Exhibit 10.3
 
 
[barnesnoblelogo.jpg]
 
March ­­17, 2010

Mr. Joseph J. Lombardi
122 Fifth Avenue
New York, NY 10011

Dear Mr. Lombardi:

This letter agreement (the “Agreement”) is intended to set forth our mutual
understanding regarding your employment as Chief Financial Officer of Barnes &
Noble, Inc. (the “Company”).

Accordingly, we are pleased to agree as follows:

1.           Duties.  You agree to be Chief Financial Officer for the term of
this Agreement.  In this capacity, you shall perform such duties and have such
responsibilities as are typically associated with such position, including such
duties and responsibilities as are prescribed by the Board of Directors of the
Company (the “Board”) consistent with such position.  While you are the
Company’s employee, you agree to devote your full business time and attention to
the performance of your duties and responsibilities hereunder.  You shall report
to the Company’s Chief Executive Officer.

2.           Term.  (a)  The initial term of this Agreement shall be for a
period beginning on March 17, 2010 (the “Effective Date”) and ending on the
third anniversary of the Effective Date or, if earlier, the termination of your
employment in accordance with the provisions set forth below (the “Initial
Term”).  At the expiration (but not earlier termination) of the Initial Term,
and any subsequent “Renewal Term” (as defined below), the term of this Agreement
shall automatically renew for additional periods of one year (each, a “Renewal
Term”), unless your employment has earlier terminated or either party hereto has
given the other party written notice of non-renewal at least 90 days prior to
the expiration date of the Initial Term or the Renewal Term, as applicable.  In
the event that either party has given written notice of non-renewal, and your
employment with the Company continues after the expiration of the Initial Term
or any Renewal Term, such post-expiration employment shall be “at-will” and
either party may terminate such employment with or without notice and for any
reason or no reason.
 
                              (b)           Your employment hereunder shall
terminate upon your death and may be terminated by the Company upon written
notice to you following your Disability (as defined below).  Your employment
hereunder may also be terminated by the Company immediately for Cause (as
defined below) or following two weeks written notice to you for any other
reason.  Your employment hereunder may also be terminated by you following
written notice to the Company of your intention to resign with or without Good
Reason (as defined below); provided that a resignation for Good Reason shall
comply with Section 2(c)(iv).
 
                              (c)           For purposes of this Agreement:
 
     (i)“Cause” means (A)  your engaging in intentional misconduct or gross
negligence that, in either case, is injurious to Company; (B) your indictment,
entry of a plea of nolo contendere or conviction by a court of competent
jurisdiction with respect to any crime or violation of law involving fraud or
dishonesty (with the exception of misconduct based in good faith on the advice
of professional consultants, such as attorneys and accountants) or any felony
(or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence,
intentional acts or intentional omissions by you (as determined by a majority
vote of the Board in its reasonable discretion and judgment) that constitute
fraud, dishonesty, embezzlement or misappropriation in connection with the
performance of your employment duties and responsibilities; (D) your engaging in
any act of intentional misconduct or moral turpitude (as determined by a
majority vote of the Board in its reasonable discretion and judgment) reasonably
likely to adversely affect the Company or its business; (E) your abuse of or
dependency on alcohol or drugs (illicit or otherwise) that adversely affects
your job performance; (F) your willful failure or refusal to properly perform
(as determined by a majority vote of the Board in its reasonable discretion and
judgment) the duties, responsibilities or obligations of your employment for
reasons other than Disability or authorized leave, or to properly perform or
follow (as determined by a majority vote of the Board in its reasonable
discretion and judgment) any lawful direction by the Company (with the exception
of a willful failure or refusal to properly perform based in good faith on the
advice of professional consultants, such as attorneys and accountants); or (G)
your material breach of this Agreement or of any other contractual duty to,
written policy of, or written agreement with the Company (with the exception of
a material breach based in good faith on the advice of professional consultants,
such as attorneys and accountants).
 
 
 
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              (ii)           “Disability” shall mean a written determination by
a majority of three physicians (one of which shall be your most recent primary
care provider) mutually agreeable to the Company and you (or, in the event of
your total physical or mental disability, your legal representative) that you
are physically or mentally unable to perform your duties as Chief Financial
Officer under this Agreement and that such disability can reasonably be expected
to continue for a period of six consecutive months or for shorter periods
aggregating 180 days in any 12-month period.
 
              (iii)           “Good Reason” shall mean the occurrence of one or
more of the following events without your written consent:  (A) there shall have
been a material diminution of your authority, duties or responsibilities; (B)
there shall have been a greater than 10% reduction in your Annual Base Salary
(as defined below) in effect as of the Effective Date pursuant to Section 3.1;
(C) the principal executive offices of the Company shall be relocated to a
location more than 50 miles from New York City; or (D) the Company fails to make
material payments to you (or provide to you restricted common stock) as required
by this Agreement.
 
              (iv)           You shall only be deemed to terminate employment
for Good Reason if (A) you provide the Company with written notice of Good
Reason within a period not to exceed 90 days after the initial existence of the
condition alleged to give rise to Good Reason, (B) the Company fails to remedy
the condition within 30 days of such notice and (C) your termination is within
six months following the initial existence of the condition alleged to give rise
to Good Reason.

3.           Compensation.

3.1.        Annual Base Salary.  During the Initial Term and any Renewal Term,
the Company shall pay you, for all services you perform hereunder, an annual
base salary of U.S. $750,000.00, or such higher amount as the Compensation
Committee of the Board (the “Compensation Committee”) may determine, payable in
accordance with the Company’s payroll schedule applicable to executive officers
of the Company (“Annual Base Salary”).

3.2.        Bonus Compensation.  During the Initial Term and any Renewal Term,
the Company shall pay you annual bonus compensation, as determined by the
Compensation Committee, with an annual target amount of not less than 150% of
your Annual Base Salary, which shall be paid in accordance with and subject to
the terms and conditions of the Company’s Executive Performance Plan (as may be
amended from time to time and attached hereto as Exhibit A and incorporated
herein by reference) or such other incentive or compensation plan or arrangement
specified by the Compensation Committee.

3.3.        Employee Benefits.  During the Initial Term and any Renewal Term,
you shall be eligible to participate in and receive any benefits to which you
are entitled under the employee benefit plans that the Company provides for its
employees generally, as well as any employee benefit plans that the Company
provides for its executive officers generally.

3.4.        Expenses.  During the Initial Term and any Renewal Term, the Company
shall reimburse you for all expenses incurred by you in the performance of your
duties and responsibilities under this Agreement, including entertainment and
travel expenses, in accordance with the policies and procedures established by
the Compensation Committee.
 
