Barnes & Noble Education, Inc. (Form: S-1/A, Received: 06/29/2015 06:02:07)

Large Accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

As filed with the Securities and Exchange Commission on June 29, 2015

Registration No. 333-202298

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Barnes & Noble Education, Inc.

(Exact name of registrant as specified in its Charter)

Delaware

451211

46-0599018

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

120 Mountain View Blvd

Basking Ridge, NJ 07920

(908) 991-2665

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

General Counsel and Corporate Secretary

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

(908) 991-2665

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Kris Heinzelman

Andrew R. Thompson

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

(212) 474-1000

Approximate date of commencement of proposed sale to the public : As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one)

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this Prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JUNE 29, 2015

Barnes & Noble Education, Inc.

Common Stock

(par value $0.01)

This Prospectus is being furnished to you as a stockholder of Barnes & Noble, Inc. (“Barnes & Noble”) in connection with the planned distribution (the “Spin-Off” or the “Distribution”) by Barnes & Noble to its stockholders of all the shares of common stock, par value $0.01 per share (the “Common Stock”), of Barnes & Noble Education, Inc. (the “Company”) held by Barnes & Noble immediately prior to the Spin-Off. Immediately prior to the time of the Distribution, Barnes & Noble will hold 100% of the outstanding shares of Common Stock. On May 1, 2015, we distributed to Barnes & Noble all of the membership interests in NOOK Digital LLC (formerly known as barnesandnoble.com llc), which owns the digital business and which will continue to be owned by Barnes & Noble. At such time, we ceased to own any interest in the digital business.

At the time of the Spin-Off, Barnes & Noble will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of Barnes & Noble’s common stock. Each share of Barnes & Noble’s common stock outstanding as of 5:00 p.m., New York City time, on , 2015, the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive 0.632 shares of Common Stock. The Distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off. The distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to each holder (net of any required withholding for taxes applicable to each holder) who would otherwise have been entitled to receive a fractional share in the distribution.

The Spin-Off will be effective after the close of trading on the New York Stock Exchange (the “NYSE”) on , 2015 (the “Distribution Date”). Immediately after the Spin-Off, the Company will be an independent publicly-traded company.

Holders of Barnes & Noble’s Senior Convertible Redeemable Series J Preferred Stock (“Series J Preferred Stock,” and each holder of such Series J Preferred Stock, a “Series J Holder”) have the option to exchange their holdings of the Series J Preferred Stock for a series of convertible preferred stock of the Company (the “Mirror Preferred Stock”) having terms and rights that are identical, or as nearly so as is practicable, to those of the Series J Preferred Stock, subject to certain exceptions, together with a new series of preferred stock of Barnes & Noble (“Exchange Preferred Stock”). Barnes & Noble is obligated to give notice to Series J Holders of the Spin-Off not more than 60 business days and not less than 20 business days prior to the effective date of the Spin-Off, and upon receipt of such notice, Series J Holders may elect to exchange all or a portion of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock and Exchange Preferred Stock. Series J Holders may make such an election by sending notice, in the form specified in Barnes & Noble’s notice to Series J Holders, to Barnes & Noble, which notice must be received by 5:00 p.m., New York City time, on the date of the Spin-Off. Any exchange of Series J Preferred Stock for Mirror Preferred Stock and Exchange Preferred Stock will be effective as of the Distribution Date.

Barnes & Noble’s stockholders are not required to vote on or take any other action in connection with the Spin-Off. We are not asking you for a proxy, and we request that you do not send us a proxy. Barnes & Noble stockholders will not be required to pay any consideration for the Common Stock they receive in the Spin-Off, and they will not be required to surrender or exchange their shares of Barnes & Noble’s common stock or take any other action in connection with the Spin-Off.

Barnes & Noble currently owns all the outstanding shares of Common Stock. Accordingly, there is currently no public market for the Common Stock. We anticipate, however, that trading in the Common Stock will begin on a “when-issued” basis as early as two trading days prior to the Record Date for the Distribution and will continue up to and including the Distribution Date. “When-issued” trades generally settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, any “when-issued” trading of the Common Stock will end and “regular-way” trading will begin. We intend to list the Common Stock on the NYSE under the symbol “BNED.”

In reviewing this Prospectus, you should carefully consider the matters described in the section titled “ Risk Factors ” beginning on page 13 of this Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus is not an offer to sell, or a solicitation of an offer to buy, any securities.

The date of this Prospectus is , 2015.

TABLE OF CONTENTS


	Page
QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF		i

SUMMARY		1

RISK FACTORS		13

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		24

THE SPIN-OFF		26

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SPIN-OFF		32

USE OF PROCEEDS		35

DETERMINATION OF OFFERING PRICE		35

DIVIDEND POLICY		35

CAPITALIZATION		35

SELECTED HISTORICAL FINANCIAL DATA		37

UNAUDITED PRO FORMA FINANCIAL INFORMATION		40

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		44

BUSINESS		59

MANAGEMENT		71

EXECUTIVE COMPENSATION		79

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		105

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		108

DESCRIPTION OF OUR CAPITAL STOCK		113

SHARES ELIGIBLE FOR FUTURE SALE		121

LEGAL MATTERS		122

EXPERTS		122

WHERE YOU CAN FIND MORE INFORMATION		122

INDEX TO FINANCIAL STATEMENTS		F-1

QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

The following questions and answers briefly address some commonly asked questions about the Spin-Off. They may not include all the information that is important to you. We encourage you to read carefully this entire Prospectus and the other documents to which we have referred you. We have included references in certain parts of this section to direct you to a more detailed discussion of each topic presented in this section.

