SEPARATION AGREEMENT AND GENERAL RELEASE
Borders Group, Inc., its affiliates, subsidiaries, divisions, successors and assigns and the
past, present and future employees, officers, employee benefit plans, fiduciaries, shareholders,
directors, agents, attorneys and insurers thereof, both individually and in their official
capacities (collectively referred to throughout this Separation Agreement and General Release as
“Borders”) and Xxxxxx Xxxxxxx (referred to throughout this Separation Agreement and General Release
as “Executive” and more specifically defined in paragraph 5) agree that:
1. Separation from Employment. Executive’s last day of employment with Borders Group,
Inc. is March 27, 2009. Executive’s employment will continue with current pay and benefits through
March 31, 2009 (the Effective Date), it being understood that responsibilities in the interim will
be limited to such transition services as may be requested by Borders.
2. Consideration. In consideration for signing this Separation Agreement and General
Release (sometimes referred to as “this Agreement”) and compliance with the promises made herein,
Borders agrees that Executive: (a) will continue to receive Executive’s current salary through the
Effective Date; (b) will receive as severance pay, subject to the provisions of paragraph 11,
Discontinuance of Severance Payments, and the provisions of paragraph 3, Timing of Severance
Payments, after the expiration of the revocation period set forth in paragraph 15, Revocation, and
provided that no revocation occurs, eighteen (18) months salary and target bonus (adjusted for
mitigation income) in the amount of thirty five thousand dollars ($35,000.00) per month (sixteen
thousand one hundred and fifty three dollars and eighty-five cents (16,153.85) per normal bi-weekly
pay period for thirty-nine (39) periods) minus, in each case, the amount of applicable withholding
taxes; and (c) will be entitled to a retention payment in the amount of four hundred and seventy
thousand dollars ($470,000.00). Such retention payment shall be made on the date that other
retention payments are made, expected to be on or around March 27, 2009. The severance payment
amounts described in (b) above contemplate Executive’s new employment income and shall be further
reduced by the amount of any salary increases or other compensation received by Executive during
the severance period. Executive agrees to immediately notify Borders of any changes to Executive’s
employment status or income during the severance period. Except for the payments described above,
Executive shall not be entitled to any payments of any nature whatsoever from Borders Group,
including but not limited to the Borders Severance Pay Policy.
3. Timing of Severance Payments. Monthly Severance Payments shall commence the month
following termination and shall continue for eighteen (18) months, provided that however, if the
monthly payment period would otherwise extend beyond the latter of (a) March 15, 2010, or (b) two
and a half months following the end of the current fiscal year, an amount equal to the sum of the
remaining payments that would have been made to Executive shall, in lieu thereof, be paid to
Executive in one lump sum on the last day of the month immediately preceding the month in which the
later of the dates specified in (a) or (b) above falls. In calculating the amount of any lump sum
payment, it shall be assumed that any income Executive is earning from other employment on the
payment date would continue for the remainder of the eighteen (18) month period following
Executive’s separation. No repayment shall be required if
Executive’s income increases after the lump sum payment date, and no additional payment shall
be made by the Company after the lump sum payment.
4. No Consideration Absent Execution of this Agreement. Executive understands and
agrees 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 the
fulfillment of the promises contained herein.
5. General Release of All Claims. Executive knowingly and voluntarily releases and
forever 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 to
collectively throughout this Agreement as “Executive”) has or may have as of the date of execution
of 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);as
amended
The Immigration Reform and Control Act; as amended
The Americans with Disabilities Act of 1990;as amended
The Age Discrimination in Employment Act of 1967 (“ADEA”);as
amended
The Worker Adjustment and Retraining Notification Act; as amended
The Occupational Health and Safety Act, as amended
The Fair Credit Reporting Act, as amended;
Michigan Xxxxxxx-Xxxxxx Civil Rights Act — Mich. Comp. Laws §37-2101 et seq.
Michigan Persons with Disabilities Civil Rights Act — Mich. Comp. Laws §37.1101 et
seq.
Michigan Whistleblower Protection Act — Mich. Comp. Laws §15.361 et seq.
Michigan Statutory Provision Regarding Retaliation/Discrimination for Filing a
Worker’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 amended
Michigan Occupational Safety and Health Act — Pub. Acts 154
any other federal, state or local law, rule, regulation, or
ordinance;
any public policy, contract, tort, or common law; or
any basis for recovering costs, fees, or other expenses including
attorneys’ fees incurred in these matters.
6. Executive’s Acknowledgment of Tax Liability. Executive hereby acknowledges and
agrees as follows: (a) nothing in this Agreement constitutes tax advice; (b) Borders does not take
any responsibility, or have any liability to Executive with respect to Executive’s Tax Liability
and/or Executive’s personal tax reporting; (c) Executive has been given the opportunity and
encouraged to consult with Executive’s own attorney and to seek professional tax advice prior to
execution of this Agreement; and (d) Executive agrees to indemnify Borders and hold it harmless
from any liability for income taxes, interest or penalties that may be imposed as a result of
under-payment or non-payment of income taxes on any amounts paid Executive under the terms of this
Agreement.
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 or
unpaid), compensation, wages, bonuses, commissions, and/or benefits to which Executive may be
entitled 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 General
Release.
Executive further affirms that Executive has no known workplace injuries or occupational
diseases; and has been provided and/or has not been denied any leave requested under the Family
Medical Leave Act.
8. Non-Disparagement. Executive agrees not to defame, disparage or demean Borders in
any manner whatsoever.
