{"id":39028,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-chief-financial-officer-barnes-amp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-chief-financial-officer-barnes-amp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-chief-financial-officer-barnes-amp.html","title":{"rendered":"Employment Agreement – Chief Financial Officer – Barnes & Noble Inc."},"content":{"rendered":"

March 9, 2012<\/p>\n

Mr. Michael P. Huseby<\/p>\n

c\/o 122 Fifth Avenue<\/p>\n

New York, NY 10011<\/p>\n

Dear Mr. Huseby:<\/p>\n

This letter agreement (the “Agreement”) is intended to set forth our mutual
\nunderstanding regarding your employment as Chief Financial Officer of Barnes
\n& Noble, Inc. (the “Company”).<\/p>\n

Accordingly, we are pleased to agree as follows:<\/p>\n

1. Duties.<\/u> You agree to be Chief Financial Officer for the term of
\nthis Agreement. In this capacity, you shall perform such duties and have such
\nresponsibilities as are typically associated with such position, including such
\nduties and responsibilities as are prescribed by the Board of Directors of the
\nCompany (the “Board”) consistent with such position. While you are the Company153s
\nemployee, you agree to devote your full business time and attention to the
\nperformance of your duties and responsibilities hereunder. You shall report to
\nthe Company153s Chief Executive Officer. Your principal work location shall be at
\nthe offices of the Company located in New York City, provided that the Company
\nmay, in its discretion, relocate your principal work location to Palo Alto, CA.\n<\/p>\n

2. Term.<\/u> (a) The initial term of this Agreement shall be for a period
\nbeginning on March 13, 2012 (the “Effective Date”) and ending on the third
\nanniversary of the Effective Date or, if earlier, the termination of your
\nemployment in accordance with the provisions set forth below (the “Initial
\nTerm”). At the expiration (but not earlier termination) of the Initial Term, and
\nany subsequent “Renewal Term” (as defined below), the term of this Agreement
\nshall automatically renew for additional periods of one year (each, a “Renewal
\nTerm”), unless your employment has earlier terminated or either party hereto has
\ngiven the other party written notice of non-renewal at least 90 days prior to
\nthe expiration date of the Initial Term or the Renewal Term, as applicable. In
\nthe event that either party has given written notice of non-renewal, and your
\nemployment with the Company continues after the expiration of the Initial Term
\nor any Renewal Term, such post-expiration employment shall be “at-will” and
\neither party may terminate such employment with or without notice and for any
\nreason or no reason.<\/p>\n

(b) Your employment hereunder shall terminate upon your death and may be
\nterminated by the Company upon written notice to you following your Disability
\n(as defined below). Your employment hereunder may also be terminated by the
\nCompany immediately for Cause (as defined below) or following two weeks written
\nnotice to you for any other reason. Your employment hereunder may also be
\nterminated by you following written notice to the Company of your intention to
\nresign with or without Good Reason (as defined below); provided that a
\nresignation for Good Reason shall comply with Section 2(c)(iv).<\/p>\n

(c) For purposes of this Agreement:<\/p>\n

(i) “Cause” means (A) your engaging in intentional misconduct or gross
\nnegligence that, in either case, is injurious to Company; (B) your indictment,
\nentry of a plea of nolo contendere or conviction by a court of competent
\njurisdiction with respect to any crime or violation of law involving fraud or
\ndishonesty (with the exception of misconduct based in good faith on the advice
\nof professional consultants, such as attorneys and accountants) or any felony
\n(or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence,
\nintentional acts or intentional omissions by you (as determined by a majority
\nvote of the Board in its reasonable discretion and judgment) that constitute
\nfraud, dishonesty, embezzlement or<\/p>\n

1<\/p>\n

\n

misappropriation in connection with the performance of your employment duties
\nand responsibilities; (D) your engaging in any act of intentional misconduct or
\nmoral turpitude (as determined by a majority vote of the Board in its reasonable
\ndiscretion and judgment) reasonably likely to adversely affect the Company or
\nits business; (E) your abuse of or dependency on alcohol or drugs (illicit or
\notherwise) that adversely affects your job performance; (F) your willful failure
\nor refusal to properly perform (as determined by a majority vote of the Board in
\nits reasonable discretion and judgment) the duties, responsibilities or
\nobligations of your employment for reasons other than Disability or authorized
\nleave, or to properly perform or follow (as determined by a majority vote of the
\nBoard in its reasonable discretion and judgment) any lawful direction by the
\nCompany (with the exception of a willful failure or refusal to properly perform
\nbased in good faith on the advice of professional consultants, such as attorneys
\nand accountants); or (G) your material breach of this Agreement or of any other
\ncontractual duty to, written policy of, or written agreement with the Company
\n(with the exception of a material breach based in good faith on the advice of
\nprofessional consultants, such as attorneys and accountants).<\/p>\n

(ii) “Disability” shall mean a written determination by a majority of three
\nphysicians (one of which shall be your most recent primary care provider)
\nmutually agreeable to the Company and you (or, in the event of your total
\nphysical or mental disability, your legal representative) that you are
\nphysically or mentally unable to perform your duties as Chief Financial Officer
\nunder this Agreement and that such disability can reasonably be expected to
\ncontinue for a period of six consecutive months or for shorter periods
\naggregating 180 days in any 12-month period.<\/p>\n

(iii) “Good Reason” shall mean the occurrence of one or more of the following
\nevents without your written consent: (A) there shall have been a material
\ndiminution of your authority, duties or responsibilities except that any
\ndiminution of your authority, duties or responsibilities in connection with an
\nassignment of this agreement in accordance with section 6.4 or related to or
\narising out of the separation or sale of the company153s digital and\/or college
\nbusinesses shall not constitute “Good Reason” provided your position upon any
\nsuch assignment pursuant to Section 6.4 or separation or sale shall be that of
\nChief Financial Officer or a similar executive officer position; (B) there shall
\nhave been a greater than 10% reduction in your Annual Base Salary (as defined
\nbelow) in effect as of the Effective Date pursuant to Section 3.1; (C) the
\nprincipal executive offices of the Company shall be relocated to a location more
\nthan 50 miles from New York City, provided that a relocation of your principal
\nwork location to Palo Alto, CA pursuant to Section 1 shall not constitute Good
\nReason; or (D) the Company fails to make material payments to you (or provide to
\nyou restricted stock units) as required by this Agreement. For the avoidance of
\ndoubt, the Company153s assignment of its rights and obligations under this
\nAgreement pursuant to Section 6.4 shall not constitute Good Reason.<\/p>\n

(iv) You shall only be deemed to terminate employment for Good Reason if (A)
\nyou provide the Company with written notice of Good Reason within a period not
\nto exceed 90 days after the initial existence of the condition alleged to give
\nrise to Good Reason, (B) the Company fails to remedy the condition within 30
\ndays of such notice and (C) your termination is within six months following the
\ninitial existence of the condition alleged to give rise to Good Reason.<\/p>\n

3. Compensation. <\/u><\/p>\n

3.1. Annual Base Salary.<\/u> During the Initial Term and any Renewal Term,
\nthe Company shall pay you, for all services you perform hereunder, an annual
\nbase salary of U.S. $850,000, or such higher amount as the Compensation
\nCommittee of the Board (the “Compensation Committee”) may determine, payable in
\naccordance with the Company153s payroll schedule applicable to executive officers
\nof the Company (“Annual Base Salary”).<\/p>\n

3.2. Bonus Compensation.<\/u> During the Initial Term and any Renewal Term,
\nthe Company shall pay you annual bonus compensation, as determined by the
\nCompensation Committee, with an annual target amount of not less than 150% of
\nyour Annual Base Salary, which shall be paid in accordance with and subject to
\nthe terms and conditions of the Company153s Executive Performance Plan (as may be
\namended from time to time and attached hereto as Exhibit A and incorporated
\nherein by reference) or such other incentive or compensation plan or arrangement
\nspecified by the Compensation Committee. Notwithstanding the foregoing, subject
\nto Sections 2(c)(i), 3.8 and 3.9, the amount of your annual bonus compensation
\nfor the fiscal year ending April 30, 2013 shall be guaranteed at 150% of your
\nAnnual Base Salary.<\/p>\n

2<\/p>\n

\n

3.3. Employee Benefits.<\/u> During the Initial Term and any Renewal Term,
\nyou shall be eligible to participate in and receive any benefits to which you
\nare entitled under the employee benefit plans that the Company provides for its
\nemployees generally, as well as any employee benefit plans that the Company
\nprovides for its executive officers generally.<\/p>\n

