Executive’s income increases after the lump sum payment date, and no additional payment shallbe made by the Company after the lump sum payment.     4. **No Consideration Absent Execution of this Agreement****.**Executive understands andagrees that Executive would not receive the monies and/or benefits specified in paragraph “2”above, except for Executive’s execution of this Separation Agreement and General Release and thefulfillment of the promises contained herein.     5. **General Release of All Claims****. Executive knowingly and voluntarily releases andforever discharges Borders of and from any and all claims, known and unknown,**against Borders,which Executive, Executive’s heirs, executors, administrators, successors, and assigns (referred tocollectively throughout this Agreement as “Executive”) has or may have **as of the date of executionof this Agreement,**including, but not limited to, any alleged violation of:Title VII of the Civil Rights Act of 1964;Civil Rights Act of 1991;Sections 1981 through 1988 of Title 42 of the United States Code;The Employee Retirement Income Security Act of 1974 (“ERISA”)(except for any vested benefits under any tax qualified benefit plan);asamendedThe Immigration Reform and Control Act; as amendedThe Americans with Disabilities Act of 1990;as amendedThe Age Discrimination in Employment Act of 1967 (“ADEA”);asamendedThe Worker Adjustment and Retraining Notification Act; as amendedThe Occupational Health and Safety Act, as amendedThe Fair Credit Reporting Act, as amended;Michigan Elliott-Larsen Civil Rights Act – Mich. Comp. Laws §37-2101 et seq.Michigan Persons with Disabilities Civil Rights Act – Mich. Comp. Laws §37.1101 etseq.Michigan Whistleblower Protection Act – Mich. Comp. Laws §15.361 et seq.Michigan Statutory Provision Regarding Retaliation/Discrimination for Filing aWorker’s Compensation Claim – Mich. Comp. Laws §418.301 (11) et seq.
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Michigan AIDS Testing and Confidentiality Act – Mich. Comp. Laws §333.5131 et seq.Michigan Equal Pay Law – Mich. Comp. Laws §408.381 et seq.Michigan State Wage Payment and Work Hour Laws, as amendedMichigan Occupational Safety and Health Act – Pub. Acts 154any other federal, state or local law, rule, regulation, orordinance;any public policy, contract, tort, or common law; orany basis for recovering costs, fees, or other expenses includingattorneys’ fees incurred in these matters.     6. **Executive’s Acknowledgment of Tax Liability.** Executive hereby acknowledges andagrees as follows: (a) nothing in this Agreement constitutes tax advice; (b) Borders does not takeany responsibility, or have any liability to Executive with respect to Executive’s Tax Liabilityand/or Executive’s personal tax reporting; (c) Executive has been given the opportunity andencouraged to consult with Executive’s own attorney and to seek professional tax advice prior toexecution of this Agreement; and (d) Executive agrees to indemnify Borders and hold it harmlessfrom any liability for income taxes, interest or penalties that may be imposed as a result ofunder-payment or non-payment of income taxes on any amounts paid Executive under the terms of thisAgreement.     7. **Affirmations****.**Executive affirms that Executive has not filed, caused to be filed,or presently is not a party to any claim, complaint or action against Borders in any forum or form.Executive also affirms that Executive has been paid and/or has received all leaves (paid orunpaid), compensation, wages, bonuses, commissions, and/or benefits to which Executive may beentitled and that no other leave (paid or unpaid), compensation, wages, bonuses, commissions,and/or benefits are due to Executive except as provided in this Separation Agreement and GeneralRelease.     Executive further affirms that Executive has no known workplace injuries or occupationaldiseases; and has been provided and/or has not been denied any leave requested under the FamilyMedical Leave Act.     8. **Non-Disparagement****.**Executive agrees not to defame, disparage or demean Borders inany manner whatsoever.     9. **Confidentiality and Return of Property****.**Executive agrees that Executive willcontinue to maintain in strict confidence and will not, directly or indirectly, divulge, transmit,publish, release or otherwise use or cause to be used in any manner, any confidential orproprietary information relating to Borders’ clients, customers, proprietary knowledge and trade
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secrets, research, business plans, business methods, operating procedures, processes orprograms, records and reports, marketing information, merchandising strategies, pricing strategies,technology, software systems, operations, processes, computer programs and data bases, records,development data and reports, store designs, quality control specifications, cost analysis, flowcharts, know-how, employee lists, customer lists, supplier lists, marketing data, personnel data,or any other information of like nature. Executive acknowledges that all information regardingBorders compiled or obtained by, or furnished to, Executive in connection with Employer’semployment or association with Borders is confidential information and Borders’ exclusiveproperty.      Executive affirms that Executive has not divulged any proprietary or confidential informationof Borders.     Executive also affirms that Executive has returned all of Borders’ property, documents, and/orany confidential information in Executive’s possession or control. Executive also affirms thatExecutive is in possession of all of Executive’s property that Executive had at Borders’ premisesand that Borders is not in possession of any of Executive’s property.     