NORDSTROM SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Exhibit 10.4

NORDSTROM

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(2008 Restatement)

Lane Powell PC
601 SW Second Avenue, Suite 2100
Portland, Oregon 97204-3158
Telephone: (503) 778-2100
Facsimile: (503) 778-2200

TABLE OF CONTENTS

supplemental executive retirement plan
2008 restatement

supplemental executive retirement plan
2008 restatement

ARTICLE I.

TITLE, PURPOSE AND EFFECTIVE DATE

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

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

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

ARTICLE II.

ELIGIBILITYAND PARTICIPATION

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

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

supplemental executive retirement plan
2008 restatement

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

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

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

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

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

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

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

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

supplemental executive retirement plan
2008 restatement

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

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

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

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

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

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

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

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

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

supplemental executive retirement plan
2008 restatement

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

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

ARTICLE III.

BENEFITS

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

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

supplemental executive retirement plan
2008 restatement

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

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

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

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

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

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

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

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

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

supplemental executive retirement plan
2008 restatement

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

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

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

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

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

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

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

          (b) Early Retirement Reduction Factor .

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

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

supplemental executive retirement plan
2008 restatement

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

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

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

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

     3.08 Disability Retirement Benefits . A Disabled Executive continuing to accrue service credit under Section 2.03 shall be treated, for purposes of the Plan, as an active Executive for such period, and the Retirement Benefit under this Article III shall be determined as of such