Q:	*What is the Spin-Off?*

The Spin-Off is the method by which we will separate from Barnes & Noble. In the Spin-Off, Barnes & Noble will distribute to holders of its common stock all the outstanding shares of our Common Stock and will distribute shares of the Mirror Preferred Stock and the Exchange Preferred Stock to electing Series J Holders, if any. Following the Spin-Off, we will be an independent publicly-traded company, and Barnes & Noble will not retain any ownership interest in us.

Q:	*Will the number of Barnes & Noble shares of common stock I own change as a result of the Spin-Off?*

A:	No, the number of shares of Barnes & Noble common stock you own will not change as a result of the Spin-Off.

Q:	*What are the reasons for the Spin-Off?*

A:	The Barnes & Noble board of directors considered the following potential benefits in deciding to pursue the Spin-Off:

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The opportunities and challenges we expect to arise in the immediate future of the Barnes & Noble retail business differ markedly from those of our business. For Barnes & Noble, increasing foot traffic in existing locations, adapting offerings to shifting consumer tastes and patterns and harmonizing the in-store, online and digital experiences will require a fully engaged board of directors and management team that has a different skill set and experience than those required to execute our goals and strategic initiatives. We believe the Spin-Off will enhance the ability of Barnes & Noble and the Company to focus on their respective strategies.

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Our near-term goals for our business include the expansion of both the scale and the scope of the historic business model and also pursuing growth opportunities more broadly in the education sector, including by enhancing and expanding our digital assets. Achieving these goals will likely require acquisitions or mergers funded, in part, with capital raises and strategic alliances with other companies. Our business will be separate and distinct from Barnes & Noble’s business and, accordingly, we believe that pursuing such growth opportunities will be greatly facilitated with a capital structure that is tailored for the Company’s needs, separate from those of Barnes & Noble.

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The Spin-Off will establish the Company as an independent publicly traded corporation, which we believe will meaningfully enhance its industry market perception, thereby providing greater growth opportunities for us than our consolidated operation as a division of Barnes & Noble.

Q:	*Why is the separation of the Company structured as a spin-off?*

A:	Barnes & Noble believes that a tax-free distribution of our Common Stock is the most efficient way to separate our business from Barnes & Noble in a manner that will achieve the above benefits.

Q:	*What will I receive in the Spin-Off?*

As a holder of Barnes & Noble common stock, you will receive a dividend of 0.632 shares of our Common Stock for every share of Barnes & Noble common stock you hold on the Record Date (as defined below). The distribution agent will distribute only whole shares of our Common Stock in the Spin-Off. See

“Questions and Answers About the Spin-Off—How will fractional shares be treated in the Spin-Off?” for more information on the treatment of the fractional share you may be entitled to receive in the Spin-Off. Your proportionate interest in Barnes & Noble will not change as a result of the Spin-Off. For a more detailed description, see “The Spin-Off.”

Q:	*What is being distributed to holders of Barnes & Noble common stock in the Spin-Off?*

Barnes & Noble will distribute approximately 44.4 million shares of our Common Stock in the Spin-Off, based on the approximately 70.2 million shares of Barnes & Noble common stock outstanding as of May 31, 2015 (which total includes the 6,117,347 New Barnes & Noble Shares to be issued on or around July 9, 2015, as described further under “Summary—Recent Developments”). The actual number of shares of our Common Stock that Barnes & Noble will distribute will depend on the number of shares of Barnes & Noble common stock outstanding on the Record Date. The shares of our Common Stock that Barnes & Noble distributes will constitute all of the issued and outstanding shares of our Common Stock immediately prior to the Spin-Off. For more information on the shares being distributed in the Spin-Off, see “Description of Our Capital Stock—Common Stock.”

Q:	*What is the record date for the Distribution?*

A:	Barnes & Noble will designate 5:00 p.m., New York City time, on , 2015, which we refer to as the “Record Date”, as the record ownership date for the Distribution.

Q:	*When will the Distribution to holders of Barnes & Noble common stock occur?*

The Distribution will be effective after the close of trading on the NYSE on , 2015, which we refer to as the “Distribution Date.” On or shortly after the Distribution Date, the whole shares of our Common Stock will be credited in book-entry accounts for stockholders entitled to receive those shares in the Distribution. See “Questions and Answers About the Spin-Off—How will Barnes & Noble distribute shares of our Common Stock?” for more information on how to access your book-entry account or your bank, brokerage or other account holding the Common Stock you will receive in the Distribution.

Q:	*What do I have to do to participate in the Distribution?*

You are not required to take any action, but we urge you to read this Prospectus carefully. Holders of Barnes & Noble common stock on the Record Date will not need to pay any cash or deliver any other consideration, including any shares of Barnes & Noble common stock, in order to receive shares of our Common Stock in the Distribution. No stockholder approval of the Distribution is required. We are not asking you for a vote, and we request that you do not send us a proxy card.