The foregoing covenant of confidentiality has no temporal, geographical or territoriallimitation.     10. **Confidentiality of this Agreement.** Employ agrees that Executive will maintain instrict confidence and will not, directly or indirectly, divulge, transmit, publish, release orotherwise disclose, the terms of this Agreement except to Executive’s spouse, domestic partner (asdefined by Borders Group Inc. benefits plans), tax advisor and an attorney with whom Executivechooses to consult regarding Executive’s consideration of this Agreement, provided that saidindividuals agree to be bound by the terms of this Confidentiality Clause and Executive agrees tobe liable for any breach by them.     11. **Discontinuance of Severance Payments**. Executive agrees that any right to receiveseverance payments hereunder will cease if, during the one-year period following Executive’stermination of employment, Executive directly or indirectly becomes an employee, director, advisorof, or otherwise affiliated with, any other entity or enterprise whose business is in competitionwith the business of Borders.     12. **Governing Law and Interpretation****.**This Agreement shall be governed and conformedin accordance with the laws of the State of Michigan without regard to its conflict of lawsprovision. Should any provision of this Agreement be declared illegal or unenforceable by anycourt of competent jurisdiction and cannot be modified to be enforceable, excluding the generalrelease language, such provision shall immediately become null and void, leaving the remainder ofthis Agreement in full force and effect. In the event of a breach of any provision of thisSeparation Agreement and General Release, either party may institute an action specifically toenforce any term or terms of this Separation Agreement and General Release and/or to seek anydamages for breach.
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     13. **Nonadmission of Wrongdoing****.**The Parties agree that neither this SeparationAgreement and General Release nor the furnishing of the consideration for this Separation Agreementand General Release shall be deemed or construed at any time for any purpose as an admission byBorders of wrongdoing or evidence of any liability or unlawful conduct of any kind.     14. **Amendment****.**This Separation Agreement and General Release may not be modified,altered or changed except in writing and signed by both parties wherein specific reference is madeto this Separation Agreement and General Release.     15. **Revocation**. Executive may revoke this Separation Agreement and General Releasefor a period of seven (7) calendar days following the day Executive executes this SeparationAgreement and General Release. Any revocation within this period must be submitted, in writing, toBorders Group Inc. Attention: Compensation Department, 100 Phoenix Drive, Ann Arbor, MI 48108 andstate, “I hereby revoke my acceptance of our Separation Agreement and General Release.” Therevocation must be personally delivered to Borders Compensation Department or a named designee, ormailed to Borders Group Inc., Compensation Department and postmarked within seven (7) calendar daysof execution of this Separation Agreement and General Release. This Separation Agreement andGeneral Release shall not become effective or enforceable until the revocation period has expired**.**If the last day of the revocation period is a Saturday, Sunday, or legal holiday in the state inwhich Executive was employed at the time of Executive’s last day of employment, then the revocationperiod shall not expire until the next following day which is not a Saturday, Sunday, or legalholiday.     16. **Entire Agreement; Termination of Prior Agreements****.**This Agreement sets forth theentire agreement between the parties hereto, and fully supersedes any prior written or oralagreements or understandings between the parties, which are hereby terminated and of no furtherforce and effect, including but not limited to the employment agreement dated on or around April29, 2008. Executive acknowledges that Executive has not relied on any representations, promises,or agreements of any kind made to Executive in connection with Executive’s decision to sign thisAgreement, except for those set forth in this Agreement.
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          **EXECUTIVE IS ADVISED THAT EXECUTIVE HAS TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THISAGREEMENT AND GENERAL RELEASE, IN WHICH EXECUTIVE WAIVES IMPORTANT RIGHTS, INCLUDING THOSE UNDERTHE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967. BORDERS ADVISES EXECUTIVE TO CONSULT WITH ANATTORNEY PRIOR TO EXECUTIVE’S SIGNING OF THIS AGREEMENT AND GENERAL RELEASE.**          **EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT ANDGENERAL RELEASE, DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAYCONSIDERATION PERIOD.**          **HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES AND TORECEIVE THE SUMS AND BENEFITS IN PARAGRAPH “2” ABOVE, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUECONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE ANDRELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST BORDERS.**          The parties knowingly and voluntarily sign this Separation Agreement and General Release as ofthe date(s) set forth below:           Borders Group, Inc.       By: /s/ ROBERT P. GRUEN By: /s/ DANIEL T. SMITH  Robert P. Gruen   Daniel T. Smith      Chief Administrative Officer       Date: January 15, 2009 Date: January 15, 2009
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