Exhibit 10.1
 BORDERS GROUP, INC.
 ANNUAL INCENTIVE BONUS PLAN
RESTATED AS OF MARCH 11, 2010
 Purposes .
 Definitions .
 (a)
    
    Board shall mean the Board of Directors of the Company.(b)
    
    Bonus shall mean any annual incentive bonus award granted pursuant to the Plan; the payment
of any such award shall be contingent upon the attainment of Performance Goals with respect to
a Plan Year.(c)
    
    Change in Control shall mean the occurrence of an event described in Section 6(e) hereof.(d)
    
    Code shall mean the Internal Revenue Code of 1986, as amended from time to time.(e)
    
    Committee shall mean the Compensation Committee of the Board.(f)
    
    Company shall mean Borders Group, Inc., a corporation organized under the laws of the State
of Michigan, or any successor corporation.(g)
    
    Covered Employee shall have the meaning set forth in Section 162(m)(3) of the Code (or any
successor provision).(h)
    
    Exchange Act shall mean the Securities Exchange Act of 1934, as amended.(i)
    
    2004 Long-Term Incentive Plan (or LTIP) shall mean the Amended and Restated Borders
Group, Inc. 2004 Long-Term Incentive Plan, approved by the shareholders of Borders Group, Inc.
on May 21, 2009, as amended from time to time, or any successor or predecessor plan.(j)
    
    LTIP Participant shall mean a participant in the LTIP who has been granted stock purchase
rights for the relevant Plan Year of the Plan.(k)
    
    Participant shall mean an officer or other employee of the Company or one of its
Subsidiaries who is eligible to participate herein pursuant to Section 3 of the Plan and for
whom a target Bonus is established with respect to the relevant Plan Year.(l)
    
    Performance Goal(s) shall mean the criteria and objectives which must be met during the
Plan Year as a condition of the Participants receipt of payment with respect to a Bonus, as
described in Section 5 hereof.(m)
    
    Plan shall mean Borders Group, Inc. Annual Incentive Bonus Plan, as amended from time to
time.(n)
    
    Plan Year shall mean the Companys fiscal year.(o)
    
    Restricted Shares shall mean the Shares in which a Bonus is partially or wholly payable
pursuant to Section 6(d) hereof; such




---



##### 



Restricted Shares are issuable pursuant to the 2004 Long-Term Incentive Plan.(p)
    
    Shares shall mean common shares of the Company.(q)
    
    Subsidiary shall mean any subsidiary of the Company which is designated by the Board or the
Committee to have any one or more of its employees participate in the Plan.
 Eligibility .
 No Shares Subject to the Plan .
 Performance Goals .
 Bonuses . In General.
 2




---



##### 



(b)
    
    Special Limitation on Certain Bonuses.Notwithstanding anything to the contrary contained in
this Section 6, the actual Bonus paid to the Companys Chief Executive Officer under the Plan
for any Plan Year may not exceed three times the salary midpoint for the salary grade of the
Chief Executive Officer, as determined by the Committee prior to the beginning of such Plan
Year based on competitive data, including a survey of comparable companies; and the Bonus for
each other Covered Employee under the Plan may not exceed two times the salary midpoint (as of
the beginning of such Plan Year) for such Covered Employees salary grade, as so determined by
the Committee prior to the beginning of such Plan Year.(c)
    
    Time of Payment.Unless otherwise determined by the Committee, or except as provided in
Section 6(e) hereof, all payments in respect of Bonuses granted under this Section 6 shall be
made within a reasonable period after the end of the Plan Year. In the case of Participants
who are Covered Employees, except as provided in Section 6(e) hereof, such payments shall be
made only after
achievement of the Performance Goals has been certified by the Committee but in no event later
than two and one-half (2.5) months after the end of the Plan Year .(d)
    
    Form of Payment. Payment of each Participants Bonus for any Plan Year shall be made in
cash. However, the Committee may, in its sole discretion, require that payment of a portion of
any LTIP Participants Bonus for any Plan Year (less applicable payroll deductions, which
shall not include Federal income tax withholding) be made in Restricted Shares pursuant to,
and subject to the terms and conditions of, the 2004 Long-Term Incentive Plan except as
provided in Section 6 (e) hereof. The Committee also may, in its sole discretion, allow an
LTIP Participant to make an election (made in accordance with the terms and conditions of the
2004 Long-Term Incentive Plan), with respect to up to 100 percent of the LTIP Participants
Bonus for any Plan Year (less applicable payroll deductions, which shall not include Federal
income tax withholding) to be paid in Restricted Shares pursuant to, and subject to the terms
and conditions of, the 2004 Long-Term Incentive Plan, except as provided in Section 6 (e)
hereof. The amount of the Bonus being paid in Restricted Shares shall, subject to the final
sentence of this paragraph, be calculated as follows: (i) multiply the gross Bonus by the
aggregate percentage of the Bonus being paid in Restricted Shares, and (ii) subtract
applicable payroll deductions from the result. The number of Restricted Shares to be paid
shall be calculated in accordance with the 2004 Long-Term Incentive Plan. Payment of the
balance of the LTIP Participants Bonus for any Plan Year shall be made in cash. Payments of
portions of any Bonuses made in Restricted Shares pursuant to the 2004 Long-Term Incentive
Plan may be referred to therein as purchases of such Shares.(e)
    