Q:	*If I sell my shares of Barnes & Noble common stock on or before the Distribution Date, will I still be entitled to receive shares of the Common Stock in the Distribution?*

If you hold shares of Barnes & Noble common stock on the Record Date and decide to sell them on or before the Distribution Date, you may choose to sell your Barnes & Noble common stock with or without your entitlement to our Common Stock. You should discuss these alternatives with your bank, broker or other nominee. See “The Spin-Off—Trading Prior to the Distribution Date” for more information.

Q:	*How will Barnes & Noble distribute shares of our Common Stock?*

Registered stockholders: If you are a registered stockholder (meaning you own your shares of Barnes & Noble common stock directly through Barnes & Noble’s transfer agent, Computershare), our distribution agent will credit the whole shares of our Common Stock you receive in the Distribution to a new book-entry account with our transfer agent on or shortly after the Distribution Date. Our distribution agent will mail you a book-entry account statement that reflects the number of whole shares of our Common Stock you own. You will be able to access information regarding your book-entry account holding our Common Stock at Computershare.

“Street name” or beneficial stockholders: If you own your shares of Barnes & Noble common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our Common Stock you receive in the Distribution on or shortly after the Distribution Date. Please contact your bank, broker or other nominee for further information about your account.

We will not issue any physical stock certificates to any stockholders, even if requested. See “The Spin-Off—When and How You Will Receive Company Common Stock” for a more detailed explanation.

Q:	*How will fractional shares be treated in the Distribution?*

The distribution agent will not distribute any fractional shares of our Common Stock in connection with the Spin-Off. Instead, the distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices on behalf of Barnes & Noble stockholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). We anticipate that the distribution agent will make these sales in the “when-issued” market, and “when-issued” trades will generally settle within four trading days following the Distribution Date. See “Questions and Answers About the Spin-Off—How will the Common Stock trade?” for additional information regarding “when-issued” trading and “The Spin-Off—Treatment of Fractional Shares” for a more detailed explanation of the treatment of fractional shares.

Q:	*What are the U.S. federal income tax consequences to me of the Distribution?*

For U.S. federal income tax purposes, no gain or loss should be recognized by, or be includible in the income of, a U.S. Holder (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off”) as a result of the Distribution, except with respect to any cash received by Barnes & Noble stockholders in lieu of fractional shares. In addition, the aggregate tax basis of the Barnes & Noble common stock and our Common Stock held by each U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of the Barnes & Noble common stock held by the U.S. Holder immediately before the Distribution, allocated between the Barnes & Noble common stock and our Common Stock in proportion to their relative fair market values on the Distribution Date (subject to certain adjustments).

See “Material U.S. Federal Income Tax Consequences of the Spin-Off” for more information regarding the potential tax consequences to you of the Spin-Off.

Q:	*Does the Company intend to pay cash dividends?*

A:	Following the Spin-Off, we do not anticipate paying any dividends on our Common Stock in the foreseeable future. See “Dividend Policy” for more information.

Q:	*How will the Common Stock trade?*

A:	Currently, there is no public market for our Common Stock. We intend to list our Common Stock on the NYSE under the symbol “BNED.”

We anticipate that trading in our Common Stock will begin on a “when-issued” basis as early as two trading days prior to the Record Date for the Distribution and will continue up to and including the Distribution Date. “When-issued” trading in the context of a spin-off refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. “When-issued” trades generally settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, any “when-issued” trading of our Common Stock will end and “regular-way” trading will begin. Regular-way trading refers to trading after the security has been

iii

distributed and typically involves a trade that settles on the third full trading day following the date of the trade. See “The Spin-Off—Trading Prior to the Distribution Date” for more information. We cannot predict the trading prices for our Common Stock before, on or after the Distribution Date.

Q:	*Will the Spin-Off affect the trading price of my Barnes & Noble common stock?*

We expect the trading price of shares of Barnes & Noble common stock immediately following the Spin-Off to be lower than immediately prior to the Spin-Off because the trading price will no longer reflect the value of Barnes & Noble Education, Inc. and our subsidiaries. Furthermore, until the market has fully analyzed the value of Barnes & Noble without the Company, the trading price of shares of Barnes & Noble common stock may fluctuate. We cannot assure you that, following the Spin-Off, the combined trading prices of the Barnes & Noble common stock and our Common Stock will equal or exceed what the trading price of Barnes & Noble common stock would have been in the absence of the Spin-Off. It is possible that after the Spin-Off, the combined equity value of Barnes & Noble and the Company will be less than Barnes & Noble’s equity value before the Spin-Off. In addition, since the liquidation preference for any Mirror Preferred Stock issued to Series J Holders (and the related Exchange Preferred Stock) will be based on the relative trading values of our Common Stock and the Barnes & Noble common stock during the five trading days immediately following the Spin-Off, the trading price of the Barnes & Noble common stock and our Common Stock could be affected during this period. See “Risk Factors—We may have shares of preferred stock convertible into Common Stock.”

Q:	*Do I have appraisal rights in connection with the Spin-Off?*

A:	No. Holders of Barnes & Noble common stock are not entitled to appraisal rights in connection with the Spin-Off.

Q:	*Who is the transfer agent and registrar for the Common Stock?*

A:	Computershare is the transfer agent and registrar for the Common Stock.

Q:	*Are there risks associated with owning shares of the Common Stock?*

Yes. Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Off. Following the Spin-Off, we will also face risks associated with being an independent publicly-traded company. Accordingly, you should read carefully the information set forth in the section titled “Risk Factors” in this Prospectus.

