Document:

<PAGE>
                                                                   EXHIBIT 10.55

                                    NORDSTROM

                      DIRECTORS DEFERRED COMPENSATION PLAN

                               (2002 RESTATEMENT)

            CONSOLIDATES ALL PLAN PROVISIONS APPROVED BY THE COMPANY
                            INCLUDING THE FOLLOWING:

                        JANUARY 1, 2000 RESTATEMENT; AND
                                AMENDMENT 2001-1

                         LANE POWELL SPEARS LUBERSKY LLP
                       601 S.W. SECOND AVENUE, SUITE 2100
                             PORTLAND, OREGON 97204
                            TELEPHONE: (503) 778-2100
                            FACSIMILE: (503) 778-2200

<PAGE>

                                    ARTICLE I

                        TITLE, PURPOSE AND EFFECTIVE DATE

                  1.01     Title. This plan shall be known as the Nordstrom
Directors Deferred Compensation Plan, and any reference in this instrument to
the "Plan" 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 members of the Board of Nordstrom, Inc., a Washington
corporation, and its affiliates ("Company"), within the meaning of Sections
201(2), 301(a)(3) and 401(a)(4) of the Employee Retirement Income Security Act
of 1974 ("ERISA").

                  1.03     Effective Date. The Plan was originally effective as
of January 1, 1994. In order to provide for Company contributions and to
otherwise clarify certain Plan provisions, the Company adopts this Restatement
of the Plan, effective January 1, 2003.

                                   ARTICLE II

                                   ELIGIBILITY

                  2.01     Participation. A Board member becomes a "Participant"
in the Plan when he or she elects to defer a portion of his or her director's
fees pursuant to the terms of the Plan and Article III or when the Company
awards Units to the Board member pursuant to the terms of the Plan and Article
IV. A Board member remains a Participant as long as he or she has a Bookkeeping
Account balance that has not yet been entirely distributed.

                  2.02     Time of Eligibility. A Board member shall be eligible
to participate in the Plan upon the earlier of: (i) January 1 of the year
following the year in which he or she became a Board member; or (ii) the first
day of the second month following the date he or she became a Board member. A
Board Member shall be eligible to receive an award of Units following adoption
of a resolution by the Committee awarding the Units and execution of a
Participation Agreement by the Board member and the Company. Subject to the
provisions of the Plan, all Board members will be eligible to defer compensation
and receive benefits at the time and in the manner provided hereunder.

                                   ARTICLE III

                            DEFERRAL OF COMPENSATION

                  3.01     Deferral Elections. Upon becoming eligible to be a
Participant under Section 2.01, and for any Plan Year thereafter, a Board member
must complete, sign and return a Deferral Agreement to the Company's Corporate
Employee Benefits & Compensation

<PAGE>

Department ("Corporate Employee Benefits & Compensation") on or before the
applicable Election Date.

                  a.       Deferral Agreement. As used in this instrument, the
         term "Deferral Agreement" means the written form prescribed by the
         Committee, and developed in conjunction with Corporate Employee
         Benefits & Compensation, and which indicates the portion of
         Participant's director's fees he or she elects to defer for any Plan
         Year, and applies only with respect to fees to be earned in periods
         after the date of such election. In the case of an initial Deferral
         Agreement only, such agreement shall also indicate directions with
         respect to distribution options and in-service withdrawals. No Deferral
         Agreement shall be effective until approved by the Company.

                  b.       Election Date. The "Election Date" is the date by
         which a Participant must submit a valid Deferral Agreement to the
         Company, determined as follows:

                           i.Plan Year Open Enrollment. Except as provided in
                  Section 3.01.b.ii, the applicable Election Date for any given
                  Plan Year is the date preceding the Board Member's performing
                  any services relating to Board Membership for such year as the
                  Company may determine, provided that the Election Date for any
                  given Plan Year must be a date prior to the first meeting of
                  the Company's Board of Directors within the Plan Year.

                           ii.Election Date for Gains from Options, Stock
                  Appreciation Rights and Stock Units. The applicable Election
                  Date for gains from Options, Stock Appreciation Rights or
                  Stock Units granted under the Nordstrom Inc. 2002 Nonemployee
                  Director Stock Incentive Plan ("Incentive Plan") exercised in
                  any given Plan Year is June 30 of the preceding Plan Year.

                           iii.New Participants. The applicable Election Date
                  for any person who becomes a Board member during the Plan Year
                  is thirty (30) days after first becoming a Board member.

                                                      c.Eligible Compensation.
         For purposes of this Plan, the following items of a Participant's
         remuneration shall be considered "Eligible Compensation":

                                                      i.Cash Fees. The

                  Participant's cash director's fees;

                                                      ii.Options. The
                  Participant's gain (in the form of cash or stock units) from
                  the exercise of Incentive Plan Options;

                                                      iii.Stock Appreciation
                  Rights. The Participant's Stock Appreciation Rights ("SAR")
                  granted under the Incentive Plan;

                                                      iv.Restricted Shares. The
                  Participant's Restricted Shares granted under the Incentive
                  Plan; and

<PAGE>

                                                      v.Stock Units. The
                  Participant's Stock Units granted under the Incentive Plan.

                  3.02     Amount of Deferral. A Participant may, for any Plan
Year, irrevocably elect to have the following amounts of Eligible Compensation
deferred and credited to the Participant's Bookkeeping Account in accordance
with the terms and conditions of the Plan:

                  a.       Cash Fees. All or a portion of the Participant's cash
         director's fees for such Plan Year;

                  b.       Options. All or a portion of the Participant's gain
         from the exercise in such Plan Year of Incentive Plan Options;

                  c.       Stock Appreciation Rights. All or a portion of the
         Participant's proceeds from the exercise in such Plan Year of Incentive
         Plan SAR;

                  d.       Restricted Stock. All or a portion of the
         Participant's Restricted Stock granted under the Incentive Plan for
         such Plan Year; and

                  e.       Stock Units. All or a portion of the Participant's
         settlement in such Plan Year of Incentive Plan Stock Units.