3.4. Expenses.<\/u> During the Initial Term and any Renewal Term, the
\nCompany shall reimburse you for all expenses incurred by you in the performance
\nof your duties and responsibilities under this Agreement, including
\nentertainment and travel expenses, in accordance with the policies and
\nprocedures established by the Compensation Committee.<\/p>\n

3.5. Equity Awards.<\/u> On March 13, 2012, you shall be granted 275,000
\nshares of restricted stock units of the Company (the “Stock Grant”), in
\naccordance with the Company153s 2009 Incentive Plan (the “Plan”). The Stock Grant
\nshall vest over three years with 50% vesting on 2nd<\/sup> anniversary of
\nthe grant date, and 50% on 3rd anniversary of the grant date, except that, no
\ninstallment shall vest unless you are still employed by the Company at the time
\nof such vesting. Notwithstanding the foregoing, the Stock Grant shall vest
\nimmediately (i) upon the occurrence of a Change of Control (as defined in and
\npursuant and subject to the terms of Section 3.9 of this Agreement) and (ii) in
\nthe event that, during the Initial Term or any Renewal Term, (x) your employment
\nis terminated by the Company without Cause or (y) you voluntarily terminate your
\nemployment for Good Reason. Except as provided above, the Stock Grant shall be
\nsubject to the terms and conditions set forth in the Company153s customary award
\nagreement. During the Initial Term and any Renewal Term, you shall be eligible
\nto receive additional equity awards of the Company under the terms of the
\nCompany153s 2009 Incentive Plan, as determined by the Compensation Committee. For
\nthe avoidance of doubt, and notwithstanding anything to the contrary contained
\nin the Stock Grant agreement, for purposes of the Stock Grant, “Good Reason”
\nshall have the meaning provided in this Agreement.<\/p>\n

3.6 Car Allowance.<\/u> During the Initial Term and any Renewal Term, the
\nCompany shall pay you in cash a monthly car allowance of U.S. $1,500, or such
\nhigher amount as may be determined by the Compensation Committee.<\/p>\n

3.7 Life and Disability Insurance.<\/u> During the Initial Term and any
\nRenewal Term, the Company shall obtain in your name (a) a life insurance policy
\nproviding for a death benefit of U.S. $1,000,000 payable to any beneficiary or
\nbeneficiaries named by you and (b) a disability insurance policy providing for
\nmonthly payments to you of at least U.S. $12,800 during the period of any
\ndisability until the earlier of your attaining age 65 or death; provided that
\nthe term “disability” in any such disability insurance policy shall be defined
\nin a manner consistent with the definition in Section 2(c)(ii). During the
\nInitial Term and the Renewal Term, the Company shall pay all premiums due on
\nsuch policies.<\/p>\n

3.8. Severance.<\/u> In the event that, during the Initial Term or any
\nRenewal Term, (a) your employment is terminated by the Company without Cause or
\n(b) you voluntarily terminate your employment for Good Reason, the Company shall
\npay you an amount equal to two times the sum of (i) your then Annual Base
\nSalary, (ii) the average of the annual bonuses actually paid or guaranteed to
\nyou with respect to the three completed years preceding the date of your
\ntermination of employment (or such lesser number of completed years beginning on
\nthe Effective Date and ending on the date of your termination of employment) and
\n(iii) the aggregate annual dollar amount of the payments made or to be made to
\nyou or on your behalf for purposes of providing you with the benefits set forth
\nin Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other
\napplicable taxes and deductions (“Severance Amount”); provided that (x) you
\nexecute and deliver to the Company, and do not revoke, a release of all claims
\nagainst the Company substantially in the form attached hereto as Exhibit B
\n(“Release”) and (y) you have not materially breached as of the date of such
\ntermination any provisions of this Agreement and do not materially breach such
\nprovisions at any time during the Relevant Period (as defined below). The
\nCompany153s obligation to make such payment shall be cancelled upon the occurrence
\nof any such material breach and, in the event such payment has already been
\nmade, you shall repay to the Company such payment within 30 days after demand
\ntherefore; provided, however, such repayment shall not be required if the
\nCompany shall have materially breached<\/p>\n

3<\/p>\n

\n

this Agreement prior to the time of your breach. The Severance Amount shall
\nbe paid in cash in a single lump sum on the later of (1) the first day of the
\nmonth following the month in which such termination occurs and (2) the date the
\nRevocation Period (as defined in the Release) has expired. Notwithstanding
\nanything in this paragraph to the contrary, if a Release is not executed and
\ndelivered to the Company within 60 days of such termination of employment (or if
\nsuch Release is revoked in accordance with its terms), the Severance Amount
\nshall not be paid. Upon the expiration of this Agreement due to non-renewal, or
\nupon the termination of your employment hereunder for Cause or by your death or
\nDisability, or by your voluntary termination of your employment hereunder
\nwithout Good Reason, you shall be entitled only to the payment of such
\ninstallments of your Annual Base Salary that have been earned through the date
\nof such expiration and\/or termination.<\/p>\n

3.9. Change of Control Payments.<\/u> (a) If at any time during the Initial
\nTerm and any Renewal Term (i) there is a Change of Control (as defined below)
\nand (ii) your employment is terminated by the Company without Cause or you
\nvoluntarily terminate your employment for Good Reason, in either case, within
\nthe greater of two years following the Change of Control or the remainder of the
\nInitial Term or any Renewal Term, as applicable, then the Company shall pay you
\nan amount equal to three times the sum of (a) your then Annual Base Salary, (b)
\nthe average of the annual bonuses actually paid or guaranteed to you with
\nrespect to the three completed years preceding the date of your termination of
\nemployment (or such lesser number of completed years beginning on the Effective
\nDate and ending on the date of your termination of employment) and (c) the
\naggregate annual dollar amount of the payments made or to be made by the Company
\nfor purposes of providing you with the benefits set forth in Sections 3.3, 3.6
\nand 3.7 above, less all applicable withholding and other applicable taxes and
\ndeductions (“Change of Control Amount”). The Change of Control Amount shall be
\npaid to you in cash in a single lump sum within 30 days after the date your
\nemployment terminates. In the event that it is determined that the aggregate
\namount of the payments and benefits that could be considered “parachute
\npayments” within the meaning of Section 280G of the Internal Revenue Code of
\n1986, as amended (collectively, with the regulations and other guidance
\npromulgated thereunder, the “Code”; and such payments and benefits, the
\n“Parachute Payments”) that, but for this Section 3.9 would be payable to you
\nunder this Agreement or any other plan, policy or arrangement of the Company,
\nexceeds the greatest amount of Parachute Payments that could be paid to you
\nwithout giving rise to any liability for any excise tax imposed by Section 4999
\nof the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments
\npayable to you shall not exceed the amount that produces the greatest after-tax
\nbenefit to you after taking into account any Excise Tax to be payable by you.
\nAny reduction in Parachute Payments pursuant to the immediately preceding
\nsentence shall be made in the following order: (1) cash payments that do not
\nconstitute deferred compensation within the meaning of Section 409A of the Code,
\n(2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash
\npayments that do constitute deferred compensation, in each case, such reductions
\nshall be made in the manner that maximizes the present value to you of all such
\npayments. Subject to the Section 280G limitation referred to above, to the
\nextent that you are not fully vested in any retirement benefits from any
\npension, profit-sharing or other retirement plan or program maintained by the
\nCompany and your employment terminates in the circumstances contemplated by this
\nSection 3.9(a), the Company shall pay directly to you within 30 days after the
\ndate on which your employment terminates the difference between the amounts that
\nwould have been paid to you had you been fully vested on the date that your
\nemployment terminates and the amounts actually paid or payable to you pursuant
\nto such plans or programs. The amounts payable to you under this Section 3.9(a)
\nshall be in lieu of any amounts payable to you under Section 3.8 above.<\/p>\n

(b) As used herein, “Change of Control” shall mean the occurrence of one or
\nmore of the following events:<\/p>\n

(i) after the Effective Date hereof, any person, entity or “group” as
\nidentified in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
\n1934 (the “1934 Act”), other than you or any of your affiliates or Leonard
\nRiggio or any of his heirs or affiliates, becomes a beneficial owner (as such
\nterm is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
\nsecurities of the Company representing 40% or more of the total number of votes
\nthat may be cast for the election of directors of the Company; or<\/p>\n

(ii) within two years after a merger, consolidation, liquidation or sale of
\nassets involving the Company, or a contested election of a Company director, or
\nany combination of the foregoing, the individuals who were directors of the
\nCompany immediately prior thereto shall cease to constitute a majority of the
\nBoard; or<\/p>\n