Q:	*Are there any conditions to completing the Spin-Off?*

Yes. The Spin-Off is conditional upon a number of matters, including the authorization and approval of the board of directors of Barnes & Noble, the consent of the lenders to Barnes & Noble under its existing credit agreement and the declaration of effectiveness of our Registration Statement on Form S-1, of which this Prospectus is a part, by the Securities and Exchange Commission. See “Summary of the Spin-Off— Conditions to the Spin-Off” for a more detailed explanation of the conditions to completing the Spin-Off.

Q:	*Could there be any other classes of capital stock of the Company outstanding after the Spin-Off?*

Yes. Series J Holders have the option to exchange all or a portion of their holdings of Barnes & Noble’s Series J Preferred Stock for Mirror Preferred Stock of the Company having terms and rights that are identical, or as nearly as practicable, to the Series J Preferred Stock, subject to certain exceptions. Series J Holders are not required to elect to receive Mirror Preferred Stock until the effective date of the Spin-Off. See “Risk Factors—We may have shares of preferred stock that will be convertible into Common Stock” and “Description of Our Capital Stock—Preferred Stock” for more information regarding the Series J Preferred Stock and the Mirror Preferred Stock.

Q:	*What is happening to the NOOK digital business?*

A:	On May 1, 2015, the NOOK digital business was transferred to Barnes & Noble. Therefore, the digital business will continue to be owned by Barnes & Noble after the Spin-Off.

Q:	*Where can I get more information?*

A:	Before the Spin-Off, if you have any questions relating to the Spin-Off, you should contact:

Investor Relations

Barnes & Noble, Inc.

122 Fifth Avenue

New York, New York 10011

Andy Milevoj

amilevoj@bn.com

After the Spin-Off, if you have any questions relating to the Company, you should contact:

Investor Relations

Barnes & Noble Education, Inc.

120 Mountain View Blvd.

Basking Ridge, NJ 07920

Thomas D. Donohue

tdonohue@bncollege.com

SUMMARY

This summary of certain information contained in this Prospectus may not include all the information that is important to you. To understand fully and for a more complete description of the terms and conditions of the Spin-Off, you should read this Prospectus in its entirety and the documents to which you are referred. See “Where You Can Find More Information.”

In this Prospectus, unless the context otherwise requires:

•

“Barnes & Noble” refers to Barnes & Noble, Inc. and its consolidated subsidiaries other than, for all periods following the Spin-Off, Barnes & Noble Education, Inc.,

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“Company,” “we,” “our” and “us” refer to Barnes & Noble Education, Inc. and its consolidated subsidiaries,

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“our business” and “the college business” refers to our college bookstore business operated through our subsidiary Barnes & Noble College Booksellers, LLC, and

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The “NOOK digital business” and “digital business” refer to our historical digital business that is operated through NOOK Digital LLC (formerly known as barnesandnoble.com llc) but prior to the Spin-Off will no longer be owned by us.

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Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. “Fiscal 2015” means the 52 weeks ended May 2, 2015, “Fiscal 2014” means the 53 weeks ended May 3, 2014, “Fiscal 2013” means the 52 weeks ended April 27, 2013, “Fiscal 2012” means the 52 weeks ended April 28, 2012, and “Fiscal 2011” means the 52 weeks ended April 30, 2011.

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Any reference to our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws give effect to the proposed amendments thereto which will not become effective until immediately prior to the Distribution.

Unless otherwise indicated, market and industry information contained in this Prospectus is based on information provided by the National Association of College Stores (NACS) and management estimates of market shares.

Overview

On February 26, 2015, Barnes & Noble announced plans for the complete legal and structural separation of the Company from Barnes & Noble. Barnes & Noble will distribute all of our Common Stock to Barnes & Noble’s common stockholders and, at the election of Series J Holders, Mirror Preferred Stock and Exchange Preferred Stock to such Series J Holders. Thereupon, we will be an independent publicly traded company.

Our Company

We are one of the largest contract operators of bookstores on college and university campuses in the United States. We create and operate campus stores that are focal points for college life and learning, enhancing the educational mission of the institution, enlivening campus culture and delivering an important revenue stream to our partner colleges and universities. We typically operate our stores under multi-year management service agreements granting us the right to operate the official bookstore on campus. In turn, we pay the school a percentage of store sales and, in certain cases, a minimum fixed guarantee.

of which are available for sale or rent, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. We are a multi-channel marketer, and our largest growth area is sales through the school-branded e-commerce sites we operate for each store, allowing students and faculty to purchase textbooks, course materials and other products online.

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* Organizational charts show our simplified capital structure, giving effect to the distribution of the digital business and the Spin-Off. Barnes & Noble Education, Inc. was formerly known as NOOK Media Inc. NOOK Digital LLC was formerly known as barnesandnoble.com llc.

Market Opportunity

We are positioned for growth based on both the strength of the current traditional campus bookstore business and current competitive dynamics in the market for digital distribution of course materials.

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A Majority of Traditional Campus Bookstores Have Yet to be Outsourced : Approximately 52% of college and university affiliated bookstores in the United States are operated by their respective institutions. This presents a significant opportunity to increase market share and to continue to expand our store footprint.

