Document:

exv10w3

Exhibit 10.3

AMENDMENT 2008-1

NORDSTROM, INC. LEADERSHIP SEPARATION PLAN

The Nordstrom, Inc. Leadership Separation Plan (“Plan”) is amended to exclude certain positions
from eligibility, to clarify how the Plan complies with certain provisions of the Employee
Retirement Income Security Act of 1974, as amended, and Section 409A of the Internal Revenue Code
of 1986, as amended, and to delegate amendment authority.

1. Article II Eligible Employees is amended by adding the following sentence to the end of Section
B:

“Employees holding the following positions are not Designated Leadership Employees for
purposes of this Plan: President—Nordstrom, Inc.; President—Merchandising; and
President—Stores.”

2. Article IV Plan Benefits is amended by adding a new Section G., as follows:

“G. Administration of Benefits.

1. Welfare Plan Under ERISA. The Plan is intended to be an employee welfare benefit
plan governed by ERISA. Therefore, in accordance with 29 CFR § 2510.3-2(b), the following
rules apply to benefits paid under the Plan:

a. Payments are not contingent, directly or indirectly, on a Participant’s
retirement;

b. The total amount of payments under this Plan cannot exceed the equivalent of
twice the Participant’s annual compensation during the year immediately preceding
the Participant’s termination of employment; and

c. All payments to the Participant under the Plan are completed within 24 months
after the Participant’s termination of employment.

2. Compliance with Code Section 409A. It is intended that benefits provided under
the Plan will qualify for exemptions contained in final regulations under Code Section 409A.
Therefore, severance benefits will be paid according to the following rules.

a. Cash Severance Benefits and Cash in Lieu of COBRA Contributions. Cash
Severance Benefits and cash in lieu of COBRA contributions will be paid in a single
lump sum on or before the last day of either of the following periods, whichever is
later:

     (i) the 15th day of the third month following the end of the
calendar year in which the Participant’s Involuntary Termination occurs; or

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amendment 2008-1

 

 

     (ii) the 15th day of the third month following the end of the
Company’s fiscal year in which the Participant’s Involuntary Termination occurs.

b. Outplacement Services and Relocation Benefits. Outplacement Services and
Relocation Benefits will not be provided for periods beyond the last day of the
second calendar year following the calendar year in which the Participant’s
Involuntary Termination occurred, provided that all reimbursements must be paid not
later than the third calendar year following the calendar year in which the
Participant’s Involuntary Termination occurred.”

3. Article VI Amendment and Termination is replaced with the following:

“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. The Board of Directors has the authority to amend or terminate
the Plan. The Compensation Committee has the authority to amend the Plan. The Company’s
senior officer with responsibility for Human Resources has the authority to approve
technical, administrative, editorial, and compliance amendments recommended by legal
counsel, including any amendments that are necessary to bring the Plan into legal compliance
or to clarify operation of the Plan.”

Approved pursuant to proper authority this 19th day of November 2008.

	 	 	 	 	 
	 	 	NORDSTROM, INC.
	 
	 	 	 	 
	 

	 	By:
	 	Delena Sunday
	 
	 	 	 	 
	 

	 	Title:
	 	Executive Vice President
	 

	 	 	 	Human Resources and Diversity Affairs

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2exv10w4

Exhibit 10.4

NORDSTROM

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(2008 Restatement)

Lane Powell PC

601 SW Second Avenue, Suite 2100

Portland, Oregon 97204-3158

Telephone: (503) 778-2100

Facsimile: (503) 778-2200

 

 

TABLE OF CONTENTS

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

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

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ARTICLE I.

TITLE, PURPOSE AND EFFECTIVE DATE

     1.01 Title. This plan shall be known as the Nordstrom Supplemental Executive
Retirement Plan, and any reference in this instrument to the “Plan” or “SERP” shall include the
plan as described herein and as amended from time to time.

     1.02 Purpose. The Plan is intended to constitute an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group of management or
highly compensated employees of Nordstrom, Inc., a Washington corporation (“Company”), and its
affiliates as designated by the Board (collectively the “Employers”), within the meaning of
Section 201(2), 301(a)(3) and 401(a)(4) of the Employee Retirement Income Security Act of 1974
(“ERISA”). In addition, the Plan is an unfunded, nonqualified plan that is not intended to satisfy
the qualification requirements set forth in Section 401(a) of the Internal Revenue Code of 1986, as
amended (“Code”). The benefits provided to a Participant under this Plan are in addition to any
other benefits available to such Participant under any other plan or program for employees of the
Employers. The Plan shall supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.

     1.03 Effective Date. The Plan was originally effective as of July 18, 1988. The Plan
was subsequently amended on a number of occasions and, in order to provide a number of Plan design
changes, to make changes in Plan administration and to otherwise clarify certain Plan provisions,
the Company adopted a restatement of the Plan, effective January 1, 1999. Subsequent to the 1999
Restatement, the Company undertook a complete review of the competitive nature of the Plan’s
benefit structure, revisited the initial goals and objectives of the Plan and, in making a number
of other administrative changes, adopted the 2002 Restatement. After an internal review of the
2002 Restatement and the structure of the benefit formula and its impact on specific participant
groups, a number of modifications were proposed, which were included in a 2003 Restatement. The
2008 Restatement is adopted effective January 1, 2009 to document compliance with Section 409A of
the Code. For the period from January 1, 2005 to December 31, 2008, the Plan observed operational
compliance with Section 409A of the Code, in accordance with transitional guidance issued by the
Internal Revenue Service.

ARTICLE II.

ELIGIBILITYAND PARTICIPATION

     2.01 Eligibility. Eligibility for this Plan shall be limited to Executives as that
term is defined herein.

          (a) Executive Defined. For purposes of this Plan, the term “Executive” means the
officers of Nordstrom, Inc., as selected by the Board, and any other management or highly
compensated employee of the Company or an Employer, who has been specifically designated

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by the
Committee and approved by the Board as eligible to become a Participant in this Plan. When
designating such individual as an “Executive,” the Board or Committee shall have the discretion to
categorize Executives as any one of the following:

               (i) 1999 Plan Executives. A “1999 Plan Executive” is any Executive who, as of January
1, 2003, was both: (1) designated as eligible under the Plan (either because he or she was a
corporate officer or as a result of Board or Committee designation), and (2) eligible for, or
within one year of being eligible for, Early Retirement under the Plan.

