 General Rule. Subject to the consent requirements of 10.1, the
benefit payable to a Participant or beneficiary shall be made as soon as
administratively practicable following the occurrence of a distribution event
described in Article IX and, if applicable, such Participant’s request and
consent to such distribution.
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          10.3-2 Statutory Deadlines. Unless the Participant otherwise elects in
writing, payments hereunder must begin not later than sixty (60) days after
(a) or (b):
               (a) The end of the Plan Year in which the Participant (1) attains
age sixty (60), (2) reaches the tenth anniversary of the date he or she
commenced participation in the Plan, or (3) severs employment, whichever of (1),
(2) or (3) is latest; or
               (b) If the Trustee or Administrator requires information which is
not available before that latest date under (a), the payments shall begin no
later than sixty (60) days after that information is supplied.
          10.3-3 Election to Defer Payment.
               (a) Written Election. A Participant may elect in writing that a
payment to him or her of any benefit under this Plan will commence at a date
later than the date specified under 10.3-1 and 10.3-2 above. Any such election
shall be signed by the Participant and shall state the date payments are to
commence. In any event, a Participant making such election shall be required to
commence the receipt of his or her retirement benefit no later than the
Participant’s required beginning date under Article XI.
               (b) Deemed Election. Notwithstanding the foregoing, the failure
of a Participant and a spouse to consent to a distribution while a benefit is
Immediately Distributable, within the meaning of 10.1-3 of the Plan, shall be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
     10.4 Form of Payment.
          10.4-1 Cash Payment. Except as provided in section 10.4-2, all
distributions from the Plan shall be made in the form of cash.
          10.4-2 In-Kind Distributions. In the following circumstances, the Plan
shall make an in-kind distribution of benefits.
               (a) Company Stock. If the Participant’s Plan account holds fifty
(50) or more shares of Company stock and the Participant or beneficiary requests
an in-kind distribution of the shares, the Administrator shall instruct the
Trustee to distribute the shares in lieu of their cash equivalent, in a manner
that is consistent with the rules set forth in 1.02-2(f) of the Nordstrom
Retirement Plan Participant Investment Appendix.
               (b) Non-Marketable Security. If the Participant’s Plan account
holds a security that is not publicly traded on an established securities market
(i.e., a non-publicly traded security) at the time that the Participant or
beneficiary requests a distribution, the Administrator shall instruct the
Trustee to make an in-kind distribution of such non-publicly traded security, in
lieu of cash.
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               (c) Insurance. If a Participant has elected to have a portion of
his or her Plan account invested in insurance in accordance with Article VII and
whether or not any such policy is in force at the time of the distribution to
the Participant, the aggregate of the premiums paid for the policy or policies
on his or her life shall be deducted from the amount of his or her vested
interest and any policy or policies then in effect on his or her life shall be
distributed to him or her as a part of his or her vested interest.
     10.5 Qualified Domestic Relations Orders. Subject to the procedures
established by the Administrator under 14.3, benefits may be paid from the
nonforfeitable balance of a Participant’s accounts in accordance with a
qualified domestic relations order (“QDRO”) as defined in § 414(p) of the Code
without regard to whether the Participant has attained the “earliest retirement
age,” as defined in § 414(p) of the Code.
     10.6 Partial Withdrawals. A Participant who is entitled to a distribution
under Article IX may elect partial withdrawals of his or her vested account
balance in lieu of a lump sum distribution of his or her entire vested account
balance. No withdrawal of less than $5,000 (or the balance of the account, if
less) may be made. Partial withdrawals are subject to the consent requirements
of 10.1 and may be subject to a reasonable administrative fee. For purposes of
withdrawals under this section, a Participant’s account shall be valued as of
the Valuation Date immediately preceding the date of withdrawal. Amounts in a
Participant’s designated Roth contributions account are not eligible for partial
withdrawals.
     10.7 Rollovers.
          10.7-1 Direct Rollover Election. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a distributee’s election under
this section, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
          10.7-2 Definitions. For purposes of this section, certain terms shall
be defined as follows:
               (a) Eligible Rollover Distribution.
                    (1) General Rule. An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee and the distributee’s designated beneficiary, or for a specified
period of ten (10) years or more; any distribution to the extent such
distribution is required under § 401(a)(9) of the Code; any withdrawal on
account of hardship; or, except as provided in (2), the portion of any
distribution that is not includible in the distributee’s gross income
(disregarding these rollover rules).
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                    (2) Special Rule for After-tax Amounts. A portion of a
distribution shall not fail to be an eligible rollover distribution merely
because the portion consists of after-tax employee contributions that are not
includible in gross income upon distribution. However, any such portion shall be
distributed only to an individual retirement account or annuity described in
Code § 408(a) or (b), or to a qualified defined contribution plan described in
Code § 401(a) or § 403(a) that agrees to separately account for transferred
amounts, including separately accounting for the portion that is includible in
gross income and the portion that is not includible in gross income.
               (b) Eligible Retirement Plan. An eligible retirement plan is one
of the following that accepts the Participant’s eligible rollover distribution:
                    (1) an individual retirement account described in Code
§ 408(a);
                    (2) an individual retirement annuity described in Code §
408(b);
                    (3) an annuity plan described in Code § 403(a);
                    (4) an annuity contract described in Code § 403(b);
                    (5) a qualified trust described in Code § 401(a);
                    (6) an eligible deferred compensation plan described in
§ 457(b) of the Code that is maintained by a state, a political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state and that agrees to separately account for amounts transferred into such
plan from this Plan; or
                    (7) for eligible rollover distributions after December 31,
2007, a Roth individual retirement account described in Code § 408A.
This definition of an “eligible retirement plan” also applies in the case of a
distribution to a Participant’s surviving spouse, or to a spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in Section 10.5. For a non-spouse designated beneficiary, an “eligible
retirement plan” means only an individual retirement account under Code § 408(a)
or an individual retirement annuity under Code § 408(b) and only if the transfer
is a direct rollover.
               (c) Distributee: A distributee includes an employee or former
employee. In addition, the employee’s or former employee’s surviving spouse and
the employee’s or former employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in § 414(p) of the
Code, are distributees with regard to the interest of the spouse or former
spouse. Effective for eligible rollover distributions on and after March 1,
2007, a distributee includes the Participant’s non-spouse designated
beneficiary.
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               (d) Direct Rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
          10.7-3 Rollover of Designated Roth Contributions. A direct rollover of
a distribution from a Participant’s account attributable to designated Roth
contributions under the Plan can be made only to a designated Roth contributions
account under an applicable retirement plan described in Code Section 402A(e)(1)
or to a Roth IRA described in Code Section 408A, and only to the extent the
rollover is permitted under the rules of Code Section 402(c).
     10.8 Administration of Unclaimed Benefits.
          10.8-1 Forfeiture of Unclaimed Benefits. If at, after, or during the
time when a benefit is payable to any Participant or beneficiary, the
Administrator, upon request of the Trustee or at its own instance, mails to the
Participant or beneficiary at his or her last known address, a written demand
for his or her then address, or for satisfactory evidence of his or her
continued life, or both, and, if the Participant or beneficiary fails to furnish
the information to the Administrator within thirty (30) days from the mailing of
the demand, then the benefit shall be forfeited and held in the forfeiture
suspense account under section 6.5, subject to restoration under section 10.8-2,
below.
          10.8-2 Restoration of Unclaimed Benefits. If a Participant or
beneficiary whose benefit has been forfeited under section 10.8-1 above
thereafter is located and requests payment of such benefits, and if the Plan has
not terminated (or if the Plan has been terminated, all benefits have not yet
been distributed), then the benefit of such Participant or beneficiary shall be
restored, without any adjustment for investment earnings through the restoration
date. The Administrator shall restore the benefit using the forfeiture suspense
account pursuant to section 6.5-3. However, if any such unclaimed benefit has
not been restored by the time the Plan terminates and all benefits are
distributed, the forfeiture of such unclaimed benefit will be irrevocable.
ARTICLE XI. MINIMUM DISTRIBUTION REQUIREMENTS
     11.1 General Rules
          11.1-1 Effective Date. The provisions of this article will apply for
purposes of determining required minimum distributions for calendar years
beginning on and after January 1, 2003.
          11.1-2 Precedence. The requirements of this article will take
precedence over any inconsistent provisions of the Plan.
          11.1-3 Requirements of Treasury Regulations Incorporated. All
distributions required under this article will be determined and made in
accordance with the Treasury regulations under Code § 401(a)(9).
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          11.1-4 TEFRA Section 242(b)(2) Elections. Notwithstanding the other
provisions of this article, distributions may be made under a designation made
before January 1, 1984, in accordance with section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act (TEFRA) and the provisions of the plan that relate
to section 242(b)(2) of TEFRA.
     11.2 Time and Manner of Distribution.
          11.2-1 Required Beginning Date. The Participant’s entire interest will
be distributed, or begin to be distributed, to the Participant no later than the
Participant’s required beginning date, as defined in section 11.5-5.
          11.2-2 Death of Participant Before Distributions Begin. If the
Participant dies before distributions begin, the Participant’s entire interest
will be distributed, or begin to be distributed, no later than as follows:
               (a) Surviving Spouse Beneficiary. If the Participant’s surviving
spouse is the Participant’s sole designated beneficiary, then distributions to
the surviving spouse must begin by December 31 of the calendar year immediately
following the calendar year in which the Participant dies, or by December 31 of
the calendar year in which the Participant would have attained age 701/2, if
later.
               (b) Non-Spouse Beneficiary. If the Participant’s surviving spouse
is not the Participant’s sole designated beneficiary, then distributions to the
designated beneficiary must begin by December 31 of the calendar year
immediately following the calendar year in which the Participant dies.
               (c) Absence of Beneficiary. If there is no designated beneficiary
as of September 30 of the year following the year of the Participant’s death,
the Participant’s entire interest will be distributed by December 31 of the
calendar year containing the fifth anniversary of the Participant’s death.
               (d) Death of Surviving Spouse. If the Participant’s surviving
spouse is the Participant’s sole designated beneficiary and the surviving spouse
dies after the Participant but before distributions to the surviving spouse
begin, this section 11.2-2, other than section 11.2-2(a), will apply as if the
surviving spouse were the Participant.
     For purposes of this section 11.2 and section 11.4, unless section
11.2-2(d) applies, distributions are considered to begin on the Participant’s
required beginning date. If section 11.2-2(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 11.2-2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant
before the Participant’s required beginning date (or to the Participant’s
surviving spouse before the date distributions are required to begin to the
surviving spouse under section 11.2-2(a)), the date distributions are considered
to begin is the date distributions actually commence.
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          11.2-3 Forms of Distribution. Unless the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the required beginning date, as of the first
distribution calendar year distributions will be made in accordance with
sections 11.3 and 11.4 of this article. If the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of
Code § 401(a)(9) and the Treasury regulations.
     11.3 Required Minimum Distributions During Participant’s Lifetime.
          11.3-1 Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Participant’s lifetime, the minimum amount that will
be distributed for each distribution calendar year is the lesser of:
               (a) General Rule. The quotient obtained by dividing the
Participant’s account balance by the distribution period in the Uniform Lifetime
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations, using the
Participant’s age as of the Participant’s birthday in the distribution calendar
year; or
               (b) Surviving Spouse. If the Participant’s sole designated
beneficiary for the distribution calendar year is the Participant’s spouse, the
quotient obtained by dividing the Participant’s account balance by the number in
the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the
Treasury regulations, using the Participant’s and spouse’s attained ages as of
the Participant’s and spouse’s birthdays in the distribution calendar year.
          11.3-2 Lifetime Required Minimum Distributions Continue Through Year
of Participant’s Death. Required minimum distributions will be determined under
this section 11.3 beginning with the first distribution calendar year and up to
and including the distribution calendar year that includes the Participant’s
date of death.
     11.4 Required Minimum Distributions After Participant’s Death.
          11.4-1 Death On or After Date Distributions Begin.
               (a) Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date required minimum distributions begin and
there is a designated beneficiary, the minimum amount that will be distributed
for each distribution calendar year after the year of the Participant’s death is
the quotient obtained by dividing the Participant’s account balance by the
longer of the remaining life expectancy of the Participant or the remaining life
expectancy of the Participant’s designated beneficiary, determined as follows:
                    (1) The Participant’s remaining life expectancy is
calculated using the age of the Participant in the year of death, reduced by one
for each subsequent year.
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                    (2) If the Participant’s surviving spouse is the
Participant’s sole designated beneficiary, the remaining life expectancy of the
surviving spouse is calculated for each distribution calendar year after the
year of the Participant’s death using the surviving spouse’s age as of the
spouse’s birthday in that year. For distribution calendar years after the year
of the surviving spouse’s death, the remaining life expectancy of the surviving
spouse is calculated using the age of the surviving spouse as of the spouse’s
birthday in the calendar year of the spouse’s death, reduced by one for each
subsequent calendar year.
                    (3) If the Participant’s surviving spouse is not the
Participant’s sole designated beneficiary, the designated beneficiary’s
remaining life expectancy is calculated using the age of the beneficiary in the
year following the year of the Participant’s death, reduced by one for each
subsequent year.
               (b) No Designated Beneficiary. If the Participant dies on or
after the date required minimum distributions begin and there is no designated
beneficiary as of September 30 of the year after the year of the Participant’s
death, the minimum amount that will be distributed for each distribution
calendar year after the year of the Participant’s death is the quotient obtained
by dividing the Participant’s account balance by the Participant’s remaining
life expectancy calculated using the age of the Participant in the year of
death, reduced by one for each subsequent year.
          11.4-2 Death Before Date Distributions Begin.
               (a) Participant Survived by Designated Beneficiary. If the
Participant dies before the date required minimum distributions begin and there
is a designated beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant’s death is the
quotient obtained by dividing the Participant’s account balance by the remaining
life expectancy of the Participant’s designated beneficiary, determined as
provided in section 11.4-1.
               (b) No Designated Beneficiary. If the Participant dies before the
date required minimum distributions begin and there is no designated beneficiary
