<PAGE>

                                                                   Exhibit 10.43

                           NORDSTROM, INC. LEADERSHIP
                                 SEPARATION PLAN
                       (Restated Effective March 1, 2005)

            I. INTRODUCTION.

            A. Background. The Separation Program for Key Management Employees
(the "Plan") was originally adopted by Nordstrom, Inc. (the "Company"),
effective October 28, 1997. This amendment, restatement, and renaming of the
Plan is effective as of March 1, 2005 (the "Effective Date") and renames the
Plan, the Nordstrom Leadership Separation Plan. The purpose of the Plan is to
provide a group of key leadership employees of the Company or its subsidiaries
and affiliates ("Affiliates") with an appropriate level of severance benefits in
the event he/she separates from service under the circumstances described
herein.

            The Plan does not apply to any employment terminations other than
those expressly described below and is not intended to set any precedent for
future severance policies or practices of the Company.

            The Plan is intended to constitute an unfunded severance pay plan
for a select group of management employees for purposes of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").

            B. Plan Governance.

            1. Plan Sponsor and Administrator. The Company is the "Plan Sponsor"
and the "Plan Administrator" of the Plan. The Company's senior officer with
responsibility for Human Resources and the Company's Compensation and Leadership
Benefits Department have been selected to assist the Company in its day-to-day
responsibilities with respect to the Plan. The Company is the named fiduciary
charged with responsibility for administering the Plan; the Administrative
Committee is the named fiduciary that has the authority to act with respect to
any appeal from a denial of benefits. The Administrative Committee, with the
advice of the Company, will make such rules and computations and will take such
other actions to administer the Plan as the Committee deems appropriate. The
address of the Administrative Committee is: Nordstrom, Inc., C/O Leadership
Benefits, PO Box 12338, Seattle, Washington 98111-3338.

            a. Company's Discretion. As Plan Administrator, the Company has the
      sole and exclusive discretion, authority and responsibility to construe
      and interpret the terms and provisions of the Plan, to remedy and resolve
      ambiguities, to grant and/or deny any and all claims for benefits, and to
      determine all issues relating to eligibility for benefits. All actions
      taken by the Company as Plan Administrator, or its delegate, will be
      conclusive and binding on all persons having any interest under the Plan,
      subject only to the provisions of Article IX. All findings, decisions and
      determinations of any kind made by the Plan Administrator or its delegate
      shall not be disturbed unless the Plan Administrator has acted in an
      arbitrary and capricious manner.

            b. Delegation of Authority. The Company may delegate all or part of
      its responsibilities, authority and discretion under the Plan to other
      persons. The duties of the Company under the Plan will be carried out in
      its name by its officers, directors and employees. Any such delegation
      shall carry with it the full discretion and authority vested in the
      Company under paragraph I.B.1., above. As of the effective date of the
      Restated Plan, the Company has delegated the day-to-day administration of
      the Plan to its Compensation and Leadership Benefits Department under the
      direction of the Company's senior officer with responsibility for Human
      Resources and the responsibility for adjudicating the appeal of a denied
      claim under the Plan's claims procedures to its Administrative Committee.

                                     Page 1
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            2. Administrative Committee. The Plan Administrator may appoint an
"Administrative Committee," consisting of one or more individuals who may (but
need not) be employees of the Company. The Administrative Committee will be the
named fiduciary that has the authority to act with respect to any appeal from a
denial of benefits. The Administrative Committee appointed by the Plan
Administrator shall be empowered with the same level of authority and discretion
as that set forth in Section I.B. As of the Effective Date, the Administrative
Committee for purposes of Eligible Key Leadership Employees who are Section 16
insiders shall be the Compensation Committee of the Board of Directors of the
Company. The Administrative Committee for purposes of Eligible Key Leadership
Employees who are not Section 16 insiders shall be the Company's senior officer
with responsibility for Human Resources and the Divisional Vice President for
Compensation and Leadership Benefits.