               (ii) Transition Plan Executives. A “Transition Plan Executive” is any Executive who,
as of January 1, 2003, met all of the following requirements: (1) was designated as eligible under
the Plan (either because he or she was a corporate officer or as a result of Board or Committee
designation), (2) had more than 15 Years of Credited Service under the Plan, (3) was not eligible
for, and was not within one year of being eligible for, Early Retirement under the Plan, and (4)
was not specifically designated as a Tier I or Tier II Executive.

               (iii) Tier I Executives. A “Tier I Executive” is any Executive designated by the
Board or the Committee as a Tier I Executive and who is not a 1999 Plan Executive or a Transition
Plan Executive.

               (iv) Tier II Executives. A “Tier II Executive” is any Executive designated by the
Board or Committee as a Tier II Executive and who is not a 1999 Plan Executive or a Transition Plan
Executive.

               (v) Change in Designation. The Committee and the Board shall have the discretion and
authority to change an Executive’s designation, provided that the time and form of payment of a
benefit under this Plan shall be determined based on the Executive’s category when he or she was
first designated as eligible for this Plan.

          (b) Revocation of Designation. Notwithstanding the foregoing, the Board may, in its
sole and exclusive discretion, revoke an employee’s designation as an Executive hereunder at any
time. An Executive whose designation has been revoked shall be entitled to only those benefits, if
any, which have vested as of the date of revocation, and the revocation shall not change the time
or form of payment of benefits.

          (c) Certain Executive Transfers. An Executive pursuant to subparagraph (a) who has
terminated employment with an Employer or the Company as a result of an employment transfer to an
affiliate that is not an Employer, shall continue to be considered an eligible Executive solely for
purposes of determining whether the Executive has separated from active employment (including for
purposes of determining eligibility for Early Retirement under 3.06), but shall not accrue any
additional benefits while not actively employed by the Company or an Employer. Any subsequent
designation of such individual’s Executive status under the Plan may
include benefit credit for years of service with such organization as the Committee deems
appropriate.

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     2.02 Participation. An Executive becomes a “Participant” in the Plan, when such
Executive retires under 2.02(a), with the appropriate approval under 2.02(b) and 2.02(c), as
follows:

          (a) “Retirement” Defined. An Executive retires under the terms of the Plan when such
Executive separates from active employment with the Company and each and every subsidiary and
affiliate of the Company, on or after a retirement date specified in this section. For purposes of
this Plan, an Executive separates from active employment on the date when the Company and the
Executive reasonably anticipate that the Executive’s level of bona fide services will be
permanently reduced to 49 percent or less of the level of bona fide services performed during the
immediately preceding period of 36 consecutive months. An Executive’s termination of employment
with the Company as a result of such Executive’s transfer to a subsidiary or affiliate of the
Company shall not, by itself, constitute a separation from active employment for purposes of this
section. The retirement dates are:

               (i) Normal Retirement Date. The Executive’s Normal Retirement Date shall be (a) a
1999 Plan Executive’s sixtieth (60th) birthday, (b) a Transition Plan Executive’s fifty-fifth
(55th) birthday, or (c) a Tier I or Tier II Executive’s fifty-eighth (58th) birthday.

               (ii) Early Retirement Date. The Executive’s Early Retirement Date shall be the date
that the Executive has both:

                    (1) completed at least ten (10) Years of Credited Service (as defined under 3.01(a)); and

                    (2) in the case of a 1999 Plan Executive, attained age 50, or in the case of a Tier I, Tier
II or Transition Plan Executive, attained age 53.

               (iii) Disability Retirement Date. The Executive’s Disability Retirement Date shall be
the date on which: (1) a 1999 Plan Executive becomes eligible for unreduced Early Retirement
Benefits under Section 3.06, provided that the Executive continues to be permanently Disabled on
such date, or (2) a Tier I, Tier II or Transition Plan Executive becomes eligible for Normal
Retirement Benefits under 3.05, provided that the Executive continues to be permanently Disabled
through his or her Normal Retirement Date.

          (b) Committee Approval. As a condition to payment, the Committee must approve all
Retirement Benefits under Article III.

          (c) Board Approval for Early Retirement. An Executive who separates from active
employment on or after his or her Early Retirement Date (but prior to Normal Retirement Date) must
receive the consent and approval of the Board for such early retirement. If the
Executive elects to separate from active employment without Board approval of early retirement, the
Executive’s entire benefit under the Plan shall be forfeited.

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     2.03 Disability. An Executive who becomes Disabled while employed by the Company or
an Employer shall be deemed to be an Executive in active service with the Company during the period
of such Disability and shall continue to accrue Years of Credited Service for such period whether
or not such Executive actually performs services for the Company during such period; provided,
however, that accrual of service under this section shall cease upon the earlier of the Disabled
Executive’s: (i) recovering from such Disability; or (ii) Disability Retirement Date. An Executive
who recovers from such Disability, but who does not thereafter return to active service with an
Employer shall be treated as though he or she terminated employment prior to reaching a Retirement
Date and his or her Plan benefit shall be forfeited. For purposes of this Plan, an Executive is
Disabled if, due to a medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of at least 12 months, the
Executive is receiving income replacement benefits for a period of at least three months under the
Company’s Disability Program.

     2.04 Leave of Absence. The Board shall determine, on an individual basis and in its
sole and absolute discretion, the treatment under the Plan of an Executive who takes a leave of
absence from the Company or an Employer for reasons other than Disability, provided that the Board
shall not change the time or form of payment of benefits set forth in this Plan solely because of
the Executive’s leave of absence. An Executive on a leave of absence for reasons other than
Disability will be considered to have experienced a termination of employment for purposes of this
Plan if the period of leave exceeds six months, unless the Executive retains a right to be
reinstated to employment with the Company or an Employer under an applicable law or contract after
the six-month period ends.