         3.03     Minimum Deferral. Each Participant must agree to defer a
         minimum of five thousand dollars ($5,000) per Plan Year; provided,
         however, that this minimum need not be met if director's fees actually
         paid is insufficient to yield such minimum deferral in accordance with
         the Participant's Deferral Election.

                  3.04     Requirement for Deferral Agreement. A Participant who
has not timely submitted a valid Deferral Agreement may not defer any Eligible
Compensation for the applicable Plan Year under the Plan.

                  3.05     Applicability of Deferral Agreement. A Deferral
Agreement remains in effect for the Plan Year to which it applies. A Participant
must file a new Deferral Agreement for each Plan Year. The terms of any Deferral
Agreement may, but need not be, similar to the terms of any prior Agreement.

                                   ARTICLE IV

                     APPRECIATION UNIT AWARDS AND VALUATION

                  4.01     Participation. The Committee shall designate members
of the Board who, in the judgment of the Committee, perform services of special
importance on behalf of the Board or of the Company and should be entitled to an
award of Appreciation Units under this Plan.

<PAGE>

Each Board member so designated must execute a Participation Agreement in the
form and manner prescribed by the Committee as a condition to receiving an award
of Appreciation Units.

                  4.02     Award of Units. After execution of a Participation
Agreement, the Company shall award Appreciation Units to designated Participants
on such terms and conditions as the Committee deems appropriate. Such Units
shall be immediately fully vested.

                  4.03     Nature of Units. Each Appreciation Unit represents
the Company's agreement to pay to the Participant as deferred compensation an
amount based on changes in the value of one share of common stock of the
Company, determined under section 4.05. Appreciation Units represent a
contractual right to receive deferred compensation, and the Participant holding
such right shall be a general, unsecured creditor of the Company. Appreciation
Units are intended to reflect changes in the value of actual shares of common
stock of the Company, but they are not common stock of the Company, are not
transferable or assignable, shall not give the Participant any right to purchase
actual shares of Company stock, and shall not confer on the Participant any of
the ownership rights associated with shares of common stock of the Company.

                  4.04     Conversion. Upon the occurrence of a distribution
event under Article VII, or at any time upon the election of a Participant, some
or all of the Appreciation Units shall be converted into a dollar amount, which
represents the difference in value of shares of Company common stock from the
date the Appreciation Units are awarded to the date the Units are converted. The
value of the converted Units shall be determined under section 4.05, shall be
credited to the Participant's Bookkeeping Account, and shall be deemed invested
in accordance with the Participant's deemed investments under section 5.03.
Unless a distribution event has occurred under Article VII, the fact that a
Participant elects to convert one or more Appreciation Units to a cash value
does not create the right to receive a distribution or payment of any kind from
this Plan.

                  4.05     Valuation. Upon the Participant's election to convert
some or all of the Appreciation Units or upon occurrence of a distribution event
described in Article VII, the value of the Units shall be determined as follows:

                  a. First, the base value of the Units shall be determined by
multiplying the number of Units awarded by the closing price of Company common
stock on the New York Stock Exchange on the date that the Units are awarded.

                  b. Second, the adjusted value of the Units shall be determined
by multiplying the number of converted Units by the closing price of Company
common stock on the New York Stock Exchange on the date that the Units are
converted.

                  c. Third, the dollar amount under a. shall be subtracted from
the dollar amount in b., and the difference shall be credited to the
Participant's Bookkeeping Account. In the event that the difference results in a
number less than zero, the converted Units shall be cancelled without any
liability or obligation to pay on the part of the Company or the Participant.
<PAGE>

                  4.05     Participation Agreement. As used in this Plan, the
term "Participation Agreement" means the written form prescribed by the
Committee that specifies the number of Appreciation Units awarded to a member of
the Board. The Participation Agreement may include such terms and conditions
applicable to the award and conversion of the Appreciation Units as the
Committee may deem reasonable and necessary to achieve the objectives of this
Plan. In addition, the Participation Agreement with respect to each separate
award of Appreciation Units shall specify the Participant's elections for
distributions of the value of the Units, and the elections can be modified only
as provided in Article VII. The Participation Agreement must be executed prior
to an actual award of Appreciation Units, and shall not be effective until
approved and accepted by the Company.

                                    ARTICLE V

                        BOOKKEEPING ACCOUNT AND CREDITING

5.01     Bookkeeping Account. A "Bookkeeping Account" is the account established
on the books of the Company as a record of each Participant's Plan balance. A
Bookkeeping Account may, at the discretion of the Committee, include one or more
sub-accounts to reflect amounts credited to a Participant under the various
terms of the Plan. As of the effective date of this Restatement, the Committee
has established the following three sub-accounts:

                  a.       Deemed Investment Sub-Account: A Deemed Investment
         sub-account, expressed as a dollar amount, reflecting the Participant's
         account balance resulting from the following:

                           i.       Deferred cash director's fees;

                           ii.      Cash paid as the result of the exercise or
                  settlement of Options, SAR, or Stock Units under the Incentive
                  Plan deferred pursuant to Article III; Appreciation Units
                  pursuant to Article IV; or dividends issued in the form of
                  cash under the Incentive Plan and

                           iii.     The Participant's deemed investment of such
                  amounts under Section 5.03.

                  b.       Company Shares Sub-Account. A Company Shares
         sub-account, expressed in Units (denominated in units of shares of the
         Company's Common Stock) reflecting the number of Common Shares in the
         Company in which the Participant is vested resulting from Company
         Common Shares paid following the exercise or settlement of Options,
         SAR, or Stock Units under the Incentive Plan deferred pursuant to
         Article III; Incentive Plan Restricted Shares deferred pursuant to
         Article III or dividends issued in the form of stock units under the
         Incentive Plan.

                  c.       Appreciation Units Sub-Account. An Appreciation Units
         sub-account reflecting the number of Appreciation Units in the Company.
         The balance in such sub-

<PAGE>

         account shall be expressed in Units (denominated in units of shares of
         the Company's Common Stock).