4<\/p>\n

\n

(iii) within two years after a tender offer or exchange offer for voting
\nsecurities of the Company, the individuals who were directors of the Company
\nimmediately prior thereto shall cease to constitute a majority of the Board.\n<\/p>\n

For the avoidance of doubt, in the event the Company assigns its rights and
\nobligations under this Agreement pursuant to Section 6.4, (i) the term “Company”
\nas used in this Section 3.9(b) shall be deemed, from and after the date of such
\nassignment, to refer to the Successor (as defined in Section 6.4) and (ii) the
\nboard of directors of the Company and the members thereof shall be deemed, from
\nand after the date of such assignment, to refer to the board of directors, board
\nof managers or other equivalent governing body of the Successor (and the members
\nthereof).<\/p>\n

4. Non-Competition and Confidential Information. <\/u><\/p>\n

4.1. Non-Competition.<\/u> You agree that during the Initial Term and any
\nRenewal Term and for a period of two years (the “Relevant Period”) after the
\ntermination for any reason of your employment, you shall not, directly or
\nindirectly, (a) employ or retain, or induce or cause any other person or entity
\nto employ or retain, any person who is, or who at any time in the twelve-month
\nperiod prior to such time had been, employed or retained by the Company or any
\nof its subsidiaries or affiliates; or (b) provide services, whether as principal
\nor as agent, officer, director, employee, consultant, shareholder, or otherwise,
\nalone or in association with any other person, corporation or other entity, to
\nany Competing Business (as defined below); provided, however, that you may
\nprovide services to a Competing Business (other than Amazon.com, Inc. and its
\nsubsidiaries and affiliates and their respective successors (collectively,
\n“Amazon”)) that is engaged in one or more businesses other than the Business
\nArea (as defined below) but only to the extent that you do not provide services,
\ndirectly or indirectly, to the segment of such Competing Business that is
\nengaged in the Business Area. For purposes of this Agreement, the term
\n“Competing Business” shall mean (i) Amazon or (ii) any person, corporation or
\nother entity engaged in the Business Area. For purposes of this Agreement, the
\nterm “Business Area” shall mean the sale, distribution or attempted sale or
\ndistribution of books, textbooks, periodicals, newspapers, digital or audio
\nversions of any of the foregoing or e-reading devices and related software.
\nNotwithstanding the foregoing, the restrictions of this Section 4.1 shall not
\napply to the placement of general advertisements or the use of general search
\nfirm services with respect to a particular geographic area, but which are not
\ntargeted, directly or indirectly, towards employees of the Company or any of its
\nsubsidiaries.<\/p>\n

4.2. Ownership of Other Securities.<\/u> Nothing in Section 4.1 shall be
\nconstrued as denying you the right to own securities of any corporation listed
\non a national securities exchange or quoted in the NASDAQ System in an amount up
\nto 5% of the outstanding number of such securities.<\/p>\n

4.3. Confidential Information.<\/u> (a) You shall use best efforts and
\ndiligence both during and after any employment with the Company, regardless of
\nhow, when or why such employment ends, to protect the confidential, trade secret
\nand\/or proprietary character of all Confidential Information and Trade Secret
\nInformation (as defined below). You shall not, directly or indirectly, use (for
\nyour benefit or for the benefit of any other person) or disclose any
\nConfidential Information or Trade Secret Information, for so long as it shall
\nremain proprietary or protectable, except as may be necessary for the
\nperformance of your duties for the Company. For purposes of this Agreement,
\n“Confidential Information” shall mean all confidential information of the
\nCompany, regardless of the form or medium in which it is or was created, stored,
\nreflected or preserved, information that is either developed by you (alone or
\nwith others) or to which you shall have had access during any employment with
\nthe Company. Confidential Information includes, but is not limited to, Trade
\nSecret Information, and also includes information that is learned or acquired by
\nthe Company from others with whom the Company has a business relationship in
\nwhich, and as a result of which, such information is revealed to the Company.
\nFor purposes of this Agreement, “Trade Secret Information” shall mean all
\ninformation, regardless of the form or medium in which it is or was created,
\nstored, reflected or preserved, that is not commonly known by or generally
\navailable to the public and that: (i) derives or creates economic value, actual
\nor potential, from not being generally known to, and not being readily
\nascertainable by proper means by, other persons who can obtain economic value
\nfrom its disclosure or use; and (ii) is the subject of efforts that are
\nreasonable under the circumstances to maintain its secrecy. The Company153s Trade
\nSecret Information may include, but is not limited to, all confidential
\ninformation relating to or reflecting the Company153s research and development
\nplans and activities; compilations of data; product plans; sales, marketing and
\nbusiness plans and strategies; pricing, price lists, pricing methodologies and
\nprofit margins; current and planned incentive, recognition and rewards programs
\nand services; personnel; inventions, concepts, ideas, designs and formulae;
\ncurrent, past and prospective customer lists; current, past and anticipated
\ncustomer needs, preferences and<\/p>\n

5<\/p>\n

\n

requirements; market studies; computer software and programs (including
\nobject code and source code); and computer and database technologies, systems,
\nstructures and architectures. You understand that Confidential Information
\nand\/or Trade Secret Information may or may not be labeled as such, and you shall
\ntreat all information that appears to be Confidential Information and\/or Trade
\nSecret Information as confidential unless otherwise informed or authorized by
\nthe Company. Nothing in this Agreement shall be construed to mean that Company
\nowns any intellectual property or ideas that were conceived by you before you
\ncommenced employment with Company and which you have previously disclosed to the
\nCompany. Subject to Section 4.3(b), nothing in this Section 4.3(a) shall prevent
\nyou from complying with a valid legal requirement (whether by oral questions,
\ninterrogatories, requests for information or documents, subpoena, civil
\ninvestigative demand or similar process) to disclose any Confidential
\nInformation or Trade Secret Information.<\/p>\n

(b) You agree that both during and after any employment with the Company,
\nregardless of how, when or why such employment ends, if you are legally required
\n(whether by oral questions, interrogatories, requests for information or
\ndocuments, subpoena, civil investigative demand or similar process) to disclose
\nany Confidential Information or Trade Secret Information, you shall promptly
\nnotify the Company of such request or requirement so that the Company may seek
\nto avoid or minimize the required disclosure and\/or to obtain an appropriate
\nprotective order or other appropriate relief to ensure that any information so
\ndisclosed is maintained in confidence to the maximum extent possible by the
\nagency or other person receiving the disclosure, or, in the discretion of the
\nCompany to waive compliance with the provisions of this Section 4.3. Thereafter,
\nyou shall use reasonable efforts, in cooperation with the Company or otherwise,
\nto avoid or minimize the required disclosure and\/or to obtain such protective
\norder or other relief. If, in the absence of a protective order or the receipt
\nof a waiver hereunder, you are compelled to disclose the Confidential
\nInformation or Trade Secret Information or else stand liable for contempt or
\nsuffer other sanction, censure or penalty, you shall disclose only so much of
\nthe Confidential Information or Trade Secret Information to the party compelling
\ndisclosure as you believe in good faith on the basis of advice of counsel is
\nrequired by law, and you shall give the Company prior notice of the Confidential
\nInformation or Trade Secret Information you believe you are required to
\ndisclose. The Company shall reimburse any reasonable legal fees and related
\nexpenses you incur in order to comply with this Section 4.3(b).<\/p>\n

4.4. Inventions.<\/u> You shall promptly disclose and provide to the
\nCompany, any original works of authorship, designs, formulas, processes,
\nimprovements, compositions of matter, computer software programs, data,
\ninformation or databases, methods, procedures or other inventions, developments
\nor improvements of any kind that you conceive, originate, develop, improve,
\nmodify and\/or create, solely or jointly with others, during the period of your
\nemployment, or as a result of such employment (collectively, “Inventions”), and
\nwhether or not any such Inventions also may be included within “Confidential
\nInformation” or “Trade Secret Information” (as defined under this Agreement), or
\nare patentable, copyrightable or protectable as trade secrets. You acknowledge
\nand agree that the Company is and shall be the exclusive owner of all rights,
\ntitle and interest in and to the Inventions and, specifically, that any
\ncopyrightable works prepared by you within the scope of your employment are
\n“works for hire” under the Copyright Act, that such “works for hire” are
\nInventions and that the Company shall be considered the author and owner of such
\ncopyrightable works. In the event that any Invention is deemed not to be a “work
\nfor hire”, or in the event that you should, by operation of law, be deemed to be
\nentitled to retain any rights, title or interest in and to any Invention, you
\nhereby irrevocably waive all rights, title and interest and assign to the
\nCompany, without any further consideration and regardless of any use by the
\nCompany of any such Inventions, all rights, title and interest, if any, in and
\nto such Invention. You agree that the Company, as the owner of all Inventions,
\nhas the full and complete right to prepare and create derivative works based
\nupon the Inventions and to use, reproduce, publish, print, copy, market,
\nadvertise, distribute, transfer, sell, publicly perform and publicly display and
\notherwise exploit by all means now known or later developed, such Inventions and
\nderivative works anywhere throughout the world and at any time during or after
\nyour employment hereunder or otherwise.<\/p>\n