ARTICLE III.

BENEFITS

     3.01 Retirement Benefit. An Executive’s “Retirement Benefit” shall mean the benefit
payable to the Executive as a Participant, pursuant to this Article III, expressed and payable as a
monthly benefit in the form of a 50% Joint and Survivor Annuity, commencing on the Retirement Date.
An Executive’s Retirement Benefit depends on the Executive’s eligibility category as designated by
the Board or Committee as a 1999 Plan Executive, Transition Plan Executive, Tier I Executive, or
Tier II Executive, with the following provisions and definitions applying to each of those
categories:

          (a) Year of Credited Service. A “Year of Credited Service” shall have the same
meaning as “Years of Service” under the Nordstrom 401(k) Plan & Profit Sharing (and any predecessor
or successor thereto) (“Profit Sharing Plan”). Service with a subsidiary or other corporation
controlled by the Company shall not be considered “Credited Service” unless the Committee
specifically agrees to credit such service. In addition, Years of Credited Service may
be granted by the Committee under 4.05. In no case, however, will more than twenty five (25) Years
of Credited Service be counted for any purpose under the Plan.

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          (b) Final Average Compensation. For purposes of this Plan, Final Average Compensation
shall mean the monthly compensation resulting from the average of the highest thirty-six (36)
months of the Executive’s Covered Compensation, measured over the Averaging Period:

               (i) Covered Compensation. For purposes of determining an Executive’s Final Average
Compensation, Covered Compensation shall include base salary and the cash bonus accrued for a
fiscal year, divided by the number of full and partial months the Executive worked in the fiscal
year. Covered Compensation shall not include any other items of remuneration such as
reimbursements, allowances, fringe benefits or gains on the exercise of stock options, regardless
of whether such amounts are included in the taxable income of the Executive. Unless specifically
agreed to by the Committee, Covered Compensation shall not include any remuneration provided by a
subsidiary or an affiliate.

               (ii) Averaging Period. The Executive’s Averaging Period shall be the longer of: (a)
the final sixty (60) months of the Executive’s employment; or (b) the entire period of service
(measured in months) after either (1) a 1999 Plan Executive’s fiftieth (50th) birthday, or (2) a
Transition Plan or Tier I or II Executive’s fifty-third (53rd) birthday. Unless the Committee
decides otherwise, periods of employment with a subsidiary or affiliate that is not an Employer
shall not be considered for purposes of determining the Averaging Period.

     3.02 Tier I Executive Retirement Benefit. A Tier I Executive’s Retirement Benefit
shall be equal to one and six-tenths percent (1.6%) of such Executive’s Final Average Compensation,
multiplied by the Executive’s Years of Credited Service.

     3.03 Tier II Executive Retirement Benefit. A Tier II Executive’s Retirement Benefit
shall be equal to eight-tenths percent (0.8%) of such Executive’s Final Average Compensation,
multiplied by the Executive’s Years of Credited Service.

     3.04 1999 and Transition Plan Executive Retirement Benefit. A 1999 Plan Executive’s
Retirement Benefit and a Transition Plan Executive’s Retirement Benefit shall be equal to two and
four-tenths percent (2.4%) of such Executive’s Final Average Compensation, multiplied by the
Executive’s Years of Credited Service, but reduced by the Executive’s Annuity Value of Profit
Sharing, determined as follows:

          (a) Annuity Value of Profit Sharing. The Executive’s Annuity Value of Profit Sharing
means the actuarially equivalent monthly amount of the Executive’s Company contribution account
balances as of the date such Executive retires, if the account balances were paid in the form of a
50% Joint and Survivor Annuity, as follows:

               (i) Profit Sharing Plan. Company-provided profit sharing and matching contributions
(and income thereon) under the Profit Sharing Plan; plus

               (ii) Other Qualified Plans. The amount of any Company-provided benefits to the
Executive under any other qualified plan of the Company or its affiliates; plus

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               (iii) Distributions. The amount of any previous withdrawals or other distributions of
any type (regardless of the payee) from the previously described plans (without adjustment for
imputed earnings for any period following the actual date of withdrawal or distribution), other
than (1) distributions of life insurance policies from the Profit Sharing Plan; and (2) the excess
(if any) of premiums paid with respect to life insurance policies prior to such date over the cash
surrender value used in computing the account balances in the Profit Sharing Plan as of such date
expressed and payable as a monthly benefit commencing on the applicable payment date in the form of
a 50% Joint and Survivor Annuity.

          (b) 50% Joint and Survivor Annuity. For purposes of determining the reductions under
Section 3.04(a), a 50% Joint and Survivor Annuity means the annuity defined in Section 5.02, with
the following modifications to take into account the determination of such annuity value upon the
Participant’s (as opposed to the Beneficiary’s) commencement of benefits under the Plan:

               (i) Beneficiary. A Participant’s joint annuitant in this context is the individual
who would be considered the Participant’s Beneficiary under 5.01(a) (for purposes of the Plan’s
pre-retirement survivor annuity) on the date the Participant retires. In the event that there is
no Beneficiary on such date, the survivor annuity shall be calculated as though the Participant had
a Beneficiary of the same age as the Participant.

               (ii) Actuarial Equivalent. The Actuarial Equivalent used for this section shall be
the same as that defined and used by the Committee in Section 5.02(b), except that the interest
rate used shall be the IRS Long Term Applicable Federal Rate (AFR) stated for the month prior to
the month in which the Executive retires.

     3.05 Normal Retirement Benefits. An Executive who retires on or after Normal
Retirement Date shall be entitled, upon approval of the Committee, to a Retirement Benefit under
either 3.02, 3.03 or 3.04 (as appropriate) determined as of the actual date the Executive retires.