9. Confidentiality and Return of Property. Executive agrees that Executive will
continue 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 or
proprietary information relating to Borders’ clients, customers, proprietary knowledge and trade
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secrets, research, business plans, business methods, operating procedures, processes or
programs, 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, flow
charts, know-how, employee lists, customer lists, supplier lists, marketing data, personnel data,
or any other information of like nature. Executive acknowledges that all information regarding
Borders compiled or obtained by, or furnished to, Executive in connection with Employer’s
employment or association with Borders is confidential information and Borders’ exclusive
property.
Executive affirms that Executive has not divulged any proprietary or confidential information
of Borders.
Executive also affirms that Executive has returned all of Borders’ property, documents, and/or
any confidential information in Executive’s possession or control. Executive also affirms that
Executive is in possession of all of Executive’s property that Executive had at Borders’ premises
and that Borders is not in possession of any of Executive’s property.
The foregoing covenant of confidentiality has no temporal, geographical or territorial
limitation.
10. Confidentiality of this Agreement. Employ agrees that Executive will maintain in
strict confidence and will not, directly or indirectly, divulge, transmit, publish, release or
otherwise disclose, the terms of this Agreement except to Executive’s spouse, domestic partner (as
defined by Borders Group Inc. benefits plans), tax advisor and an attorney with whom Executive
chooses to consult regarding Executive’s consideration of this Agreement, provided that said
individuals agree to be bound by the terms of this Confidentiality Clause and Executive agrees to
be liable for any breach by them.
11. Discontinuance of Severance Payments. Executive agrees that any right to receive
severance payments hereunder will cease if, during the eighteen (18) month period following
Executive’s termination of employment, Executive directly or indirectly becomes an employee,
director, advisor of, or otherwise affiliated with, any other entity or enterprise whose business
is in competition with the business of Borders. The parties agree that Executive’s employment with
The Finish Line, Inc., shall not cause discontinuance of severance payments or violate the
Non-Competition provision of the Employment Agreement dated April 29, 2008.
12. Governing Law and Interpretation. This Agreement shall be governed and conformed
in accordance with the laws of the State of Michigan without regard to its conflict of laws
provision. Should any provision of this Agreement be declared illegal or unenforceable by any
court of competent jurisdiction and cannot be modified to be enforceable, excluding the general
release language, such provision shall immediately become null and void, leaving the remainder of
this Agreement in full force and effect. In the event of a breach of any provision of this
Separation Agreement and General Release, either party may institute an action specifically to
enforce any term or terms of this Separation Agreement and General Release and/or to seek any
damages for breach.
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13. Nonadmission of Wrongdoing. The Parties agree that neither this Separation
Agreement and General Release nor the furnishing of the consideration for this Separation Agreement
and General Release shall be deemed or construed at any time for any purpose as an admission by
Borders 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 made
to this Separation Agreement and General Release.
15. Revocation. Executive may revoke this Separation Agreement and General Release
for a period of seven (7) calendar days following the day Executive executes this Separation
Agreement and General Release. Any revocation within this period must be submitted, in writing, to
Borders Group Inc. Attention: Compensation Department, 000 Xxxxxxx Xxxxx, Xxx Xxxxx, XX 00000 and
state, “I hereby revoke my acceptance of our Separation Agreement and General Release.” The
revocation must be personally delivered to Borders Compensation Department or a named designee, or
mailed to Borders Group Inc., Compensation Department and postmarked within seven (7) calendar days
of execution of this Separation Agreement and General Release. This Separation Agreement and
General 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 in
which Executive was employed at the time of Executive’s last day of employment, then the revocation
period shall not expire until the next following day which is not a Saturday, Sunday, or legal
holiday.
16. Entire Agreement; Termination of Prior Agreements. Subject only to the exceptions
specifically set forth below, this Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any prior written or oral agreements or understandings between the
parties, which are hereby terminated and of no further force and effect. Notwithstanding the
generality of the foregoing, the following provisions of the Employment Agreement dated on or
around April 29, 2008, are hereby incorporated by reference, and remain in full force and effect
and binding on Employee: (a) paragraph 7, Non-Solicitation; Non-Competition; Confidentiality; Work
Product, and each of its subparts (a), (b) and (c); (b) paragraph 8, Injunctive Relief; and (c)
paragraph 9, Survivability. Employee acknowledges that Employee has not relied on any
representations, promises, or agreements of any kind made to Employee in connection with Employee’s
decision to sign this Agreement, 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 THIS
AGREEMENT AND GENERAL RELEASE, IN WHICH EXECUTIVE WAIVES IMPORTANT RIGHTS, INCLUDING THOSE UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967. BORDERS ADVISES EXECUTIVE TO CONSULT WITH AN
ATTORNEY PRIOR TO EXECUTIVE’S SIGNING OF THIS AGREEMENT AND GENERAL RELEASE.
EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND
GENERAL RELEASE, DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY
CONSIDERATION PERIOD.
HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES AND TO
RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH “2” ABOVE, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE
CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND
RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST BORDERS.
The parties knowingly and voluntarily sign this Separation Agreement and General Release as of
the date(s) set forth below:
| Borders Group, Inc. | ||||||||
By:
|
/s/ XXXXXX X. XXXXXXX | By: | /s/ XXXXXX X. XXXXX | |||||
| Xxxxxx Xxxxxxx | Xxxxxx X. Xxxxx | |||||||
| Chief Administrative Officer | ||||||||
| Date: March 18, 2009 | Date: March 18, 2009 | |||||||
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