                  5.02     Time of Crediting Accounts. Amounts deferred by a
Participant under the Plan shall be credited to the Participant's Bookkeeping
Account as soon as administratively practicable after the date deferred amounts
would otherwise have been received (or beneficially received in the case of
Company contributions) by the Participant. Subject to 5.04(c)(ii) regarding the
underwriting of the Plan's investment vehicles, Earnings shall be credited to a
Participant's Bookkeeping Account on the date determined by the Company, but no
later than the month following the month in which deferrals and Company
contributions were credited to the Bookkeeping Account in accordance with the
preceding sentence. Earnings are based on the performance of the investment
options selected by Participants in accordance with Section 5.03.

                  5.03     Participant Deemed Investments. Subject to Section
5.03(b), each Participant may, from time to time, select from the various
indices provided by the Committee (under Section 5.04(b)) in which his or her
Bookkeeping Account will be deemed invested; provided, however, that the
Committee is under no obligation to acquire or provide any of the investments
designated by the Participant.

                  a.       Deemed Investment Sub-Account Valuation. A
         Participant's Deemed Investment Sub-Account shall be credited or
         debited on a monthly basis with additional amounts equal to the
         appreciation (or loss) such accounts would have experienced had they
         actually been invested in the specified fund indices as the relevant
         times. This crediting and debiting will take into account the date that
         a Participant's Bookkeeping Account transactions (such as deferrals,
         contributions, distributions and transfers among funds) are actually
         reflected by the Plan's record-keeping system.

                  b.       Company Shares and Appreciation Units Sub-Account
         Valuation. The number of Units in a Participant's Company Shares and
         Appreciation Units Sub-Accounts shall be appropriately adjusted
         periodically to reflect any dividend (if applicable), split, split-up
         or any combination or exchange, however accomplished, with respect to
         the shares of the Company's Common Stock represented by such Units.

                  5.04     Investments by the Company. In order to provide funds
to satisfy its obligations under the Plan, the Company may, but shall not be
required to, keep cash or invest and reinvest in mutual funds, stocks, bonds
securities or any other assets as may be reasonably selected by the Committee in
its discretion. Such investments may, but need not, follow the investment
indices chosen by the Participants.

                  a.       Investment Advice. In the exercise of the foregoing
         investment powers, the Committee may engage investment counsel and, if
         the Committee so desires, may delegate to such counsel full or limited
         authority to select the assets in which the funds are to be invested.
         Such investment counsel may be an Officer and Employee of the Company.

<PAGE>

                  b.       Choice of Investment Indices. The Committee, or its
         investment counsel, may specify one or more investment funds to serve
         as indices for the investment performance of amounts credited under the
         Bookkeeping Accounts. The Committee has the authority to expand or
         limit the type or number of fund indices and to prescribe, in
         conjunction with the Company, the frequency with which Participants may
         change their deemed investment elections.

                  c.       Insurance. In the event that, in its discretion, the
         Company purchases an insurance policy or policies insuring the life of
         the Participant to allow the Company to recover the cost of providing
         the benefits hereunder, neither the Participant, Participant's
         Beneficiary, nor any other person shall have or acquire any rights
         whatsoever in such policy or policies or in the proceeds therefrom. If
         the Company elects to purchase a life insurance or annuity policy on
         the life of the participant:

                  i.       The Participant shall, as a condition to continued
         participation, sign any papers and undergo any medical examinations or
         tests that may be necessary or required for such purpose; and

                           ii.      Notwithstanding the Participant's election
                  or direction or any provision in the Plan to the contrary, the
                  Participant's Bookkeeping Account will be deemed invested in a
                  money market fund or instrument or other liquid asset selected
                  by the Committee or its delegate, pending the underwriting and
                  delivery of such policy or annuity.

                  5.05     Limited Effect of Allocation. The fact that any
allocation shall be made and credited to a Bookkeeping Account shall not vest in
a Participant any right, title or interest in or to any assets of the Company,
or in any right to payment, except at the time(s) and upon the conditions
elsewhere set forth in the Plan.

                  5.06     Report of Account. A Participant shall be provided
information regarding Participant's Bookkeeping Account balance within a
reasonable time after requesting such information from Corporate Employee
Benefits & Compensation. The Company shall furnish each Participant statements
on a periodic basis, no less frequently than annually, as soon as
administratively practicable after the allocations for the end of the Plan Year
have been completed. The Company may, in its discretion, provide Participants
with account balance statements more frequently than provided in the preceding
sentence.

                                   ARTICLE VI

                          RIGHTS OF PARTICIPANT IN PLAN

                  6.01     Ownership Rights in Bookkeeping Account. Subject to
the restrictions provided in this Article, each Participant shall at all times
have a vested right to the value of the Participant's Bookkeeping Account.

<PAGE>

                  6.02     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 those 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 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.

                  6.03     No Transfer of Interest in Plan Allowed. Except as
permitted by applicable law, no sale, transfer, alienation, assignment, pledge,
collateralization or attachment of any benefits under the Plan shall be valid or
recognized by the Company. Neither the Participant, Participant's spouse or a
designated Beneficiary shall have any power to hypothecate, mortgage, commute,
modify or otherwise encumber in advance of any of the benefits payable
hereunder. Said benefits shall not be subject to seizure for the payment of any
debts, judgments, alimony, maintenance owed by the Participant or a Beneficiary,
or be transferable by operation of law in the event of bankruptcy, insolvency,
or otherwise. Notwithstanding the foregoing, the Company may, if the Committee
so determines in its sole discretion, follow the terms of any court order issued
in connection with any domestic relations proceeding including but not limited
to marital dissolution or child support.