            II. ELIGIBLE EMPLOYEES.

            A. Eligibility Criteria. Each active employee of the Company or an
Affiliate who, on or after the Effective Date, meets all of the following
conditions will be considered an Eligible Leadership Employee, entitled to
participate in and receive benefits under the Plan upon satisfying the
participation requirements of Article III of this Plan (as specified below):

            1. The employee is a Designated Leadership Employee;

            2. The employee is not employed under a written contract of definite
      term; and

            3. The employee is not eligible to receive benefits under any other
      severance program or arrangement established or provided by the Company or
      Affiliate.

            B. Designated Leadership Employee. For purposes of this Plan, a
"Designated Leadership Employee" is any officer or employee of the Company or an
Affiliate designated as a Key, Core, Business or Company leadership level
employee, by the Company's senior officer with responsibility for Human
Resources. In addition, a "Designated Leadership Employee" includes any employee
of the Company or an Affiliate who is designated as a "Designated Leadership
Employee" of the Company by either (a) a corporate Officer, or (b) the senior
Human Resources executive with responsibility for the employee's group, with
either (a) or (b) acting jointly in such designation with the Company's senior
officer with responsibility for Human Resources.

            C. Ineligible Employee Groups. Employees who are not Designated
Leadership Employees are not eligible to participate in the Plan and shall not
be deemed an Eligible Leadership Employee.

            D. Company Determination of Eligibility. The determination of those
employees who are eligible to participate in the Plan will be made by the
Company in its sole and exclusive discretion, and, for purposes of determining
eligibility, the Company need not treat similarly situated employees in the same
manner.

            E. Affiliates of the Company. For purposes of this Plan, an
Affiliate of the Company means any other U.S. entity owned or controlled by the
Company, unless such Affiliate is designated by the Company as not eligible to
participate in the Plan.

            F. Employees of Divested Groups Excluded. Any employee of a divested
business group (including a business unit, store, facility, department or
division) who is offered employment by that group in the same or an equivalent
position, regardless of whether such offer is part of the agreement between the
Company, the group, and the purchaser of that business, or successor entity, as
applicable, shall not be deemed an Eligible Leadership Employee hereunder and
shall not be eligible to participate in this Plan.

                                     Page 2
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            III. PARTICIPATION/ELIGIBILITY FOR BENEFITS.

            A. Participation. An Eligible Leadership Employee who commences
participation in the Plan is called a "Participant" of the Plan. Participation
in the Plan will commence upon the Eligible Leadership Employee's (1)
Involuntary Termination by the Company, and (2) election to participate in the
Plan and execution of a release of claims ("Election and Release"), both as
described below. A Participant's participation will terminate on the date the
Participant receives payment of all of the Participant's Cash Severance Benefits
under the Plan or, if earlier, on the date the employee's eligibility expires.

            1. Involuntary Termination. An Eligible Leadership Employee's
      termination of employment will be considered an Involuntary Termination by
      the Company, for purposes of this Plan, where the employee is terminated
      by the Company without cause. "Cause" shall be defined either as a willful
      failure of the Eligible Leadership Employee to perform his/her duties at a
      level reasonably expected by the Company or as any form of willful
      misconduct which shall include but not be limited to acts of dishonesty,
      gross insubordination, gross negligence, discrimination or harassment, or
      any knowing and willful violation of law or of the Company's policies or
      performance standards. The Company shall have the discretion to interpret
      whether a termination was for "cause."