 
 
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3.5.        Equity Awards.  On April 1, 2010, you shall be granted 150,000
shares of restricted common stock of the Company (the “Stock Grant”) in
accordance with the Company’s 2009 Incentive Plan, vesting in two equal annual
installments on the second and third anniversaries of the Effective Date, except
that no installment shall vest unless you are still employed by the Company at
the time of such vesting.  Notwithstanding the foregoing, the Stock Grant shall
vest immediately (i) upon the occurrence of a Change of Control (as defined in
and pursuant and subject to the terms of Section 3.9 of this Agreement) or
(ii) in the event that, during the Initial Term or any Renewal Term, (x) your
employment is terminated by the Company without Cause or (y) you voluntarily
terminate your employment for Good Reason.  Except as provided above, the Stock
Grant shall be subject to the terms and conditions set forth in the Company’s
customary award agreements.  During the Initial Term and any Renewal Term, you
shall be eligible to receive additional equity awards of the Company under the
terms of the Company’s 2009 Incentive Plan, as determined by the Compensation
Committee.

3.6         Car Allowance.  During the Initial Term and any Renewal Term, the
Company shall pay you in cash a monthly car allowance of U.S. $1,500.00, or such
higher amount as may be determined by the Compensation Committee.

3.7         Life and Disability Insurance.  During the Initial Term and any
Renewal Term, the Company shall obtain in your name (a) a life insurance policy
providing for a death benefit of U.S. $1,000,000.00 payable to any beneficiary
or beneficiaries named by you and (b) a disability insurance policy providing
for monthly payments to you of at least U.S. $12,800.00 during the period of any
disability until the earlier of your attaining age 65 or death; provided that
the term “disability” in any such disability insurance policy shall be defined
in a manner consistent with the definition in Section 2(c)(ii).  During the
Initial Term and the Renewal Term, the Company shall pay all premiums due on
such policies.

3.8.        Severance.  In the event that, during the Initial Term or any
Renewal Term, (a) your employment is terminated by the Company without Cause or
(b) you voluntarily terminate your employment for Good Reason, the Company shall
pay you an amount equal to two times the sum of (i) your then Annual Base
Salary, (ii) the average of the annual bonuses actually paid to you with respect
to the three completed years preceding the date of your termination of
employment and (iii) the aggregate annual dollar amount of the payments made or
to be made to you or on your behalf for purposes of providing you with the
benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable
withholding and other applicable taxes and deductions (“Severance Amount”);
provided that (x) you execute and deliver to the Company, and do not revoke, a
release of all claims against the Company substantially in the form attached
hereto as Exhibit B (“Release”) and (y) you have not materially breached as of
the date of such termination any provisions of this Agreement and do not
materially breach such provisions at any time during the Relevant Period (as
defined below).  The Company’s obligation to make such payment shall be
cancelled upon the occurrence of any such material breach and, in the event such
payment has already been made, you shall repay to the Company such payment
within 30 days after demand therefore; provided, however, such repayment shall
not be required if the Company shall have materially breached this Agreement
prior to the time of your breach.  The Severance Amount shall be paid in cash in
a single lump sum on the later of (1) the first day of the month following the
month in which such termination occurs and (2) the date the Revocation Period
(as defined in the Release) has expired.  Notwithstanding anything in this
paragraph to the contrary, if a Release is not executed and delivered to the
Company within 60 days of such termination of employment (or if such Release is
revoked in accordance with its terms), the Severance Amount shall not be
paid.  Upon the expiration of this Agreement due to non-renewal, or upon the
termination of your employment hereunder for Cause or by your death or
Disability, or by your voluntary termination of your employment hereunder
without Good Reason, you shall be entitled only to the payment of such
installments of your Annual Base Salary that have been earned through the date
of such expiration and/or termination.

3.9.        Change of Control Payments.  (a)  If at any time during the Initial
Term and any Renewal Term (i) there is a Change of Control (as defined below)
and (ii) your employment is terminated by the Company without Cause or you
voluntarily terminate your employment for Good Reason, in either case, within
the greater of two years following the Change of Control or the remainder of the
Initial Term or any Renewal Term, as applicable, then the Company shall pay you
an amount equal to three times the sum of (a) your then Annual Base Salary, (b)
the average of the annual bonuses actually paid to you with respect to the three
completed years preceding the date of your termination of employment and (c) the
aggregate annual dollar amount of the payments made or to be made by the Company
for purposes of providing you with the benefits set forth in Sections 3.3, 3.6
and 3.7 above, less all applicable withholding and other applicable taxes and
deductions (“Change of Control Amount”).  The Change of Control Amount shall be
paid to you in cash in a single lump sum within 30 days after the date your
employment terminates.  In the event that it is determined that the aggregate
amount of the payments and benefits that could be considered “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (collectively, with the regulations and other guidance
promulgated thereunder, the “Code”; and such payments and benefits, the
“Parachute Payments”) that, but for this Section 3.9 would be payable to you
under this Agreement or any other plan, policy or arrangement of the Company,
exceeds the greatest amount of Parachute Payments that could be paid to you
without giving rise to any liability for any excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments
payable to you shall not exceed the amount that produces the greatest after-tax
benefit to you after taking into account any Excise Tax to be payable by
you.  Any reduction in Parachute Payments pursuant to the immediately preceding
sentence shall be made in the following order:  (1) cash payments that do not
constitute deferred compensation within the meaning of Section 409A of the Code,
(2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash
payments that do constitute deferred compensation, in each case, such reductions
shall be made in the manner that maximizes the present value to you of all such
payments.  Subject to the Section 280G limitation referred to above, to the
extent that you are not fully vested in any retirement benefits from any
pension, profit-sharing or other retirement plan or program maintained by the
Company and your employment terminates in the circumstances contemplated by this
Section 3.9(a), the Company shall pay directly to you within 30 days after the
date on which your employment terminates the difference between the amounts that
would have been paid to you had you been fully vested on the date that your
employment terminates and the amounts actually paid or payable to you pursuant
to such plans or programs.  The amounts payable to you under this Section 3.9(a)
shall be in lieu of any amounts payable to you under Section 3.8 above.
 
 
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                              (b) As used herein, “Change of Control” shall mean
the occurrence of one or more of the following events:
 
              (i)  after the Effective Date hereof, any person, entity or
“group” as identified in Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the “1934 Act”), other than you or any of your affiliates or
Leonard Riggio or any of his heirs or affiliates, becomes a beneficial owner (as
such term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
of securities of the Company representing 40% or more of the total number of
votes that may be cast for the election of directors of the Company; or

(ii)  within two years after a merger, consolidation, liquidation or sale of
assets involving the Company, or a contested election of a Company director, or
any combination of the foregoing, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a majority of the
Board; or

(iii)  within two years after a tender offer or exchange offer for voting
securities of the Company, the individuals who were directors of the Company
immediately prior thereto shall cease to constitute a majority of the Board.

