NORDSTROM INC
EXHIBIT 10.56
<DOCUMENT>
<TYPE>EX-10.56
<SEQUENCE>4
<FILENAME>v96844exv10w56.txt
<DESCRIPTION>EXHIBIT 10.56
<TEXT>
<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

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