4.5. Return of Information.<\/u> You shall promptly deliver to the Company,
\nupon the termination for any reason of your employment, or at any other time at
\nthe Company153s request, without retaining any copies, all documents, information
\nand other material in your possession or control containing, reflecting and\/or
\nrelating, directly or indirectly, to any Confidential Information and\/or Trade
\nSecret Information.<\/p>\n

4.6 Cooperation.<\/u> You agree that both during and after any employment
\nwith the Company, regardless of how, when or why such employment ends, you shall
\nprovide reasonable cooperation to the Company and its affiliates in connection
\nwith any pending or future lawsuit, arbitration, or proceeding between the
\nCompany<\/p>\n

6<\/p>\n

\n

and\/or any affiliate and any third party, any pending or future regulatory or
\ngovernmental inquiry or investigation concerning the Company and\/or any
\naffiliate and any other legal, internal or business matters of or concerning the
\nCompany and\/or any affiliate. Such cooperation shall include meeting with and
\nproviding information the Company, any affiliate and\/or their respective
\nattorneys, auditors or other representatives as reasonably requested by the
\nCompany. The Company shall reimburse any reasonable legal fees and related
\nexpenses you incur in order to comply with this Section 4.6.<\/p>\n

4.7. Non-Disparagement.<\/u> During and after any employment with the
\nCompany, regardless of how, when or why such employment ends, (a) you shall not
\nmake, either directly or by or through another person, any oral or written
\nnegative, disparaging or adverse statements or representations of or concerning
\nthe Company or its subsidiaries or affiliates, any of their clients or
\nbusinesses or any of their current or former officers, directors, employees or
\nshareholders and (b) Company Parties (as defined below) shall not make any oral
\nor written negative, disparaging or adverse statements or representations of or
\nconcerning you; provided, however, that nothing herein shall prohibit (i)
\ncritical communications between you and the Company or Company Parties during
\nthe Initial Term and any Renewal Term and in connection with your employment or
\n(ii) you or any Company Party from disclosing truthful information if legally
\nrequired (whether by oral questions, interrogatories, requests for information
\nor documents, subpoena, civil investigative demand or similar process). For
\npurposes of this Agreement, the term “Company Parties” shall mean the executive
\nofficers and designated spokespersons of the Company.<\/p>\n

4.8. Severability.<\/u> If any of the restrictions in this Section 4 should
\nfor any reason whatsoever be declared invalid, the validity or enforceability of
\nthe remainder of this Agreement shall not be adversely affected thereby.<\/p>\n

4.9. Equitable Relief.<\/u> (a) You acknowledge that your services to the
\nCompany are of a unique character that gives them a special value to the
\nCompany. You further recognize that any violation of the restrictions in this
\nSection 4 may give rise to losses or damages for which the Company cannot be
\nreasonably or adequately compensated in an action at law and that such violation
\nmay result in irreparable and continuing harm to the Company. Accordingly, you
\nagree that, in addition to any other remedy that the Company may have at law or
\nin equity, the Company shall be entitled to injunctive relief to restrain any
\nviolation by you of the restrictions in this Section 4.<\/p>\n

(b) In addition, the Company recognizes that any violation of the
\nrestrictions in Section 4.7(b) may give rise to losses or damages for which you
\ncannot be reasonably or adequately compensated in an action at law and that such
\nviolation may result in irreparable and continuing harm to you. Accordingly, the
\nCompany agrees that, in addition to any other remedy that you may have at law or
\nin equity, you shall be entitled to injunctive relief to restrain any violation
\nby the Company of the restrictions in Section 4.7(b).<\/p>\n

4.10. Reasonableness.<\/u> You acknowledge that the limitations and
\nobligations contained in this Section 4 are, individually and in the aggregate,
\nreasonable and properly required by the Company and that in the event that any
\nsuch limitations are found to be unreasonable and unenforceable, you shall
\nsubmit to such limitations and\/or obligations in such form as the arbitrator
\nshall determine. You agree that you shall not challenge or contest the
\nreasonableness, validity or enforceability of any such limitations and
\nobligations.<\/p>\n

5. Indemnification.<\/u> You shall be indemnified by the Company, as an
\nofficer of the Company and its affiliates, against all actions, suits, claims,
\nlegal proceedings and the like to the fullest extent permitted by law, including
\nadvancement of expenses, partial indemnification, indemnification following the
\ntermination of this Agreement, indemnification of your estate and similar
\nmatters. For purposes of this Agreement, such indemnification shall extend to,
\nto the fullest extent permitted by law, legal fees, costs, expenses, judgments,
\nsettlements, claim resolution payments, arbitration fees, arbitrator fees,
\nmediation fees, negotiation fees and hold harmless obligations.<\/p>\n

6. Miscellaneous. <\/u><\/p>\n

6.1. Entire Agreement.<\/u> This Agreement constitutes the entire agreement
\nbetween you and the Company with respect to the terms and conditions of your
\nemployment by the Company and supersedes all prior agreements, understandings
\nand arrangements, oral or written, between you and the Company with respect to
\nthe subject matter hereof.<\/p>\n

7<\/p>\n

\n

6.2. Binding Effect; Benefits.<\/u> This Agreement shall inure to the
\nbenefit of and shall be binding upon you and the Company and our respective
\nheirs, legal representatives, successors and assigns.<\/p>\n

6.3. Amendments and Waivers.<\/u> This Agreement may not be amended or
\nmodified except by an instrument or instruments in writing signed by both
\nparties to this Agreement. Electronic communications, even if receipt is
\nacknowledged, shall not constitute an amendment or modification of this
\nAgreement.<\/p>\n

6.4. Assignment.<\/u> Neither this Agreement nor any rights or obligations
\nthat either party may have by reason of this Agreement shall be assignable by
\neither party without the prior written consent of the other party, provided that
\nthe Company may, without your consent, assign your employment and the Company153s
\nrights and obligations under this Agreement to barnesandnoble.com llc or any
\nentity formed to facilitate the separation of the Company153s Digital and\/or
\nCollege businesses from the Company (any such entity, a “Successor”). In the
\nevent of any such assignment, the term “Company” as used herein shall be deemed,
\nfrom and after the date of such assignment, to refer to the Successor.<\/p>\n

6.5. Notices.<\/u> Any notice that may or must be given under this
\nAgreement shall be in writing and shall be personally delivered or sent by
\ncertified or registered mail, postage prepaid, or reputable overnight courier,
\naddressed to you c\/o Seyfarth Shaw, Attn: of Howard Pianko, 620 Eight Avenue,
\nNew York, NY 10018-1405, or to the Company at 122 Fifth Avenue, New York, NY
\n10011 to the attention of the Vice President for Human Resources for the Company
\n(with a copy to the General Counsel for the Company), or to such other address
\nas you or the Company, as the case may be, may designate in writing in
\naccordance with the provisions of this section.<\/p>\n

6.6. Section and Other Headings; Other.<\/u> The section and other headings
\ncontained in this Agreement are for reference purposes only and are not deemed
\nto be a part of this Agreement or to affect the meaning and interpretation of
\nthis Agreement. For purposes of this Agreement, the term “including” shall mean
\n“including, without limitation.”<\/p>\n

6.7. Governing Law.<\/u> This Agreement shall be construed (both as to
\nvalidity and performance) and enforced in accordance with and governed by the
\nlaws of the State of New York applicable to agreements made and to be performed
\nwholly within the State of New York, without giving effect to any choice of law
\nor conflict of law provision or rule (whether of the State of New York or any
\nother jurisdiction) that would cause the application of the laws of any
\njurisdiction other than the State of New York. Except as provided in Section
\n6.9, exclusive jurisdiction for all disputes or claims arising under or in
\nconnection with this Agreement, and any and all claims by or against you
\nrelating to your employment with the Company, shall lie in any Federal or state
\ncourt located within the County of New York.<\/p>\n