                  6.04     Plan Binding upon Parties. The Plan shall be binding
upon the Company, its assigns, and any successor company that acquires
substantially all of its assets and business through merger, acquisition or
consolidation; and upon all Participants and any Participant's Beneficiaries,
assigns, heirs, executors and administrators.

                                   ARTICLE VII

                                  DISTRIBUTIONS

                  7.01     Retirement. A Participant's "Retirement" shall mean
the Participant's "early retirement," if applicable, or if not applicable, the
later of the Participant's 60th birthday or the date on which the Participant
ceases to be a Board member. "Early retirement" shall mean the date on which the
Participant ceases to be a Board member if the Participant is at least fifty
(50) but less than sixty (60) years of age on such date and has been a Board
member for at least ten (10) years. For this purpose, years served as a Board
member are measured in consecutive full years (i.e., 12 months), based on
service from the date Participant began serving as a Board member.

                  7.02     In-Service Distributions. While a Participant is a
Board member, the Participant may receive Plan distributions as provided in this
Section 7.02.

                  a.       Hardship Distributions. At the request of a
         Participant before his or her service with the Company terminates, or
         at the request of any of the Participant's

<PAGE>

         Beneficiaries after the Participant's death, the Committee may, in its
         sole discretion, pay all or part of the value of the Participant's
         Bookkeeping Account in the event of an unforeseen financial emergency
         beyond the requesting party's control. Such hardship distributions may
         be allowed only as follows:

                           i.       Financial Emergency. In this context, an
                  "unforeseen financial emergency" is defined as (1) a severe
                  financial hardship, (2) the loss of a Participant's or
                  Beneficiary's property due to casualty, or (3) other similar
                  extraordinary, unforeseeable and unforeseen circumstances
                  arising as a result of events beyond the control of the
                  requesting party.

                           ii.      Amount. The amount of an accelerated
                  distribution shall be limited to an amount necessary to
                  relieve such emergency.

                  b.       Scheduled Distributions. Prior to Retirement, a
         Participant may elect, in his or her initial Deferral Agreement or the
         Participation Agreement for each award of Units, to receive a specified
         percentage of Participant's Bookkeeping Account in one or more annual
         installments commencing not earlier than his sixth (6th) year of
         participation, whether or not the Participant is a Board member;
         provided that such designation may be canceled or the distribution
         extended to a later date as long as such cancellation or extension is
         made at least one year prior to the beginning of the Plan Year in which
         such distribution would otherwise commence.

                  c.       In-Service Distributions - With Penalty. A
         Participant may, before Retirement, request to withdraw the balance of
         the Participant's Bookkeeping Account prior to the time such balance is
         otherwise due and payable under the Plan and for reasons other than
         those described in the Hardship or Scheduled Distributions under
         Sections 7.02(a) and (b). In such a case, no partial withdrawals of
         that balance shall be allowed. The Participant shall make this request
         by giving the Committee advance written notice of the election in a
         form determined from time to time by the Committee. Any such withdrawal
         request granted by the Committee or its delegate shall be subject to a
         penalty equal to ten percent (10%) of the portion of the Participant's
         Bookkeeping Account balance determined immediately prior to such
         withdrawal that is not otherwise due and payable. The Company shall
         distribute the balance of the Participant's Bookkeeping Account,
         reduced by the penalty amount, as soon as administratively practicable
         after the Participant's request. Once such distribution is made, the
         Participant shall cease to be eligible for the Plan for the remainder
         of the Plan Year of the distribution and for the next following Plan
         Year.

                  7.03     Distribution Following Termination. If a Participant
ceases to act or is terminated as a Board member prior to Retirement, that
Participant shall receive the value of that Participant's Bookkeeping Account in
a single payment as soon as administratively practicable after such event, or,
if the Participant requests and the Committee in its sole discretion consents,
in three substantially equal annual installments.

<PAGE>

                  7.04     Retirement Distributions. Upon Retirement, a
Participant may receive Plan distributions as provided in this Section 7.04.

                  a.       Distribution Options. Distribution of a Participant's
         Bookkeeping Account balance shall be made as soon as administratively
         practicable after a Participant's Retirement, and according to the
         distribution options specified on the Participant's initial Deferral
         Agreement or the Participation Agreement for the Units to which the
         distribution relates. Bookkeeping Accounts subject to installment
         payment shall continue to be valued as provided in Section 4.03. A
         Participant may modify any distribution format election at any time
         prior to the date that is three years before his Retirement by
         submitting to the Committee a new Deferral Agreement or Participation
         Agreement. The distribution options available to a Participant are: (i)
         Lump sum payment; or (ii) Five (5), ten (10) or fifteen (15) year
         installment payments.

                  b.       Early Withdrawal. A Participant not receiving a Lump
         Sum Payment may, at or after Retirement, elect to withdraw the balance
         of the Participant's Bookkeeping Account prior to the time such balance
         is otherwise due and payable under the Plan. No partial withdrawals of
         that balance shall be allowed. The Participant shall make this request
         by giving the Committee advance written notice in a form determined
         from time to time by the Committee. Any such withdrawal approved by the
         Committee shall be subject to a penalty equal to fifteen percent (15%)
         of the portion of the Participant's Bookkeeping Account balance
         determined immediately prior to such withdrawal that is not otherwise
         due and payable. The Company shall distribute the balance of the
         Participant's Bookkeeping Account, reduced by the penalty amount, as
         soon as administratively practicable following the Participant's
         request. Once such distribution is made, the Participant shall cease to
         participate in the Plan and shall not be eligible to participate in the
         Plan in the future.

                  7.05     Cash and Stock Distributions. Distributions of a
Participant's Deemed Investment Sub-Account shall be made in cash only.
Distributions of a Participant's Common Shares Sub-Account shall be made in
Common Stock of the Company. Distributions of a Participant's Restricted Shares
Sub-Account shall be made in Restricted Shares of the Company.