     3.06 Early Retirement Benefits. Subject to 3.06(c), an Executive who retires (with
the consent and approval of the Board) on or after his or her Early Retirement Date shall be
entitled, upon approval of the Committee, to an Early Retirement Benefit as follows:

          (a) Retirement Benefit. The Executive’s Retirement Benefit under 3.02, 3.03 or 3.04
(as appropriate) determined on the actual date the Executive retires, reduced by the Early
Retirement Reduction Factor.

          (b) Early Retirement Reduction Factor.

               (i) 1999 Plan Executives. For 1999 Plan Executives, three percent (3%) for each year
the sum of the Participant’s age and Years of Credited Service is less than 75.

               (ii) Transition Plan Executives. For Transition Plan Executives, twelve and one-half
percent (12.5%) for each year prior to the Executive’s Normal Retirement

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Date, with such reduction
percentage to be prorated for any applicable fraction of a year, based on the number of full months
worked in such year.

               (iii) Tiers I and II Executives. For any Tier I or Tier II Executive, ten percent
(10%) for each year prior to the Executive’s Normal Retirement Date, with such reduction percentage
to be prorated for any applicable fraction of a year, based on the number of full months worked in
such year.

          (c) Transition Plan Executives. If a Transition Plan Executive’s Early Retirement
Benefit calculated as though they were a Tier I Executive (under 3.02 and 3.06(b)(iii)), is greater
than the Early Retirement Benefit calculated as a Transition Plan Executive (under 3.04 and
3.06(b)(ii)), then such Transition Plan Executive shall be entitled to receive such greater Early
Retirement Benefit calculated as though they were a Tier I Executive.

     3.07 Deferred Retirement Benefits. An Executive who retires after his or her Normal
Retirement Date shall be entitled to a Deferred Retirement Benefit equal to the Normal Retirement
Benefit under this Article III, but increased with interest for each Year of Post-Normal Retirement
Date Service, up to a maximum of ten (10) Years of Post-Normal Retirement Date Service. A Year of
Post-Normal Retirement Date Service means the period of twelve (12) consecutive complete calendar
months beginning with the first of the month following a Participant’s Normal Retirement Date, and
each successive period of twelve (12) consecutive complete calendar months, prior to the
Participant’s date of Retirement (as defined in 2.02(a)). Partial Years of Post-Normal Retirement
Date Service shall be disregarded. An interest rate of five percent (5%) per Year of Post-Normal
Retirement Date Service, compounded annually, shall be used to calculate the increase under this
section.

     3.08 Disability Retirement Benefits. A Disabled Executive continuing to accrue
service credit under Section 2.03 shall be treated, for purposes of the Plan, as an active
Executive for such period, and the Retirement Benefit under this Article III shall be determined as
of such Disabled Executive’s Disability Retirement Date. A Disabled Executive may not receive
Retirement Benefits prior to the Disability Retirement Date, even if, for example, the Executive
qualifies for Early Retirement before his or her Disability Retirement Date. In addition, a
Disabled Executive who receives Retirement Benefits while also receiving long-term disability or
other disability income benefits pursuant to any other Employer-sponsored plan, fund or program
that covers a substantial number of employees (excluding disability income paid by Social
Security), shall have the monthly Retirement Benefit payable under this Plan reduced (but not below
zero) by the monthly benefit actually paid or payable under such other plan. The amount by which
the disability retirement benefit is reduced due to other payments shall be permanently forfeited.

     3.09 Death Benefit. The Death Benefit under this Plan, whether payable before or
after Retirement, shall consist solely of a survivor annuity, payable for the life of the
Beneficiary (if any), as described in Article V.

     3.10 Payment of Benefits. The following shall apply to the payment of benefits under
Article III:

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          (a) Payment Commencement.

               (i) General Rule. Payment of benefits under this Article III shall commence within 90
days after the date the Executive retires. The Participant may not designate the taxable year in
which payments will begin.

               (ii) Key Employees. If the Executive is a Key Employee, in order to comply with Code
Section 409A, payments during the six-month period beginning on the Retirement Date shall be
suspended. The first payment after expiration of the six-month waiting period shall include all
periodic payments that were suspended during the six-month waiting period. For purposes of the
Plan, Key Employee has the same meaning as under Code Section 416(i)(1)(A)(i), (ii), or (iii) (and
disregarding Code Section 416(i)(5)). An Executive’s status as a Key Employee is determined as of
each September 30, and the Executive is treated as a Key Employee under the Plan for the next
calendar year.

          (b) Semi-Monthly Payment. Periodic payments of benefits shall be paid in equal
monthly amounts on a semi-monthly basis through the Company’s normal payroll system.

          (c) Withholding.

               (i) Income Tax and Other Withholding. The Company shall withhold from any and all
benefit payments made under the Plan and this Article III, all federal, state and local income
taxes the Company reasonably determines are required to be withheld in connection with the benefits
hereunder, and any other amounts due, owing and unpaid by the Participant to the Company, to be
determined in the sole discretion of the Company. In the event the amounts due under this
3.10(c)(i) exceed the amount of benefits currently payable, the Participant shall be required to
contribute to the Company an amount necessary to meet such obligations.

               (ii) Employment Taxes. At the time of Retirement, the Company shall calculate the
employment taxes (i.e., Social Security and Medicare taxes) due on the Participant’s benefit under
the Plan. The Company shall pay the Company’s share and the Participant’s share of the employment
taxes directly to the appropriate taxing authority. To the extent that the Company’s payment
creates an additional tax liability for the Participant, the Company shall pay the Participant an
additional amount to satisfy this additional tax liability. The Company’s payment to the
Participant must be made no later than the last day of the Participant’s taxable year next
following the Participant’s taxable year in which the Company makes the employment tax payment on
behalf of the Participant.

ARTICLE IV.

RIGHTS OF PARTICIPANTS IN THE PLAN

     4.01 Vesting. Except as otherwise provided in this Section and elsewhere in
Article IV and Section 6.02, no Executive, Participant or Beneficiary shall have any vested
interest in any

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Plan benefits. The Benefits in which such Participant or Beneficiary has a vested
interest under this Section (subject to forfeiture in 4.02) shall be determined as follows:

          (a) Years in Position. In addition to the other requirements of this Section 4.01, an
Employee must have been a designated Tier II Executive under the Plan for a period of at least
seven Years of Credited Service in order to become vested in a benefit under this Plan.

