Exhibit 10.3

     
Performance Share Unit Award Agreement
  2009

AN AWARD FOR PERFORMANCE SHARE UNITS (hereinafter the “Units”), representing a
number of shares of Common Stock as noted in the 2009 Notice of Award of
Performance Share Units (the “Notice”), of Nordstrom, Inc., a Washington
Corporation (the “Company”), is hereby granted to the “Unit holder” on the date
set forth in the Notice, subject to the terms of this Agreement. The Units are
also subject to the terms, definitions and provisions of the Nordstrom, Inc.
2004 Equity Incentive Plan (the “Plan”) adopted by the Board of Directors of the
Company and approved by the Company’s shareholders, which is incorporated in
this Agreement. Each vested Unit is equal in value to one share of Nordstrom
Common Stock (“Common Stock”). To the extent inconsistent with this Agreement,
the terms of the Plan shall govern. The Compensation Committee of the Board has
the discretionary authority to construe and interpret the Plan and this
Agreement. The Units are subject to the following:

1.   VESTING AND SETTLEMENT OF UNITS       At the end of three fiscal years
following the date of the Award (“the Performance Cycle”), Units shall vest and
be settled in accordance with the provisions of the Plan as follows:

  (a)   Vesting

Except as set forth in Section 4, Units shall vest at the applicable percentage
when the Compensation Committee of the Board certifies that (1) the Company’s
Total Shareholder Return (TSR) is positive, and (2) its TSR performance relative
to the TSR of other companies in the Peer Group exceeds the following
corresponding percentile rankings. For purposes of determining the Company’s TSR
relative to the TSR of other companies in the Peer Group, the share price of our
Common Stock, and the share prices of the companies in the Peer Group, are based
on the thirty trading day closing price average immediately prior to the start
of the Performance Cycle and the thirty trading day closing price average
immediately prior to the end of the Performance Cycle.
PSU Vesting % Based on Nordstrom
Percentile Rank Among Peers

          If Nordstrom TSR Is Positive and Our     Percentile Rank Is:   PSU
Vesting Is:  
>85%
    125 %  
>75%
    100 %  
>65%
    85 %  
>50%
    75 %  
£50%
    0 %

      While the relative percentile rankings may change during the Performance
Cycle based upon mergers, acquisitions, dissolutions and other industry
consolidation involving the companies in the Peer Group, the application of the
percentile vesting above is applied consistently. Generally, Units will be
earned if the Nordstrom TSR for the Performance Cycle is in the top half of
performers relative to the other companies in the Peer Group.     (b)  
Settlement         Units shall be settled upon vesting, unless the Unit holder
has elected to defer the Units into the Executive Deferred Compensation Plan
(EDCP) in accordance with the rules. Upon deferral, the vested Units (and their
subsequent settlement and payment) shall be governed by the terms and conditions
of the EDCP as that Plan may be amended from time to time by the Company.      
  Unless earlier deferred into the EDCP, the Unit holder shall elect (during a
period prior to settlement as prescribed by and in accordance with procedures
established by the Company) to settle the Units upon vesting in either one share
of Common Stock for each vested Unit, receive an equivalent amount of cash for
each vested Unit, or receive a combination of cash and stock. In the event the
Unit holder does not or is unable to make such a settlement election, the Units
shall be settled in stock. In the event the Units are settled in cash, the
amount of cash will be determined on the basis of the closing price of the
Common Stock on the New York Stock Exchange on the last day of the Performance
Cycle.     (c)   Withholding Taxes         No stock certificates or cash will be
distributed to the Unit holder, or amounts deferred into the EDCP, unless the
Unit holder has made acceptable arrangements to pay any withholding taxes that
may be due as a result of the settlement of this Award. These arrangements may
include withholding shares of Common Stock that otherwise would be distributed
when the Units are settled. The fair market value of the shares required to
cover withholding will be applied to the withholding of taxes prior to the Unit
holder receiving the remaining shares or the cash value of those shares.     (d)
  Restrictions on Resale         The Unit holder agrees not to sell any shares
of Common Stock at a time when applicable laws or Company policies prohibit a
sale. This restriction will apply as long as the Unit holder is an employee,
consultant or director of the Company or a subsidiary or affiliate of the
Company.