                  7.06     Distributions Following Change of Control. If the
Committee determines in good faith prior to a Change in Control that there is a
reasonable likelihood that any compensation paid to a Participant for a taxable
year of the company would not be deductible by the Company solely by reason of
the limitation under Code section 162(m), then to the extent deemed necessary by
the Company to ensure that the entire amount of any distribution to the
Participant pursuant to this Plan prior to the Change in Control is deductible,
the Company may defer all or any portion of the distribution.

                  a.       Continued Crediting of Interest. Any amounts deferred
         pursuant to this limitation shall continue to be credited with interest
         or earnings pursuant to the terms hereof. The amounts so deferred and
         interest thereon shall be distributed to the Participant or his
         Beneficiary (in the event of a death benefit required hereunder) at the
         earliest possible date, as determined by the Committee in good faith,
         on which the

<PAGE>

         deductibility of compensation paid or payable to the Participant for
         the taxable year of the Company during which the distribution is made
         will not be limited by Code section 162(m), or if earlier, the
         effective date of a Change in Control.

                  b.       "Change in Control" Defined. The term "Change in
         Control" means the purchase or other acquisition by any person, entity
         or group of persons, within the meaning of section 13(d) or 14(d) of
         the Securities Exchange Act of 1934 ("Act"), or any comparable
         successor provisions, of beneficial ownership (within the meaning of
         Rule 13d-3 promulgated under the Act) of 30 percent or more of either
         the outstanding shares of common stock or the combined voting power of
         the Company's then outstanding voting securities entitled to vote
         generally, or the approval by the stockholders of the Company of a
         reorganization, merger, or consolidation, in each case, with respect to
         which persons who were stockholders of the Company immediately prior to
         such reorganization, merger or consolidation do not, immediately
         thereafter, own more than 50 percent of the combined voting power
         entitled to vote generally in the election of directors of the
         reorganized, merged or consolidated Company's then outstanding
         securities, or a liquidation or dissolution of the Company or of the
         sale of all or substantially all of the Company's assets.

                                  ARTICLE VIII

                                 DEATH BENEFITS

                  8.01     Designation of Beneficiary. A Participant shall
designate a Beneficiary to receive death benefits under the Plan by completing
the beneficiary designation form specified by the Committee. A Participant shall
have the right to change the Beneficiary by submitting to Corporate Employee
Benefits & Compensation a form designating the Participant's change of
Beneficiary. No beneficiary designation or change of beneficiary shall be
effective until executed by the Company.

                  a.       Deemed Beneficiary. If no designation has been made,
         or if the Beneficiary has predeceased the Participant, then the
         Participant will be deemed to have designated the following as his or
         her surviving beneficiaries and contingent beneficiaries with priority
         in the order named below:

                           (i)first, to his widow or her widower, as the case
                  may be;

                           (ii)next, to his or her children, in equal shares;

                           (iii)next, to his or her parents, in equal shares;

                           (iv)next, to his or her brothers and sisters, in
                  equal shares; or

                           (v) next, to his or her estate.

<PAGE>

                  b.Surviving Beneficiary. For purposes of determining the
         appropriate named or deemed beneficiary or contingent beneficiary, an
         individual is considered to survive the Participant if that individual
         is alive seven (7) days after the date of the Participant's death.

                  8.02     Determination of Account Balance at Death. The
remaining value of Participant's Bookkeeping Account shall be determined as of
the date of the Participant's death and shall cease earning interest under
Section 5.03(a). The amounts in such Account shall be invested in a separate
interest-bearing account and earn interest under such account.

                  8.03     Distribution of Bookkeeping Account Balance at Death.
Upon a Participant's death, the value of Participant's Bookkeeping Account shall
be distributed as follows:

                  a.       Death Prior to Retirement. If a Participant dies
         before Retirement, the Participant's Beneficiary shall receive the
         balance of the Participant's Bookkeeping Account. Additionally, if the
         Participant's death is not attributable to suicide committed within two
         years of becoming a Participant, such Beneficiary shall receive an
         amount equal to twice the Participant's actual deferrals under Section
         3.02 (exclusive of any earnings thereon). This 8.03.a. pre-retirement
         death benefit shall be paid in three substantially equal annual cash
         payments of principal plus interest credited under the interest bearing
         account.

                  b.       Death After Retirement. If a Participant dies after
         Retirement, the Participant's Beneficiary shall receive the
         Participant's remaining Account Balance in a manner consistent with the
         Participant's distribution election under Section 7.04 together with
         interest credited under the interest bearing account.

                  8.04     Determination of Beneficiary. If the Committee has
any doubt as to the proper Beneficiary to receive payments hereunder, the
Committee shall have the right to direct the Company to withhold such payments
until the matter is finally adjudicated. However, as provided in Section 12.08,
any payment made by the Company, in good faith and in accordance with the Plan
and the directions of the Committee shall fully discharge the Company, the Board
and the Committee from all further obligations with respect to that payment.

                  8.05     Payments to Minor or Incapacitated Beneficiaries. In
distributing property hereunder to or for the benefit of any minor or
incapacitated Beneficiary, the Committee, in its sole and absolute discretion,
may direct the Company to make such distribution to a legal or natural guardian
of such Beneficiary, or to any adult with whom the minor or incompetent
temporarily or permanently resides. The receipt by such guardian or other adult
shall be a complete discharge of liability to the Company, the Board, and the
Committee. Neither the Board, the Committee, nor the Company shall have any
responsibility to see to the proper application of any payments so made.

<PAGE>

                  8.06     Acceleration of Death Benefits. Anything in this
Article to the contrary notwithstanding, the Committee may, in its sole and
absolute discretion, accelerate any death benefit payments hereunder.

                  8.07     Effect of Divorce. If a Participant and his or her
named beneficiary are or become married and thereafter their marriage is
dissolved by entry of a decree of dissolution or other court order having the
effect of dissolving the marriage, then any such pre-divorce beneficiary
designation shall be deemed automatically revoked as to such beneficiary spouse
as of the date of such dissolution unless the death benefit rights of such
former spouse are subsequently reaffirmed by a qualified domestic relations
order or the Participant's subsequent written designation.