          (b) Early Retirement. A Participant entitled to Early Retirement Benefits under
Section 3.06 shall have a vested interest in such benefits after the Board consents to and approves
the Participant’s Early Retirement Date.

          (c) Normal Retirement. A Participant entitled to Normal Retirement benefits under
Section 3.05 shall have a vested interest in Normal Retirement benefits on the Participant’s Normal
Retirement Date.

          (d) Deferred Retirement. An Executive who retires after Normal Retirement Date shall
have a vested interest in Retirement Benefits granted under Section 3.05 on the Participant’s
Normal Retirement Date, and shall have a vested interest in the additional benefits under Section
3.07 on such Participant’s Deferred Retirement Date.

          (e) Death Benefit. The Beneficiary of a Participant who is entitled to a survivor
annuity under Article V shall have a vested interest in any applicable survivor annuity which is
actually payable in accordance with the terms of Article V, on and after the date of the
Participant’s death.

     4.02 Exceptions to Vesting. Notwithstanding any other provision of this Plan, an
Executive’s benefit shall be forfeited in the following situations:

          (a) Tier II Executives. No benefits shall be paid to a Tier II Executive who
terminates employment with less than seven Years of Credited Service as a designated Tier II
Executive under the Plan.

          (b) Suicide or Self-Inflicted Injury. No benefits shall be paid to an Executive or to
any Beneficiary of such Executive as a result of suicide or self-inflicted injury by the Executive
within three (3) years after such Executive becomes an “Executive” under the Plan.

          (c) Termination for Good Cause. If an Executive is terminated for “cause” or if an
Executive is found by the Company at any time to have engaged in any acts as would have constituted
“cause” for termination, the Executive and any Beneficiary of the Executive shall immediately
forfeit any and all rights to benefits under this Plan. Accordingly, any benefits in pay status
shall cease immediately, and no future benefits shall be payable to the Executive or to his or her
Beneficiary. For purposes of this Plan, “cause” shall mean that the Executive has or had:

               (i) misappropriated, stolen or embezzled funds of the Company or an affiliate;

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               (ii) committed an act of deceit, fraud, dereliction of duty or gross or willful misconduct;

               (iii) been convicted of either a felony or a crime involving moral turpitude or entered a plea
of no contest in response to an indictment for such crime or felony;

               (iv) intentionally disclosed confidential information of the Company or an affiliate (except
when such disclosure is made pursuant to the direction of the Company or in accordance with legal,
administrative or judicial process); or

               (v) engaged in competitive behavior against, actions inimical to the interests of, purposely
aided a competitor of, or has misappropriated or aided in the misappropriation of a material
opportunity of the Company or its affiliates.

     (d) Cessation of Benefits for Competition. Retirement Benefits currently in pay
status to a Participant shall cease, and no further benefits shall be payable, to the Participant
(or Beneficiary) to the extent the Participant competes, directly or indirectly, with the Company.
For purposes of this Plan, “competing, directly or indirectly, with the Company” shall mean
(without limitation) a determination, in the sole discretion of the Committee, of any of the
following: (i) engaging in the operation of any type of business or enterprise in any way
competitive with the business of the Company or its subsidiaries or affiliates, (ii) holding an
interest, either directly or indirectly, as owner, director, officer, employee, partner,
shareholder (other than as the owner of less than two percent (2%) of the outstanding stock of a
publicly owned company), in any type of business or enterprise in any way competitive with the
business of the Company or its subsidiaries or affiliates; or (iii) investing capital in, lending
money or property to or rendering services to any type of business or enterprise in any way
competitive with the business of the Company or its subsidiaries or affiliates. In the event of a
dispute as to the application of this paragraph, the Committee may waive or modify its right to
discontinue payment to any Participant or to any Beneficiary of such Participant by written
agreement.

     4.03 Application of Clawback Policy. This section applies if the Board elects to
apply the Company’s clawback policy to a Participant and application of the clawback policy results
in a reduction in the Participant’s Final Average Compensation. The Participant’s Plan benefit
shall be recalculated, and the
Participant’s future payments shall be adjusted automatically beginning with the first payment
after the recalculation is completed. To the extent that the Participant has already received
payments under the Plan and those payments are greater than the recalculated benefit (i.e., an
overpayment), the Plan Administrator shall recover the overpayment by reducing the next payment due
under the Plan (but not below zero) and applying it to the overpayment. To the extent that there
continues to be an overpayment after reduction of the first recalculated payment, each successive
payment shall be reduced (but not below zero) and the reduction shall be applied to the overpayment
until the overpayment has been repaid in full. Once the overpayment has been repaid in full, the
Participant shall receive the recalculated benefit as if the recalculated benefit had been the
initial benefit calculated under the Plan. The provisions of this section for recovery of
overpayments shall also apply to the Beneficiary of a Participant after the Participant’s death.

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     4.04 Rights in Plan are Unfunded and Unsecured. The Company’s obligation under the
Plan shall in every case be an unfunded and unsecured promise to pay. A Participant’s right to
Plan distributions shall be no greater than the rights of general, unsecured creditors of the
Company. The Company may establish one or more grantor trusts (as defined in Code Section 671
et seq.) to facilitate the payment of benefits hereunder; however, the Company shall not be
obligated under any circumstances (other than a Change of Control, as described in 6.02) to fund
its financial obligations under the Plan. Any assets which the Company may acquire or set aside to
defray its financial liabilities shall be general assets of the Company, and such assets, as well
as any assets set aside in a grantor trust, shall be subject to the claims of its general creditors
in the event of the Company’s insolvency.