6.8. Survival of Rights and Obligations.<\/u> All rights and obligations
\narising hereunder shall continue to have full force and effect after the
\ntermination of this Agreement unless otherwise provided herein to the extent
\nnecessary to preserve the intended benefits of such provisions. If any section
\nof this Agreement is determined to be void, voidable or unenforceable, it shall
\nhave no effect on the remainder of this Agreement, which shall remain in full
\nforce and effect, and the provisions so held invalid or unenforceable shall be
\ndeemed modified as to give such provisions the maximum effect permitted by
\napplicable law.<\/p>\n

6.9. Arbitration.<\/u> The parties agree that all disputes arising under or
\nin connection with this Agreement, and any and all claims by you relating to
\nyour employment with the Company, including any claims of discrimination or
\nother employment-related claims arising under Title VII of the Civil Rights Act
\nof 1964, as amended, the Age Discrimination in Employment Act, the Americans
\nwith Disabilities Act or any other employment-related Federal, state or local
\nlaw, shall be submitted to arbitration before the American Arbitration
\nAssociation (“AAA”) under its rules then prevailing for the type of claim in
\nissue before one arbitrator and to be held at the AAA153s office located in the
\nCounty of New York. In any arbitration hereunder, the arbitrator shall have the
\npower to issue appropriate injunctive or other non-monetary relief, and award
\nappropriate compensatory damages. The parties agree that no damages other than
\ncompensatory damages shall be sought or claimed by either party and each party
\nwaives any claim, right or entitlement to punitive, exemplary or consequential
\ndamages, or any<\/p>\n

8<\/p>\n

\n

other damages, and each relevant arbitrator is specifically divested of any
\npower to award any damages in the nature of punitive, exemplary or consequential
\ndamages, or any other damages of any kind or nature in excess of compensatory
\ndamages. Nothing in this arbitration provision shall preclude, and the parties
\nexpressly acknowledge that either party may seek, temporary injunctive relief
\nfrom any Federal or state court located within the County of New York in
\nconnection with or as supplement to an arbitration hereunder, including
\nregarding any claim under Section 4 of this Agreement. For purposes of any such
\naction or proceeding, the parties each hereby specifically submit to the
\npersonal jurisdiction of any Federal or state court located within the County of
\nNew York and further agree that service of process may be made within or without
\nthe State of New York by giving notice in the manner provided in Section 6.5 of
\nthis Agreement.<\/p>\n

6.10. Section 409A of the Code.<\/u> It is intended that the provisions of
\nthis Agreement comply with Section 409A of the Code, and all provisions of this
\nAgreement shall be construed and interpreted in a manner consistent with the
\nrequirements for avoiding taxes or penalties under Section 409A of the Code. If,
\nat the time of your separation from service (within the meaning of Section 409A
\nof the Code), (a) you shall be a specified employee (within the meaning of
\nSection 409A of the Code and using the identification methodology selected by
\nthe Company from time to time) and (b) the Company shall make a good faith
\ndetermination that an amount payable under this Agreement or any other plan,
\npolicy, arrangement or agreement of or with the Company (this Agreement and such
\nother plans, policies, arrangements and agreements, the “Company Plans”)
\nconstitutes deferred compensation (within the meaning of Section 409A of the
\nCode) the payment of which is required to be delayed pursuant to the six-month
\ndelay rule set forth in Section 409A of the Code in order to avoid taxes or
\npenalties under Section 409A of the Code, then the Company shall not pay any
\nsuch amount on the otherwise scheduled payment date but shall instead accumulate
\nsuch amount and pay it, without interest, on the first day of the seventh month
\nfollowing such separation from service. Except as permitted under Section 409A
\nof the Code, any deferred compensation (within the meaning of Section 409A of
\nthe Code) payable to or for your benefit under any Company Plan may not be
\nreduced by, or offset against, any amount owing by you to the Company. Except as
\nspecifically permitted by Section 409A of the Code, the benefits and
\nreimbursements provided to you under this Agreement and any Company Plan during
\nany calendar year shall not affect the benefits and reimbursements to be
\nprovided to you under the relevant section of this Agreement or Company Plan in
\nany other calendar year, and the right to such benefits and reimbursements
\ncannot be liquidated or exchanged for any other benefit and shall be provided in
\naccordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto.
\nFurther, in the case of reimbursement payments, such payments shall be made to
\nyou on or before the last day of the calendar year following the calendar year
\nin which the underlying fee, cost or expense is incurred. Notwithstanding the
\npreceding, the Company makes no representations concerning the tax consequences
\nof your participation in this Agreement under Section 409A of the Code or any
\nother Federal, state or local tax law. Your tax consequences shall depend, in
\npart, upon the application of relevant tax law, including Section 409A of the
\nCode, to the relevant facts and circumstances. You should consult a competent
\nand independent tax advisor regarding the tax consequences of this Agreement.\n<\/p>\n

6.11. Representations and Warranties.<\/u> You hereby represent and warrant
\nto the Company that (a) your execution, delivery and performance of this
\nAgreement do not and shall not conflict with, breach, violate or cause a default
\nunder any contract, agreement, instrument, order, judgment or decree to which
\nyou are a party or by which you are bound; (b) you are not a party to or bound
\nby any employment agreement, noncompete agreement or confidentiality agreement
\nwith any other person or entity that has not been disclosed to the Company prior
\nto the execution of this Agreement; (c) in the performance of any duties and
\nresponsibilities on behalf of the Company, you shall not divulge or use in any
\nway any trade secrets or confidential or proprietary information that are within
\nyour possession or knowledge (if any), are owned by any other person or entity
\nand regardless of whether or not such trade secrets or confidential or
\nproprietary information are subject to any written agreement; and (d) upon the
\nexecution and delivery of this Agreement, it shall be a valid and binding
\nobligation, enforceable in accordance with its terms. You hereby acknowledge and
\nrepresent that you fully understand the terms and conditions contained herein.\n<\/p>\n

6.12. Counterparts.<\/u> This Agreement may be executed in one or more
\nidentical counterparts, each of which shall be deemed an original but all of
\nwhich together shall constitute one and the same instrument.<\/p>\n

9<\/p>\n

\n

If the foregoing accurately reflects our agreement, kindly sign and return to
\nus the enclosed duplicate copy of this letter.<\/p>\n

Very truly yours,<\/p>\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

BARNES & NOBLE, INC.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Michelle Smith<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Michelle Smith<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Title: Vice President, Human Resources<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Accepted and Agreed to:<\/p>\n

Michael P. Huseby<\/p>\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

By:<\/p>\n<\/td>\n

<\/td>\n\n

\/s\/ Michael P. Huseby<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n\n

Name: Michael P. Huseby<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Date:<\/p>\n<\/td>\n

<\/td>\n\n

March 9, 2012<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[Signature Page to Employment Agreement<\/em>]<\/p>\n

10<\/p>\n

\n

EXHIBIT A <\/strong><\/p>\n

BARNES & NOBLE, INC. <\/strong><\/p>\n

2009 EXECUTIVE PERFORMANCE PLAN <\/strong><\/p>\n

BARNES & NOBLE, INC., a corporation existing under the laws of the State
\nof Delaware (the “Company”), hereby establishes and adopts the following 2009
\nExecutive Performance Plan (the “Plan”). Certain capitalized terms used in the
\nPlan are defined in Article 2.<\/p>\n

RECITALS <\/strong><\/p>\n

WHEREAS,<\/strong> the Company desires to encourage high levels of
\nperformance by those individuals who are key to the success of the Company, to
\nattract new individuals who are highly motivated and who are expected to
\ncontribute to the success of the Company and to stimulate the efforts of such
\nindividuals to contribute to the continued success and growth of the Company153s
\nbusiness; and<\/p>\n

WHEREAS,<\/strong> to attain these ends, the Company has formulated
\nthe Plan embodied herein to authorize the awarding of bonuses that are intended
\nto qualify as “performance based compensation” within the meaning of Section
\n162(m) of the Code.<\/p>\n

NOW, THEREFORE,<\/strong> the Company hereby constitutes, establishes
\nand adopts the following Plan and agrees to the following provisions:<\/p>\n

ARTICLE 1<\/p>\n

PURPOSE OF THE PLAN<\/p>\n

1.1. <\/strong>Purposes.<\/em> The purposes of the Plan are to
\nprovide personal incentive and financial rewards to senior management who,
\nbecause of the extent of their responsibilities, can and do make significant
\ncontributions to the success of the Company by their ability, industry, loyalty
\nand exceptional services. Making such senior management participants in that
\nsuccess will advance the interests of the Company and its stockholders and will
\nassist the Company in attracting and retaining such senior management.<\/p>\n