4.           Non-Competition and Confidential Information.

4.1.        Non-Competition.  You agree that during the Initial Term and any
Renewal Term and for a period of two years (the “Relevant Period”) after the
termination for any reason of your employment, you shall not, directly or
indirectly, (a) employ or retain, or induce or cause any other person or entity
to employ or retain, any person who is, or who at any time in the twelve-month
period prior to such time had been, employed or retained by the Company or any
of its subsidiaries or affiliates; or (b) provide services, whether as principal
or as agent, officer, director, employee, consultant, shareholder, or otherwise,
alone or in association with any other person, corporation or other entity, to
any Competing Business (as defined below); provided, however, that you may
provide services to a Competing Business (other than Amazon.com, Inc. and its
subsidiaries and affiliates and their respective successors (collectively,
“Amazon”)) that is engaged in one or more businesses other than the Business
Area (as defined below) but only to the extent that you do not provide services,
directly or indirectly, to the segment of such Competing Business that is
engaged in the Business Area.  For purposes of this Agreement, the term
“Competing Business” shall mean (i) Amazon or (ii) any person, corporation or
other entity engaged in the Business Area.  For purposes of this Agreement, the
term “Business Area” shall mean the sale, distribution or attempted sale or
distribution of books, textbooks, periodicals, newspapers, digital or audio
versions of any of the foregoing or e-reading devices and related
software.  Notwithstanding the foregoing, the restrictions of this Section 4.1
shall not apply to the placement of general advertisements or the use of general
search firm services with respect to a particular geographic area, but which are
not targeted, directly or indirectly, towards employees of the Company or any of
its subsidiaries.
 
 
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4.2.        Ownership of Other Securities.  Nothing in Section 4.1 shall be
construed as denying you the right to own securities of any corporation listed
on a national securities exchange or quoted in the NASDAQ System in an amount up
to 5% of the outstanding number of such securities.

4.3.        Confidential Information.  (a) You shall use best efforts and
diligence both during and after any employment with the Company, regardless of
how, when or why such employment ends, to protect the confidential, trade secret
and/or proprietary character of all Confidential Information and Trade Secret
Information (as defined below).  You shall not, directly or indirectly, use (for
your benefit or for the benefit of any other person) or disclose any
Confidential Information or Trade Secret Information, for so long as it shall
remain proprietary or protectable, except as may be necessary for the
performance of your duties for the Company.  For purposes of this Agreement,
“Confidential Information” shall mean all confidential information of the
Company, regardless of the form or medium in which it is or was created, stored,
reflected or preserved, information that is either developed by you (alone or
with others) or to which you shall have had access during any employment with
the Company.  Confidential Information includes, but is not limited to, Trade
Secret Information, and also includes information that is learned or acquired by
the Company from others with whom the Company has a business relationship in
which, and as a result of which, such information is revealed to the
Company.  For purposes of this Agreement, “Trade Secret Information” shall mean
all information, regardless of the form or medium in which it is or was created,
stored, reflected or preserved, that is not commonly known by or generally
available to the public and that: (i) derives or creates economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.  The Company’s Trade
Secret Information may include, but is not limited to, all confidential
information relating to or reflecting the Company’s research and development
plans and activities; compilations of data; product plans; sales, marketing and
business plans and strategies; pricing, price lists, pricing methodologies and
profit margins; current and planned incentive, recognition and rewards programs
and services; personnel; inventions, concepts, ideas, designs and formulae;
current, past and prospective customer lists; current, past and anticipated
customer needs, preferences and requirements; market studies; computer software
and programs (including object code and source code); and computer and database
technologies, systems, structures and architectures.  You understand that
Confidential Information and/or Trade Secret Information may or may not be
labeled as such, and you shall treat all information that appears to be
Confidential Information and/or Trade Secret Information as confidential unless
otherwise informed or authorized by the Company.  Nothing in this Agreement
shall be construed to mean that Company owns any intellectual property or ideas
that were conceived by you before you commenced employment with Company and
which you have previously disclosed to the Company.  Subject to Section 4.3(b),
nothing in this Section 4.3(a) shall prevent you from complying with a valid
legal requirement (whether by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information or Trade Secret Information.

(b)           You agree that both during and after any employment with the
Company, regardless of how, when or why such employment ends, if you are legally
required (whether by oral questions, interrogatories, requests for information
or documents, subpoena, civil investigative demand or similar process) to
disclose any Confidential Information or Trade Secret Information, you shall
promptly notify the Company of such request or requirement so that the Company
may seek to avoid or minimize the required disclosure and/or to obtain an
appropriate protective order or other appropriate relief to ensure that any
information so disclosed is maintained in confidence to the maximum extent
possible by the agency or other person receiving the disclosure, or, in the
discretion of the Company to waive compliance with the provisions of this
Section 4.3.  Thereafter, you shall use reasonable efforts, in cooperation with
the Company or otherwise, to avoid or minimize the required disclosure and/or to
obtain such protective order or other relief.  If, in the absence of a
protective order or the receipt of a waiver hereunder, you are compelled to
disclose the Confidential Information or Trade Secret Information or else stand
liable for contempt or suffer other sanction, censure or penalty, you shall
disclose only so much of the Confidential Information or Trade Secret
Information to the party compelling disclosure as you believe in good faith on
the basis of advice of counsel is required by law, and you shall give the
Company prior notice of the Confidential Information or Trade Secret Information
you believe you are required to disclose.  The Company shall reimburse any
reasonable legal fees and related expenses you incur in order to comply with
this Section 4.3(b).
 
 
 
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4.4.        Inventions.  You shall promptly disclose and provide to the Company,
any original works of authorship, designs, formulas, processes, improvements,
compositions of matter, computer software programs, data, information or
databases, methods, procedures or other inventions, developments or improvements
of any kind that you conceive, originate, develop, improve, modify and/or
create, solely or jointly with others, during the period of your employment, or
as a result of such employment (collectively, “Inventions”), and whether or not
any such Inventions also may be included within “Confidential Information” or
“Trade Secret Information” (as defined under this Agreement), or are patentable,
copyrightable or protectable as trade secrets.  You acknowledge and agree that
the Company is and shall be the exclusive owner of all rights, title and
interest in and to the Inventions and, specifically, that any copyrightable
works prepared by you within the scope of your employment are “works for hire”
under the Copyright Act, that such “works for hire” are Inventions and that the
Company shall be considered the author and owner of such copyrightable
works.  In the event that any Invention is deemed not to be a “work for hire”,
or in the event that you should, by operation of law, be deemed to be entitled
to retain any rights, title or interest in and to any Invention, you hereby
irrevocably waive all rights, title and interest and assign to the Company,
without any further consideration and regardless of any use by the Company of
any such Inventions, all rights, title and interest, if any, in and to such
Invention.  You agree that the Company, as the owner of all Inventions, has the
full and complete right to prepare and create derivative works based upon the
Inventions and to use, reproduce, publish, print, copy, market, advertise,
distribute, transfer, sell, publicly perform and publicly display and otherwise
exploit by all means now known or later developed, such Inventions and
derivative works anywhere throughout the world and at any time during or after
your employment hereunder or otherwise.