as of September 30 of the year following the year of the Participant’s death,
distribution of the Participant’s entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.
               (c) Death of Surviving Spouse Before Distributions to Surviving
Spouse Are Required to Begin. If the Participant dies before the date required
minimum distributions begin, the Participant’s surviving spouse is the
Participant’s sole designated beneficiary, and the surviving spouse dies before
distributions are required to begin to the surviving spouse under section
11.2-2(a), this section 11.4-2 will apply as if the surviving spouse were the
Participant.
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     11.5 Definitions.
          11.5-1 Designated beneficiary. The individual who is designated as the
beneficiary under section 9.3 of the Plan is the designated beneficiary under
Code § 401(a)(9) and section 1.401(a)(9)-1, Q&A-4 of the Treasury regulations.
For purposes of this Article XI, if the Participant has not designated a
beneficiary or if a Participant-designated beneficiary does not survive the
Participant, then the designated beneficiary shall be determined under the
priority rules set forth in section 9.3-4(a) through (d). If there is more than
one individual within the highest priority class under 9.3-4(a) through (d), the
individual with the shortest life expectancy will be the designated beneficiary
for purposes of Article XI.
          11.5-2 Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year that contains the Participant’s required beginning
date. For distributions beginning after the Participant’s death, the first
distribution calendar year is the calendar year in which distributions are
required to begin under section 11.2. The required minimum distribution for the
Participant’s first distribution calendar year will be made on or before the
Participant’s required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the Participant’s required beginning
date occurs, will be made on or before December 31 of that distribution calendar
year.
          11.5-3 Life expectancy. Life expectancy as computed by use of the
Single Life Table in section 1.401(a)(9)-9 of the Treasury regulations.
          11.5-4 Participant’s account balance. The account balance as of the
last Valuation Date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the account balance
as of dates in the valuation calendar year after the Valuation Date and
decreased by distributions made in the valuation calendar year after the
Valuation Date. The account balance for the valuation calendar year includes any
amounts rolled over or transferred to the plan either in the valuation calendar
year or in the distribution calendar year if distributed or transferred in the
valuation calendar year.
          11.5-5 Required beginning date.
               (a) Permissive Rule. Participants who remain Employees, and who
are not five percent (5%) owners (described in 11.5-5(c)), may elect to continue
to treat their required beginning date as the first day of April of the calendar
year following the calendar year in which the Participant attains age seventy
and one-half (701/2).
               (b) Mandatory Rule.
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                    (1) Non Five Percent (5%) Owner. The required beginning date
of a Participant who is not a five percent (5%) owner is the first day of April
of the calendar year following the later of the calendar year in which the
Participant attains age seventy and one-half (701/2), or the calendar year in
which the Participant retires.
                    (2) Five Percent (5%) Owner. The required beginning date of
a Participant who is a five percent (5%) owner during any year beginning after
December 31, 1979, is the first day of April following the later of:
                         (A) the calendar year in which the Participant attains
age seventy and one-half (701/2); or
                         (B) the earlier of the calendar year in which the
Participant becomes a five percent (5%) owner, or the calendar year in which the
Participant retires.
               (c) Five Percent (5%) Owner.
                    (1) Defined. A Participant is treated as a five percent (5%)
owner for purposes of this section if such Participant is a five percent (5%)
owner as defined in § 416(i) of the Code (determined in accordance with § 416
but without regard to whether the plan is top heavy) at any time during the Plan
Year ending with or within the calendar year in which such owner attains age
sixty-six and one-half (661/2) or any subsequent plan year.
                    (2) Continued Distribution. Once distributions have begun to
a five percent (5%) owner under this section, they must continue to be
distributed, even if the Participant ceases to be a five percent (5%) owner in a
subsequent year.
ARTICLE XII. TOP HEAVY PLANS
     12.1 Effective Date. This article shall apply for purposes of determining
whether the Plan is a top-heavy plan under Code § 416(g) and whether the Plan
satisfies the minimum benefits requirements under Code § 416(c) for Plan Years
beginning after December 31, 2001.
     12.2 Effect of Top Heavy Plan Status. In the event that the Plan is
determined to be a “top heavy plan” as defined in 12.3, the Plan shall comply
with the provisions of Section 12.4, in addition to meeting the requirements set
forth elsewhere in this Plan.
     12.3 Determination of Top Heavy Status. The determination of top heavy
status will be made with regard to the following defined terms:
          12.3-1 Determination Date. The last day of the preceding Plan Year,
or, in the case of the first Plan Year, the last day of that Plan Year.
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          12.3-2 Key Employee. An Employee (including a deceased Employee or a
beneficiary of such Employee) who at any time during the Plan Year which
includes the Determination Date is any of the following (a), (b), or (c):
               (a) Officer. An officer of the Employer (as that term is defined
within the meaning of the regulations under Code § 416) whose annual
compensation is greater than $130,000 (as adjusted for cost of living for Plan
Years beginning after December 31, 2002). No more than fifty (50) Employees
shall be treated as officers.
               (b) Five Percent (5%) Owner. A “five percent (5%) owner” of the
Employer. “Five percent (5%) owner” means any person who owns (or is considered
as owning within the meaning of Code § 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five percent
(5%) of the total combined voting power of all stock of the Employer.
               (c) One Percent (1%) Owner. A “one percent (1%) owner” of the
Employer having annual compensation from the Employer of more than $150,000.
“One percent (1%) owner” means any person who owns (or is considered as owning
within the meaning of Code § 318) more than one percent (1%) of the outstanding
stock of the Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer. In determining whether
an individual has annual compensation of more than $150,000, annual compensation
from each employer required to be aggregated under Code §§ 414(b), (c) and
(m) shall be taken into account.
               (d) Determining Ownership.
                    (1) Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code §§ 414(b), (c) and
(m) shall be treated as separate employers.
                    (2) Attribution of Ownership. In the case of a corporation,
for purposes of applying the ownership attribution rules of Code § 318 in
determining Key Employee status, subparagraph (C) of Code § 318(a)(2) shall be
applied by substituting “five percent (5%)” for “fifty percent (50%).” If an
entity is not a corporation, ownership attribution rules shall be applied in
accordance with regulations promulgated by the Secretary of the Treasury based
upon the principles of § 318(a), as herein revised.
               (e) Annual Compensation. For purposes of this Article XII, the
term annual compensation means compensation as defined in § 415(c)(3) of the
Code, but including amounts contributed by Employer pursuant to a salary
reduction agreement which are excludable from Employee’s gross income under §§
125, 402(a)(8), 402(h) or 403(b) of the Code. Effective for Plan Years
commencing on and after January 1, 1998, the above reference to compensation as
defined in § 415(c)(3) shall also include amounts excludible from the Employee’s
gross income under § 132(f).
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          12.3-3 Non-Key Employee. Any Employee who does not meet the definition
of a Key Employee pursuant to 12.3-2 above, is a Non-Key Employee.
          12.3-4 Top Heavy Plan. This Plan will be a top heavy plan if, with
respect to the applicable Plan Year (commencing after December 31, 1983), as of
the determination date for that year the Plan has a top heavy percentage that
exceeds sixty percent (60%).
               (a) Percentage. “Top heavy percentage” shall be that percentage
which equals a fraction,
                    (1) The numerator of which is the sum of the present value
of accrued benefits of all Key Employees as of the determination date,
contributions for all Key Employees which are due but unpaid as of the
determination date, and distributions made to Key Employees during the one year
period ending on the determination date, and
                    (2) The denominator of which is the sum of the present value
of accrued benefits for all Employees as of the determination date, total
contributions for all Participants due but unpaid as of the determination date,
and total distributions made to Participants during the one year period ending
on the determination date.
                    (3) However, in the case of a distribution made for a reason
other than severance from employment, death or disability, the above provisions
shall be applied by substituting “five year period” for “one year period.”
               (b) Related Rules. For purposes of calculating the top heavy
percentage under 12.3-4(a):
                    (1) Accrued Benefit. The present value of a Participant’s
accrued benefit shall include: (A) in the case of a defined contribution plan,
that Participant’s account balance (including Catch-up Contributions Accounts);
(B) in the case of a defined benefit plan, the present value of the accrued
benefits of such individual determined as of the most recent valuation date
which is within the twelve (12) month period ending on the determination date;
(C) the accrued benefit attributable to nondeductible employee contributions;
and (D) the accrued benefit of a participant other than a Key employee shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the employer, or (ii) if
there is not such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of § 411(b)(1)(C) of
the Code.
                    (2) Distribution. In considering distributions within the
one year period (or five year period, as appropriate) ending on the
determination date: (A) all distributions from this Plan and distributions from
terminated plans which would have been required to be aggregated had they not
been terminated, must be considered; and (B) no benefit attributable to
deductible contributions, or to amounts rolled over or transferred to this Plan
from the Plan of another employer after December 31, 1983, shall be considered
in determining a Participant’s accrued benefit.
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                    (3) Exclusions. The following exclusions shall apply:
(A) contributions, accrued benefits, and distributions on behalf of a Non-Key
Employee who was formerly a Key Employee shall be disregarded in determining the
top heavy percentage; and (B) for Plan Years beginning after December 31, 2001,
if a Participant or former Participant has not performed services for any
Employer maintaining the Plan at any time during the one year period ending on
the determination date, the accrued benefit for such Participant shall not be
taken into account in determining top heavy plan status.
               (c) Aggregation With Other Plans. If the Employer or an entity
affiliated with the Employer pursuant to Code §§ 414(b), (c) or (m) maintains
other qualified plans (including simplified employee pension plans), a plan is a
top heavy plan only to the extent that the combined top heavy percentage for the
plan and all aggregated plans exceeds sixty percent (60%). For the purpose of
making this determination:
                    (1) Mandatory Aggregation. All qualified plans of the
Employer or an entity affiliated with the Employer pursuant to Code §§ 414(b),
(c) or (m) which include one or more Key Employees as Participants, and all
qualified plans which must be considered in order for a plan including Key
Employee Participants to meet the requirements of Code §§ 401(a)(4) or 410, must
be aggregated.
                    (2) Permitted Aggregation. Additional qualified plans of the
Employer or an entity affiliated with the Employer pursuant to Code §§ 414(b),
(c) or (m), if such plans, when aggregated with this Plan, satisfy the
requirements of Code §§ 401(a)(4) and 410, may be aggregated.
                    (3) Determination Date. Where multiple plans with differing
determination dates are to be aggregated for the determination of top heavy
status, the top heavy percentage shall be calculated by reference to
determination dates for all plans falling within the same calendar year.
     12.4 Minimum Employer Contributions to Top Heavy Plans.
          12.4-1 Minimum Contribution.
               (a) General Rule. Except as provided in 12.4-1(c) below, for each
Plan Year that this Plan is determined to be a top heavy plan, a Participant who
is a Non-Key Employee shall have allocated to his or her account (in either this
Plan or another defined contribution plan maintained by an Employer) a
contribution equal to the product of that Participant’s Compensation, as defined
in 2.6, and the minimum top heavy contribution rate. The minimum top heavy
allocation, if any, required shall not be forfeited under §§ 411(a)(3)(B) or
411(a)(3)(D).
               (b) Minimum Top Heavy Contribution Rate. Subject to 12.4-1(c)
below, the minimum top heavy contribution rate for a Participant who is a
Non-Key Employee shall equal the lesser of three percent (3%) of such Non-Key
Employee’s compensation or the highest
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contribution rate (excluding Catch-up Contributions for the Plan Year containing
the determination date) made to the account of a Key Employee, provided that the
contribution rate shall not be less than three percent (3%) if this Plan is
required to be aggregated with a defined benefit plan in order for that plan to
meet the requirements of Code §§ 401(a) and 410(b). The term “contribution rate”
shall mean the percentage derived by dividing a numerator, which is the sum of
Employer contributions (including amounts deferred at the Employee’s election to
a Plan described in § 401(k) of the Code but excluding contributions to Social
Security) and forfeitures allocated to a Participant’s account, by a denominator
equal to the Participant’s Compensation. For the purposes of this 12.4, the term
“Participant who is a Non-Key Employee” shall include all Non-Key Employees who
have become Participants but who have failed to complete one thousand (1,000)
Hours of Service during the Plan Year and those Non-Key Employees who would be
eligible to participate in the Plan except that their compensation does not
exceed a specified minimum level or they have failed to make a mandatory
employee contribution or an elective contribution to a plan described in §
401(k) of the Code. Effective for Plan Years beginning after December 31, 2001,
Employer Matching Contributions to this Plan shall count toward the minimum top
heavy contribution rate (and any reduction to the contribution rate that results
will not be taken into account in determining whether the Plan impermissibly
conditions benefits on the making of elective deferrals under Code §
401(k)(4)(A)).
               (c) Exceptions for Defined Benefit Plan. Notwithstanding
12.4-1(a) and (b):
                    (1) If a defined benefit pension plan providing benefits for
one or more Key Employees is maintained by the Employer, and if such defined
benefit pension plan depends upon this Plan to satisfy the nondiscrimination
rules of Code § 401(a)(4) or the coverage rules of Code § 410 (or if another
plan benefiting the Key Employee so depends on such defined benefit plan) the
guaranteed minimum top heavy contribution for a Non-Key Employee shall be three
percent (3%) of his or her compensation regardless of the contribution rate for
the Key Employees.
                    (2) If in addition to this Plan the Employer maintains a
qualified defined benefit pension plan which Provides a minimum benefit to
Non-Key Employee Participants pursuant to Code § 416(c)(1), no minimum top heavy
employer contribution need be made for such Participants under this Plan.
          12.4-2 Minimum Top Heavy Contributions and/or Benefits in Multiple
Plans. In the event that a Non-Key Employee participates in both this Plan and a
defined benefit plan, it shall not be necessary to provide such Non-Key Employee
with both a minimum top heavy contribution under this Plan (and other defined
contribution plans) and a minimum benefit under the defined benefit plan. The
minimum top heavy contribution and minimum benefit requirements with respect to
all such Plans shall be deemed satisfied if such Non-Key Employee is provided
with the minimum benefit under the defined benefit plan.
          12.4-3 Make-Up Contribution. If the contribution rate for the Plan
Year with respect to a Non-Key Employee is less than the minimum top heavy
contribution required, the
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Employer will increase its contribution for such Employee to the extent
necessary to cause the Employee’s contribution rate for the Plan Year to equal
the required minimum top heavy contribution. The Employer will cause this
make-up contribution to be made from Employer’s net profits.
          12.4-4 Vesting Schedule. For each Plan Year in which this Plan is
determined to be top heavy, Employer contributions to the Plan on behalf of
Non-Key Employees shall vest under the following schedule if it is more
favorable to the Non-Key Employees than the schedule set forth in Article VIII:

      Years of Service   Vested Percentage 1 or less   0 2   20 3   40 4   60 5
  80 6 or more   100

ARTICLE XIII. PARTIES RESPONSIBLE FOR IMPLEMENTING THE PLAN
     13.1 Plan Sponsor. The Company is the Plan sponsor for purposes of ERISA
and designates in 13.1-1 to 13.1-6 below how Plan powers and duties shall be
performed.
          13.1-1 Company Powers and Duties. The Company shall have the powers
and duties set forth in the following (a)-(e):
               (a) Plan and Trust Documents. To make all Plan and Trust
documents needed or desired to establish and operate the Plan and the separate
Trust Fund, subject to the direction of the Board, or the Executive Vice
President Human Resources and Diversity Affairs, as applicable.
               (b) Plan Administration. To perform all duties as Plan
Administrator under 13.1-4, Article III and elsewhere provided in the Plan and
Trust documents.
               (c) Service Providers. To make and monitor the performance of all
agreements with any third party administrative service provider for the Plan and
Trust acting as accountant, actuary, asset custodian, attorney, auditor,
contract administrator, recordkeeper or in any other administrative capacity.
               (d) Plan Changes. To recommend to the Board or Executive Vice
President Human Resources and Diversity Affairs any changes in Plan or Trust
terms which the Company deems appropriate.
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               (e) Other. To take any action deemed necessary or desirable to
cause the Plan and Trust to be operated according to the Plan and Trust
documents and applicable law.
               13.1-2 Board Powers and Duties. Subject to the liability
limitation in (f) below, the Board of Directors of the Company (“Board”) has the
exclusive powers set forth in the following (a)-(e):
               (a) Plan and Trust Terms. To establish, amend or terminate the
Plan and the related Trust Agreement, subject only to 13.1-3 and Article XV.
               (b) Funding Policy. To determine that an appropriate funding
policy, consistent with the objectives of the Plan, the Trust Agreement and the
requirements of ERISA, is adopted and implemented.
               (c) Contributions. To determine the amount and manner of payment
of all Company contributions to the Trust.
               (d) Indemnification. To determine the scope of any
indemnification by the Company to any person or entity acting as a fiduciary or
otherwise under the Plan or Trust, provide appropriate insurance and bonding
coverage of any Employee of the Company acting in such capacity, and determine
whether the Company shall furnish such insurance or bonding coverage to any
other person or entity, all to the extent permitted by law.
               (e) Committees. To establish any Committee(s) of the Board deemed
appropriate for Plan or Trust purposes.
               (f) Liability Limitation. The Board has no administrative or
investment authority or functions, and no member of the Board shall be a Plan
fiduciary because of such Board membership.
          13.1-3 Executive Vice President Human Resources and Diversity Affairs
Powers and Duties. Until such time as the Board shall modify, revoke or rescind
such authority, all Employer or Plan sponsor functions and responsibilities
vested in the Company shall be exercised pursuant to authorization by the
Executive Vice President Human Resources and Diversity Affairs of the Company.
Without specific Board approval, the Executive Vice President Human Resources
and Diversity Affairs has the powers and duties set forth in the following
(a)-(d):
               (a) Technical Amendments. To amend the Plan and Trust Agreement
to make technical, administrative, editorial and legal compliance changes
recommended by Corporate Employee Benefits to comply with applicable law or to
simplify or clarify the Plan.
               (b) Substantive Amendments. To take all actions necessary to
implement (after approval by the Chairman or the Board) any amendments relating
to Plan and Trust benefit or governance provisions.
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               (c) Plan Administration. To delegate or terminate the power and
authority of any person(s) or entity(ies) responsible for performance and
administration of the Plan.
               (d) Committees. To establish, maintain or terminate the
existence, membership and powers of any Committee for any Plan purpose, except
any Committee established by the Board.
          13.1-4 Administrator Powers and Duties. The Plan shall be administered
by the Company, herein called the “Administrator.” The Company shall be the
“administrator” for purposes of ERISA § 3(16) and the named fiduciary for
purposes of Plan administration. The Administrator shall have all powers
necessary to carry out the provisions of the Plan, including those set forth in
Article III, but excluding those relating to the custody, management and control
of Trust assets and those allocated or delegated to others.
          13.1-5 Retirement Committee. Subject to the liability limitation under
(g), the Retirement Committee established by the Board shall have the powers and
duties set forth in the following (a)-(f):
               (a) Asset Fiduciaries. To make sure that Plan assets are held,
safeguarded, invested and distributed by persons or entities that agree to act
as the designated “fiduciary” within the meaning of § 3(21) and other fiduciary
provisions of ERISA for purposes of the applicable custodial, trusteeship,
investment management or other Plan asset functions.
               (b) Investment Policy. To establish the investment policy and
guidelines for investment of Plan assets.
               (c) Monitor Plan Asset Fiduciaries. To establish the policies and
procedures for periodic reporting by and review of performance by asset
fiduciaries, and to implement any changes which such Committee, in its
discretion, deems appropriate regarding such policies, procedures or
fiduciaries.
               (d) Monitor Plan Administration. To establish the policies and
procedures for periodic reporting by and review of performance by the
Administrator and service providers involved in Plan administration, and to
implement any changes which such Committee, in its discretion, deems appropriate
regarding Plan administration.
               (e) Contributions. To make sure that the Board is informed of the
actuarial and legal funding needs of the Plan when the Board determines the
Company’s contributions to the Plan.
               (f) Claims Review. To review and decide, as a committee or by its
authorized subcommittee, all appeals of denied claims under Article XVI.
               (g) Liability Limitation. The Retirement Committee has no
administrative or asset responsibility or control beyond the limited oversight
functions set forth
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above, and, subject only to applicable law, no member of such committee shall be
liable for errors, omissions or breaches by any fiduciary or service provider
having the actual power and authority to act.
          13.1-6 Investment Committee. Until such time as the Retirement
Committee shall modify, revoke or rescind such authority, an Investment
Committee shall be established with the following authority to act for the
Retirement Committee with respect to the performance of the Plan’s investment
vehicles and managers:
               (a) Performance Review. To review, monitor and evaluate, at
reasonable intervals, the performance of the Trustee(s), the investment
managers, investment vehicles and any other appointed or delegated fiduciaries
or other service providers to ensure that their performance has been in
compliance with the terms of the Plan and Trust documents, the investment policy
and applicable law, and satisfies the needs of the Plan, and to report all
findings and recommendations to the Retirement Committee.
               (b) Investment Service Providers. Subject to approval by or
procedures of the Retirement Committee, to make or terminate the power and
authority of any person(s) or entity(ies) responsible to hold, control, manage
or invest assets of the Trust, including (but not limited to) any Trustee,
custodian, investment manager, investment performance monitor or other provider
of services involving Trust assets.
     13.2 Plan Fiduciaries. The following 13.2-1 to 13.2-6 apply to any
individual or entity who is a “fiduciary” under ERISA § 3 (21) with respect to
Plan or Trust administration or assets:
          13.2-1 Authorization. Authority to act as a fiduciary shall be
conferred as provided under 13.1 and accepted in writing by the designated
fiduciary. Such authorization shall continue until the earliest of (a), (b) or
(c), as follows:
               (a) if the fiduciary is unable to act, or
               (b) the fiduciary is terminated pursuant to authority under this
Plan, or
               (c) upon the effective date of resignation by the fiduciary,
which can be no earlier than the 30th day after written notice of resignation.
          13.2-2 Qualifications of Fiduciary. Any individual, even if an
officer, director, Employee or shareholder of the Company, and any corporation,
partnership or other entity may serve as a fiduciary hereunder. All fiduciary
responsibility may be vested in any single individual, group of individuals,
corporation, partnership or other entity, or in any combination thereof, with
liability being joint and several; or fiduciary responsibility may be divided
among two (2) or more of the foregoing, with such duties and responsibilities as
are provided in the authorizing designation and liability being limited solely
to breach of the duties so imposed or conduct violating ERISA § 405(a).
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          13.2-3 Other Fiduciaries. The Company shall be the named fiduciary for
any other rights or duties imposed by ERISA upon a “named fiduciary” which are
not otherwise placed.
          13.2-4 Performance of Company Duties and Responsibilities. The Company
shall carry out its duties and responsibilities under the Plan through its
directors, officers and Employees, acting on behalf of and in the name of
Company in such respective capacities and not as individual fiduciaries.
          13.2-5 Scope of Responsibility. No fiduciary or other person or entity
responsible for any functions involving administration of the Plan or management
of Trust assets shall be obligated to perform any duty or responsibility which
has been allocated or delegated to another fiduciary pursuant to the Plan, the
Trust Agreement or the procedures established therein.
          13.2-6 Multiple Fiduciary Capacities. Nothing herein shall prohibit
any person or entity, or group of persons or entities, from serving in more than
one (1) fiduciary capacity with respect to the Plan.
     13.3 Plan Committees. Unless otherwise provided in the specific
authorization of the Committee, any Committee established under the Plan, having
either overall or specifically limited responsibility of a ministerial or
discretionary nature, as determined from time to time, shall be established and
operated as provided below in 13.3-1 to 13.3-6:
          13.3-1 Procedure for Establishing Committee. The party having
authority to establish the Committee shall designate by written instrument the
members of the Committee and the nature of the responsibilities the Committee is
to carry out under the Plan; provided, however, that if the responsibilities of
the Committee are fiduciary in nature, any such members shall consent in writing
to serve in such capacity.
          13.3-2 Committee Composition. The Committee shall be composed of three
(3) or more members. Membership in the Committee is limited to individuals who
are officers, directors, former directors or Employees of the Company.
          13.3-3 Committee Governance. The Committee shall appoint from its
members a chair and a secretary. The Committee may take any authorized action by
a majority vote, and any writing signed by a majority of such members shall have
the same effect and may be relied upon to the same extent as if signed by all
members.
          13.3-4 Procedures. To the extent consistent with the provisions of
this Plan, the Committee shall have the power to adopt such rules of procedure
and regulation as may be necessary for the proper execution of its duties.
          13.3-5 Vacancies. Any member of a Committee may resign on thirty
(30) days’ advance written notice. Any member of a Committee may be removed from
the Committee by the Board with or without cause. Removal of a Committee member
does not require notice to be effective. Any Committee member who is an Employee
but is not also an officer, director, or
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former director of the Company shall automatically cease to be a Committee
member effective upon the date such individual ceases to be an Employee of the
Company. All Committee vacancies shall be filled as soon as reasonably
practicable. Until a new appointment is made, the remaining members of the
Committee shall have authority to act although less than a quorum.
          13.3-6 Committee Compensation. No member of any Committee shall
receive any compensation for services as such, except that the Company may pay a
reasonable fee to any member who is not a Participant under the Plan, not to
exceed the amount paid to a Director to attend a Board meeting, for such
person’s attendance at any meeting of the Committee. Each member of the
Committee shall be reimbursed by the Company for reasonable travel and other
expenses actually incurred in attending meetings of the Committee and for any
other proper purpose in connection with duties as such member. No bond or other
security shall be required of any member of the Committee in such capacity,
except to the extent required by law.
     13.4 Limitation of Individual Liability. Subject to ERISA §§ 404 and 405,
any individual acting in the administration of the Plan or as a Committee member
shall be protected from personal liability as provided below in 13.4-1 to
13.4-3:
          13.4-1 Plan Benefits and Expenses. Such individual shall not be liable
personally, either individually or jointly, for any debts, obligations,
undertakings or benefit payments contracted or authorized in such capacity, but
such debts, obligations, undertakings and benefit payments shall be paid solely
and exclusively out of assets held in the Trust Fund.
          13.4-2 Investment. Such individual shall not be obligated to invest or
otherwise manage or control any portion of the assets held in the Trust Fund,
such obligation having been delegated to third party fiduciaries pursuant to
13.1.
          13.4-3 Other Responsible Party. Such individual shall not be
responsible for any duty or function allocated or delegated to another person or
entity pursuant to procedures hereunder, except to the extent that such
individual is responsible for the selection and supervision of such other person
or entity.
ARTICLE XIV. SPENDTHRIFT PROVISIONS
     14.1 Prohibition Against Assignment. The provisions of this Plan are
intended as personal protection for the Participants. A Participant may not
assign, anticipate or transfer any assets held for his or her benefit, including
amounts credited to his or her account. The benefits under this Plan are not
subject to seizure by legal process or in any way subject to the claims of the
Participant’s creditors, including, without limitation, any liability for
contracts, debts, torts, alimony or support of any relative. The Plan’s benefits
or the Trust assets may not be considered an asset of a Participant in the event
of his or her divorce, insolvency or bankruptcy. However, this Section 14.1
shall not apply to preclude the offset of a Participant’s benefits if the
Participant engages in misconduct with respect to the Plan as described in Code
§ 401(a)(13)(C).

