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                                                                   EXHIBIT 10.16

                              FIRST AMENDMENT TO
                           THE BORDERS GROUP, INC.
                             DIRECTORS STOCK PLAN


The Borders Group, Inc. Director Stock Plan (the "Plan") is hereby amended in
the following particulars:

1.   Section 1.2 of Article 1 of the Plan is hereby amended to insert the words
     "and Article 19" after the words "Article 4" in the eighth line thereof.

2.   The following paragraph (o) is hereby added to Article 2 of the Plan:

     "(o) "Option" or "Options" shall mean an option or options granted under
     Article 19 of this Plan"

3.   Article 3 of the Plan is hereby amended in its entirety to read as
     follows:           

     "3.    Shares.

            The maximum number of shares which will be reserved for the
     grant of Shares, Restricted Shares and Options under the Plan shall be
     155,521 Shares, which number shall be subject to adjustment as provided in
     Article 11 hereof.  Such shares may be either authorized but unissued
     Shares or Shares that may have been or may be reacquired by the Company.

            If any outstanding Restricted Shares or Options under the Plan
     shall be forfeited, such Shares or the Shares subject to such Options, as 
     the case may be, shall (unless the Plan shall have been terminated) again 
     become available for use under the Plan to the extent permitted by Rule 
     16b-3."

4.   The word "and" appearing before clause (iii) in paragraph (a) of Article
     9 of the Plan is hereby moved to the end of such clause and the following
     clause (iv) is hereby added at the end of such paragraph:

     "(iv) any Options held by such Participant that have not yet become
     exercisable shall be forfeited.
  
5.   The word "and" appearing before clause (ii) in paragraph (b) of Article 9
     of the Plan is hereby moved to the end of such clause and the following 
     clause (iii) is hereby added at the end of such paragraph: 

     "(iii) all outstanding Options held by such Participant shall become
     immediately exercisable."

6.   Article 11 of the Plan is hereby amended to substitute the words "the
     number of outstanding Restricted Shares, Deferred Shares and Options" for 
     the words "the number of outstanding Restricted Shares and Deferred 
     Shares" in each place in which such words appear therein.



























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7.   Article 15 of the Plan is hereby amended to substitute the words "the
     Plan" for the words "Article 4" in the eighth line thereof.

8.   Section 17.2 of Article 17 of the Plan is hereby amended in its entirety
     to read as follows:

            "17.2 The Plan shall remain in effect until December 31, 2005, 
     unless sooner terminated by the Board; provided, however, that, except
     as provided in Article 9 hereof, Shares and Dividend Equivalents may be
     delivered pursuant to a Deferral Election or the exercise of an Option
     after such date and the Restricted Period of Restricted Shares and the
     term of Options may extend beyond such date, and the provisions of the
     Plan shall continue to apply such Deferred Shares, Dividend Equivalents,
     Restricted Shares and Options."

9.   The following Article 19 is hereby added to the Plan:

     "19.   Stock Options

            Section 19.1 Annual Grant of Options.  On the date of each Annual
     Meeting of shareholders of the Company commencing with the May 16, 1996
     Annual Meeting, each eligible director shall receive an Option to purchase
     5,000 shares of common stock of the Company.

            Section 19.2 Eligibility for Options.  Each director of the Company 
     who is not an officer or employee of the Company and who is serving as
     a director of the Company on the date of the 1996 Annual Meeting shall be
     eligible to receive Options on that date.  The persons eligible to receive
     Options on the date of subsequent Annual Meetings shall be persons serving
     as directors of the Company on such date (including persons elected on
     such date), who are not officers or employees of the Company and who have
     held at least the following minimum number of shares since the preceding
     Annual Meeting:  (i) 1997 Annual Meeting - 5,000 shares; (ii) 1998 Annual
     Meeting - 7,500 shares; (iii) 1999 Annual Meeting and Annual Meetings
     thereafter - 10,000 shares; provided, however, that the minimum
     shareholding requirement shall not be applicable to a director who is
     being initially elected on the date of the applicable Annual Meeting.  In
     calculating the number of shares owned by a director for purposes of the
     minimum shareholding requirement, all shares previously issued to the
     director under Section 4 of the Plan and then held by the director,
     whether restricted or unrestricted, shall be deemed owned by the director.


            Section 19.3 Terms and Conditions of Options.  The Options granted
     to directors under this Plan shall have the following terms and conditions:

                    (a) EXERCISE PRICE.  The exercise price shall be the Fair
            Market Value per Share on the date of grant.

                    (b) TERM OF OPTIONS.  The term of each Option shall be ten 
            years from the date of grant.