4.5.        Return of Information.  You shall promptly deliver to the Company,
upon the termination for any reason of your employment, or at any other time at
the Company’s request, without retaining any copies, all documents, information
and other material in your possession or control containing, reflecting and/or
relating, directly or indirectly, to any Confidential Information and/or Trade
Secret Information.

4.6         Cooperation.  You agree that both during and after any employment
with the Company, regardless of how, when or why such employment ends, you shall
provide reasonable cooperation to the Company and its affiliates in connection
with any pending or future lawsuit, arbitration, or proceeding between the
Company and/or any affiliate and any third party, any pending or future
regulatory or governmental inquiry or investigation concerning the Company
and/or any affiliate and any other legal, internal or business matters of or
concerning the Company and/or any affiliate.  Such cooperation shall include
meeting with and providing information the Company, any affiliate and/or their
respective attorneys, auditors or other representatives as reasonably requested
by the Company.  The Company shall reimburse any reasonable legal fees and
related expenses you incur in order to comply with this Section 4.6.

4.7.        Non-Disparagement.  During and after any employment with the
Company, regardless of how, when or why such employment ends, (a) you shall not
make, either directly or by or through another person, any oral or written
negative, disparaging or adverse statements or representations of or concerning
the Company or its subsidiaries or affiliates, any of their clients or
businesses or any of their current or former officers, directors, employees or
shareholders and (b) Company Parties (as defined below) shall not make any oral
or written negative, disparaging or adverse statements or representations of or
concerning you; provided, however, that nothing herein shall prohibit (i)
critical communications between you and the Company or Company Parties during
the Initial Term and any Renewal Term and in connection with your employment or
(ii) you or any Company Party from disclosing truthful information if legally
required (whether by oral questions, interrogatories, requests for information
or documents, subpoena, civil investigative demand or similar process).  For
purposes of this Agreement, the term “Company Parties” shall mean the executive
officers and designated spokespersons of the Company.

4.8.        Severability.  If any of the restrictions in this Section 4 should
for any reason whatsoever be declared invalid, the validity or enforceability of
the remainder of this Agreement shall not be adversely affected thereby.
 
 
 
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4.9.        Equitable Relief.  (a) You acknowledge that your services to the
Company are of a unique character that gives them a special value to the
Company.  You further recognize that any violation of the restrictions in this
Section 4 may give rise to losses or damages for which the Company cannot be
reasonably or adequately compensated in an action at law and that such violation
may result in irreparable and continuing harm to the Company.  Accordingly, you
agree that, in addition to any other remedy that the Company may have at law or
in equity, the Company shall be entitled to injunctive relief to restrain any
violation by you of the restrictions in this Section 4.

(b)         In addition, the Company recognizes that any violation of the
restrictions in Section 4.7(b) may give rise to losses or damages for which you
cannot be reasonably or adequately compensated in an action at law and that such
violation may result in irreparable and continuing harm to you.  Accordingly,
the Company agrees that, in addition to any other remedy that you may have at
law or in equity, you shall be entitled to injunctive relief to restrain any
violation by the Company of the restrictions in Section 4.7(b).

4.10.      Reasonableness.  You acknowledge that the limitations and obligations
contained in this Section 4 are, individually and in the aggregate, reasonable
and properly required by the Company and that in the event that any such
limitations are found to be unreasonable and unenforceable, you shall submit to
such limitations and/or obligations in such form as the arbitrator shall
determine.  You agree that you shall not challenge or contest the
reasonableness, validity or enforceability of any such limitations and
obligations.

5.           Indemnification.  You shall be indemnified by the Company, as an
officer of the Company and its affiliates, against all actions, suits, claims,
legal proceedings and the like to the fullest extent permitted by law, including
advancement of expenses, partial indemnification, indemnification following the
termination of this Agreement, indemnification of your estate and similar
matters.  For purposes of this Agreement, such indemnification shall extend to,
to the fullest extent permitted by law, legal fees, costs, expenses, judgments,
settlements, claim resolution payments, arbitration fees, arbitrator fees,
mediation fees, negotiation fees and hold harmless obligations.

6.           Miscellaneous.

6.1.        Entire Agreement.  This Agreement constitutes the entire agreement
between you and the Company with respect to the terms and conditions of your
employment by the Company and supersedes all prior agreements, understandings
and arrangements, oral or written, between you and the Company with respect to
the subject matter hereof.

6.2.        Binding Effect; Benefits.  This Agreement shall inure to the benefit
of and shall be binding upon you and the Company and our respective heirs, legal
representatives, successors and assigns.

6.3.        Amendments and Waivers.  This Agreement may not be amended or
modified except by an instrument or instruments in writing signed by both
parties to this Agreement.  Electronic communications, even if receipt is
acknowledged, shall not constitute an amendment or modification of this
Agreement.

6.4.        Assignment.  Neither this Agreement nor any rights or obligations
that either party may have by reason of this Agreement shall be assignable by
either party without the prior written consent of the other party.

6.5.        Notices.  Any notice that may or must be given under this Agreement
shall be in writing and shall be personally delivered or sent by certified or
registered mail, postage prepaid, or reputable overnight courier, addressed to
you at the address set forth on the first page hereof, or to the Company at 122
Fifth Avenue, New York, NY 10011 to the attention of the Vice President for
Human Resources for the Company (with a copy to the General Counsel for the
Company), or to such other address as you or the Company, as the case may be,
may designate in writing in accordance with the provisions of this section.

6.6.        Section and Other Headings; Other.  The section and other headings
contained in this Agreement are for reference purposes only and are not deemed
to be a part of this Agreement or to affect the meaning and interpretation of
this Agreement.  For purposes of this Agreement, the term “including” shall mean
“including, without limitation.”
 
 
 
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6.7.        Governing Law.  This Agreement shall be construed (both as to
validity and performance) and enforced in accordance with and governed by the
laws of the State of New York applicable to agreements made and to be performed
wholly within the State of New York, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.  Except as provided in Section
6.9, exclusive jurisdiction for all disputes or claims arising under or in
connection with this Agreement, and any and all claims by or against you
relating to your employment with the Company, shall lie in any Federal  or state
court located within the County of New York.

6.8.        Survival of Rights and Obligations.  All rights and obligations
arising hereunder shall continue to have full force and effect after the
termination of this Agreement unless otherwise provided herein to the extent
necessary to preserve the intended benefits of such provisions.  If any section
of this Agreement  is determined to be void, voidable or unenforceable, it shall
have no effect on the remainder of this Agreement, which shall remain in full
force and effect, and the provisions so held invalid or unenforceable shall be
deemed modified as to give such provisions the maximum effect permitted by
applicable law.

