Exhibit 10.3

SECOND AMENDMENT TO

2004 INCENTIVE PLAN

THIS AMENDMENT, made this 18th day of December, 2008, by Barnes & Noble, Inc., a
Delaware corporation (“Company”).

WHEREAS, the Company maintains the Barnes & Noble, Inc. 2004 Incentive Plan (the
“Plan”); and

WHEREAS, the Board of Directors of the Company retained the right to amend the
Plan pursuant to Section 12.1 thereof;

WHEREAS, the Board of Directors of the Company desires to amend the Plan to
reflect documentary compliance with Section 409A of the Internal Revenue Code of
1986, as amended and the regulations and other guidance promulgated thereunder.

NOW, THEREFORE, effective December 31, 2008, the Plan is amended as follows:

 

1. The following is added to the end of Section 2.1:

“Notwithstanding the foregoing, no Award shall be granted to a Participant if
the grant of such Award would cause such Award to constitute “deferred
compensation” within the meaning of Code Section 409A by virtue the Company’s
failure to constitute an “eligible issuer of service recipient stock” within the
meaning of 26 CFR 1.409A-l(b)(5)(iii)(E), or any successor regulation thereto.”

 

2. The following is added to the end of Section 2.13:

“Notwithstanding the foregoing, the Fair Market Value of Shares shall, in all
events, be determined in accordance with Code Section 409A.”

 

3. The following is added to the end of Section 6.1(b):

“but only to the extent such Stock Appreciation Right is either not considered
“deferred compensation” for purposes of Code Section 409A or complies with the
requirements of Code Section 409A.”

 

4. Section 6.2(a)(i) is deleted in its entirety and replaced with the following:

“(i) the Fair Market Value of one Share on the date of exercise over”

 

5. The following is added to the end of Section 8.1 of the Plan:

“Notwithstanding the foregoing, the terms of all Other Stock Unit Awards so
granted will be structured so that such Other Stock Unit Awards either are not
“deferred compensation” for purposes of Code Section 409A or comply with Code
Section 409A.”

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6. The following is added to the end of Section 9.1 of the Plan:

“Notwithstanding the foregoing, the terms of all Performance Awards so granted
will be structured so that such Performance Awards either are not “deferred
compensation” for purposes of Code Section 409A or comply with Code
Section 409A.”

 

7. The second full sentence of Section 11.1 is deleted in its entirety and
replaced with the following:

“For purposes of the Plan, “Change in Control” shall mean an event which shall
occur if there is: (i) a change in the ownership of the Company as defined in
Treasury Regs 1.409A-2(i)(5)(v); (ii) a change in the effective control of the
Company as defined in Treasury Regs 1.409A-2(i)(5)(vi); or (iii) a change in the
ownership of a substantial portion of the Company’s assets as defined in
Treasury Regs 1.409A-2(i)(5)(vii). The determination as to the occurrence of a
Change in Control shall be based on objective facts and in accordance with the
requirements of Code Section 409A and the regulations promulgated thereunder.”

 

8. The following is added to the end of Section 11.2:

“Notwithstanding the foregoing, no Award shall be assumed or substituted
pursuant to this Section 11.2 if such action would cause an Award not otherwise
“deferred compensation” within the meaning of Code Section 409 to become or
create “deferred compensation” within the meaning of Code Section 409A.”

 

9. The following is added to the end of Section 12.2:

“Notwithstanding the foregoing, no Award shall be adjusted, substituted or
otherwise modified pursuant to this Section 12.2 if such action would cause an
Award not otherwise “deferred compensation” within the meaning of Code
Section 409 to become or create “deferred compensation” within the meaning of
Code Section 409A.”

 

10. Section 12.5 is deleted in its entirety and replaced with the following:

“12.5 Dividend Equivalents. Subject to the provisions of the Plan and any Award
Agreement, the recipient of an Award may, if so determined by the Committee, be
entitled to receive, currently or on a deferred basis, cash, stock or other
property dividends, or cash payments in amounts equivalent to cash, stock or
other property dividends on Shares (“Dividend Equivalents”) with respect to the
number of Shares covered by the Award. Notwithstanding the foregoing, such
Dividend Equivalents shall not be granted if the terms of the grant of such
Dividend Equivalents would either cause an amount to be considered “deferred
compensation” within the meaning of Code Section 409A that would otherwise not
be considered “deferred compensation” or cause an amount to be included in an
Award recipient’s income under Code Section 409A.”

 

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11. A new Section 13.15 is added as follows:

“13.15 Code Section 409A. All provisions of this Plan shall be interpreted in a
manner consistent with Code Section 409A, and the regulations and other guidance
promulgated thereunder. Notwithstanding the preceding, the Company makes no
representations concerning the tax consequences of participation in the Plan
under Code Section 409A or any other federal, state, or local tax law. Tax
consequences will depend, in part, upon the application of relevant tax law,
including Code Section 409A, to the relevant facts and circumstances.
Participant should consult a competent and independent tax advisor regarding the
tax consequences of this Plan.”

IN WITNESS WHEREOF, this Amendment is executed on the 18th day of December,
2008.

 

BARNES & NOBLE, INC. By:  

/s/ Michelle Smith

  Michelle Smith   VP, Human Resources

 

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