                    (c) VESTING AND EXERCISE DATE.  Each Option shall vest and 
            become exercisable on the third anniversary of the date of grant;
            provided, however, that (i) an Option shall be forfeited in its
            entirety if the director ceases, at any time prior to his or        
            her exercise of the Option, to hold the minimum number of shares
            that he or she was required to hold for the one year period prior 
            to the grant to be eligible therefor; (ii) all outstanding Options
            shall vest and become immediately exercisable in the event of a
            Change in Control, and (iii) all options held by a director who has
            served as a director for six years or more shall vest as of the
            date upon which he or she ceases to serve as a director.
            






























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                 (d) DISCONTINUANCE OF SERVICE AS A DIRECTOR.  An Option may be
            exercised by a director only while he or she is serving as such
            or within three months thereafter and only if the Option is fully
            vested and exercisable and has not expired on the date of exercise;
            provided however, that if on the date upon which the director
            ceases to serve as such, he or she has ten or more years of full
            time service as a director of the Company, or if termination of
            service as a director results from the death or Disability of the
            director, such three month period shall be extended to three years. 
            In the event of a death of a director, either before or after
            termination of his or her service as a director, an Option which is
            otherwise exercisable may be exercised by the person or persons
            whom the director shall have designated in writing on forms
            prescribed by and filed with the Board ("Beneficiaries") or, if no
            such designation has been made, by the person or persons to whom
            the director's rights shall have passed by the laws of decent and
            distribution ("Successors").  In the event of a Disability of a
            director, an option which is otherwise exercisable may be exercised
            by the director's legal representative or guardian.  The Board may
            require an indemnity and/or such other evidence or assurances as it
            may deem necessary in connection with an exercise by a legal
            representative, guardian, Beneficiary, or Successor.

                 (e) EXERCISE AND PAYMENT.  Subject to the terms hereof, an
            Option may be exercised by noticed in writing to the Company
            specifying the number of  shares to be purchased.  Payment for the
            number of shares purchased upon the exercise of an Option shall be
            made in full at the per share exercise price and such purchase
            price shall be paid by delivery to the Company of cash (including
            check or similar draft), in United States dollars or previously
            owned whole shares otherwise not subject to holding periods under
            Rule 16b-3.  Shares used in payment of the purchase price shall be
            valued at their Fair Market Value as of the date of notice of
            exercise is received by the Company.  Any shares delivered to the
            Company shall be in such form as acceptable to the Company.

                 (f) WITHHOLDING TAXES.  The Company may defer making delivery
            of shares under the Plan until satisfactory arrangements have been
            made for the payment of any tax attributable to the exercise of the
            Option.  A director may pay all or any portion of all taxes;  (i)
            in cash; (ii) by having the Company withhold whole Shares; (iii) by
            delivering to the Company whole Shares previously owned by the
            director having a Fair Market Value not greater than the amount to
            be withheld; provided, however, that the amount to be withheld may
            not exceed the director's estimated total Federal, State and local
            tax obligations associated with the transaction.

                 (g) NON-TRANSFERABILITY.  No Option or any rights with respect
            thereto shall be subject to any debts or liabilities of an
            Director, nor be assignable or transferable except by will or the
            laws of decent and distribution, or be exercisable during the
            Director's lifetime other than by him or her, nor shall shares be
            issued to or in the name of anyone other than the Director,
            provided, however that an Option may be exercised after the death
            of an Director in accordance with Section 19.3 above and, provided
            further that any shares issued to an Director may be, at the
            request of the Director, issued in the name of the Director and/or
            one other person, as joint tenants with right of survivorship and
            not as tenants-in-common, or in the name of a trust for the benefit
            of the Director or for the benefit of the Director and others.

                 (h) TERMINATION BY A DIRECTOR.  A director may at any time
            elect, in a written notice filed with the Board, to terminate an
            Option with respect to any number of shares as to which such
            Option shall not have been exercised.







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                (i) TYPE OF OPTION.  All Options issued under the Plan shall be
        non-qualified Options.


                (j) RIGHTS AS A STOCKHOLDER.  A director shall not have any
        rights as a stockholder with respect to shares covered by his or her
        Option until the date of issuance to him or her of a certificate
        evidencing such shares after the exercise of such Option and payment in
        full of the exercise price.  No adjustment will be made for dividends
        or other rights for which the record date is prior to the date such
        certificate is issued.

10.     Notwithstanding any other provision hereof, this Amendment shall not be
        effective unless and until it is approved and adopted by the 
        shareholders of the Company.

        Except as herein amended, the Plan shall remain in full force and
        effect. 


                                                Borders Group, Inc.

                                                By:  George R. Mrkonic
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                                                Its:  Vice Chairman
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