ARTICLE 2<\/p>\n

DEFINITIONS<\/p>\n

2.1. <\/strong>“Award”<\/em> shall mean the amount of the Incentive
\nAward paid to a Participant pursuant to the Plan.<\/p>\n

2.2. <\/strong>“Board”<\/em> shall mean the board of directors of
\nthe Company.<\/p>\n

2.3. <\/strong>“Certification”<\/em> shall have the meaning set
\nforth in Section 4.2.<\/p>\n

2.4. <\/strong>“Code”<\/em> shall mean the Internal Revenue Code of
\n1986, as amended from time to time, and any successor thereto.<\/p>\n

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

2.6. <\/strong>“Company”<\/em> has the meaning set forth in the
\nintroductory paragraph of the Plan.<\/p>\n

2.7. <\/strong>“Exchange Act”<\/em> shall mean the Securities
\nExchange Act of 1934, as amended.<\/p>\n

1<\/p>\n

\n

EXHIBIT A <\/strong><\/p>\n

2.8<\/strong>. “Incentive Award<\/em>” shall mean an amount equal
\nto 1.5% of the Company153s Operating Income for the Performance Period for each
\nParticipant.<\/p>\n

2.9. <\/strong>“Operating Income”<\/em> shall mean the gross profit
\nminus operating expenses of the Company and its Subsidiaries on a consolidated
\nbasis, before deduction of interest payments and income taxes and accrual of any
\namounts for payment under this Plan for the Performance Period, as reported in
\nthe Company153s income statement for the applicable Performance Period, without
\nregard to items relating to (a) restructurings, discontinued operations,
\nextraordinary items, and other unusual or non-recurring charges, (b) an event
\neither not directly related to the operations of the Company or not within the
\nreasonable control of the Company153s management, or (c) changes in accounting
\nstandards required by generally accepted accounting principles, in each case as
\ndetermined in accordance with generally accepted accounting principles and as
\nreported in (x) the Company153s consolidated statement of operations, (y) notes to
\nthe Company153s consolidated financial statements or (z) management153s discussion
\nand analysis with respect to the Company153s consolidated financial statements as
\nfiled with the U.S. Securities and Exchange Commission, in each case for the
\napplicable Performance Period.<\/p>\n

2.10. <\/strong>“Participant”<\/em> shall mean the Company153s Chief
\nExecutive Officer and each other executive officer of the Company selected by
\nthe Committee pursuant to Section 4.1 to participate in this Plan with respect
\nto any given Performance Period.<\/p>\n

2.11. <\/strong>“Performance Period”<\/em> shall mean the Company153s
\nfiscal year or any other period during a fiscal year that the Committee, in its
\nsole discretion, may determine.<\/p>\n

2.12. <\/strong>“Shares”<\/em> shall mean the shares of common
\nstock of the Company, par value $0.001 per share.<\/p>\n

2.13. <\/strong>“Subsidiary”<\/em> shall mean any corporation
\n(other than the Company) in an unbroken chain of corporations beginning with the
\nCompany if, at the time of the granting of the Award, each of the corporations
\nother than the last corporation in the unbroken chain owns stock possessing 50%
\nor more of the total combined voting power of all classes of stock in one of the
\nother corporations in the chain, excluding any such Subsidiary whose securities
\nare publicly traded.<\/p>\n

ARTICLE 3<\/p>\n

ELIGIBILITY AND ADMINISTRATION<\/p>\n

3.1. <\/strong>Eligibility.<\/em> The individuals eligible to
\nparticipate in the Plan shall be the Company153s Chief Executive Officer and any
\nother executive officer of the Company or any Subsidiary selected by the
\nCommittee to participate in the Plan.<\/p>\n

3.2. <\/strong>Administration.<\/em> (a) The Plan shall be
\nadministered by the Committee. The Committee shall have full power and
\nauthority, subject to the provisions of the Plan and subject to such orders or
\nresolutions not inconsistent with the provisions of the Plan as may from time to
\ntime be adopted by the Board, to: (i) select the Participants to whom Incentive
\nAwards may from time to time be granted hereunder; (ii) determine the terms and
\nconditions of Incentive Awards, not inconsistent with the provisions of the
\nPlan, and whether an Award shall be paid in cash or Shares; (iii) determine the
\ntime when Incentive Awards will be made and the Performance Period to which they
\nrelate; (iv) certify the calculation of Operating Income and the amount of the
\nIncentive Award payable to each Participant in respect of Performance Periods;
\n(v) in connection with the determination of the amount of each Award, determine
\nwhether and to what extent the Incentive Award shall be reduced based on such
\nfactors as the Committee deems appropriate in its discretion; (vi) interpret and
\nadminister the Plan; (vii) correct any defect, supply any omission or reconcile
\nany inconsistency in the Plan in the manner and to the extent that the Committee
\nshall deem desirable to carry it into effect; (viii) establish such rules and
\nregulations and appoint such agents as it shall deem appropriate for the proper
\nadministration of the Plan; and (ix) make any other determination and take any
\nother action that the Committee deems necessary or desirable for administration
\nof the Plan.<\/p>\n

(b) Decisions of the Committee shall be final, conclusive and binding on all
\npersons or entities, including the Company, any Participant and any person
\nclaiming any benefit or right under an Incentive Award or under the Plan. A
\nmajority of the members of the Committee may determine its actions and fix the
\ntime and place of its meetings.<\/p>\n

2<\/p>\n

\n

EXHIBIT A <\/strong><\/p>\n

(c) To the extent not inconsistent with the applicable provisions of Section
\n162(m) of the Code, applicable law or the rules and regulations of the New York
\nStock Exchange, the Committee may delegate to one or more officers of the
\nCompany or any of its Subsidiaries the authority to take actions on its behalf
\npursuant to the Plan.<\/p>\n

ARTICLE 4<\/p>\n

AWARDS<\/p>\n

4.1. <\/strong>Performance Period.<\/em> Not later than 90 days
\nafter the commencement of each fiscal year of the Company, the Committee shall,
\nin writing, (i) designate one or more Performance Periods for such fiscal year,
\nprovided that any Performance Period of less than one year shall be designated
\nno later than the date on which 25% of such Performance Period has lapsed, (ii)
\ndetermine the Participants for such Performance Period(s), and (iii) specify any
\nadjustments to Operating Income for the Performance Period. If a person becomes
\neligible to participate in the Plan after the Committee has made its initial
\nwritten determination of the Participants for a Performance Period, such
\nindividual may become a Participant for the Performance Period if so designated
\nby the Committee in writing.<\/p>\n

4.2. <\/strong>Certification.<\/em> As soon as reasonably
\npracticable following the conclusion of each Performance Period, the Committee
\nshall certify, in writing, the amount of Operating Income and the Incentive
\nAward for each Participant (the “Certification”).<\/p>\n

4.3. <\/strong>Payment of Incentive Awards.<\/em> Following each
\nCertification, the Committee shall determine the amount of the Incentive Award
\nactually payable to each Participant in its sole discretion based on such
\nfactors as it deems appropriate, provided that the actual Award shall not exceed
\nthe Incentive Award with respect to such Participant. The Award amount
\ndetermined by the Committee for a Performance Period shall, subject to Section
\n4.4, be paid to each Participant no later than the fifteenth day of the third
\nmonth following the end of the fiscal year of the Company in which the
\napplicable Performance Period ends. Awards shall be paid in cash or, in the
\nCommittee153s sole discretion, in shares under a shareholder approved stock plan
\nof the Company or any combination thereof.<\/p>\n

4.4. <\/strong>Deferral.<\/em> A Participant shall be entitled to
\nelect to defer the payment of any Award payable to such Participant under the
\nPlan pursuant to a plan or arrangement satisfying the requirements of Section
\n409A of the Code.<\/p>\n

4.5. <\/strong>Changes in Employment.<\/em> If a person becomes a
\nParticipant during a Performance Period (pursuant to the last sentence of
\nSection 4.1 herein) or if a Participant dies or retires or if a Participant153s
\nemployment otherwise ceases during a Performance Period (except for termination
\nby the Company for cause, as determined by the Committee in its sole
\ndiscretion), the Incentive Award payable to such a Participant may be
\nproportionately reduced based on the period of actual employment during the
\napplicable Performance Period), as determined by the Committee in its sole
\ndiscretion.<\/p>\n