                                   ARTICLE IX

                           ADMINISTRATION OF THE PLAN

                  9.01     Plan Sponsor and Administrator. The Company is the
"Plan Sponsor," and its address is: Nordstrom, Inc., P.O. Box 1270, Seattle,
Washington 98111-1270. The Committee is the "Plan Administrator." The Company's
Vice President of Human Resources and Corporate Employee Benefits & Compensation
have been selected to assist the Committee in its day to day responsibilities
with respect to the Plan. The Committee is the named fiduciary charged with
responsibility for administering the Plan. The 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 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 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 person having any interest under the Plan, subject only to the
provisions of Article X. 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 be either: (a) by vote of a majority of
those present at a meeting at which a majority of the members are present; or
(b) in writing by a majority of all the members at the time in office if they
act 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. As of the effective date of the Restated Plan, the

<PAGE>

Committee has delegated the day-to-day administration of the Plan to Corporate
Employee Benefits & Compensation, under the direction of the Vice President of
Human Resources.

                  9.05     Reliance on Opinions. The members of the Committee
and the officers and directors of the Company 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 with respect to the Plan, from and 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.

                                    ARTICLE X

                                CLAIMS PROCEDURE

                  10.01    Submittal 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.

                  10.02    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).

                  10.03    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 pertinent documents, may

<PAGE>

submit any written issues and comments, and may request an extension of time for
such written submission of issues and comments.

                  10.04    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 no hearing is held) or
within sixty (60) days after the hearing if one is held. 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 XI

                            AMENDMENT AND TERMINATION

                  The Board of Directors may amend or terminate the Plan at any
time. Such amendment or termination may modify or eliminate any benefit
hereunder, provided that no such amendment or termination shall in any way
reduce the vested portion of the affected Participants' or Beneficiaries'
Bookkeeping Accounts. In addition, 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 benefit amounts and Plan eligibility.

                                   ARTICLE XII

                                  MISCELLANEOUS

                  12.01    No Employment Contract. The terms and conditions of
the Plan shall not be deemed to constitute a contract of employment between the
Company and any Board member. Nothing in this Plan shall be deemed to give any
Board member 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 Board
member at any time.

                  12.02    Employee Cooperation. A Board member 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.

                  12.03    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.

                  12.04    Required Notice. Any notice which shall be or may be
given under the Plan or a Deferral Agreement or Participation Agreement 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
Corporate Employee Benefits & Compensation Department; at 1321 Second Avenue,
Seattle Washington 98101. If notice is to be given to a Participant, such

<PAGE>

notice shall be addressed to the last known address on the Company's Human
Resources records. Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Participant.
Any party may, from time to time, change the address to which notices shall be
mailed by giving written notice of such new address.

                  12.05    Interest of Participant's Spouse. The interest in the
benefits hereunder of a spouse of a Participant who has predeceased the
Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not limited to such
spouse's will, nor shall such interest pass under the laws of intestate
succession.

                  12.06    Tax Liabilities from Plan. If all or any portion of a
Participant's benefit under this Plan generates a state or federal income tax
liability to the Participant prior to receipt, that Participant may petition the
Committee for a distribution of funds sufficient to meet such liability
(including additions to tax, penalties and interest). Upon the grant of such a
petition, which grant shall not be unreasonably withheld, the Company shall
distribute to the Participant immediately available funds in an amount equal to
that Participant's federal, state and local tax liability associated with such
taxation, which liability shall be measured by using that Participant's then
current highest federal, state and local marginal tax rate, plus the rates or
amounts for the applicable additions to tax, penalties and interest. This
distribution shall include an additional amount to "gross up" the tax liability
distribution to include all applicable taxes on the tax liability distribution
and the grossed up amount. If the petition is granted, the tax liability
distribution (including gross-up) shall be made within 90 days of the date when
the Participant's petition is granted. Such a distribution shall affect and
reduce the benefits to be paid under Articles VII and VIII hereof.

                  12.07    Benefits Nonexclusive. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in addition to any
other benefits available to the 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.

                  12.08    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 that
Participant's Deferral Agreement and Participation Agreement shall terminate
upon such full payment of benefits.

                  12.09    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.

                  12.10    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.

<PAGE>

                  12.11    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.

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

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

                  12.14    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 and Stock Option Committee
         of the Board.

         d.       The "Plan Year" means the calendar year.

                  IN WITNESS WHEREOF, this instrument setting forth the terms
and conditions of this amendment and restatement to the NORDSTROM DIRECTORS
DEFERRED COMPENSATION PLAN (2002 Restatement) is executed this 26th day of
November, 2002, effective January 1, 2003, except as otherwise provided herein.

                                                NORDSTROM, INC.

                                                By: /s/ Delena Sunday
                                                    ----------------------------
                                                 Title: EVP Human Resources &
                                                        Diversity Affairs

ATTEST:

By: /s/ Leslie R. Thornton
    ------------------------------------------
Title: DVP Compensation & Leadership Benefits<PAGE>
                                                                   EXHIBIT 10.56

                                 NORDSTROM, INC.
                               SEPARATION PROGRAM
                                       FOR
                            KEY MANAGEMENT EMPLOYEES
                        (Restated Effective June 1, 2001)

                  I.       INTRODUCTION.

                  The Separation Program for Key Management Employees (the
"Plan") was originally adopted by Nordstrom, Inc. (the "Company"), to be
effective October 28, 1997. This amendment and restatement of the Plan is
effective as of June 1, 2001 (the "Effective Date"). The purpose of the Plan is
to provide a group of key management employees with an appropriate level of
severance benefits in the event they separate from service with the Company
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").