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     14.2 Effect of Assignment. Any attempt by a Participant to assign,
anticipate, or transfer any assets held for his or her benefit under the terms
of this Plan shall be null and void.
     14.3 QDRO Exception. Notwithstanding 14.1 and 14.2, nothing in this
Article XIV shall prohibit the distribution of plan assets to a Participant’s
spouse or former spouse pursuant to a “qualified domestic relations order”
(“QDRO”) as that term is defined in Code § 414(p), including any domestic
relations order entered into before January 1, 1985, which Administrator
determines to treat as a QDRO. The Administrator shall establish reasonable
nondiscriminatory rules for determining the qualification and procedures for
handling domestic relations orders, which rules shall be in writing, shall
provide for prompt notification of prospective alternate payee under the order
of the procedures for designating a representative to receive copies of any
notifications.
ARTICLE XV. AMENDMENT AND TERMINATION OF PLAN
     15.1 Future of the Plan. The Company expects to continue the Plan
indefinitely. Future conditions, however, cannot be foreseen, and the Company
reserves the right to amend or terminate the Plan at any time.
     15.2 Company Right to Amend the Plan. The Company reserves the right, from
time to time, to modify, alter or amend this Plan, as well as the Trust herein
provided for, by action of the person or entity having power to amend under
13.1, subject to the following 15.2-1 to 15.2-2:
          15.2-1 Retroactive Effect. Any amendment may have retroactive effect
to comply with legal requirements, Plan design, original intent or actual
administrative practice, subject only to restrictions under 15.2-2.
          15.2-2 Restrictions. No amendment shall be made in violation of the
following (a)-(d):
               (a) Exclusive Benefit. No amendment shall make it possible, at
any time prior to the satisfaction of all liabilities with respect to Employees
and their beneficiaries under the Trust, for any part of the corpus or income of
the Trust to be used for, or diverted to, purposes other than for the exclusive
benefit of the participating Employees of the Company or their beneficiaries.
               (b) No Cut Back of Accrued Benefit. No amendment (including a
change in the actuarial basis for determining optional or early retirement
benefits) shall decrease a Participant’s benefit to the date of the amendment,
except to the extent permitted under Code § 412(c)(8). A Plan amendment which
results in (i) or (ii) with respect to benefits attributable to service before
the amendment shall be treated as reducing accrued benefits: (i) eliminating or
reducing an early retirement benefit or a retirement-type subsidy, or
(ii) eliminating an optional form of benefit. In the case of a retirement-type
subsidy, the preceding sentence shall apply only with respect to a Participant
who satisfies (either before or after the amendment) the pre-amendment
conditions for the subsidy. In general, a retirement-type subsidy is a subsidy
that continues after