6.9.        Arbitration.  The parties agree that all disputes arising under or
in connection with this Agreement, and any and all claims by you relating to
your employment with the Company, including any claims of discrimination or
other employment-related claims arising under Title VII of the Civil Rights Act
of 1964, as amended, the Age Discrimination in Employment Act, the Americans
with Disabilities Act or any other employment-related Federal, state or local
law, shall be submitted to arbitration before the American Arbitration
Association (“AAA”) under its rules then prevailing for the type of claim in
issue before one arbitrator and to be held at the AAA’s office located in the
County of New York.  In any arbitration hereunder, the arbitrator shall have the
power to issue appropriate injunctive or other non-monetary relief, and award
appropriate compensatory damages.  The parties agree that no damages other than
compensatory damages shall be sought or claimed by either party and each party
waives any claim, right or entitlement to punitive, exemplary or consequential
damages, or any other damages, and each relevant arbitrator is specifically
divested of any power to award any damages in the nature of punitive, exemplary
or consequential damages, or any other damages of any kind or nature in excess
of compensatory damages.  Nothing in this arbitration provision shall preclude,
and the parties expressly acknowledge that either party may seek, temporary
injunctive relief from any Federal or state court located within the County of
New York in connection with or as supplement to an arbitration hereunder,
including regarding any claim under Section 4 of this Agreement.  For purposes
of any such action or proceeding, the parties each hereby specifically submit to
the personal jurisdiction of any Federal or state court located within the
County of New York and further agree that service of process may be made within
or without the State of New York by giving notice in the manner provided in
Section 6.5 of this Agreement.

6.10.      Section 409A of the Code.  It is intended that the provisions of this
Agreement comply with Section 409A of the Code, and all provisions of this
Agreement shall be construed and interpreted in a manner consistent with the
requirements for avoiding taxes or penalties under Section 409A of the
Code.  If, at the time of your separation from service (within the meaning of
Section 409A of the Code), (a) you shall be a specified employee (within the
meaning of Section 409A of the Code and using the identification methodology
selected by the Company from time to time) and (b) the Company shall make a good
faith determination that an amount payable under this Agreement or any other
plan, policy, arrangement or agreement of or with the Company (this Agreement
and such other plans, policies, arrangements and agreements, the “Company
Plans”) constitutes deferred compensation (within the meaning of Section 409A of
the Code) the payment of which is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A of the Code in order to avoid
taxes or penalties under Section 409A of the Code, then the Company shall not
pay any such amount on the otherwise scheduled payment date but shall instead
accumulate such amount and pay it, without interest, on the first day of the
seventh month following such separation from service.  Except as permitted under
Section 409A of the Code, any deferred compensation (within the meaning of
Section 409A of the Code) payable to or for your benefit under any Company Plan
may not be reduced by, or offset against, any amount owing by you to the
Company.  Except as specifically permitted by Section 409A of the Code, the
benefits and reimbursements provided to you under this Agreement and any Company
Plan during any calendar year shall not affect the benefits and reimbursements
to be provided to you under the relevant section of this Agreement or Company
Plan in any other calendar year, and the right to such benefits and
reimbursements cannot be liquidated or exchanged for any other benefit and shall
be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any
successor thereto.  Further, in the case of reimbursement payments, such
payments shall be made to you on or before the last day of the calendar year
following the calendar year in which the underlying fee, cost or expense is
incurred.  Notwithstanding the preceding, the Company makes no representations
concerning the tax consequences of your participation in this Agreement under
Section 409A of the Code or any other Federal, state or local tax law.  Your tax
consequences shall depend, in part, upon the application of relevant tax law,
including Section 409A of the Code, to the relevant facts and
circumstances.  You should consult a competent and independent tax advisor
regarding the tax consequences of this Agreement.
 
 
 
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6.11.      Representations and Warranties.  You hereby represent and warrant to
the Company that (a) your execution, delivery and performance of this Agreement
do not and shall not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which you are a
party or by which you are bound; (b) you are not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement with any
other person or entity that has not been disclosed to the Company prior to the
execution of this Agreement; (c) in the performance of any duties and
responsibilities on behalf of the Company, you shall not divulge or use in any
way any trade secrets or confidential or proprietary information that are within
your possession or knowledge (if any), are owned by any other person or entity
and regardless of whether or not such trade secrets or confidential or
proprietary information are subject to any written agreement; and (d) upon the
execution and delivery of this Agreement, it shall be a valid and binding
obligation, enforceable in accordance with its terms.  You hereby acknowledge
and represent that you fully understand the terms and conditions contained
herein.

6.12.      Counterparts. This Agreement may be executed in one or more identical
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
 
 
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If the foregoing accurately reflects our agreement, kindly sign and return to us
the enclosed duplicate copy of this letter.

Very truly yours,

BARNES & NOBLE, INC.
   
By:
/s/ Michelle Smith   
Name:  Michelle Smith
 
Title:    Vice President, Human Resources
            Date:  March 18, 2010 

Accepted and Agreed to:
 
JOSEPH J. LOMBARDI
 
By:
/s/ Joseph J. Lombardi   
Name:  Joseph J. Lombardi
            Date: March 18, 2010       

 

[Signature Page to Employment Agreement]
 
 
 
 
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EXHIBIT A
 
 
BARNES & NOBLE, INC.
2009 EXECUTIVE PERFORMANCE PLAN

BARNES & NOBLE, INC., a corporation existing under the laws of the State of
Delaware (the “Company”), hereby establishes and adopts the following 2009
Executive Performance Plan (the “Plan”). Certain capitalized terms used in the
Plan are defined in Article 2.

RECITALS

WHEREAS, the Company desires to encourage high levels of performance by those
individuals who are key to the success of the Company, to attract new
individuals who are highly motivated and who are expected to contribute to the
success of the Company and to stimulate the efforts of such individuals to
contribute to the continued success and growth of the Company’s business; and

WHEREAS, to attain these ends, the Company has formulated the Plan embodied
herein to authorize the awarding of bonuses that are intended to qualify as
“performance based compensation” within the meaning of Section 162(m) of the
Code.

NOW, THEREFORE, the Company hereby constitutes, establishes and adopts the
following Plan and agrees to the following provisions:

ARTICLE 1

PURPOSE OF THE PLAN

1.1.    Purposes. The purposes of the Plan are to provide personal incentive and
financial rewards to senior management who, because of the extent of their
responsibilities, can and do make significant contributions to the success of
the Company by their ability, industry, loyalty and exceptional services. Making
such senior management participants in that success will advance the interests
of the Company and its stockholders and will assist the Company in attracting
and retaining such senior management.

ARTICLE 2

DEFINITIONS

2.1.   “Award” shall mean the amount of the Incentive Award paid to a
Participant pursuant to the Plan.

2.2.   “Board” shall mean the board of directors of the Company.

2.3.   “Certification” shall have the meaning set forth in Section 4.2.

2.4.   “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.

