| Borders      Group, Inc.100      Phoenix DriveAnn      Arbor, MI  48108   |   |
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| date |                  |
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| re   | 2008 Additional Bonus |
| to   | George Jones          |

As a keyemployee who is critical to the strategic alternative evaluation process,Borders Group, Inc. (the “Company”) is pleased to inform you that you have beenselected to participate in the Company’s 2008 enhanced annual bonus program (the“Program”).  Your participation in the Program is contingent upon yoursignature below acknowledging your acceptance of the terms of the Program setforth below.

| 1.   | For      purposes of the Company’s Annual Bonus Incentive Plan (the “Bonus Plan”),      your “target” bonus for this year will be 80% of your base salary (your      “Target Bonus”), your “threshold” bonus for this year will be 20%  (your “Threshold      Bonus”), and your “maximum” bonus for this year under the Bonus Plan will      be 240% (your “Maximum Bonus”).  For levels of performance goal      achievement between threshold and target levels, the amount of your annual      bonus under the Bonus Plan will be straight-line interpolated between your      Threshold Bonus and your Target Bonus, and for levels of performance goal      achievement between target and maximum levels, the amount of your annual      bonus under the Bonus Plan will be straight-line interpolated between your      Target Bonus and your Maximum Bonus (in all cases, applied proportionally      to each performance objective on a per-objective basis).  Notwithstanding      the foregoing, the maximum bonus that you can be paid under the Bonus Plan      is the lesser of (x) $900,000 and (y) three times the salary midpoint for      your salary grade (such lesser amount, your “Plan      Limit”).   Eligibility for an annual bonus under the Bonus      Plan remains subject to the continued service requirements and other terms      of the Bonus Plan. |
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| 2.   | Subject      to your continued employment with the Company and its affiliates through      the date (the “Bonus Payment Date”) that bonuses are paid under the Bonus      Plan, you will receive an additional bonus payment (the “Additional      Bonus”) equal to your Target Bonus, payable on the Bonus Payment      Date.  The Additional Bonus will be paid regardless of the      amount, if any, earned under the Bonus Plan, and will be paid      independently of the Bonus Plan.  Further, in the event that you      would have earned a bonus under the Bonus Plan pursuant to paragraph 1      above that would have exceeded your Plan Limit, the amount of your      Additional Bonus will be increased by the excess of (x) the amount that      you would have earned pursuant to paragraph 1 above absent the Plan Limit      over (y) the Plan Limit.  Notwithstanding the foregoing, in the      event of a Change of Control (as defined in the Bonus Plan) prior to the      conclusion of the fiscal year, the Additional Bonus (which will in such      case equal your Target Bonus) will be paid to you (in full satisfaction of      the Company’s obligations under this paragraph) as soon as practicable      following the date of such Change of Control, so long as you had remained      employed with the Company and its affiliates through the date of such      Change of Control. |
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| 3.   | You      acknowledge that the Program is in place only for the Company’s 2008      fiscal year.  You further acknowledge and agree that (i) for      purposes of any employment or severance agreement, plan, or program that      uses a target bonus amount as a component for calculation of severance or      any other compensation item or benefit, your target bonus for the 2008      fiscal year is the Target Bonus, (ii) for purposes of any employment or      severance agreement, plan, or program that uses an actual bonus amount as      a component for calculation of severance or any other compensation item or      benefit, your actual bonus for the 2008 fiscal year shall be deemed to      equal (x) the amount, if any, that is actually payable to you pursuant to      the Bonus Plan minus (y) 50% of the portion, if any, of such amount that      exceeds your Target Bonus, and (iii) the Additional Bonus under the      Program is a one-time benefit that will not be taken into account as an      annual bonus for purposes of other Company  programs. |
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