     4.05 Discretion to Grant Years of Service or Increase Age. If circumstances warrant
(in order to attract or retain a qualified Executive), and it is decided it is in the best
interests of the Company, the Committee shall have the authority and discretion to grant to certain
individuals additional Years of Credited Service or to treat such individuals as having attained a
certain age for purposes of this Plan, provided, however, that no such action may alter the time or
form of payment of Plan benefits. Such circumstances may include (a) providing Executives with a
recruiting incentive, or (b) such other circumstances that the Committee deems appropriate. The
Committee may condition the receipt of such additional benefits (to which the Executive is not
otherwise entitled) on the Participant’s execution of an election of increased benefits under this
Plan and a general release of all claims. The Committee’s granting of Years of Credited Service
and/or treating the Executive as attaining a certain age may affect the amount of the Executive’s
benefit under this Plan, but shall not alter, and shall not be construed as altering, the
Executive’s actual age or years of service with the Employer under any other plan of the Employer
or for purposes of determining the time or form of payment under this Plan.

ARTICLE V.

DEATH BENEFITS

     5.01 Death Benefit Payable. Each Executive’s Retirement Benefit is expressed and
payable as a monthly benefit in the form of a 50% Joint and Survivor Annuity under this Plan.
Accordingly, the sole death benefit payable under this Plan on behalf of an Executive or a
Participant is as follows:

          (a) Pre-Retirement Death Benefit. If a Participant dies while actively employed as an
Executive, a pre-retirement death benefit shall be payable under the Plan upon the death of the
Executive. The pre-retirement death benefit shall be a Survivor Annuity payable for the life of
the Executive’s Beneficiary, calculated as though the Executive had retired as a Participant and
had begun receiving Early, Normal or Deferred Retirement Benefits under the Plan based on his or
her actual age and Years of Credited Service on the day before his or her death. The periodic
payment to the Beneficiary is 50% of the periodic payment that would have been paid to the
Executive if the Executive had not died prior to Retirement. If the Executive

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dies before reaching
a Retirement Date under the Plan, the survivor annuity shall commence on the earliest date the
Executive would have been eligible to retire under the Plan.

          (b) Post-Retirement Death Benefit. The Post-Retirement Death Benefit payable on
behalf of a Participant shall be a 50% Survivor Annuity payable for the life of the Participant’s
Beneficiary, based on the actual Retirement Benefit the Participant was receiving at the time of
his or her death, calculated in accordance with the provisions of Section 5.02.

     5.02 50% Joint and Survivor Annuity. A 50% Joint and Survivor Annuity means an
annuity for the life of the Participant and, after his or her death, a survivor annuity for the
life of the Participant’s Beneficiary in an amount that is fifty percent (50%) of the original
annuity amount paid to the Participant; provided, however, that if the Beneficiary is more than
five years younger than the Participant, such survivor annuity will be calculated so that it is the
Actuarial Equivalent of the 50% survivor annuity for a Beneficiary five years younger than the
Participant.

          (a) Beneficiary. A Participant’s Beneficiary is the individual to whom the
Participant is legally married or the Participant’s Life Partner on the date of the Participant’s
death. For this purpose, the term “Life Partner” has the same meaning as is used under the
Nordstrom Welfare Benefit Plan; provided, however, that the Committee may, in its discretion,
substitute a less restrictive definition than is used in the Nordstrom Welfare Benefit Plan.

          (b) Actuarial Equivalent. The Committee shall have the authority to periodically
determine and change the appropriate factors used to determine Actuarial Equivalence under the
Plan. As of the Effective Date of this Restatement, the mortality table shall be the 1983 Group
Annuity Mortality Table for males (GAM 83) and the interest rate shall be the IRS Long Term
Applicable Federal Rate (AFR) stated for the month of the Executive’s death.

     5.03 Acknowledgment. The Committee shall have the sole and exclusive discretion to
determine the identity of any Beneficiary, and no person shall have a right to any death benefit
under this Plan in the absence of a determination that he or she is the Beneficiary of the
Executive or Participant.

     5.04 Surviving Beneficiary. For purposes of determining whether the Beneficiary
predeceases the Executive, the individual is considered to survive the Executive if such
Beneficiary is alive seven (7) days after the date of the Executive’s death.

     5.05 Doubt as to Beneficiary. If the Plan Administrator has any doubt as to the proper
individual to receive payments pursuant to this Plan, the Plan Administrator shall have the right,
exercisable in its discretion, to cause the Executive’s Employer to withhold such payments until
this matter is resolved to the Plan Administrator’s satisfaction.

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ARTICLE VI.

TERMINATION, AMENDMENT OR MODIFICATION OF THE PLAN

     6.01 Plan Amendments and Termination.

          (a) Board of Directors. The Plan may be amended or terminated by the Board of
Directors at any time. Except as provided in 6.02, such amendment or termination may modify or
eliminate any benefit hereunder other than a benefit that is in pay status, or the vested portion
of a Retirement Benefit that is not in pay status.

          (b) Compensation Committee. The Committee has the authority on behalf of the Board to
review, finalize, approve and adopt amendments to the Plan, other than amendments relating to Plan
eligibility. Except as provided in 6.02, such amendment may modify or eliminate any benefit
hereunder other than a benefit that is in pay status, or the vested portion of a Retirement Benefit
that is not in pay status. The Committee shall notify the Board of all amendments adopted under
this provision.

          (c) Officer in Charge of Human Resources. The Company’s senior officer with
responsibility for Human Resources has the authority on behalf of the Board to review, finalize,
approve and adopt technical, legal, administrative, and compliance amendments recommended by the
Company’s legal counsel. The Company’s senior officer with responsibility for Human Resources
shall notify the Board of all amendments adopted under this provision.

          (d) Benefits on Termination. If the Plan is terminated, benefit payments may be
accelerated only to the extent permitted in final regulations under Code Section 409A.

     6.02 Change of Control – Protected Benefits. In the event of a Change of Control (as
defined in the Trust), the following additional provisions shall apply.

          (a) No Amendment or Termination. No amendment (or termination) of the Plan can occur
that would reduce or otherwise eliminate the monthly benefit payable under the Plan to any person
with respect to a Participant who retired prior to such Change of Control, nor shall any Plan
amendment reduce the benefit to be paid with respect to an Executive (who has not retired) below
the amount which such Executive has accrued and would have received (upon reaching Normal
Retirement Date) had he or she retired the day before such Change of Control (the “Change of
Control Benefit”).