            2. Election and Release. Once an Involuntary Termination described
      in paragraph III.A.1. occurs, in order to receive benefits provided under
      the Plan, an Eligible Leadership Employee must first execute an Election
      and Release provided by the Company and described in this paragraph
      III.A.2., without any alteration, addition or deletion, and then return it
      to the Company at the location and by the deadline specified by the
      Company.

                  a. Form of Release. The form and content of the Election and
            Release will be determined by the Company. Such Release shall be
            effective according to its terms but may be modified by the Company
            prior to its execution by the Eligible Leadership Employee as it
            deems necessary.

                  b. Timing of Release. The Eligible Leadership Employee may, as
            determined by the Company as appropriate, have a period of time to
            review and sign the Release and return it to the Company. For any
            period required by law after the Eligible Leadership Employee signs
            the Release, the Eligible Leadership Employee may revoke the
            Release, and it shall not be effective or enforceable until the
            revocation period expires. The filing of a claim under the Plan's
            claim procedure (Article IX), shall toll any time requirement for
            signing and returning the Release until the claims procedure has
            been exhausted. If the Eligible Leadership Employee fails to sign
            and return to the Company the Release within the time and in the
            manner described herein, he or she will no longer be eligible for
            this Plan, unless and until the Company thereafter designates the
            Employee as eligible under Article II of this Plan.

            B. Loss of Eligibility. An Eligible Leadership Employee (or
Participant of the Plan, as the case may be) will become ineligible for and lose
any rights he or she may have to benefits under the Plan, and his or her
participation in the Plan will cease if, before the scheduled date of the
Participant's employment termination, any of the following occurs:

            1. He or she voluntarily resigns his or her employment with the
      Company.

            2. The Eligible Leadership Employee (or Participant) fails to abide
      by such terms and conditions as the Company has established as a condition
      for participation in, or payment of benefits from, the Plan, provided such
      terms and conditions have been set forth in any eligibility notice
      provided.

                                     Page 3
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            3. The Eligible Leadership Employee remains an employee, but is no
      longer a Designated Leadership Employee (as defined above) or no longer
      qualifies as a member of a select group of management employees of the
      Company or its Affiliates within the meaning of Sections 201(2), 301(a)(3)
      and 401(a)(4) of ERISA.

            4. The Eligible Leadership Employee either dies or becomes disabled
      prior to becoming a Participant.

            IV. PLAN BENEFITS.

      This Article IV sets forth the benefits provided by the Plan as summarized
in the attached Schedule of Benefits, as from time to time is or may be
established and amended by the Company and incorporated herein by this reference
(the "Benefits Schedule"). The benefits provided under the Plan include the
following: (a) a Cash Severance Benefit, (b) Medical/Dental Premium Assistance
Benefits, (c) Outplacement Benefits, and (d) a Relocation Benefit, each as
described below. In addition, the Company may provide additional severance
benefits to a Participant under this Plan, based on the particular circumstances
surrounding that Participant's termination.

            A. Cash Severance Benefits.

            1. Severance Benefit Amount. A Participant will receive the Cash
      Severance Benefit specified in the Benefits Schedule, based on his or her
      Years of Service, Annual Salary, and designated Leadership level.

            2. Cash Payments. A Participant's Cash Severance Benefits under the
      Plan will be calculated as a lump-sum payment.

            3. "Annual Salary" Defined. A Participant's "Annual Salary" under
      paragraph IV.A.1., shall be such Participant's monthly base salary paid in
      cash (at the rate in effect at the time of termination) multiplied by
      twelve (12). "Annual Salary" shall exclude bonuses, commissions, and other
      supplemental pay or allowances provided by the Company to the Participant
      (such as options, performance share units, restricted stock, and other
      forms of equity-based compensation, but shall be calculated prior to
      withholdings for the Participant's own contributions for participation in
      any of the Company's benefits or plans, such as retirement, stock
      purchase, welfare, or deferred compensation plans).

            4. "Years of Service" Defined. A Participant's "Years of Service"
      under paragraph IV.A.1, shall be measured in whole years and based on
      uninterrupted periods of service from such Participant's most recent date
      of hire.

            5. Withholding. The Company will withhold appropriate federal, state
      and local income and employment taxes from any payments made under the
      Plan.