ARTICLE 5<\/p>\n

GENERALLY APPLICABLE PROVISIONS<\/p>\n

5.1. <\/strong>Amendment and Termination of the Plan.<\/em> The
\nBoard may, from time to time, alter, amend, suspend or terminate the Plan as it
\nshall deem advisable, subject to any requirement for stockholder approval
\nimposed by applicable law, including Section 162(m) of the Code or by the rules
\nand regulations of the New York Stock Exchange.<\/p>\n

5.2. <\/strong>Section 162(m) of the Code.<\/em> Unless otherwise
\ndetermined by the Committee, the provisions of this Plan shall be administered
\nand interpreted in accordance with Section 162(m) of the Code to ensure the
\ndeductibility by the Company or its Subsidiaries of the payment of Awards.<\/p>\n

5.3. <\/strong>Tax Withholding.<\/em> The Company or any Subsidiary
\nshall have the right to make all payments or distributions pursuant to the Plan
\nto a Participant, net of any applicable Federal, State and local taxes required
\nto be paid or withheld. The Company or any Subsidiary shall have the right to
\nwithhold from wages, Awards or other amounts otherwise payable to such
\nParticipant such withholding taxes as may be required by law, or to otherwise
\nrequire the Participant to pay such withholding taxes. If the Participant shall
\nfail to make such tax payments as are required, the<\/p>\n

3<\/p>\n

\n

EXHIBIT A <\/strong><\/p>\n

Company or any Subsidiary shall, to the extent permitted by law, have the
\nright to deduct any such taxes from any payment of any kind otherwise due to
\nsuch Participant or to take such other action as may be necessary to satisfy
\nsuch withholding obligations.<\/p>\n

5.4. <\/strong>Right of Discharge Reserved; Claims to Awards.<\/em>
\nNothing in the Plan nor the grant of an Award hereunder shall confer upon any
\nParticipant the right to continue in the employment of the Company or any
\nSubsidiary or affect any right that the Company or any Subsidiary may have to
\nterminate the employment of (or to demote or to exclude from future Awards under
\nthe Plan) any such Participant at any time for any reason. No Participant shall
\nhave any claim to be granted any Award under the Plan, and there is no
\nobligation for uniformity of treatment of Participants under the Plan.<\/p>\n

5.5. <\/strong>Other Plans.<\/em> Nothing contained in the Plan
\nshall prevent the Board from adopting other or additional compensation
\narrangements, subject to stockholder approval if such approval is required; and
\nsuch arrangements may be either generally applicable or applicable only in
\nspecific cases.<\/p>\n

5.6. <\/strong>Severability.<\/em> If any provision of the Plan
\nshall be held unlawful or otherwise invalid or unenforceable in whole or in part
\nby a court of competent jurisdiction, such provision shall (a) be deemed limited
\nto the extent that such court of competent jurisdiction deems it lawful, valid
\nand\/or enforceable and as so limited shall remain in full force and effect, and
\n(b) not affect any other provision of the Plan or part thereof, each of which
\nshall remain in full force and effect. If the making of any payment or the
\nprovision of any other benefit required under the Plan shall be held unlawful or
\notherwise invalid or unenforceable by a court of competent jurisdiction, such
\nunlawfulness, invalidity or unenforceability shall not prevent any other payment
\nor benefit from being made or provided under the Plan, and if the making of any
\npayment in full or the provision of any other benefit required under the Plan in
\nfull would be unlawful or otherwise invalid or unenforceable, then such
\nunlawfulness, invalidity or unenforceability shall not prevent such payment or
\nbenefit from being made or provided in part, to the extent that it would not be
\nunlawful, invalid or unenforceable, and the maximum payment or benefit that
\nwould not be unlawful, invalid or unenforceable shall be made or provided under
\nthe Plan.<\/p>\n

5.7. <\/strong>Construction.<\/em> All references in the Plan
\nto “Section,”<\/em> or “Article”<\/em> are intended to refer to the
\nSection, Sections or Article, as the case may be, of the Plan. As used in the
\nPlan, the word “including,”<\/em> and variations thereof, shall not be deemed
\nto be terms of limitation, but rather shall be deemed to be followed by the
\nwords “without limitation.” <\/em><\/p>\n

5.8. <\/strong>Unfunded Status of the Plan.<\/em> The Plan is
\nintended to constitute an “unfunded” plan for incentive compensation. With
\nrespect to any payments not yet made to a Participant by the Company, nothing
\ncontained herein shall give any such Participant any rights that are greater
\nthan those of a general creditor of the Company or any Subsidiary.<\/p>\n

5.9. <\/strong>Governing Law.<\/em> The Plan and all determinations
\nmade and actions taken thereunder, to the extent not otherwise governed by the
\nCode or the laws of the United States, shall be governed by the laws of the
\nState of Delaware, without reference to principles of conflict of laws that
\nmight result in the application of the laws of another jurisdiction, and
\nconstrued accordingly.<\/p>\n

5.10. <\/strong>Effective Date of Plan.<\/em> The Plan shall be
\neffective on the date of the approval of the Plan by the holders of a majority
\nof the shares entitled to vote at a duly constituted meeting of the stockholders
\nof the Company. The Plan shall be null and void and of no effect if the
\nforegoing condition is not fulfilled.<\/p>\n

5.11. <\/strong>Captions.<\/em> The captions in the Plan are for
\nconvenience of reference only, and are not intended to narrow, limit or affect
\nthe substance or interpretation of the provisions contained herein.<\/p>\n

4<\/p>\n

\n

EXHIBIT B <\/strong><\/p>\n

GENERAL RELEASE AND WAIVER <\/u><\/strong><\/p>\n

1. [Name] (“Employee”) hereby acknowledges and agrees that Employee153s
\nemployment with Barnes & Noble, Inc. (the “Company”) terminated on , 20 (the
\n“Termination Date”).<\/p>\n

2. Employee acknowledges and agrees that Employee153s executing this General
\nRelease and Waiver (“Release”) is a condition precedent to the Company153s
\nobligation to pay (and the Employee153s right to retain) the payments and benefits
\nset forth in Section 3.8 of the employment letter agreement, dated as of [],
\nbetween Employee and the Company (such agreement referred to herein as the
\n“Employment Agreement” and such payments and benefits collectively referred to
\nherein as the “Separation Benefit”), that the Separation Benefit is adequate
\nconsideration for this Release, and that any monetary or other benefits that,
\nprior to the execution of this Release, Employee may have earned or accrued, or
\nto which Employee may have been entitled, have been paid or such payments or
\nbenefits have been released, waived or settled by Releasor (as defined below)
\nexcept as expressly provided in this Release.<\/p>\n

3. (a) THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING
\nAND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED
\nWITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE EMPLOYEE SIGNS THIS RELEASE,
\nEMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE THAT EMPLOYEE
\nUNDERSTANDS IT FULLY.<\/p>\n