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retirement, but does not include a qualified disability benefit, a medical
benefit, a Social Security supplement, a death benefit (including life
insurance), or a plant shutdown benefit (that does not continue after retirement
age).
               (c) No Cut Back of Vested Benefit. No amendment shall decrease a
Participant’s vested interest determined without regard to such amendment as of
the later of the date such amendment is adopted, or becomes effective.
               (d) Director. No amendment shall permit any director who has not
been an Employee to derive any benefits under the Plan.
     15.3 Company Right To Terminate the Plan.
          15.3-1 Termination Event. The Company may terminate this Plan at any
time, and the Plan shall in any case be considered to have terminated if the
Company shall completely discontinue contributions under the Plan or if the
Company shall go out of existence, unless prior to such event the Plan shall be
adopted and continued by a successor.
               (a) Suspension of Contributions. The Company reserves the right
to suspend contributions to this Plan at any time. A suspension is a temporary
cessation of contributions and does not constitute or require a termination of
the Plan. Such temporary discontinuance shall not constitute a formal
termination of the Plan and shall not preclude later contributions.
               (b) Sale of Business. This Plan shall also terminate upon the
dissolution, merger, or sale of all or substantially all of the assets of the
Company, unless the successor to the business of the Company agrees to continue
this Plan and Trust Fund by executing an appropriate supplemental agreement. If
such an agreement is made the successor shall succeed to all the rights, duties
and powers of Nordstrom, Inc. under this Plan and the employment of any Employee
who is retained in the employ of such successor shall not be deemed to have been
terminated or severed for any purpose hereunder.
               (c) Merger or Consolidation. In the case of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan,
each Participant of this Plan shall receive a benefit which is equal to the
benefit he/she would have been entitled to receive immediately before the merger
or consolidation as if the Plan had then terminated. Moreover, prior to any
transfer pursuant to this 15.3-1(c), the administrator of the transferee plan
shall provide adequate assurances and representations to the Administrator that
those portions of Participant accounts that are subject to the limitations of
9.8 as of the date of transfer shall subsequently remain subject to such
limitations under the transferee plan. However, this provision shall not be
construed to be a termination or discontinuance of the Plan or to be a guaranty
of a specified level of benefit from the Plan.
               (d) Effect of Dissolution, Bankruptcy, General Assignment. The
Plan shall be deemed terminated if the Company is dissolved or adjudicated
bankrupt, or makes a general