                  6. SERP Offset. A Participant's Cash Severance Benefit under
      this Plan shall be reduced, dollar for dollar, by the SERP Offset Amounts
      (if any) calculated for such Participant as provided in this Section.

                  a. Calculation of Monthly SERP Offset Benefit. A Participant's
      monthly benefit under the Nordstrom Supplemental Executive Retirement Plan
      ("SERP") shall be calculated and determined under the SERP, in accordance
      with the rules and procedures established thereunder. For purposes of this
      Plan, the Participant's SERP benefit used for the offset under this
      Section, shall be the Participant's gross monthly SERP benefit, calculated
      prior to any reduction under the SERP for Company contributions to its
      401(k) Plan & Profit Sharing and Executive Deferred Compensation Plan, or
      other post employment retirement plans as the case shall be.

                                     Page 4
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                  b. SERP Offset Amount. The monthly SERP offset benefit
      determined under Paragraph 6(a) shall be multiplied by the total number of
      months covered by the Severance Period (as defined in F., below), to
      provide a total SERP Offset Amount.

                  c. Application of Offset. To the extent a Participant is
      entitled to the payment of a Cash Severance Benefit under this Plan, a
      Participant's Cash Severance Benefit payable under this Plan shall be the
      benefit determined in accordance with the provisions of Sections IV.A.1
      through 4 of this Plan, reduced dollar for dollar by the SERP Offset
      Amount determined in this Section IV.A.6.

            B. Medical/Dental Premium Assistance Benefit.

            1. Benefits Continued through Termination. For Company-sponsored
      employee welfare benefit plans in which the Participant is a participant
      on the date his or her employment terminates (i.e., group medical, dental,
      disability, AD&D and life), the Company will take appropriate steps to
      provide for a Participant's continued participation in a plan to which the
      Participant is required to contribute as provided under those Plans'
      rules, unless the Participant does not make the required contribution to
      that plan.

            2. Health Benefits After Termination. Upon termination, the
      Participant shall have such rights to continue coverage under any
      Company-sponsored health care plans (i.e., medical and dental) as are
      provided by Section 4980B(f) of the Internal Revenue Code of 1986, as
      amended, and Section 602 of ERISA ("COBRA").

            3. Payment for Coverage. For any Company-sponsored employee health
      care plans in which the Participant elects COBRA (other than the
      Leadership Health Reimbursement Program), the Company will take
      appropriate steps to continue the Participant's participation in each of
      those plans, by paying the Company's active plan contribution amount for
      the Participant's (and his or her dependents') coverage through the end of
      the period specified in the Benefits Schedule. During this period, the
      Participant will be required to pay for any such Participant's COBRA
      continuation coverage elected by the Participant at the same level and on
      the same basis as the Participant's contribution to group health plan
      coverage for active employees. Thereafter, the Participant shall be
      responsible for the entirety of any COBRA premium obligations required to
      continue group health plan coverage under the terms of those plans.

            4. Period of Continuation Coverage. The entirety of the group health
      benefits provided under paragraphs 2 and 3, above, after the date that the
      Participant (and his or her qualifying dependents) would otherwise have
      lost coverage, will be counted against the maximum period of coverage
      provided under COBRA.

            5. Alternatives to COBRA Continuation Payments. In lieu of Company
      assisted COBRA Continuation Payments as described in sections B.2, B.3 and
      B.4, the Participant may elect to participate in the Company's Retiree
      Medical Plan (to the extent he or she is eligible). If the Participant is
      not eligible for coverage under the Company's Retiree Medical Plan, the
      Company, in its discretion, may elect to pay to the Participant the cash
      equivalent of the Company's cost for such benefits (excluding any cost
      relating to Participant's continued participation in the Leadership Health
      Reimbursement Program) for the period of coverage described in B.3;
      provided however, that to the extent the Company makes such an election,
      the Participant shall be required to pay the entire COBRA Premium for any
      period of coverage elected.

                                     Page 5
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            C. Outplacement Services.