                  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 Key Management Employee,
entitled to participate in and receive benefits under the Plan upon satisfying
the participation requirements of Article III:

                  1.       The employee is a Key Management 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.

                  B.       Key Management Employee. For purposes of this Plan, a
"Key Management Employee" is any officer or employee of the Company or an
Affiliate designated as receiving a benefit package level A, B, C or D, as
designated by the Executive Vice President of Human Resources for the Company.
In addition, a "Key Management Employee" includes any employee of the Company or
an Affiliate who is designated as a "Key Management Employee" of the Company by
either (a) a corporate Officer, or (b) the senior Human Resources executive

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       1
<PAGE>

with responsibility for the employee's group, with either (a) or (b) acting
jointly in such designation with the Executive Vice-President of Human
Resources.

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

                  D.       Change in Control. Any Key Management Employee of a
business unit that is undergoing a change in control who is offered employment
by the buyer, as part of the agreement between the Company and the buyer of that
business unit, is ineligible to participate in the Plan and shall not be deemed
an Eligible Key Management Employee hereunder.

                  E.       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.

                  F.       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.

                  G.       Employees of Divested Groups Excluded. Any employee
of a divested business group (including a 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 buyer of that business, or successor entity, as
applicable, shall not be deemed an Eligible Employee hereunder and shall not be
eligible to participate in this Plan. This provision shall specifically apply to
employees who are offered employment by Nordstrom.com, LLC, and such employees
shall not be eligible for this Plan.

                  III.     PARTICIPATION/ELIGIBILITY FOR BENEFITS.

                  A.       Participation. An Eligible Key Management Employee
who commences participation in the Plan is called a "Member" of the Plan.
Participation in the Plan will commence upon the Eligible Key Management
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 Member's participation will terminate on
the date the Member receives payment of all of the Member's Cash Severance
Benefits under the Plan or, if earlier, on the date the employee's eligibility
expires.

                  1.       Involuntary Termination. An Eligible Key Management
         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 Key Management Employee to
         perform his/her duties at a level reasonably expected by 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,

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       2

<PAGE>

or any knowing and willful violation of law or of 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 Key Management 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 Eligible Key
                  Management Employee if such modification becomes necessary by
                  law to effectively release all claims listed therein.

                           b.       Timing of Release. The Eligible Key
                  Management 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 Key Management Employee signs the
                  Release, the Eligible Key Management 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 Eligible Key
                  Management 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 Employee as
                  eligible under Article II of this Plan.

                  B.       Loss of Eligibility. A Member of the Plan will 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
Member's employment termination any of the following occurs:

                  1.       The Member voluntarily resigns his or her employment
         with the Company.

                  2.       The Member 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 to Member.

                  3.       The Member remains an employee, but 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.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       3

<PAGE>

                  4.       The Member's employment terminates due to death.

                  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
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 Plan Benefits, (c)
Outplacement Benefits, and (d) a Relocation Benefit, each as described below. In
addition, the Company may provide additional severance benefits to a Member
under this Plan, based on the particular circumstances surrounding that Member's
termination.

                  A.       Cash Severance Benefits.

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

                  2.       Cash Payments. A Member's Cash Severance Benefits
         under the Plan will be calculated as a lump-sum payment. At the
         complete discretion of the Company, the cash severance amount may be
         paid in cash or deferred by the Company under the Nordstrom Executive
         Deferred Compensation Plan.

                  3.       "Annual Salary" Defined. Member's "Annual Salary"
         under paragraph IV.A.1., shall be Member's monthly salary (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 Member.

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

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

                  B.       Medical Plan Benefits.

                  1.       Benefits Continued through Termination. For any
         Company-sponsored employee welfare benefit plans in which the Member 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 Member's continued participation in
         a plan to which the Member is required to contribute, unless the Member
         does not make the required contribution to that plan.

                  2.       Benefits After Termination. Upon termination, the
         Member shall have

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       4

<PAGE>

         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 member elects COBRA, the
         Company will take appropriate steps to continue the Member's
         participation in each of those plans, by paying the Company's active
         plan contribution for the employee's (and his or her dependents')
         coverage through the end of the period specified in the Benefits
         Schedule. During this period, the Member will be required to pay for
         Member's COBRA continuation coverage at the same level and on the same
         basis as Member's contribution to group health plan coverage for active
         employees. Thereafter, Member 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 Member (and his or her qualifying dependents) would
         otherwise have lost coverage, will be counted against the maximum
         period of coverage provided under COBRA.

                  5.       Company Payment of Medical Plan Cash Equivalent. In
         lieu of Company assisted COBRA Continuation Payments as described in
         sections B.2, B.3 & B.4, the Company, in its discretion, may elect to
         pay to the Participant the cash equivalent of the Company's cost for
         such benefits 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.

                  C.       Outplacement Services.

                  Upon termination, Member 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 will be provided by a provider chosen by the Company, and the Company
will directly pay all such expenses. Members may elect not to accept the
outplacement services; however, he or she will not be entitled to receive any
monetary encashment in its stead.

                  D.       Relocation Benefits. The Company will directly pay
the cost of moving of Member's personal goods to the extent that (i) the
termination of employment occurs less than one year after Member has relocated
to his or her current location, (ii) such earlier relocation was in connection
with Member's employment with the Company, and (iii) the relocation benefit
amount does not to exceed the price of moving such goods during the original
relocation. Should Member choose not to 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.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       5

<PAGE>

                  E.       Additional Benefits.

                  The Company may, in its sole and exclusive discretion, provide
Member with additional severance benefits, in cash or in kind, to assist Member
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 the employee accepts an offer
         of employment with the Company prior to the end of the total number of
         months 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 Member under the Plan only to the extent of the
         employee's period of actual separation from service with the Company.

                           a.       Termination of Cash Severance Benefits. Any
                  Cash Severance Benefits which are currently being paid to such
                  employee will be terminated upon the Member's reemployment. To
                  the extent Member's remaining Cash Severance Benefits do not
                  exceed payment for the actual period of severance, Member
                  shall receive a lump sum payment upon reemployment so that his
                  or her total Cash Severance Benefits are equivalent to payment
                  for the actual period of severance.