2.5.   “Committee” shall mean the Compensation Committee of the Board (or such
other committee designated by the Compensation Committee of the Board),
consisting of no fewer than two directors, each of whom is (i) a “Non-Employee
Director” within the meaning of Rule 16b-3 (or any successor rule) of the
Exchange Act, (ii) an “outside director” within the meaning of
Section 162(m)(4)(C)(i) of the Code, and (iii) an “independent director” for
purpose of the rules and regulations of the New York Stock Exchange.

2.6.   “Company” has the meaning set forth in the introductory paragraph of the
Plan.

2.7.   “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
 
 
 
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EXHIBIT A

 
2.8.   “Incentive Award” shall mean an amount equal to 1.5% of the Company’s
Operating Income for the Performance Period for each Participant.

2.9.   “Operating Income” shall mean the gross profit minus operating expenses
of the Company and its Subsidiaries on a consolidated basis, before deduction of
interest payments and income taxes and accrual of any amounts for payment under
this Plan for the Performance Period, as reported in the Company’s income
statement for the applicable Performance Period, without regard to items
relating to (a) restructurings, discontinued operations, extraordinary items,
and other unusual or non-recurring charges, (b) an event either not directly
related to the operations of the Company or not within the reasonable control of
the Company’s management, or (c) changes in accounting standards required by
generally accepted accounting principles, in each case as determined in
accordance with generally accepted accounting principles and as reported in (x)
the Company’s consolidated statement of operations, (y) notes to the Company’s
consolidated financial statements or (z) management’s discussion and analysis
with respect to the Company’s consolidated financial statements as filed with
the U.S. Securities and Exchange Commission, in each case for the applicable
Performance Period.

2.10. “Participant” shall mean the Company’s Chief Executive Officer and each
other executive officer of the Company selected by the Committee pursuant to
Section 4.1 to participate in this Plan with respect to any given Performance
Period.

2.11. “Performance Period” shall mean the Company’s fiscal year or any other
period during a fiscal year that the Committee, in its sole discretion, may
determine.

2.12. “Shares” shall mean the shares of common stock of the Company, par value
$0.001 per share.

2.13. “Subsidiary” shall mean any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Award, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain, excluding any such Subsidiary whose securities are publicly traded.
 

 
ARTICLE 3

ELIGIBILITY AND ADMINISTRATION

3.1.    Eligibility. The individuals eligible to participate in the Plan shall
be the Company’s Chief Executive Officer and any other executive officer of the
Company or any Subsidiary selected by the Committee to participate in the Plan.

3.2.    Administration.  (a)  The Plan shall be administered by the
Committee.  The Committee shall have full power and authority, subject to the
provisions of the Plan and subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to time be adopted
by the Board, to: (i) select the Participants to whom Incentive Awards may from
time to time be granted hereunder; (ii) determine the terms and conditions of
Incentive Awards, not inconsistent with the provisions of the Plan, and whether
an Award shall be paid in cash or Shares; (iii) determine the time when
Incentive Awards will be made and the Performance Period to which they relate;
(iv)  certify the calculation of Operating Income and the amount of the
Incentive Award payable to each Participant in respect of Performance Periods;
(v) in connection with the determination of the amount of each Award, determine
whether and to what extent the Incentive Award shall be reduced based on such
factors as the Committee deems appropriate in its discretion; (vi) interpret and
administer the Plan; (vii) correct any defect, supply any omission or reconcile
any inconsistency in the Plan in the manner and to the extent that the Committee
shall deem desirable to carry it into effect; (viii) establish such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for administration
of the Plan.

(b)     Decisions of the Committee shall be final, conclusive and binding on all
persons or entities, including the Company, any Participant and any person
claiming any benefit or right under an Incentive Award or under the Plan. A
majority of the members of the Committee may determine its actions and fix the
time and place of its meetings.
 
 
 
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EXHIBIT A

 
(c)     To the extent not inconsistent with the applicable provisions of
Section 162(m) of the Code, applicable law or the rules and regulations of the
New York Stock Exchange, the Committee may delegate to one or more officers of
the Company or any of its Subsidiaries the authority to take actions on its
behalf pursuant to the Plan.

ARTICLE 4

AWARDS

4.1.   Performance Period. Not later than 90 days after the commencement of each
fiscal year of the Company, the Committee shall, in writing, (i) designate one
or more Performance Periods for such fiscal year, provided that any Performance
Period of less than one year shall be designated no later than the date on which
25% of such Performance Period has lapsed, (ii) determine the Participants for
such Performance Period(s), and (iii) specify any adjustments to Operating
Income for the Performance Period.  If a person becomes eligible to participate
in the Plan after the Committee has made its initial written determination of
the Participants for a Performance Period, such individual may become a
Participant for the Performance Period if so designated by the Committee in
writing.

4.2.   Certification. As soon as reasonably practicable following the conclusion
of each Performance Period, the Committee shall certify, in writing, the amount
of Operating Income and the Incentive Award for each Participant (the
“Certification”).

4.3.   Payment of Incentive Awards. Following each Certification, the Committee
shall determine the amount of the Incentive Award actually payable to each
Participant in its sole discretion based on such factors as it deems
appropriate, provided that the actual Award shall not exceed the Incentive Award
with respect to such Participant. The Award amount determined by the Committee
for a Performance Period shall, subject to Section 4.4, be paid to each
Participant no later than the fifteenth day of the third month following the end
of the fiscal year of the Company in which the applicable Performance Period
ends. Awards shall be paid in cash or, in the Committee’s sole discretion, in
shares under a shareholder approved stock plan of the Company or any combination
thereof.

4.4.   Deferral. A Participant shall be entitled to elect to defer the payment
of any Award payable to such Participant under the Plan pursuant to a plan or
arrangement satisfying the requirements of Section 409A of the Code.

4.5.   Changes in Employment. If a person becomes a Participant during a
Performance Period (pursuant to the last sentence of Section 4.1 herein) or if a
Participant dies or retires or if a Participant’s employment otherwise ceases
during a Performance Period (except for termination by the Company for cause, as
determined by the Committee in its sole discretion), the Incentive Award payable
to such a Participant may be proportionately reduced based on the period of
actual employment during the applicable Performance Period), as determined by
the Committee in its sole discretion.

ARTICLE 5

GENERALLY APPLICABLE PROVISIONS

5.1.   Amendment and Termination of the Plan. The Board may, from time to time,
alter, amend, suspend or terminate the Plan as it shall deem advisable, subject
to any requirement for stockholder approval imposed by applicable law, including
Section 162(m) of the Code or by the rules and regulations of the New York Stock
Exchange.

5.2.   Section 162(m) of the Code. Unless otherwise determined by the Committee,
the provisions of this Plan shall be administered and interpreted in accordance
with Section 162(m) of the Code to ensure the deductibility by the Company or
its Subsidiaries of the payment of Awards.