            The Participant will be offered outplacement services. Such services
will be provided at a specified level and for a specified length of time, as
provided in the Benefits Schedule. The outplacement services offered under this
Plan will be provided by a provider chosen by the Company, and the Company will
directly pay all such expenses. Participants may elect not to accept the
outplacement services; however, he or she will not be entitled to receive any
monetary encashment in its stead. The Participant may access outplacement
services prior to his or her termination date, however should the Participant
elect not to participate in the Plan, the cost for Outplacement services will be
borne by the Participant. The Participant must initiate Outplacement Services
within ninety (90) days following the date of termination in order to be
eligible.

            D. Relocation Benefits.

            If the Participant (1) was provided relocation benefits in
connection with their employment with the Company, and (2) decides (as a result
of their termination from the Company) to relocate their principal residence to
a location that is more than fifty (50) miles from their residence at the time
of their separation with the Company, the Company will directly pay all or a
portion of the actual cost of moving of the Participant's (and the Participant's
household) personal property (in accordance with the rules and procedures
established in the Company's general Leadership relocation policy) to the extent
that (i) the termination of employment occurs less than twelve (12) months after
the Participant commences work in the position for which he or she has relocated
to his or her current location, (ii) such earlier relocation was in connection
with the Participant's employment with the Company, (iii) the relocation benefit
amount does not to exceed the price of moving such property during the original
relocation, and (iv) such Participant's relocation expenses are incurred within
twelve (12) months following commencement of participation in this Plan. Should
the Participant not relocate within one year following termination of
employment, he or she will not be entitled to any relocation benefit, and he or
she will not be entitled to receive any monetary encashment in its stead.

            E. Additional Benefits.

            The Company may, in its sole and exclusive discretion, provide the
Participant with additional severance benefits, in cash or in kind, to assist
the Participant in the transition from active employee status.

            F. Subsequent Reemployment.

            1. Reemployment During Severance Period. If an employee satisfies
      all of the conditions for eligibility and participation set forth in
      Sections II and III, except that he or she accepts an offer of employment
      with the Company prior to the end of the period for which he or she has
      received or will receive Cash Severance Benefits under the Plan (the
      "Severance Period"), then the employee will be considered a Participant
      under the Plan only to the extent of the employee's period of actual
      separation from service with the Company.

                  a. Repayment of Duplicative Benefits. A reemployed Participant
            will be required to repay the prorated portion of any Cash Severance
            Benefits received for the duration of their Severance Period during
            which they are actively at work for the Company. To eliminate the
            possibility of duplicative payments, an employee's agreement to
            repay such amounts (if any) may be obtained, with the employee's
            total repayment to be concluded prior to reemployment, or within a
            reasonable time after his or her reemployment as approved by
            Nordstrom Leadership Benefits department.

            2. Reemployment After Severance Period. Participants who are
      subsequently reemployed by the Company after the Severance Period (defined
      in paragraph F.1) will not be required to repay any Cash Severance
      Benefits.

                                     Page 6
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            3. New Hire Date. In the event of the Participant's reemployment
      with the Company, such reemployed Participant's service date will be
      restored to the service date in effect at the time of severance only to
      the extent required by any of the Company's employee benefit plans, but
      not for purposes of this Plan.

            V. PAYMENTS TO AND FROM THE PLAN.

            The benefits under the Plan will be paid from the general assets of
the Company, and all employees eligible for benefits under the Plan will be no
more than unsecured general creditors of the Company. Nothing contained in the
Plan will be deemed to create a trust of any kind for the benefit of the
employees, or create any fiduciary relationship between the Company and the
employees with respect to any assets of the Company. The Company is under no
obligation to fund the benefits provided herein prior to payment, although it
may do so if it chooses. Any assets which the Company chooses to use for advance
funding will nevertheless constitute assets of the Company and will not cause
this to be a funded plan within the meaning of any section of ERISA.