(b) In consideration of Employee153s receipt and acceptance of the Separation
\nBenefit from the Company, and on behalf of the Company and each Releasee (as
\ndefined below), Employee, on Employee153s behalf and on behalf of Employee153s
\nheirs, executors, administrators, successors and assigns (collectively,
\n“Releasor”), hereby irrevocably, unconditionally and generally releases the
\nCompany, its current and former officers, directors, shareholders, trustees,
\nparents, members, managers, affiliates, subsidiaries, branches, divisions,
\nbenefit plans, agents, attorneys, advisors, counselors and employees, and the
\ncurrent and former officers, directors, shareholders, agents, attorneys,
\nadvisors, counselors and employees of any such parent, affiliate, subsidiary,
\nbranch or division of the Company and the heirs, executors, administrators,
\nreceivers, successors and assigns of all of the foregoing (each, a “Releasee”),
\nfrom or in connection with, and hereby waives and\/or settles, except as provided
\nin Section 3(c), any and all actions, causes of action, suits, debts, dues, sums
\nof money, accounts, controversies, agreements, promises, damages, judgments,
\nexecutions, or any liability, claims or demands, known or unknown and of any
\nnature whatsoever, whether or not related to employment, and which Releasor ever
\nhad, now has or hereafter can, shall or may have as of the date of this Release,
\nincluding, without limitation, (i) any rights and\/or claims arising under any
\ncontract, express or implied, written or oral, including, without limitation,
\nthe Employment Agreement; (ii) any rights and\/or claims arising under any
\napplicable foreign, Federal, state, local or other statutes, orders, laws,
\nordinances, regulations or the like, or case law, that relate to employment or
\nemployment practices, including, without limitation, family and medical, and\/or,
\nspecifically, that prohibit discrimination based upon age, race, religion, sex,
\ncolor, creed, national origin, sexual orientation, marital status, disability,
\nmedical condition, pregnancy, veteran status or any other unlawful bases,
\nincluding, without limitation, the Civil Rights Act of 1964, as amended, the
\nCivil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as
\namended, the Age Discrimination in Employment Act of 1967, as amended, the
\nAmericans with Disabilities Act of 1990, as amended, the Family Medical Leave
\nAct of 1993, as amended, the Employee Retirement Income Security Act of 1974, as
\namended, the Vietnam Era Veterans153 Readjustment Assistance Act of 1974, as
\namended, the Worker Adjustment and Retraining Notification Act of 1988, as
\namended, and any similar applicable statutes, orders, laws, ordinances,
\nregulations or the like, or case law, of the State of New York and any State in
\nwhich any Releasee is subject to jurisdiction, or any political subdivision
\nthereof, including, without limitation, the New York State Human Rights Law, the
\nNew York State Labor Law and the New York City Human Rights Law, and all
\napplicable rules and regulations promulgated pursuant to or concerning any of
\nthe foregoing statutes, orders, laws, ordinances, regulations or the like; (iii)
\nany waivable rights and\/or claims relating to wages and hours, including under
\nstate or local labor or wage payment laws; (iv) any rights and\/or claims to
\nbenefits that Employee may have or become entitled to receive under any
\nseverance, termination, change of control, bonus or similar policy, plan,
\nprogram, agreement or similar or related arrangements, including, without
\nlimitation, any offer letter, letter agreement or employment agreement between
\nEmployee and the Company; (v) any rights and\/or claims that Employee may have to
\nreceive any equity in the Company (whether restricted or unrestricted) in the
\nfuture; and (vi) and any rights and\/or claims for attorneys153 fees. Employee
\nagrees not to challenge or contest the reasonableness, validity or
\nenforceability of this Release.<\/p>\n

1<\/p>\n

\n

EXHIBIT B <\/strong><\/p>\n

(c) Notwithstanding the foregoing, Employee does not release any Releasee
\nfrom any of the following rights and\/or claims: (i) any rights and\/or claims
\nEmployee may have that arise after the date Employee signs this Release; (ii)
\nany rights and\/or claims that by law cannot be waived by private agreement;
\n(iii) Employee153s right to file a charge with or participate in any investigation
\nor proceeding conducted by the U.S. Equal Employment Opportunity Commission
\n(“EEOC”) or similar government agency; provided that even though Employee can
\nfile a charge or participate in an investigation or proceeding conducted by the
\nEEOC or similar government agency, by executing this Release, Employee is
\nwaiving his ability to obtain relief of any kind from any Releasee to the extent
\npermitted by law; (iv) Employee153s non-forfeitable rights to accrued benefits
\n(within the meaning of Sections 203 and 204 of ERISA); (v) any rights and\/or
\nclaims to insurance coverage under any directors153 and officers153 personal
\nliability insurance or fiduciary insurance policy; and (vi) any rights and\/or
\nclaims to enforce the Employment Agreement in accordance with its terms.<\/p>\n

4. Employee represents and warrants that Employee has not filed or commenced
\nany complaints, claims, actions or proceedings of any kind against any Releasee
\nwith any Federal, state or local court or any administrative, regulatory or
\narbitration agency or body. Employee hereby waives any right to, and agrees not
\nto, seek reinstatement or employment of any kind with any Releasee and, without
\nwaiver by any Releasee of the foregoing, the existence of this Release shall be
\na valid, nondiscriminatory basis for rejecting any such application or, in the
\nevent Employee obtains such employment, for terminating such employment. This
\nRelease and the Separation Benefit are not intended to be, shall not be
\nconstrued as and are not, an admission or concession by any Releasee of any
\nwrongdoing or illegal or actionable acts or omissions.<\/p>\n

5. (a) Employee hereby represents and agrees that Employee shall keep
\nconfidential and not disclose orally or in writing, to any person, except as may
\nbe required by law, any and all information concerning the existence or terms of
\nthis Release and the amount of any payments made hereunder. Employee further
\nagrees that, except as shall be required by law, Employee shall keep
\nconfidential and not disclose orally or in writing, directly or indirectly, to
\nany person (except Employee153s immediate family, attorneys and accountant), any
\nand all information concerning any facts, claims or assertions relating or
\nreferring to any experiences of Employee or treatment Employee received by or on
\nbehalf of any Releasee through the date of this Release.<\/p>\n

(b) If Employee is requested or required (by oral questions, interrogatories,
\nrequests for information or documents, subpoena, civil investigative demand or
\nsimilar process) to disclose any information covered by Section 5(a), Employee
\nshall promptly notify the Company of such request or requirement so that the
\nCompany may seek to avoid or minimize the required disclosure and\/or to obtain
\nan appropriate protective order or other appropriate relief to ensure that any
\ninformation so disclosed is maintained in confidence to the maximum extent
\npossible by the agency or other person receiving the disclosure, or, in the
\ndiscretion of the Company, to waive compliance with the provisions of this
\nRelease. Employee shall use reasonable efforts, in cooperation with the Company
\nor otherwise, to avoid or minimize the required disclosure and\/or to obtain such
\nprotective order or other relief. If, in the absence of a protective order or
\nthe receipt of a waiver hereunder, Employee is compelled to disclose such
\ninformation or else stand liable for contempt or suffer other sanction, censure
\nor penalty, Employee shall disclose only so much of such information to the
\nparty compelling disclosure as he believes in good faith on the basis of advice
\nof counsel is required by law, and Employee shall give the Company prior notice
\nof such information he believes he is required to disclose.<\/p>\n

6. (a) Employee shall not make, either directly or by or through another
\nperson, any oral or written negative, disparaging or adverse statements or
\nrepresentations of or concerning any Releasee.<\/p>\n

(b) Without limitation to the survival of any other terms of the Employment
\nAgreement subsequent to the end of Employee153s employment, the expiration or
\ntermination of the Employment Agreement, and\/or the execution and effectiveness
\nof this Release, Employee and the Company expressly acknowledge that the terms
\nof Sections 4 and 5 of the Employment Agreement survive and shall be in full
\nforce and effect as provided in the Employment Agreement.<\/p>\n

2<\/p>\n

\n

EXHIBIT B <\/strong><\/p>\n

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

8. This Release and the Employment Agreement constitute the sole and complete
\nagreement between the parties with respect to the matters set forth therein and
\nsupersedes all prior agreements, understandings and arrangements, oral or
\nwritten, between Employee and the Company with respect to the subject matter
\nthereof. This Release may not be amended or modified except by an instrument or
\ninstruments in writing signed by the party against whom enforcement of any such
\nmodification or amendment is sought. Either party may, by an instrument in
\nwriting, waive compliance by the other party with any term or provision of this
\nRelease to be performed or complied with by such other party.<\/p>\n

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

10. Employee agrees and acknowledges that (a) Employee has had an adequate
\nopportunity to review this Release and all of its terms, (b) Employee
\nunderstands all of the terms of this Release, which are fair, reasonable and are
\nnot the result of any fraud, duress, coercion, pressure or undue influence
\nexercised by or on behalf of any Releasee and (c) Employee has agreed to and\/or
\nentered into this Release and all of the terms hereof, knowingly, freely and
\nvoluntarily.<\/p>\n

11. By executing this Release, Releasor acknowledges that (a)
\nEmployee has been advised by the Company to consult with an attorney before
\nexecuting this Release; (b) Employee was provided adequate time (i.e., at least
\n21 days) to review this Release and to consider whether to sign this Release and
\n(c) Employee has been advised that Employee has 7 days following execution to
\nrevoke this Release (“Revocation Period”). Notwithstanding anything to the
\ncontrary contained herein or in the Employment Agreement, this Release shall not
\nbe effective or enforceable, and the Separation Benefit is not payable and shall
\nnot be delivered or paid by the Company, until the Revocation Period has expired
\nand provided that Employee has not revoked this Release. Employee agrees that
\nany revocation shall be made in writing and delivered to , Vice President, Human
\nResources, Barnes & Noble, Inc., 122 Fifth Avenue, NY, NY 10011. Employee
\nacknowledges that revocation of this Release shall result in the Company153s not
\nhaving an obligation to pay the Separation Benefit. <\/strong><\/p>\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Signature:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

Date:<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

[Name]<\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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