5.3.   Tax Withholding. The Company or any Subsidiary shall have the right to
make all payments or distributions pursuant to the Plan to a Participant, net of
any applicable Federal, State and local taxes required to be paid or withheld.
The Company or any Subsidiary shall have the right to withhold from wages,
Awards or other amounts otherwise payable to such Participant such withholding
taxes as may be required by law, or to otherwise require the Participant to pay
such withholding taxes. If the Participant shall fail to make such tax payments
as are required, the Company or any Subsidiary shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to such Participant or to take such other action as may be
necessary to satisfy such withholding obligations.
 
 
 
 
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EXHIBIT A

 
5.4.   Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor
the grant of an Award hereunder shall confer upon any Participant the right to
continue in the employment of the Company or any Subsidiary or affect any right
that the Company or any Subsidiary may have to terminate the employment of (or
to demote or to exclude from future Awards under the Plan) any such Participant
at any time for any reason. No Participant shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of treatment
of Participants under the Plan.

5.5.   Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.

5.6.    Severability. If any provision of the Plan shall be held unlawful or
otherwise invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other
provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.

5.7.   Construction. All references in the Plan to “Section,” or “Article” are
intended to refer to the Section, Sections or Article, as the case may be, of
the Plan. As used in the Plan, the word  “including,” and variations thereof,
shall not be deemed to be terms of limitation, but rather shall be deemed to be
followed by the words  “without limitation.”

5.8.   Unfunded Status of the Plan. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general creditor of
the Company or any Subsidiary.

5.9.   Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware, without
reference to principles of conflict of laws that might result in the application
of the laws of another jurisdiction, and construed accordingly.

5.10. Effective Date of Plan. The Plan shall be effective on the date of the
approval of the Plan by the holders of a majority of the shares entitled to vote
at a duly constituted meeting of the stockholders of the Company. The Plan shall
be null and void and of no effect if the foregoing condition is not fulfilled.

5.11. Captions. The captions in the Plan are for convenience of reference only,
and are not intended to narrow, limit or affect the substance or interpretation
of the provisions contained herein.
 
 
 
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EXHIBIT B
 
 
GENERAL RELEASE AND WAIVER

1.           [Name] (“Employee”) hereby acknowledges and agrees that Employee’s
employment with Barnes & Noble, Inc. (the “Company”) terminated on __________,
20__ (the “Termination Date”).

2.           Employee acknowledges and agrees that Employee’s executing this
General Release and Waiver (“Release”) is a condition precedent to the Company’s
obligation to pay (and the Employee’s right to retain) the payments and benefits
set forth in Section 3.8 of the employment letter agreement, dated as of March
17 2010, between Employee and the Company (such agreement referred to herein as
the “Employment Agreement” and such payments and benefits collectively referred
to herein as the “Separation Benefit”), that the Separation Benefit is adequate
consideration for this Release, and that any monetary or other benefits that,
prior to the execution of this Release, Employee may have earned or accrued, or
to which Employee may have been entitled, have been paid or such payments or
benefits have been released, waived or settled by Releasor (as defined below)
except as expressly provided in this Release.

3.           (a)           THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER
OF ALL EXISTING AND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND
ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.”  BEFORE EMPLOYEE
SIGNS THIS RELEASE, EMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE
THAT EMPLOYEE UNDERSTANDS IT FULLY.

  (b)           In consideration of Employee’s receipt and acceptance of the
Separation Benefit from the Company, and on behalf of the Company and each
Releasee (as defined below), Employee, on Employee’s behalf and on behalf of
Employee’s heirs, executors, administrators, successors and assigns
(collectively, “Releasor”), hereby irrevocably, unconditionally and generally
releases the Company, its current and former officers, directors, shareholders,
trustees, parents, members, managers, affiliates, subsidiaries, branches,
divisions, benefit plans, agents, attorneys, advisors, counselors and employees,
and the current and former officers, directors, shareholders, agents, attorneys,
advisors, counselors and employees of any such parent, affiliate, subsidiary,
branch or division of the Company and the heirs, executors, administrators,
receivers, successors and assigns of all of the foregoing (each, a “Releasee”),
from or in connection with, and hereby waives and/or settles, except as provided
in Section 3(c), any and all actions, causes of action, suits, debts, dues, sums
of money, accounts, controversies, agreements, promises, damages, judgments,
executions, or any liability, claims or demands, known or unknown and of any
nature whatsoever, whether or not related to employment, and which Releasor ever
had, now has or hereafter can, shall or may have as of the date of this Release,
including, without limitation, (i) any rights and/or claims arising under any
contract, express or implied, written or oral, including, without limitation,
the Employment Agreement; (ii) any rights and/or claims arising under any
applicable foreign, Federal, state, local or other statutes, orders, laws,
ordinances, regulations or the like, or case law, that relate to employment or
employment practices, including, without limitation, family and medical, and/or,
specifically, that prohibit discrimination based upon age, race, religion, sex,
color, creed, national origin, sexual orientation, marital status, disability,
medical condition, pregnancy, veteran status or any other unlawful bases,
including, without limitation, the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as
amended, the Age Discrimination in Employment Act of 1967, as amended, the
Americans with Disabilities Act of 1990, as amended, the Family Medical Leave
Act of 1993, as amended, the Employee Retirement Income Security Act of 1974, as
amended, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as
amended, the Worker Adjustment and Retraining Notification Act of 1988, as
amended, and any similar applicable statutes, orders, laws, ordinances,
regulations or the like, or case law, of the State of New York and any State in
which any Releasee is subject to jurisdiction, or any political subdivision
thereof, including, without limitation, the New York State Human Rights Law, the
New York State Labor Law and the New York City Human Rights Law, and all
applicable rules and regulations promulgated pursuant to or concerning any of
the foregoing statutes, orders, laws, ordinances, regulations or the like; (iii)
any waivable rights and/or claims relating to wages and hours, including under
state or local labor or wage payment laws; (iv) any rights and/or claims to
benefits that Employee may have or become entitled to receive under any
severance, termination, change of control, bonus or similar policy, plan,
program, agreement or similar or related arrangements, including, without
limitation, any offer letter, letter agreement or employment agreement between
Employee and the Company; (v) any rights and/or claims that Employee may have to
receive any equity in the Company (whether restricted or unrestricted) in the
future; and (vi) and any rights and/or claims for attorneys’ fees.  Employee
agrees not to challenge or contest the reasonableness, validity or
enforceability of this Release.
 
 
 
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EXHIBIT B
 
 
                              c)           Notwithstanding the foregoing,
Employee does not release any Releasee from any of the following rights and/or
claims:  (i) any rights and/or claims Employee may have that arise after the
date Employee signs this Release; (ii) any rights and/or claims that by law
cannot be waived by private agreement; (iii) Employee’s right to file a charge
with or participate in any investigation or proceeding conducted by the U.S.
Equal Employment Opportunity Commission (“EEOC”) or similar government agency;
provided that even though Employee can file a charge or participate in an
investigation or proceeding conducted by the EEOC or similar government agency,
by executing this Release, Employee is waiving his ability to obtain relief of
any kind from any Releasee to the extent permitted by law; (iv) Employee’s
non-forfeitable rights to accrued benefits (within the meaning of Sections 203
and 204 of ERISA); (v) any rights and/or claims to insurance coverage under any
directors’ and officers’ personal liability insurance or fiduciary insurance
policy; and (vi) any rights and/or claims to enforce the Employment Agreement in
accordance with its terms.