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Third-Party Operators Are Better Able to Manage the Increasingly Complex Operations of Campus Bookstores : It takes an increasing amount of technological and operational expertise to operate a modern campus bookstore that meets the needs of today’s students and faculty. As the delivery of educational materials continues to evolve, driven in large part by the growth of rentals and digital content, during the current fiscal year there has been an increasing trend towards outsourcing of bookstore operations to third party operators (including operators who have not traditionally operated campus bookstores).

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Direct Relationship with a Coveted Demographic : Due to their disproportionate impact on trendsetting and early adoption, marketing to college students is important for many brands as they seek more effective methods of engaging this audience. The importance of this demographic provides a significant opportunity to further monetize our direct relationship with more than 5 million students, both during and beyond their college years.

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Increased Use of Online and Digital Platforms : Students and faculty are increasingly relying on online and digital platforms as a means to discover, consume and share educational content. We benefit from our direct relationship with students and faculty and expect the adoption of our developing Yuzu ^TM digital education platform and its innovative solutions to increase significantly as students and faculty become more reliant on online and digital platforms.

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Ability to Deliver Non-Traditional Educational Content : Rising educational costs and changing market dynamics are driving demand for non-traditional educational content, including online coursework and supplemental materials. We believe our experience, understanding of customer needs and trends and strong customer and publisher relationships position us well to meet this demand.

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Highly-Fragmented Educational Content Market Presents Opportunity for Consolidation : As the market for educational content evolves, we believe there will be a significant opportunity to increase our market share.

Our National Campus Footprint

Beyond the anticipated growth of the traditional campus bookstore business, we have made, and will continue to make, significant investments in digital education, including the launch of Yuzu ^TM , our digital education platform that provides access to a wide range of rich, engaging content, including one of the largest catalogs of digital textbooks and consumer titles applicable to the higher education market.

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Our Ecosystem

We leverage our physical bookstores, e-commerce sites and digital platform to serve and interact with the key constituents in our business ecosystem.

We work with colleges and universities to transform the campus bookstore into a destination that enhances social and academic experiences. We offer students a customized retail experience, including, we believe, the largest inventory of used and rental titles, as well as a number of other affordable textbook solutions, including digital textbooks and our Flexible Course Fee Solution. We also operate and manage our schools’ websites for course materials and general merchandise which includes emblematic apparel and gifts and school supplies. We provide faculty with valuable tools, resources and insights that allow them to gain a deeper understanding of student needs and higher education trends. We also offer over 7,000 publishers access to one of the largest distribution networks of college education materials in the United States, which includes access to Yuzu ^TM , the next generation digital content distribution platform that we are developing.

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Strengths

We are more than just a provider of course materials and merchandise; we work as a true partner with colleges and universities, acting as a valuable support system for students and faculty. We deliver an attractive retail and digital learning experience driven by innovation, advanced technologies and a deep understanding of the evolving needs and behaviors of our customers. We believe our competitive strengths to be:

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Large Footprint with Well-Recognized Brand : We are one of the largest operators of bookstores on college and university campuses in the United States, with 724 stores in 42 states and the District of Columbia as of May 2, 2015, which reach 24% of the total United States college and university student enrolled population. Our brand, Barnes & Noble, is virtually synonymous with bookselling, and we believe it is one of the most widely recognized and respected brands in the United States. Our large footprint and well-known brand not only support our marketing efforts to universities, students and faculty but it is also important for leading publishers who value and rely on us as one of their primary distribution channels.

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Stable, Long-Term Contracts: We operate our stores under management contracts with colleges and universities that are typically for five year terms with renewal options. From Fiscal 2013 through Fiscal 2015, 93% of these contracts were renewed or extended, often before their termination dates. In addition, these contracts are financially beneficial to us as we typically pay the college or university a percentage of our sales, including certain contracts with minimum guarantee payments. Therefore, the occupancy costs for each space are primarily a function of how successful each store is. This arrangement is also beneficial to the colleges and universities, providing them with an incentive to encourage their students and faculty to shop at our affiliated stores.

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programs and educational initiatives together with a decentralized management structure that empowers local teams to make decisions based on the local campus needs and foster collaborative working relationships. We have long term relationships with over 7,000 publishers as well as a unique strategic partnership with Pearson Education, Inc., the largest publisher of higher educational course material. In addition, our stores serve as social hubs for over 5 million students and their faculty that we serve, allowing us to forge deep customer relationships and incorporate systems that seamlessly link bookstore technology with most student and faculty facing platforms.

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Attractive Business Model : We have a flexible business model with excellent visibility based on a deep understanding of our customers and their needs, minimal sensitivity to the economic cycle and ability to typically achieve profitability within the first year of operation. As the official, contracted provider for bookstore services, we have an established position with direct access to the students and faculty on the campuses we serve. This translates into relatively modest customer acquisition costs and high customer conversion and retention rates, unlike an online-only competitor that typically invests millions of dollars to gain access to its target customers, and then increases its customer retention costs to convert and retain those customers. Millennials (born between 1981 and 2000) are our core student customer, representing over $170 billion of purchasing power per year, according to comScore, and are just forming brand loyalties.

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Agile Technologies : Our highly-adaptable technology platforms allow us to effectively address the ever-changing landscape of course materials and formats and to be responsive to emerging sales trends and changing customer behaviors.