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assignment its assets (but not Trust assets) for the benefit of creditors,
unless a party having proper authority elects to continue the Plan.
          15.3-2 Termination Benefits and Expenses. In the event of such Plan
termination, the rights of each retired Participant and Participant to the
benefits accrued or credited to the date of such termination, to the extent then
funded, shall become one hundred percent (100%) vested on such termination and
shall thenceforth be nonforfeitable, and the assets in the Trust shall be used,
so far as they will extend, and subject to the conditions and limitations herein
contained:
               (a) Expenses. To pay all expenses and liabilities (absolute or
contingent) of the Trust Fund;
               (b) Benefits. To pay, provide or distribute, pursuant to
Article X, all remaining Trust Fund assets to the Participants in the
proportions determined by their respective accounts.
               (c) Source of Payments. To provide for benefit distribution by
payment from the Trust Fund or nontransferable annuities purchased from an
insurance company, with the right to commute any benefit amount on an actuarial
basis, all as determined by the Retirement Committee in the exercise of its
discretion.
               (d) Reversion to Company. To pay to the Company any residual
assets not allocated under Article XV, to the extent permitted by law.
     15.4 Partial Termination. In the event of a partial termination of this
Plan, 15.3 shall be considered as applying, at such time, only to those
Participants with respect to whom the Plan has been terminated. All other
Participants shall be unaffected by such termination to the fullest extent
allowable by then current law and regulations.
     15.5 Procedure for Plan Amendment or Termination. The amendment and
termination powers reserved in 13.1 and Article XV shall be executed as follows:
          15.5-1 Board Resolution or Chairman Action. Except as provided in
15.5-2, the Company may amend or terminate the Plan by execution of the
amendment by the Company Chairman, or pursuant to authorization in a resolution
adopted by the Board of Directors (or its Executive Committee) and delivered to
the Administrator, Retirement Committee and Trustee.
          15.5-2 Executive Vice President Human Resources and Diversity Affairs
Action. The Executive Vice President Human Resources and Diversity Affairs of
the Company may amend the Plan to make such changes as are authorized under
13.1-3 by designating such changes in writing to the Administrator, Retirement
Committee and Trustee.
          15.5-3 Proof of Amendment. Any officer of the Company, other than the
individual who has the power to create or execute the amendment or termination
document, may certify that such document has been adopted by proper authority.