2.   ACCEPTANCE OF UNITS       Although the Company does not require the Unit
holder’s signature upon accepting the Award, the Unit holder remains subject to
the terms and conditions of this Agreement.   3.   NONTRANSFERABILITY OF UNITS  
    The Units may not be sold, pledged, assigned or transferred in any manner
otherwise than in the event of the Unit holder’s death, either indicated on a
valid Nordstrom Beneficiary Designation form, by will or the laws of descent and
distribution and, except as set forth in Section 4 below, may be settled during
the lifetime of the Unit holder only by the Unit holder or by the guardian or
legal representative of the Unit holder. The terms of the Award shall be binding
upon the executors, administrators, heirs and successors of the Unit holder.  
4.   SEPARATION OF EMPLOYMENT       Except as set forth below, Units vest and
may only be settled while the Unit holder is an employee of the Company. If the
Unit holder’s employment is terminated, the Units shall continue to vest
pursuant to the schedule set forth in subparagraph 1(a) above, and the Unit
holder or his or her legal representative shall have the right to settlement of
the Units after such termination only as follows:

  (a)   If the Unit holder dies while employed by the Company, the persons named
on the

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1 Performance Share Unit Award Agreement

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      Unit holder’s Beneficiary Designation form shall be entitled to settlement
of the Units. If no valid Beneficiary Designation form is on file with the
Company, then the persons to whom the Unit holder’s rights have passed by will
or the laws of descent and distribution shall be entitled to settlement of the
Units. If the Units were granted at least six months prior to the death of the
Unit holder while employed by the Company, the Unit holder’s beneficiary shall
be entitled to a prorated payment with respect to vested Units based on the
period of service during the term of this Agreement. If the Units were granted
less than six months prior to death, the Units shall be forfeited as of the date
of death with no rights to a prorated payment at settlement.     (b)   If the
Unit holder is separated due to his or her disability, as defined in Section
22(e)(3) of the Internal Revenue Code, and the Units were granted at least six
months prior to such separation, and the Unit holder provides Nordstrom
Leadership Benefits with reasonable documentation of the Unit holder’s
disability, the Unit holder (or his or her beneficiary) shall be entitled to a
prorated payment with respect to vested Units based on the period of service
during the term of this Agreement. If the Units were granted less than six
months prior to separation due to the Unit holder’s disability, the Units shall
be forfeited as of the date of separation with no rights to a prorated payment
at settlement.     (c)   If the Unit holder is separated due to retirement
between the ages of 53 and 57 with 10 years of continuous service to the Company
from the most recent hire date, or upon attaining age 58, and the Units were
granted at least six months prior to such separation, the Unit holder (or his or
her beneficiary) shall be entitled to a prorated payment with respect to vested
Units based on the period of service during the term of this Agreement. If the
Units were granted less than six months prior to retirement, the Units shall be
forfeited as of the date of retirement with no rights to a prorated payment at
settlement.     (d)   If the Unit holder is separated for any reason other than
those set forth in subparagraphs (a), (b) and (c) above, Units, to the extent
not vested and settled as of the date of his or her separation, shall be
forfeited as of that date.

    Notwithstanding anything above to the contrary, if during the term of this
Award, the Unit holder directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, shareholder, corporate officer, director
or in any other capacity, engages or assists any third party in engaging in any
business competitive with the Company; divulges any confidential or proprietary
information of the Company to a third party who is not authorized by the Company
to receive the confidential or proprietary information; or improperly uses any
confidential or proprietary information of the Company, then the post-separation
proration of Units and settlement rights set forth above shall cease
immediately, and all outstanding vested but not settled and unvested portions of
the Award shall be automatically forfeited.   5.   TERM OF UNITS       Units not
certified by the Compensation Committee of the Board as having vested as of the
end of the Performance Cycle for which the Units were awarded, shall be
forfeited.   6.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION       The number
and kind of shares of Company stock subject to this Award shall be appropriately
adjusted pursuant to the Plan to reflect any stock dividend, stock split,
split-up, extraordinary dividend distribution, or any combination or exchange of
shares, however accomplished.   7.   ADDITIONAL UNITS       The Compensation
Committee may or may not grant the Unit holder additional Units in the future.
Nothing in this Award or any future Award should be construed as suggesting that
additional Unit awards to the Unit holder will be forthcoming.   8.   LEAVES OF
ABSENCE       For purposes of this Award, the Unit holder’s service does not
terminate due to a military leave, a sick leave or another bona fide leave of
absence if the leave was approved by the Company in writing and if continued
crediting of service is required by the terms of the leave or by applicable law.
But, service terminates when the approved leave ends unless the Unit holder
immediately returns to active work.   9.   TAX WITHHOLDING       In the event
that the Company determines that it is required to withhold any tax as a result
of the settlement of Units, the Unit holder shall make arrangements satisfactory
to the Company to enable it to satisfy all withholding requirements.   10.  
RIGHTS AS A SHAREHOLDER       Neither the Unit holder nor the Unit holder’s
beneficiary or representative shall have any rights as a shareholder with
respect to any Common Shares subject to these Units, unless and until the Units
vest and are settled in shares of Common Stock of the Company.   11.   NO
RETENTION RIGHTS       Nothing in this Agreement or in the Plan shall give the
Unit holder the right to be retained by the Company (or a subsidiary of the
Company) as an employee or in any capacity. The Company and its subsidiaries
reserve the right to terminate the Unit holder’s service at any time, with or
without cause.   12.   CLAWBACK POLICY       The Units are subject to the
Clawback Policy adopted by the Company’s Board of Directors, which provides as
follows:       To the extent permitted by law, if the Board of Directors, with
the recommendation of the Compensation Committee, determines that any bonus,
equity award, equity equivalent award or other incentive compensation has been
awarded or received by a Section 16 executive officer of the Company, and that:

  (a)   such compensation was based on the achievement of certain financial
results that were subsequently the subject of a material restatement of the
Company’s financial statements filed with the Securities and Exchange
Commission,     (b)   the Section 16 executive officer engaged in grossly
negligent or intentional misconduct that caused or substantially caused the need
for the material restatement, and     (c)   the amount or vesting of the bonus,
equity award, equity equivalent or other incentive compensation would have been
less had the financial statements been correct,

    then the Board shall recover from the Section 16 executive officer such
compensation (in whole or in part) as it deems appropriate under the
circumstances.       In the event the Clawback Policy is deemed unenforceable
with respect to the Units, then the award of Units subject to this Agreement
shall be deemed unenforceable due to lack of adequate consideration.   13.  
ENTIRE AGREEMENT       The Notice, this Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof. They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) that relate to the
subject matter hereof.       This Agreement may not be modified or amended,
except for a unilateral amendment by the Company that does not materially
adversely affect the rights of the Unit holder under this Agreement. No party to
this Agreement may unilaterally waive any provision hereof, except in writing.
Any such modification, amendment or waiver signed by, or binding upon, the Unit
holder, shall be valid and binding upon any and all persons or entities who may,
at any time, have or claim any rights under or pursuant to this Agreement.   14.
  CHOICE OF LAW       This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Washington, as such laws are applied
to contracts entered into and performed in such State.   15.   SEVERABILITY    
  If any provision of this Agreement shall be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall not
in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if such
invalid or unenforceable provision were not contained herein.   16.   CODE
SECTION 409A       The Company reserves the right, to the extent the Company
deems reasonable or necessary in its sole discretion, to unilaterally amend or
modify this Agreement as may be necessary to ensure that all vesting or delivery
of compensation provided under this Agreement are made in a manner that complies
with Section 409A of the Internal Revenue Code of 1986, as amended, together
with regulatory guidance issued thereunder.

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Performance Share Units
  Notice of Award

            Name   Employee No: XXXX
Grant No: XXXX

On February 25, 2009, you were awarded x,xxx Performance Share Units (PSUs)
under the Nordstrom, Inc. 2004 Equity Incentive Plan (the “Plan”).
Your PSUs are:

  •   Governed by the terms of your 2009 PSU Award Agreement and the terms of
the Plan.     •   Earned based on the Nordstrom Total Shareholder Return
(TSR) relative to the performance of our retail peer group over the three-year
period ending on January 28, 2012 (“Performance Cycle”).

At the end of the Performance Cycle, your PSUs could be earned as shown below:

          If Nordstrom TSR is Positive     and our Percentile Rank is:   PSU
Vesting is:
> 85%
    125 %
> 75%
    100 %
> 65%
    85 %
> 50%
    75 %
£ 50%
    0 %

The relative percentile rankings may change during the Performance Cycle based
upon mergers, acquisitions, dissolutions and other industry consolidation
involving the companies in the peer group. If that occurs, the application of
the percentile vesting above will still be applied consistently, relative to the
remaining or resulting members of the peer group at the end of the Performance
Cycle.
TSR results are provided to you via e-mail on a quarterly basis during the
fiscal year. Final vesting of PSUs will be determined by the Compensation
Committee of the Board of Directors, based on the actual TSR measured at the end
of the Performance Cycle.
Please keep this Notice for your records. If you have any questions about your
grant, please contact Nordstrom Leadership Benefits at 206.303.5855, tie line
8.805.5855, or leadership.benefits@nordstrom.com.
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