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Track Record of Innovation: Our flexible research channels help us stay ahead of the rapidly changing needs and behaviors of our customers and proactively respond with dynamic solutions to the needs of the customer constituency we serve. This commitment fuels our innovation and leadership in areas such as digital education with Yuzu ^TM , affordable course materials and student engagement.

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Seasoned Management Team : We have an experienced senior management team with a proven track record, an expertise in college bookstore outsourcing and content distribution and demonstrated marketing and retail operational expertise.

Strategies

Our primary business strategies to grow our business are as follows:

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Increase Sales at Existing Bookstores : We intend to increase sales at our existing bookstores through new product offerings, enhanced marketing efforts using mobile and other technologies, increased local social and promotional offerings and expanded sales channels to both new customers and alumni. We expect sales growth at our existing bookstores will be a driver for growth in our business.

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Increase Market Share with New Accounts : Historically, new store openings have been an important driver of growth in our business. For example, we increased our number of stores from 636 at the beginning of Fiscal 2012 to 724 as of May 2, 2015. Looking forward, approximately 52% of college and university affiliated bookstores in the United States are operated by their respective institutions. Moreover, we operate bookstores representing only 18% of all college and university affiliated bookstores in the United States. As more and more universities decide to outsource the management of their bookstores, we intend to aggressively pursue these opportunities and bid on these contracts. Based on the continuing trend towards outsourcing in the campus bookstore market, we expect awards of new accounts resulting in new store openings will continue to be an important driver of future growth in our business. We are in a unique position to offer academic superstores to colleges and universities.

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Grow digital sales by accelerating marketing, product development efforts and the acquisition of content to support the Yuzu ^TM digital education product: Yuzu ^TM , our digital education platform, offers not only electronic reading and note-taking functionality but also engaging supplemental content that we provide in conjunction with strategic publisher partners. Accelerating our product development and content acquisition efforts for Yuzu ^TM will enable us to access the growing educational technology market on a national level by leveraging our existing campus relationships with faculty and students. We believe that as textbooks continue to convert to digital and students and faculty demand increased functionality and content from their online platforms, the digital solutions we offer through Yuzu ^TM will help grow digital sales both on a school-by-school basis in the institutions we serve and on a national basis.

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Expand opportunities through acquisitions and strategic partnerships : We believe that acquisitions and strategic partnerships will be a pillar of our growth strategy in the future. We intend to pursue strategic relationships with companies that enhance our educational services or distribution platform or that create compelling content offerings. For example, our recently announced strategic investment in Flashnotes.com, an online marketplace for college students to buy and sell student created, course-specific study materials, aligns with one of the key objectives of the separation, which is to pursue opportunities in the growing educational services market. We will promote Flashnotes.com at partner schools to help improve academic outcomes and drive the power of peer to peer learning. We may also expand our current suite of digital content offerings and platform through acquisitions, internal or third party software development and strategic partnerships. Expansion into new educational verticals and markets, such as K-12, vocational and international markets, will be opportunistically evaluated.

Our History

On September 30, 2009, Barnes & Noble acquired Barnes & Noble College Booksellers, LLC from Leonard and Louise Riggio. From that date until October 4, 2012, Barnes & Noble College Booksellers, LLC was owned by Barnes & Noble Booksellers, Inc. In July 2012, NOOK Media Inc. was incorporated to hold Barnes & Noble’s college and digital businesses. On October 4, 2012, Microsoft Corporation (“Microsoft”) acquired a 17.6% preferred membership interest in our subsidiary NOOK Media LLC (the “LLC”), and through us, Barnes & Noble continued to own 82.4% of the businesses.

On January 22, 2013, Pearson Education, Inc. (“Pearson”) acquired a 5% preferred membership interest in the LLC, entered into a commercial agreement with the LLC relating to the college business and received warrants to purchase an additional preferred membership interest in the LLC.

On December 4, 2014, we re-acquired Microsoft’s interest in the LLC in exchange for cash and common stock of Barnes & Noble. On December 22, 2014, we also re-acquired Pearson’s interest in the LLC and the related warrants for cash and Barnes & Noble common stock. In connection with these transactions, Barnes & Noble entered into contingent payment agreements with Microsoft and Pearson providing for additional payments to them upon the occurrence of certain events, including upon a sale of the digital business. As a result of these transactions, Barnes & Noble owns, and expects to own prior to the Spin-Off, 100% of our stock.

In February 2015, we changed our name from NOOK Media Inc. to Barnes & Noble Education, Inc. and the LLC’s name to B&N Education, LLC.

On May 1, 2015, we distributed to Barnes & Noble all of the membership interests in NOOK Digital LLC (formerly known as barnesandnoble.com llc), which owns the digital business and which will continue to be owned by Barnes & Noble. At such time, we ceased to own any interest in the digital business.

Recent Developments

On June 5, 2015, Barnes & Noble entered into conversion agreements with certain of the Series J Holders, pursuant to which such Series J Holders agreed to convert an aggregate of 103,995 shares of Series J Preferred Stock (the “Converted Preferred Shares”) into 6,117,347 shares of Barnes & Noble common stock (the “New Barnes & Noble Shares”). Barnes & Noble currently expects the conversion will take place on or around July 9, 2015, at which time the Converted Preferred Shares will be retired by Barnes & Noble. As of June 26, 2015, after giving effect to the expected conversion, there would have been 100,005 shares of Series J Preferred Stock outstanding.

