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Borders Group, Inc.
100
Phoenix Drive
Ann
Arbor, MI 48108
t:
734-477-1100
f:
734-477-1370
www.bordersgroupinc.com
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April
29, 2008
This
letter will confirm our understanding concerning your
employment with Borders Group, Inc. (the
“Company”). You are sometimes referred
to herein as the “Executive.”
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1.
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Subject
to all of the other provisions of this agreement, if your
employment with the Company is terminated by the Company other than
for Cause or Disability, or by you for Good Reason, the Company
will pay to you:
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(a)
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Your
base salary through the month during which termination occurred,
plus any other amount due you at the time of termination under any
bonus plan of the Company; and
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(b)
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Monthly
severance payments for the period specified in Section 5 equal to
(i) your monthly base salary at the time of termination, plus (ii)
1/12 th
of the “target” bonus amount targeted for you for the
fiscal year in which termination occurred.
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No
payments shall be made under this agreement if your employment
with the Company is terminated because of your death or is
terminated by the Company for Cause or Disability or if you
terminate your employment for any reason other than Good
Reason.
2. Subject
to all of the other provisions of this agreement, if your
employment is terminated by the Company other than for Cause
or Disability, or by you for Good Reason, during the one-year
period following a Change in Control, the monthly severance
payments to be made to you under Section 1(b) shall be for an
extended period as specified in Section 5 and shall be based
upon (a) your monthly base salary at the time of termination
or immediately prior to the Change in Control, whichever base
salary amount is greater, plus (b) 1/12 th
of the “target” bonus amount targeted for you for
the fiscal year in which termination occurred or the fiscal
year immediately prior to the Change in Control, whichever
bonus amount is greater.
3. You
agree to make reasonable efforts to seek (and to immediately
notify the Company of) other employment and to the extent that
you receive compensation from other employment, the severance
payments provided herein shall be correspondingly
reduced. Notwithstanding the foregoing, this
Section 3 shall have no application with respect to
terminations of employment that occur as of, or following, a
Change in Control.
4. All
payments hereunder shall be subject to applicable withholding
and deductions.
5. Monthly
severance payments shall commence in the month following
termination and shall continue for twelve months or, in the
case of payments under Section 2, for twenty-four months;
provided however, that, if the monthly payment period would
otherwise extend beyond the later of: (i) March 15 th
of the year following the calendar year in which your
termination of employment occurs, or (ii) 2 1/2 months
following the end of the fiscal year in which your termination
of employment occurs, an amount equal to the sum of all of the
remaining payments that would have been made to you in monthly
installments shall, in lieu thereof, be paid to you in one
lump sum on the last day of the month immediately preceding
the month in which the later of the dates specified in (i) or
(ii) above falls. In calculating the amount of any lump sum
payment, it shall be assumed that any income that you are
earning from other employment on the payment date would
continue for the remainder of the applicable period following
your termination of employment. No repayment shall be required
if your income increases after the lump-sum payment date, and
no additional payments shall be made by the Company after the
lump sum payment.
6. Termination
by the Company for “Cause” means termination based
on (i) conduct which is a material violation of Company policy
or which is fraudulent or unlawful or which materially
interferes with your ability to perform your duties, (ii)
misconduct which damages or injures the Company or
substantially damages the Company’s reputation, or (iii)
gross negligence in the performance of, or willful failure to
perform, your duties and responsibilities.
7. Termination
by you for “Good Reason” means a termination that
follows the occurrence of any of the following: (i) an
involuntary relocation that increases your commute by more
than 35 miles, (ii) a material diminution in your base salary
(other than pursuant to across-the-board reductions prior to a
Change in Control that apply uniformly to similarly situated
employees generally), (iii) following a Change in Control, a
material diminution in your overall compensation opportunity
from the level in effect immediately prior to the Change in
Control, or (iv) following a Change in Control, a material
reduction in your authority, duties, or responsibilities below
the levels in effect immediately prior to the Change in
Control. Notwithstanding the foregoing, a
termination shall be deemed to be for Good Reason hereunder
only if you provide written notice to the Company of the
existence of one or more of the conditions described herein
within 90 days following your knowledge of the initial
existence of such condition, the Company fails to cure such
condition during the 30-day period (the “Cure
Period”) following its receipt of such notice, and you
terminate employment within 180 days following the conclusion
of the Cure Period.
8. Termination
by the Company for “Disability” means termination
based on inability to perform your duties and responsibilities
by reason of illness or incapacity for a total of 180 days in
any twelve-month period.
9. A
“Change in Control” shall mean:
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(a)
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The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 9; or
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(b)
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Individuals
who, as of the date hereof, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election
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