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ARTICLE XVI. CLAIMS AND REVIEW PROCEDURE
     16.1 Claims for Benefits and Inquiries. Any Participant or beneficiary may
file with the Administrator a written claim for benefits or inquiry concerning
the Plan, or concerning present or future rights to benefits under the Plan.
Applications for benefits must be made on the forms prescribed by the
Administrator, signed by the Participant or beneficiary, as applicable, and
submitted to the Administrator’s benefit claims office.
     16.2 Denial of Claims. In the event any claim for benefits is denied, in
whole or in part, the Administrator shall notify the applicant of such denial in
writing and shall advise the applicant of the right to a review thereof.
          16.2-1 Content of Notice. Such notice shall be written in a manner
calculated to be understood by the applicant and set forth the following:
               (a) The specific reason for denial.
               (b) Specific reference to the Plan provisions upon which the
denial is based.
               (c) A description of any additional information which is
necessary to perfect the claim and why this information is necessary.
               (d) An explanation of the review procedure described in 16.3
below.
          16.2-2 Timing of Notice. Such written notice shall be given to the
applicant within ninety (90) days after the Administrator receives the
application, unless special circumstances require an extension of time of up to
an additional ninety (90) days for processing the application. If such an
extension is required, written notice of the extension shall be furnished to the
applicant prior to the termination of the initial ninety (90) day period. This
notice of extension shall indicate the special circumstances requiring the
extension of time and the date by which the Administrator expects to render its
decision on the application for benefits. If written notice of denial of the
application for benefits is not furnished within the time specified in this
paragraph 16.2-2, the application shall be deemed denied.
     16.3 Review of Denied Claims. Any applicant whose claim for benefits is
denied (or deemed denied) in whole or in part, or such applicant’s authorized
representative, may appeal from such denial by submitting to the Retirement
Committee a written request for a review of the application within sixty
(60) days after receipt of denial of the notice (or, in the case of a deemed
denial, sixty (60) days after the application is deemed denied). The Retirement
Committee shall give the applicant or such representative an opportunity to
review pertinent documents (other than legally privileged documents) in
preparing the request for review. The request for review shall be in writing and
shall be addressed as follows:

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Retirement Committee for the
Nordstrom 401(k) Plan & Profit Sharing
c/o Employee Benefits – Retirement
1700 Seventh Avenue, Suite 1000
Seattle, WA 98101
The request for a review shall set forth all grounds on which it is based, all
facts and documents in support of the request and any other matters which the
applicant deems pertinent. The Retirement Committee may require the applicant to
submit such additional facts, documents or other material as it may deem
necessary or appropriate in making its decision on review.
     16.4 Decision on Review. After receiving the application for review, the
Retirement Committee, or an authorized review subcommittee thereof (“Review
Committee”) shall review and decide the final disposition of the claim. Such
decision of the Review Committee shall be binding on all parties.
          16.4-1 Timing of Review. The decision should be reached within sixty
(60) days after receipt of the application for review, although special
circumstances may delay the review decision up to one hundred twenty (120) days.
If such an extension is required, written notice of the extension shall be
furnished to the applicant prior to the end of the initial sixty (60) day
period.
          16.4-2 Notice of Decision. If the Review Committee confirms the denial
of the application for benefits in whole or in part, such notice shall set
forth, in a manner calculated to be understood by the applicant, the specific
reasons for such denial and specific references to the Plan provisions on which
the decision is based. If the Review Committee determines that the application
for benefits should not have been denied in whole or in part, the Review
Committee shall direct the Administrator to take appropriate remedial action as
soon as reasonably practicable. If written notice of the Review Committee’s
decision is not given to the applicant within the time period prescribed in
16.4-1, the application will be deemed denied on review.
     16.5 Rules and Procedures on Review. The Review Committee shall establish
such rules and procedures, consistent with the Plan and with ERISA, as it may
deem necessary or appropriate in carrying out its responsibilities in reviewing
a denied claim. The Review Committee may require an applicant who wishes to
submit additional information in connection with an appeal to do so at the
applicant’s own expense, and may convene a hearing if it determines that
sufficient cause is shown. To the extent that a claim requires a determination
of whether a Participant suffers from a Disability as defined in section 2.7,
the Plan shall adhere to the procedures for administering disability claims
under the Nordstrom, Inc. Welfare Benefit Plan, which procedures are
incorporated by this reference.
     16.6 Exhaustion of Remedies. No legal action for benefits under the Plan
shall be brought unless and until the applicant has (i) submitted a written
claim for benefits in accordance with 16.1; (ii) been notified by the
Administrator that the application is denied (or the application is deemed
denied) as provided in 16.2; (iii) filed a written request for a review of the
application in

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accordance with 16.3; and (iv) been notified in writing that the Review
Committee has affirmed the denial of the application (or the application is
deemed denied) on review as provided in 16.4.
ARTICLE XVII. MISCELLANEOUS PROVISIONS
     17.1 No Right of Continued Employment. The establishment of this Plan, the
creation of any fund or account, or the payment of any benefits shall not create
in any Employee, Participant or other party a right to continuing employment or
create any claim against the Plan or Trust Fund for any payment except as set
forth in this Plan.
     17.2 Discretion. Whenever, under the provisions of this Plan, discretion is
granted to the Employer or Administrator which affects the benefits, rights and
privileges of Participants, such discretion shall be exercised uniformly so that
all Participants similarly situated shall be similarly treated.
     17.3 Separability. If any provision of this Agreement is declared invalid
or unenforceable, the remaining provisions shall be effective.
     17.4 Participant and Others Bound by Plan. Each Participant, by executing
the beneficiary designation, agrees for himself or herself and his or her heirs,
beneficiaries, successors, and assigns to be bound by all of the provisions of
this Plan.
     17.5 Applicable Law. This Plan is to be construed according to the laws of
the State of Washington, to the extent not preempted by federal law.
     17.6 Text Controls. The paragraph numbers and headings herein are solely
for convenience. In the event of conflict between them and the text, provisions
of the text control.
     17.7 Effective Date. This amendment and restatement of the Nordstrom 401(k)
Plan & Profit Sharing is effective January 1, 2008, as provided in 1.2.
     17.8 Expenses. All reasonable expenses incurred in operating and
administering the Plan, including expenses of the Company, the Committee, and
the Trust, may be paid from the Trust Fund or, at the election of the Company,
may be paid by the Company, provided, however, that the Trust may reimburse the
Company for such expenses only to the extent such amounts constitute “direct
expenses” in accordance with U.S. Department of Labor Regulation
§ 2550.408c-2(b)(3). This provision shall be deemed to be a part of any contract
to provide for expenses of Plan administration, whether or not the signatory to
such contract is, as a matter of convenience, the Company.
     17.9 Plan Document is Controlling. All rights and benefits of Participants
and beneficiaries are controlled and determined by the provisions of this Plan
document. To this end:

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          17.9-1 Authorized Summaries. The only authorized summaries of the Plan
are the publications listed in (a)-(c) below as approved from time to time by
the Administrative Office. No other writing is authorized. No such authorized
summary overrides or modifies the Plan document.
               (a) The summary plan description;
               (b) Any Decision Guide for exercise of Participant investment
choices;
               (c) Any descriptive information programmed on a voice response
unit or other telephonic, computer or electronic communication network.
          17.9-2 Authorized Representatives. The only individuals authorized to
explain or interpret the Plan are the Committee members and the Plan
administrative personnel who are charged with such responsibility. No other
individual or entity has authority to explain or interpret the Plan. No
authorized individual has authority to override or modify what is provided in
the Plan document.
          17.9-3 Resolution of Conflicts. In the event of any conflict between
this Plan and (1) any authorized summary of the Plan, or (2) other written, oral
or electronic statement, or (3) any assumption, inference or reliance by any
Participant or beneficiary, this Plan document shall be dispositive.
     17.10 Rules of Construction. In construing this Agreement, the masculine
and neuter genders include the feminine and each other and the singular includes
the plural.
ARTICLE XVIII. LOANS TO PARTICIPANTS
          18.1 Loans to Participants.
               18.1-1 Participant’s Right to Borrow. Participants and
Beneficiaries who are parties in interest under section 3(14) of ERISA shall
have the right to borrow from their Elective Deferral Contribution accounts,
Employer Matching Contributions accounts, and Employer Profit Sharing
Contributions accounts on a reasonably equivalent basis and subject to prior
approval by the Administrator. Designated Roth contributions are not eligible
for loans. Application for a loan must be submitted to the Administrator on such
form(s) and in such manner as the Administrator may require. Approval shall be
granted or denied as specified in 18.1-2 on the terms specified in 18.1-3. For
purposes of this 18.1, but only to the extent required by Department of Labor
Regulation § 2520.408b-1, the term “Participant” shall include any Employee,
former Employee, beneficiary or alternate payee under a qualified domestic
relations order, as defined in § 414(p) of the Code, who has an interest in the
Plan that is not contingent. A beneficiary shall not be eligible for a loan
unless all events needed to make such beneficiary’s rights unconditional have
occurred.
          18.1-2 Limits on Borrowed Amount. The Administrator shall grant any
loan which meets each of the requirements of paragraphs (a), (b) and (c) below:

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               (a) Maximum Loan. The amount of the loan, when added to the
outstanding balance of all other loans to the Participant from the Plan or any
other qualified plan of the Company or any related Company shall not exceed the
lesser of:
                    (1) $50,000, reduced by the excess, if any, of a
Participant’s highest outstanding balance of all loans from the Plan or any
other qualified plan maintained by the Company or any related Company during the
preceding twelve (12) months over the outstanding balance of such loans on the
loan date, or
                    (2) Fifty percent (50%) of the value of the vested balance
of the Participant’s accounts as of the Valuation Date preceding the date upon
which the loan is made.
               (b) Minimum Loan. The loan shall be for at least $1,000; and
               (c) Outstanding Loan Limitations. No more than two (2) loans may
be outstanding to a Participant at any time. Notwithstanding the foregoing, no
more than one (1) loan used to purchase the principal residence of a Participant
may be outstanding to a Participant at any time.
          18.1-3 Repayment and Collateral. Each loan granted shall, by its
terms, satisfy each of the following additional requirements:
               (a) Term. Each loan, by its terms, must be repaid within sixty
(60) months (except that if the Administrator is satisfied that the loan
proceeds are being used to purchase the principal residence of a Participant,
the Administrator may, in its discretion, establish a term of up to two hundred
and forty (240) months for repayment).
               (b) Interest. Each loan shall bear a reasonable rate of interest,
which rate shall be established by the Administrator from time to time and shall
provide the Plan with a return commensurate with the interest rates charged by
persons in the business of lending money for loans which would be made under
similar circumstances and shall in no event be less than one percent (1%) over
the then current prime rate at Employer’s principal bank.
               (c) Repayment Amount. Each loan must require substantially level
amortization over the term of the loan, with payments not less frequently than
semi-monthly (twice each calendar month).
               (d) Collateral. Each loan must be adequately secured, with the
security to consist of the balance of the Participant’s accounts.
               (e) Means of Payment. Automatic payroll deductions shall be
required as additional security and the loan shall become immediately due and
payable if the Participant ceases the payroll deduction. Notwithstanding the
foregoing, to avoid default, an active Participant who has insufficient payroll
from which to deduct the loan payment must make timely loan

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payments by means of remitting a personal check equal to the amount of the loan
payment not deducted by payroll deduction. Other than for Participants on
qualified military service (the loan payment suspension rules for which are
provided under 5.7), a Participant who is on an approved leave of absence may
suspend loan repayments during the leave of absence, but the suspension period
shall not be longer than 12 months. Upon return from the leave of absence, the
Participant may make a single sum make-up payment equal to the amount of the
suspended payments during the leave, or may increase the periodic loan payment
so that the loan term is not extended beyond the term established when the loan
was originated. A Participant who severs employment with an outstanding loan
balance may elect to continue monthly loan repayments. However, the loan will be
deemed in default if a loan repayment is not received for a period of 80 days
(90 days for payments due on or after January 1, 2005) after severance of
employment.
               (f) Value Only in Borrower’s Account. To the extent a
Participant’s loan is secured by the Participant’s account, the investment gain
or loss attributable to the loan shall not be included in the calculation or
allocation of the increase or decrease in fair market value of the general
assets of the Plan pursuant to 6.2. Instead, the entire gain or loss (including
any gain or loss attributable to interest payments or default) shall be
allocated to the accounts of the Participant.
          18.1-4 Payments Credited to Account. All loan payments shall be
transmitted by the Company to the Trustee as soon as practicable but not later
than the end of the month during which such amounts were received or withheld.
Each loan may be prepaid in full at any time. Any prepayment shall be paid
directly to the Trustee in accordance with procedures adopted by the
Administrator.
          18.1-5 Promissory Note. Each loan shall be evidenced by a promissory
note executed by the Participant and payable in full to the Trustee, not later
than the earliest of (a) a fixed maturity date meeting the requirements of
18.1-3(a) above, (b) the Participant’s death, or (c) the termination of the
Plan. Such promissory note shall evidence such terms as are required by this
section.
          18.1-6 Administrator Powers. The Administrator shall have the power to
modify the above rules or establish any additional rules with respect to loans
extended pursuant to this section. Such additional rules shall include
establishment of a reasonable loan fee to reimburse the Plan for the
administrative costs of making such loans and establishment of rules for
default. The rules may be included in a separate document or documents and shall
be considered a part of this Plan; provided, each rule and each loan shall be
made only in accordance with the regulations and rulings of the Internal Revenue
Service and Department of Labor and other applicable state or federal law. The
Administrator shall act in its sole discretion to ascertain whether the
requirements of such regulations and rulings and this section have been met. The
Administrator may delegate any of its powers under this Article in accordance
with the provisions of Article III.

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     IN WITNESS WHEREOF pursuant to Section 13.1-3, this 2008 Restatement has
been executed on behalf of the Company by its Executive Vice President Human
Resources and Diversity Affairs pursuant to authorization of the Company’s Board
of Directors this 27th day of August, 2008.

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

          NORDSTROM 401(k) PLAN & PROFIT SHARING     2008 RESTATEMENT

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