            VI. AMENDMENT AND TERMINATION.

            The Company reserves the right to amend or terminate the Plan at any
time; provided, however, that no such amendment or termination will affect the
right to any unpaid benefit of any Eligible Leadership Employee who became
entitled to such benefits prior to such amendment or termination.

            VII. NON-ALIENATION OF BENEFITS.

            Except to the extent specifically provided by the Company, no
benefit under the Plan will be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, garnishment, levy, execution or
charge, and any attempt to do so will be void.

            VIII. LEGAL CONSTRUCTION.

            This Plan will be construed in accordance with ERISA and, to the
extent not preempted by ERISA, with the laws of the State of Washington. In the
event that any provision of this Plan shall be finally deemed to be
unenforceable, such provision shall be deemed to be severable from this Plan,
but every other provision of this Plan shall remain in full force and effect.

            IX. CLAIMS, INQUIRIES AND APPEALS.

            A. Benefit Claims and Inquiries.

            All benefit claims, and all inquiries concerning the Plan or present
or future rights to benefits under the Plan, must be submitted to the Plan
Administrator in writing and addressed as follows: "Nordstrom, Inc., Plan
Administrator Under the Leadership Separation Plan, C/O Leadership Benefits,
P.O. Box 12338, Seattle Washington 98111-3338." A benefit claim or inquiry must
be signed by the employee.

                                     Page 7
<PAGE>

            B. Denial of Claims.

            In the event that any benefit claim is denied in whole or in part,
the Plan Administrator will notify the claimant in writing of such denial and of
the right to review thereof. Such written notice will set forth, in a manner
calculated to be understood by the claimant, specific reasons for such denial,
specific references to the Plan provision on which such denial is based, a
description of any information or material necessary to perfect the claim, an
explanation of why such material is necessary and an explanation of the Plan's
review procedure. Such written notice will be given to the claimant within
ninety (90) days after the Plan Administrator receives the claim, unless special
circumstances require an extension of time of up to ninety (90) days for
processing, written notice of the extension will be furnished to the applicant
prior to the termination of the initial 90-day period. This notice of extension
will indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render its decision on the
claim. If written notice of denial of the claim for benefits is not furnished
within the time specified in this Section IX.B., the application will be deemed
denied, and the claimant will be permitted to appeal such denial in accordance
with the Review Procedure set forth below.

            C. Appeal: Requests for a Review.

            Any person whose claim for benefits is denied (or is deemed denied)
in whole or in part, or such person's duly authorized representative, may appeal
from such denial by submitting a request for a review of the claim to the
Administrative Committee within sixty (60) days after receiving written notice
of such denial from the Plan Administrator (or, in the case of a deemed denial,
within sixty (60) days after the application is deemed denied). The Plan
Administrator will give the claimant or such representative an opportunity to
review pertinent documents that are not privileged in preparing a request for a
review. A request for review must be in writing and must be addressed as
follows: "Plan Administrator Under the Separation Program for Leadership
Employees, Nordstrom Leadership Benefits, P.O. Box 12338, Seattle, Washington
98111-3338." A request for review must set forth all of the grounds on which it
is based, all facts in support of the request and any other matters that the
claimant deems pertinent. The Administrative Committee may require the applicant
to submit such additional facts, documents or other material as it may deem
necessary or appropriate in making its review.

            D. Decision on Review.

            The Administrative Committee will act on each request for review
within sixty (60) days after receipt thereof unless special circumstances
require an extension of time, up to an additional sixty (60) days, for
processing the request. If such an extension for review is required, written
notice of the extension will be furnished to the claimant within the initial
60-day period. The Administrative Committee will give prompt, written notice of
its decision to the claimant and to the Plan Administrator. In the event that
the Administrative Committee confirms the denial of the benefits in whole or in
part, such notice will set forth, in a manner calculated to be understood by the
claimant, the specific references to the Plan provisions on which the decision
is based. If written notice of the Administrative Committee's decision is not
given within the time prescribed in this Section, the application will be deemed
denied on review.