    Change in Control.Notwithstanding any other provision of the Plan to the contrary, (i) if a
Change in Control of the Company (as defined in this Section 6(e)) shall occur following a
Plan Year as to which the Committee has determined the actual Bonuses to be paid (but such
Bonuses have not yet been paid), such Bonuses shall be paid immediately in cash, (ii) if a
Change in Control shall occur following a Plan Year as to which the Committee has not yet
determined the actual Bonuses to be paid, such Bonuses shall be immediately determined and
paid in cash, and (iii) if a Change in Control shall occur during a Plan Year as to which
target Bonuses have been established (but the actual Bonuses to be paid have not yet been
determined), such Plan Year shall be deemed to have been completed, the target levels of
performance set forth under the respective Performance Goals shall be deemed to have been
attained, and a pro rata portion of the Bonus so determined for each Participant for such
partial Plan Year (based on the number of full and partial months which have elapsed with
respect to such Plan Year) shall be paid immediately in cash to each Participant for whom a
target Bonus for such Plan Year was established. Notwithstanding any other provision of the
Plan to the contrary, in no event shall the initial public offering of the Shares be treated
as a Change in Control of the Company for purposes of this Plan.
 3




---



##### 



Change of Control
     Administration .
 4




---



##### 



General Provisions .
 (a)
    
    Compliance with Legal Requirements.The Plan and the granting of
Bonuses, and the other obligations of the Company under the Plan shall be subject to all applicable
federal and state laws, rules and regulations, and to such approvals by any regulatory or
governmental agency as may be required.(b)
    
    No Right To Continued Employment. Nothing in the Plan or in any Bonus granted shall confer
upon any Participant the right to continue in the employ of the Company or any of its
Subsidiaries or to be entitled to any remuneration or benefits not set forth in the Plan or to
interfere with or limit in any way the right of the Company to terminate such Participants
employment.(c)
    
    Withholding Taxes. The Company or Subsidiary employing any Participant shall deduct from all
payments and distributions under the Plan any taxes required to be withheld by federal, state
or local governments.(d)
    
    Amendment and Termination of the Plan. The Board may at any time and from time to time alter,
amend, suspend, or terminate the Plan in whole or in part; provided, however, that no
amendment which requires stockholder approval in order for the Plan to continue to comply with
Code Section 162(m) shall be effective unless the same shall be approved by the requisite vote
of the shareholders of the Company. Additionally, the Committee may make such amendments as it
deems necessary to comply with other applicable laws, rules and regulations. Notwithstanding
the foregoing, no amendment shall affect adversely any of the rights of any Participant,
without such Participants consent, under any Bonus theretofore granted under the Plan.(e)
    
    Participant Rights. No Participant shall have any claim to be granted any Bonus under the
Plan, and there is no obligation for uniformity of treatment for Participants.(f)
    
    Unfunded Status of Bonuses. The Plan is intended to constitute an unfunded plan for
incentive compensation. With respect to any payments which at any time are not yet made to a
Participant pursuant to a Bonus, nothing contained in the Plan or any Bonus shall give any
such Participant any rights that are greater than those of a general creditor of the Company.(g)
    
    Governing Law. The Plan and the rights of all persons claiming hereunder shall be construed
and determined in accordance with the laws of the State of Michigan without giving effect to
the choice of law principles thereof, except to the extent that such law is preempted by
federal law.(h)
    
    Effective Date. The Plan shall take effect upon its adoption by the Board, but the Plan (and
any grants of Bonuses made prior to the shareholder approval mentioned herein) shall be
subject to the requisite approval of the shareholders of the Company. In the absence of such
approval, such Bonuses shall be null and void.(i)
    
    Interpretation. The Plan is designed and intended to comply with Section 162(m) of the Code,
to the extent applicable, and all provisions hereof shall be construed in a manner to so
comply.(j)
    
    Term.The Plan shall remain in effect until terminated by the Board.
 5