On December 4, 2018, the Compensation Committee of the Board of Directors of Barnes & Noble, Inc. (the “Company”) adopted the Barnes & Noble, Inc. Change in Control Severance Plan (the “Plan”). Certain of the Company’s executive officers, including the Office of the CEO and the Company’s named executive officers other than Leonard Riggio, participate in the Plan.
Pursuant to the Plan, if a participant’s employment is terminated by the Company without “cause” or by the participant for “good reason,” in each case, within two years following a “change in control” (each, as defined in the Plan), then the participant will receive, subject to the participant’s execution of a release of claims in favor of the Company: (i) a lump-sum cash severance payment equal to two times the sum of the participant’s annual base salary and target bonus; (ii) a prorated bonus for the year in which the termination occurs based on actual performance, paid when the Company normally pays bonuses to its employees; and (iii) continued benefits through the COBRA period.
In the event payments under the Plan would trigger the “golden parachute” excise tax under Sections 280G and 4999 of the Internal Revenue Code, such payments will be reduced if such reduction would result in a greater after-tax benefit to the participant. Pursuant to the Plan, each participant is subject to a noncompetition and nonsolicitation of employees covenant for 12 months following termination of employment.
Additional terms and conditions are set forth in the Plan, which will be filed with the Company’s next quarterly report on Form 10-Q. The foregoing description is subject to, and qualified in its entirety by, the Plan.