Other Information

We are a Delaware corporation. Our principal executive offices are located at 120 Mountain View Blvd., Basking Ridge, NJ 07920. Our telephone number is (908) 991-2665. Our website address is bned.com . Information contained on, or connected to, our website or Barnes & Noble’s website does not and will not constitute part of this Prospectus or the Registration Statement on Form S-1 of which this Prospectus is a part.

Summary of the Spin-Off

Distributing Company

Barnes & Noble, Inc., a Delaware corporation, which holds all of our Common Stock issued and outstanding prior to the Distribution. After the Distribution, Barnes & Noble will not own any shares of our Common Stock or our preferred stock.

Distributed Company

Barnes & Noble Education, Inc., a Delaware corporation and a wholly owned subsidiary of Barnes & Noble. At the time of the Distribution, we will hold, directly or through our wholly owned subsidiaries, the assets and liabilities of the college business. After the Distribution, we will be an independent publicly traded company.

Distributed Securities

All of the shares of our Common Stock owned by Barnes & Noble, which will be 100% of our Common Stock issued and outstanding immediately prior to the Distribution. Based on the approximately 70.2 million shares of Barnes & Noble common stock outstanding on May 31, 2015 (after giving effect to the New Barnes & Noble Shares), and applying the Distribution Ratio of 0.632 shares of Common Stock for every share of Barnes & Noble common stock, approximately 44.4 million shares of our Common Stock will be distributed. The actual number of shares of our Common Stock distributed will depend on the number of shares of Barnes & Noble common stock outstanding on the Record Date.

Record Date

The Record Date is 5:00 p.m., New York City time, on , 2015.

Distribution Date

The Distribution Date is , 2015.

Distribution Ratio

Each holder of Barnes & Noble common stock will receive 0.632 shares of our Common Stock for every share of Barnes & Noble common stock it holds on the Record Date. The distribution agent will distribute only whole shares of our Common Stock in the Spin-Off. See “The Spin-Off—Treatment of Fractional Shares” for more detail. Please note that if you sell your shares of Barnes & Noble common stock on or before the Distribution Date, the buyer of those shares may in some circumstances be entitled to receive the shares of our Common Stock to be distributed in respect of the Barnes & Noble shares that you sold. See “The Spin-Off—Trading Prior to the Distribution Date” for more detail.

The Distribution

On the Distribution Date, Barnes & Noble will release the shares of our Common Stock to the distribution agent to distribute to Barnes & Noble stockholders. Barnes & Noble will distribute our shares in book-entry form, and thus we will not issue any physical stock certificates. We expect that it will take the distribution agent up to two weeks to electronically issue shares of our Common Stock to you or your bank or brokerage firm on your behalf by way of direct registration in book-entry form. You will not be required to make any

payment, surrender or exchange your shares of Barnes & Noble common stock or take any other action to receive your shares of our Common Stock.

Fractional Shares

The distribution agent will not distribute any fractional shares of our Common Stock to Barnes & Noble stockholders. Instead, the distribution agent will first aggregate fractional shares into whole shares, then sell the whole shares in the open market at prevailing market prices on behalf of Barnes & Noble stockholders entitled to receive a fractional share, and finally distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). See “The Spin-Off—Treatment of Fractional Shares” for more detail. If you receive cash in lieu of fractional shares, you will not be entitled to any interest on the payments. The cash you receive in lieu of fractional shares generally will, for U.S. federal income tax purposes, be taxable as described under “Material U.S. Federal Income Tax Consequences of the Spin-Off.”

Conditions to the Spin-Off

The Spin-Off is subject to the satisfaction, or the Barnes & Noble board of directors’ waiver, of the following conditions:

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the Barnes & Noble board of directors shall have authorized and approved the Spin-Off and not withdrawn such authorization and approval, and shall have declared the dividend of our Common Stock to Barnes & Noble stockholders;

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the Separation Agreement and the ancillary agreements contemplated by the Separation Agreement shall have been executed by each party thereto;

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we shall have entered into a credit facility and any other financing we determine to be necessary or advisable, in each case, on terms and conditions acceptable to us;

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Barnes & Noble shall have obtained an amendment to or replacement of its Credit Agreement, dated April 29, 2011, among Barnes & Noble, Bank of America, N.A., as administrative agent, collateral agent and swing line lender and other lenders party thereto (the “B&N Credit Facility”) permitting the Spin-Off;

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the Securities and Exchange Commission (the “SEC”) shall have declared effective our Registration Statement on Form S-1, of which this Prospectus is a part, under the Securities Act of 1933, as amended (the “Securities Act”), and no stop order suspending the effectiveness of our Registration Statement shall be in effect and no proceedings for that purpose shall be pending before or threatened by the SEC;

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our Common Stock shall have been accepted for listing on the NYSE or another national securities exchange approved by Barnes & Noble, subject to official notice of issuance;

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Barnes & Noble shall have received the written opinions of Cravath, Swaine & Moore LLP and KPMG LLP, which shall remain in full force and effect, that, subject to the accuracy of and compliance with certain representations, warranties and covenants, the Spin-Off will qualify for non-recognition of gain and loss to Barnes & Noble and its stockholders;

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the Barnes & Noble board of directors shall have received a solvency opinion from a financial advisor, in form and substance acceptable to the board of directors, which shall opine that, among other things and subject to certain customary qualifications and assumptions, immediately prior to and after giving effect to the Spin-Off, the Company and Barnes & Noble will each be solvent;