4.           Employee represents and warrants that Employee has not filed or
commenced any complaints, claims, actions or proceedings of any kind against any
Releasee with any Federal, state or local court or any administrative,
regulatory or arbitration agency or body.  Employee hereby waives any right to,
and agrees not to, seek reinstatement or employment of any kind with any
Releasee and, without waiver by any Releasee of the foregoing, the existence of
this Release shall be a valid, nondiscriminatory basis for rejecting any such
application or, in the event Employee obtains such employment, for terminating
such employment.  This Release and the Separation Benefit are not intended to
be, shall not be construed as and are not, an admission or concession by any
Releasee of any wrongdoing or illegal or actionable acts or omissions.

5.           (a)           Employee hereby represents and agrees that Employee
shall keep confidential and not disclose orally or in writing, to any person,
except as may be required by law, any and all information concerning the
existence or terms of this Release and the amount of any payments made
hereunder.  Employee further agrees that, except as shall be required by law,
Employee shall keep confidential and not disclose orally or in writing, directly
or indirectly, to any person (except Employee’s immediate family, attorneys and
accountant), any and all information concerning any facts, claims or assertions
relating or referring to any experiences of Employee or treatment Employee
received by or on behalf of any Releasee through the date of this Release.

(b)           If Employee is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any information covered by
Section 5(a), Employee shall promptly notify the Company of such request or
requirement so that the Company may seek to avoid or minimize the required
disclosure and/or to obtain an appropriate protective order or other appropriate
relief to ensure that any information so disclosed is maintained in confidence
to the maximum extent possible by the agency or other person receiving the
disclosure, or, in the discretion of the Company, to waive compliance with the
provisions of this Release.  Employee shall use reasonable efforts, in
cooperation with the Company or otherwise, to avoid or minimize the required
disclosure and/or to obtain such protective order or other relief.  If, in the
absence of a protective order or the receipt of a waiver hereunder, Employee is
compelled to disclose such information or else stand liable for contempt or
suffer other sanction, censure or penalty, Employee shall disclose only so much
of such information to the party compelling disclosure as he believes in good
faith on the basis of advice of counsel is required by law, and Employee shall
give the Company prior notice of such information he believes he is required to
disclose.

6.           (a)           Employee shall not make, either directly or by or
through another person, any oral or written negative, disparaging or adverse
statements or representations of or concerning any Releasee.

(b)           Without limitation to the survival of any other terms of the
Employment Agreement subsequent to the end of Employee’s employment, the
expiration or termination of the Employment Agreement, and/or the execution and
effectiveness of this Release, Employee and the Company expressly acknowledge
that the terms of Sections 4 and 5 of the Employment Agreement survive and shall
be in full force and effect as provided in the Employment Agreement.
 
 
 
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EXHIBIT B

 
7.           The covenants, representations and acknowledgments made by Employee
in this Release shall continue to have full force and effect after the execution
and effectiveness of this Release and the delivery of the Separation Benefit,
and this Release shall inure to the benefit of each Releasee, and the successors
and assigns of each of them, to the extent necessary to preserve the intended
benefits of such provisions.  If any section of this Release is determined to be
void, voidable or unenforceable, it shall have no effect on the remainder of
this Release, which shall remain in full force and effect, and the provisions so
held invalid or unenforceable shall be deemed modified as to give such
provisions the maximum effect permitted by applicable law.  Without limitation
to Section 3.8 of the Employment Agreement, the Company shall be excused and
released from any obligation to make payment of the Separation Benefit, and
Employee shall be obligated to return to the Company the Separation Benefit, in
the event that Employee is found to have (a) made a material misstatement in any
term, condition, covenant, representation or acknowledgment in this Release, or
(b) Employee is found to have committed or commits a material breach of any
term, condition or covenant in this Release.

8.           This Release and the Employment Agreement constitute the sole and
complete agreement between the parties with respect to the matters set forth
therein and supersedes all prior agreements, understandings and arrangements,
oral or written, between Employee and the Company with respect to the subject
matter thereof.  This Release may not be amended or modified except by an
instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought.  Either party may,
by an instrument in writing, waive compliance by the other party with any term
or provision of this Release to be performed or complied with by such other
party.

9.           With respect to any claims or disputes under or in connection with
this Release or any claims released under Section 3 of this Release, Employee
and the Company hereby acknowledge and agree that Sections 6.7 and 6.9 of the
Employment Agreement shall govern.  Employee acknowledges that a breach or
threatened breach of the provisions of this Release may give rise to losses or
damages for which the Company cannot be reasonably or adequately compensated in
an action at law, and that such violation may result in irreparable and
continuing harm to the Company.  Accordingly, Employee agrees that, in addition
to any other remedy that the Company may have at law or in equity, the Company
shall be entitled to seek equitable relief, including, without limitation,
injunction and specific performance and Employee hereby waives any requirements
for security or posting of any bond in connection with such relief.  No
specification in this Release of any particular remedy shall be construed as a
waiver or prohibition of any other remedies (including claims for damages) in
the event of a breach or threatened breach of this Release.

10.         Employee agrees and acknowledges that (a) Employee has had an
adequate opportunity to review this Release and all of its terms, (b) Employee
understands all of the terms of this Release, which are fair, reasonable and are
not the result of any fraud, duress, coercion, pressure or undue influence
exercised by or on behalf of any Releasee and (c) Employee has agreed to and/or
entered into this Release and all of the terms hereof, knowingly, freely and
voluntarily.

11.         By executing this Release, Releasor acknowledges that (a) Employee
has been advised by the Company to consult with an attorney before executing
this Release; (b) Employee was provided adequate time (i.e., at least 21 days)
to review this Release and to consider whether to sign this Release and (c)
Employee has been advised that Employee has 7 days following execution to revoke
this Release (“Revocation Period”).  Notwithstanding anything to the contrary
contained herein or in the Employment Agreement, this Release shall not be
effective or enforceable, and the Separation Benefit is not payable and shall
not be delivered or paid by the Company, until the Revocation Period has expired
and provided that Employee has not revoked this Release.  Employee agrees that
any revocation shall be made in writing and delivered to ____________, Vice
President, Human Resources, Barnes & Noble, Inc., 122 Fifth Avenue, NY, NY
10011.  Employee acknowledges that revocation of this Release shall result in
the Company’s not having an obligation to pay the Separation Benefit.

Signature:
 
  Date:  
 
 [Name]
   

 
 
 
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