          (b) Full Vesting in Accrued Benefit. Upon the occurrence of a Change of Control, each
active Executive shall be fully vested in his or her Change of Control Benefit under this Plan
through the date of the Change of Control; in the event of termination of employment after a Change
of Control and before the Executive’s Normal Retirement Date, the
terminated Executive shall receive a reduced Early Retirement benefit commencing on his or her
Early Retirement Date (with reductions based upon the age attained on the actual Early Retirement
Date and without the need for Board approval of the Early Retirement Date).

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          (c) Full Funding. Notwithstanding the provisions of Section 4.04 and the unfunded
status of the Plan, in the event of a Change of Control, the Company shall fully fund the Trust as
provided in Article VIII.

ARTICLE VII.

CLAIMS PROCEDURES

     7.01 Submission of Claim. Benefits shall be paid in accordance with the provisions of
this Plan. The Participant, or any person claiming through the Participant (“Claiming Party”),
shall make a written request for benefits under this Plan, mailed or delivered to the Committee.
Such claim shall be reviewed by the Committee or its delegate.

     7.02 Denial of Claim. If a claim for payment of benefits is denied in full or in
part, the Committee or its delegate shall provide a written notice to the Claiming Party within
ninety (90) days setting forth: (a) the specific reasons for denial; (b) any additional material
or information necessary to perfect the claim; (c) an explanation of why such material or
information is necessary; and (d) an explanation of the steps to be taken for a review of the
denial. A claim shall be deemed denied if the Committee or its delegate does not take any action
within the aforesaid ninety (90) day period.

     7.03 Review of Denied Claim. If the Claiming Party desires Committee review of a
denied claim, the Claiming Party shall notify the Committee or its delegate in writing within sixty
(60) days after receipt of the written notice of denial. As part of such written request, the
Claiming Party may request a review of the Plan document or other non-privileged documents relevant
to the claim, may submit any written issues and comments, and may request an extension of time for
such written submission of issues and comments.

     7.04 Decision upon Review of Denied Claim. The decision on the review of the denied
claim shall be rendered by the Committee within sixty (60) days after receipt of the request for
review. If circumstances require, the Committee may take up to an additional sixty (60) days to
render its decision. The decision shall be in writing and shall state the specific reasons for the
decision, including reference to specific provisions of the Plan on which the decision is based.

ARTICLE VIII.

TRUST

     8.01 Establishment of the Trust. The Company may establish a trust, provided that any
trust created by the Company, and any assets held by such trust to assist the Company in meeting
its obligations under this Plan, shall be structured in a way to avoid immediate taxation to
Participants in the Plan. Except in the case of a Change of Control (as defined in the Trust), the

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Company reserves the absolute right, in its sole and exclusive discretion, to direct (or refrain
from directing) the transfer over to the Trust of such assets to the extent the
Company deems
advisable, provided that no such transfer, Trust or other arrangement entered into by the Company
shall affect the status of the Plan as unfunded for purposes of ERISA or the Code.

     8.02 Interrelationship of the Plan and the Trust. The provisions of the Plan shall
govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of
the Trust shall govern the rights of the Company, Participants and the creditors of the Company to
the assets transferred to the Trust. The Company shall at all times remain liable to carry out its
obligations under the Plan. The Company’s obligations under the Plan may be satisfied with Trust
assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the
Company’s obligations under this Plan.

     8.03 Funding on Change of Control. In the event of a Change of Control (as defined in
the Trust) at any time when the Trust has not been terminated and is not fully funded (as defined
below), the Company shall promptly transfer to the trustee of the Trust assets sufficient to cause
the Trust to be fully funded on the date of such transfer. For purposes of this paragraph, the
Trust shall be “fully funded” on a given date if, on such date, the fair market value of the assets
held by the trustee of the Trust is at least equal to the Actuarial Equivalent present value of:
(i) all benefits under the Plan in pay status to Participants or Beneficiaries on such date; plus
(ii) the fully vested Change of Control Benefit under 6.02. For purposes of this paragraph,
Actuarial Equivalent present value shall be determined using the interest and mortality assumptions
of the Article III Actuarial Equivalent in effect for the month prior to the Change of Control.

     8.04 Administration of Trust Assets. Prior to a Change of Control, the Company,
acting through an Administrative Committee established for the purpose of overseeing administration
of the Company’s non-qualified deferred compensation plans, shall direct the Trustee regarding the
investment of Trust assets. On and after a Change of Control, the authority of the Administrative
Committee shall cease, and the Trustee shall have the exclusive authority and responsibility for
the investment of Trust assets, subject to any investment guidelines provided by the Company prior
to the Change of Control.

ARTICLE IX.

PLAN ADMINISTRATION

     9.01 Plan Sponsor and Administrator. The Company is the “Plan Sponsor,” and the
Committee is the “Plan Administrator.” The Company’s senior officer with responsibility for Human
Resources and the Company’s Leadership Benefits Department have been selected to assist the
Committee in its day to day responsibilities with respect to the Plan. The Committee, with the
advice of Leadership Benefits, will make such rules and computations and will take such other
actions to administer the Plan as the Committee may deem appropriate.

     9.02 Authority of Committee. As Plan Administrator, the Committee has the sole and
exclusive discretion, authority and responsibility to construe and interpret the terms and
provisions of the Plan, to remedy and resolve ambiguities, to grant or deny any and all claims for

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benefits and to determine all issues relating to eligibility for benefits. All actions taken by
the Committee as Plan Administrator, or its delegate, will be conclusive and binding on all persons
having any interest under the Plan, subject only to the provisions of Article VII. All findings,
decisions and determinations of any kind made by the Committee or its delegate shall not be
disturbed unless the Committee has acted in an arbitrary and capricious manner.