            E. Rules and Procedures.

            The Company as Plan Administrator, and the Administrative Committee,
as applicable, may establish such rules and procedures, consistent with the Plan
and with ERISA, as it may deem necessary or appropriate in carrying out its
responsibilities under this Article IX. The Administrative Committee may require
a claimant who wishes to submit additional information in connection with an
appeal from the denial (or deemed denial) of benefits to do so at the his or her
own expense.

                                     Page 8
<PAGE>

            F. Exhaustion of Remedies.

            No legal action for benefits under the Plan shall be brought unless
and until the claimant (1) has submitted a written benefit claim in accordance
with Section IX.A. above, (2) has been notified by the Plan Administrator that
the application is denied, (3) has filed a written request for a review of the
benefit claim in accordance with Section IX.C. above and (4) has been notified
in writing that the Administrative Committee has affirmed the denial of
benefits; provided that legal action may be brought after the Plan Administrator
or the Administrative Committee has failed to take any action on the claim
within the time prescribed by Section IX.B. or Section IX.D. above.

            X. OTHER PLAN INFORMATION.

            A. Plan Identification Numbers.

            The Employer Identification Number ("EIN") assigned to the Plan
Sponsor (Nordstrom, Inc.) by the Internal Revenue Service is 91-0515058. The
Plan Number ("PN") assigned to the Plan by the Plan Sponsor pursuant to
instructions of the Internal Revenue Service is 521.

            B. Ending Date for Plan's Fiscal Year.

            The date of the end of the year for the purposes of maintaining the
Plan's fiscal records is the calendar year.

            C. Agent for the Service of Legal Process.

            The agent for the service of legal process with respect to the Plan
is the Executive Vice President for Human Resources and Diversity Affairs, C/O
Leadership Benefits, Nordstrom, Inc., PO Box 12338, Seattle Washington
98111-3338. The service of legal process may also be made on the Plan by serving
the Plan Administrator.

            XI. EMPLOYMENT STATUS.

            This Plan in no way alters the relationship between Designated or
Eligible Leadership Employees and Company as one of at-will employment.

            XII. EXECUTION.

            To record the adoption of the Plan as set forth herein, effective as
of March 18, 2005, the Company has caused its authorized representative to
execute the same this 18 day of March, 2005.

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

                    Witness:

                    By: /s/ Leslie R. Thornton
                       ---------------------------------------------------------
                    Its: Divisional Vice President, Compensation and Leadership
                    Benefits

                                     Page 9
<PAGE>

                      NORDSTROM LEADERSHIP SEPARATION PLAN
                              SCHEDULE OF BENEFITS
                               AS OF MARCH 1, 2005

<TABLE>
<CAPTION>
               YEARS OF
 LEADERSHIP    SERVICE      CASH SEVERANCE                          PERIOD OF MEDICAL/DENTAL   OUTPLACEMENT
   LEVEL       CRITERIA          PAY          MAXIMUM AND MINIMUMS     PREMIUM ASSISTANCE        SERVICES
 ----------    --------     --------------    --------------------  ------------------------   ------------
<S>           <C>         <C>                 <C>                   <C>                       <C>
BUSINESS AND     None      1 month per year    Maximum: 24 months
  COMPANY                     of service       Minimum: 6 months            12 months         Up to 6 months

              20 or more                                                    12 months

                              Two weeks
                          salary per year of                                                  Up to 6 months
                               service

               12 - 19

                                               Maximum: 52 weeks
KEY AND CORE                                   Minimum: 12 weeks            6 months

                6 - 11

                          One and one-half
                          weeks salary per
                           yearof service                                                     Up to 3 months

                0 - 5                                                       3 months
</TABLE>

* COBRA-related benefit provided only if the Participant is not eligible for the
Nordstrom Retiree Health Plan or if Participant elects not to participate in
that Plan.

                                    Page 10