                           b.       Repayment of Duplicative Benefits. A
                  reemployed Member 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 within a reasonable time after his
                  or her reemployment.

                  2.       Reemployment after Severance Period. Members 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.

                  3.       New Hire Date. In the event of Member's reemployment
         with the Company, such reemployed Member'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.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       6

<PAGE>

                  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 Key Management 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 Separation Program for Key Management Employees, P.O.
Box 1270, Seattle Washington 98111-1270." A benefit claim or inquiry must be
signed by the employee.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       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 90
days after the Plan Administrator receives the claim, unless special
circumstances require an extension of time of up to 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.       Administrative Agent.

                  The Plan Administrator may appoint an "Administrative Agent,"
consisting of one or more individuals who may (but need not) be employees of the
Company. The Administrative Agent will be the named fiduciary that has the
authority to act with respect to any appeal from a denial of benefits. The
Administrative Agent appointed by the Plan Administrator shall be empowered with
the same level of authority and discretion as that set forth in Section X.D.

                  D.       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 Agent within 60 days after receiving written notice of such
denial from the Plan Administrator (or, in the case of a deemed denial, within
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 Key Management Employees P.O. Box
1270, Seattle, Washington 98111-1270." 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 Agent may
require the applicant to submit such additional facts, documents or other
material as it may deem necessary or appropriate in making its review.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       8

<PAGE>

                  E.       Decision on Review.

                  The Administrative Agent will act on each request for review
within 60 days after receipt thereof unless special circumstances require an
extension of time, up to an additional 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 Agent will give prompt, written notice of its decision to the
claimant and to the Plan Administrator. In the event that the Administrative
Agent 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 Agent's decision is not given within the time
prescribed in this Section IX.E., the application will be deemed denied on
review.

                  F.       Rules and Procedures.

                  The Administrative Agent 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 Agent 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.

                  G.       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.D. above and (4)
has been notified in writing that the Administrative Agent has affirmed the
denial of benefits; provided that legal action may be brought after the Plan
Administrator or the Administrative Agent has failed to take any action on the
claim within the time prescribed by Section IX.B. or Section IX.E. 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.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       9

<PAGE>

                  C.       Agent for the Service of Legal Process.

                  The agent for the service of legal process with respect to the
Plan is Ms. Mary Amundson, Vice President, Employee Benefits, Nordstrom, Inc.,
PO Box 1270, Seattle Washington 98111-1270. The service of legal process may
also be made on the Plan by serving the Plan Administrator.

                  D.       Plan Sponsor and Administrator.

                  The Company is the "Plan Sponsor" and the "Plan Administrator"
of the Plan and its address is: Nordstrom, Inc., PO Box 1270, Seattle,
Washington 98111-1270; Ms. Mary Amundson, Vice President, Employee Benefits has
been selected to assist the Company in its day-to-day responsibilities with
respect to the Plan and her telephone number is: (206) 233-5470. The Company is
the named fiduciary charged with responsibility for administering the Plan. The
Company will make such rules and computations and will take such other actions
to administer the Plan as the Company may deem appropriate.

                  1.       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.

                  2.       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 X.D.1., above.

                  XI.      EMPLOYMENT STATUS.

                  This Plan in no way alters the relationship between Eligible
Key Management Employee and Company as one of at-will employment.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       10

<PAGE>

         NORDSTROM, INC. SEPARATION PROGRAM FOR KEY MANAGEMENT EMPLOYEES
                              SCHEDULE OF BENEFITS
                               AS OF JUNE 1, 2001

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                            CASH SEVERANCE                MEDICAL BENEFITS
  INDIVIDUAL/GROUP        CRITERIA              BENEFIT               (PAID FOR BY NORDSTROM)              OUTPLACEMENT SERVICES
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                <C>                     <C>                                    <C>
                                                                 If at least age 45 with 10 or more
                                                                    YOS (including 5 YOS at this
                                           One month of Base     level), coverage until age 65 for        Up to 6 months of Senior
    LEVELS A and B          None         Salary for each full      self and spouse, employee pays           Executive Outplacement
                                           year of service,        active plan deduction (retiree                  Services
                                           maximum 2 years*             coverage may apply)
                                         (minimum of 6 months)

                                                                  Otherwise, COBRA for 12 months,
                                                                     employee pays active plan
                                                                             deduction.

                                           Two weeks of Base     COBRA for 12 months, employee pays     Up to 6 months of Executive
    LEVELS C and D     20 or more YOS    Salary for each full          active plan deduction.              Outplacement Services
                                           year of service,
                                            maximum 1 year

   Core Executives
    Key Executives    Greater than or      Two weeks of Base     COBRA for 6 months, employee pays      Up to 6 months of Executive
                      equal to 12 YOS,   Salary for each full          active plan deduction               Outplacement Services
                      but less than 20      year of service
                            YOS

                                           One and one half
                      Greater than or    weeks of Base Salary    COBRA for 6 months, employee pays      Up to 3 months of Executive
                      equal to 6 YOS,     for each full year           active plan deduction               Outplacement Services
                      but less than 12        of service
                            YOS          (minimum of 3 months)
                      Less than 6 YOS          3 months          COBRA for 3 months, employee pays      Up to 3 months of Executive
                                                                       active plan deduction               Outplacement Services
</TABLE>

The portion of any payment under the Supplemental Executive Retirement Plan
(SERP) will offset cash Severance Benefit. The offset will be equal to the
employee's annualized SERP payment, unreduced by company profit sharing and 401
(k) matching contributions.

Relocation-- Nordstrom will directly pay the cost of moving of the executive's
personal goods if severance occurs less than one year after the executive has
relocated. Relocation must begin within one year of termination date. This
amount is not to exceed the price of moving such goods during the original
relocation.

                              March 5, 2004   NORDSTROM, INC. SEPARATION PROGRAM
                                                    FOR KEY MANAGEMENT EMPLOYEES

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]