     9.03 Exercise of Authority. All resolutions or other actions taken by the Committee
shall either: (a) be taken by a vote of a majority of those present at a meeting at which a
majority of the members are present; or (b) be evidenced in a writing adopted by a majority of all
the members in office at the time the action is taken if the Committee acts without a meeting.

     9.04 Delegation of Authority. The Committee may delegate all or part of its
responsibilities, authority and discretion under the Plan to other persons. The duties of the
Committee under the Plan will be carried out in its name by the officers, directors and employees
of the Company. Any such delegation shall carry with it the full discretion and authority vested
in the Committee under Section 9.02. The Committee has delegated the day-to-day administration of
the Plan to the Company’s Leadership Benefits Department under the direction of the Company’s
senior officer with responsibility for Human Resources.

     9.05 Reliance on Opinions. The members of the Committee and the officers and
directors of the Company, and any employee of the Company who is charged with duties in connection
with the administration of the Plan shall be entitled to rely on all certificates and reports made
by any duly appointed accountants, and on all opinions given by any duly appointed legal counsel,
including legal counsel for the Company.

     9.06 Information. The Company shall supply full and timely information to the
Committee on all matters relating to the compensation of
Participants, the date and circumstances of the termination of employment or death of a Participant
and such other pertinent information as the Committee may reasonably require.

     9.07 Indemnification. The Company shall indemnify and hold harmless each Committee or
Board member, and each Company employee performing services or acting in any capacity, from and
with respect to the Plan against any and all expenses and liabilities arising in connection with
services performed in regard to this Plan. Expenses against which such individual shall be
indemnified hereunder shall include, without limitation, the amount of any settlement or judgment,
costs, counsel fees and related charges reasonably incurred in connection with a claim asserted, or
a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in
addition to any other rights to which any such individual may be entitled as a matter of law or
other agreement.

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ARTICLE X.

MISCELLANEOUS

     10.01 No Employment Contract. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment between the Company and an Executive. Nothing in
this Plan shall be deemed to give an Executive the right to be retained in the service of the
Company or to interfere with any right of the Company to discipline or discharge the Executive at
any time.

     10.02 Employee Cooperation. An Executive will cooperate with the Company by
furnishing any and all information reasonably requested by the Company and take such other actions
as may be requested to facilitate Plan administration and the payment of benefits hereunder.

     10.03 Illegality and Invalidity. If any provision of this Plan is found illegal or
invalid, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan
shall be construed and enforced as if such illegal and invalid provision had not been included
herein.

     10.04 Required Notice. Any notice which shall be or may be given under the Plan shall
be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given
to the Company, such notice shall be addressed to the Company c/o Leadership Benefits, 1700 Seventh
Avenue, Suite 900, Seattle, Washington 98101-4407. If notice is to be given to a Participant, such
notice shall be hand-delivered to the Participant or may be mailed to the last known address of the
Participant on the Company’s Human Resources records. Any party may, from time to time, change the
address to which notices shall be mailed by giving written notice of such new address.

     10.05 Interest of Participant’s Beneficiary. The interest in the benefits hereunder
of a spouse or Life Partner of a Participant who, at any time prior to the death of the
Participant, ceases to be the spouse or Life
Partner of the Participant (whether by death, dissolution, annulment, separation, divorce or, in
the case of a Life Partner, the termination of the life partnership), shall automatically pass to
the Participant unless the spouse is required to be treated as the “Surviving Spouse” pursuant to a
court order meeting the requirements of a Qualified Domestic Relations Order, applying rules
analogous to those under Code Section 414(p). A former spouse may not transfer his or her interest
in the Plan in any manner, including but not limited to by his or her will, nor shall such interest
pass under the laws of intestate succession.

     10.06 Tax Liabilities from Plan. If an Executive’s participation in this Plan
generates a state or federal tax liability to the Participant prior to commencement of benefit
payments (including a tax liability under Section 409A of the Code), the Committee may exercise its
discretion to authorize a distribution of funds in an amount not to exceed the amount needed to
satisfy such liability (including additions to tax, penalties and interest). A distribution under
this provision is solely at the discretion of the Committee, and the Executive may not elect,
directly or indirectly, to accelerate payment. The Executive’s tax liability shall be measured by
using that Executive’s then current highest federal, state and local marginal tax rate, plus the
rates or

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amounts for the applicable additions to tax, penalties and interest. Such a distribution
shall affect and reduce the benefits to be paid under Articles III and V hereof.

     10.07 Benefits Nonexclusive. The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits available to such
Participant under any other plan or program for employees of the Company. The Plan shall
supplement and shall not supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.

     10.08 Discharge of Company Obligation. The payment of benefits under the Plan to a
Participant or Beneficiary shall fully and completely discharge the Company, the Board, and the
Committee from all further obligations under this Plan with respect to a Participant, and
participation shall terminate upon such full payment of benefits.

     10.09 Costs of Enforcement. If any action at law or in equity is necessary by the
Committee or the Company to enforce the terms of the Plan, the Committee or the Company shall be
entitled to recover reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which that party may be entitled.

     10.10 Gender and Case. Unless the context clearly indicates otherwise, masculine
pronouns shall include the feminine and singular words shall include the plural and vice
versa.

     10.11 Titles and Headings. Titles and headings of the Articles and Sections of the
Plan are included for ease of reference only and are not to be used for the purpose of construing
any portion or provision of the Plan document.

     10.12 Applicable Law. To the extent not preempted by federal law, the Plan shall be
governed by the laws of the State of Washington.

     10.13 Counterparts. This instrument may be executed in one or more counterparts, each
of which is legally binding and enforceable.

     10.14 Definitions:

          (a) “Board” means the board of directors of Nordstrom, Inc.

          (b) “Code” means the Internal Revenue Code of 1986, as amended.

          (c) “Committee” means the Compensation Committee of the Board.

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This Plan is signed and adopted, pursuant to proper authority, this 19th day of November 2008.

	 	 	 	 	 	 	 
	 	 	NORDSTROM, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Delena Sunday
 

Delena Sunday
	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 

	 	 	 	Human Resources and Diversity Affairs	 	 

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