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no order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Spin-Off shall be in effect, and no other event outside the control of Barnes & Noble shall have occurred or failed to occur that prevents the consummation of the Spin-Off;

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no other events or developments shall have occurred prior to the Distribution Date that, in the judgment of the Barnes & Noble board of directors, would result in the Spin-Off having a material adverse effect on Barnes & Noble or its stockholders;

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prior to the Distribution Date, this Prospectus shall have been mailed to the holders of Barnes & Noble common stock;

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Barnes & Noble shall have duly elected the individuals to be listed as members of our post-Spin-Off board of directors in this Prospectus, and such individuals shall be the members of our board of directors, which we refer to as our “Board,” immediately after the Spin-Off; provided that our current directors shall appoint at least one independent director to serve on our Board and Audit and Finance Committee prior to the date on which “when-issued” trading of our Common Stock commences;

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immediately prior to the Distribution Date, our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws, each in substantially the form filed as an exhibit to the Registration Statement on Form S-1, of which this Prospectus is a part, shall be in effect; and

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Barnes & Noble shall have received a certificate signed by our Chief Financial Officer, dated as of the Distribution Date, certifying the satisfaction of certain conditions.

The fulfillment of the foregoing conditions will not create any obligation on the part of Barnes & Noble to effect the Spin-Off. We are not aware of any material federal, foreign or state regulatory requirements with which we must comply, other than SEC rules and

regulations, or any material approvals that we must obtain, other than the approval for listing of our Common Stock and the SEC’s declaration of the effectiveness of the Registration Statement, in connection with the Spin-Off. Barnes & Noble has the right not to complete the Spin-Off if, at any time, the Barnes & Noble board or directors determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Barnes & Noble or its stockholders or is otherwise not advisable. For a more detailed description, see “The Spin-Off—Conditions to the Spin-Off.”

Trading Market and Symbol

We have filed an application to list our Common Stock on the NYSE under the symbol “BNED.” We anticipate that, as early as two trading days prior to the Record Date, trading of shares of our Common Stock will begin on a “when-issued” basis and will continue up to and including the Distribution Date, and we expect that “regular-way” trading of our Common Stock will begin the first trading day after the Distribution Date.

We also anticipate that, as early as two trading days prior to the Record Date, there will be two markets in Barnes & Noble common stock: (i) a “regular-way” market on which shares of Barnes & Noble common stock will trade with an entitlement for the purchaser of Barnes & Noble common stock to receive shares of our Common Stock to be distributed in the Distribution, and (ii) an “ex-distribution” market on which shares of Barnes & Noble common stock will trade without an entitlement for the purchaser of Barnes & Noble common stock to receive shares of our Common Stock. See “The Spin-Off—Trading Prior to the Distribution Date.”

Tax Consequences to Barnes & Noble Stockholders

For U.S. federal income tax purposes, no gain or loss should be recognized by, or be includible in the income of, a U.S. Holder (as defined in “Material U.S. Federal Income Tax Consequences of the Spin-Off”) as a result of the Distribution, except with respect to any cash received in lieu of a fractional share. In addition, the aggregate tax basis of the Barnes & Noble common stock and our Common Stock held by each U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of the Barnes & Noble common stock held by the U.S. Holder immediately before the Distribution, allocated between the Barnes & Noble common stock and our Common Stock in proportion to their relative fair market values on the date of the Distribution (subject to certain adjustments). See “Material U.S. Federal Income Tax Consequences of the Spin-Off.”

We urge you to consult your tax advisor as to the specific tax consequences of the Distribution to you, including the effect of any U.S. federal, state, local or foreign tax laws and of changes in applicable tax laws.

Relationship with Barnes & Noble after the Spin-Off

We intend to enter into several agreements with Barnes & Noble related to the Spin-Off, which will govern the relationship between Barnes & Noble and us up to and after completion of the Spin-Off and allocate between Barnes & Noble and us various assets, liabilities, rights and obligations. These agreements include:

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a Separation Agreement that will set forth Barnes & Noble’s and our agreements regarding the principal actions that both parties will take in connection with the Spin-Off and aspects of our relationship following the Spin-Off;

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a Transition Services Agreement pursuant to which Barnes & Noble and we will provide each other specified services on a transitional basis to help ensure an orderly transition following the Spin-Off;

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a Tax Matters Agreement that will govern the respective rights, responsibilities and obligations of Barnes & Noble and us after the Spin-Off with respect to all tax matters and will include restrictions to preserve the tax-free status of the Spin-Off;

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an Employee Matters Agreement that will address employment, compensation and benefits matters, including the allocation and treatment of assets and liabilities arising out of employee compensation and benefits programs in which our employees participated prior to the Spin-Off; and

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a Trademark License Agreement pursuant to which Barnes & Noble will grant us an exclusive license to use in our business certain licensed trademarks and a non-exclusive license to use in our business other licensed trademarks.

We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions—Agreements with Barnes & Noble,” and describe some of the risks of these arrangements under “Risk Factors—Risks Relating to the Spin-Off.”

Dividend Policy

Following the Spin-Off, we do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. See “Dividend Policy” for more information.

Transfer Agent

Computershare.

Risk Factors

Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Off. Following the Spin-Off, we will also face risks associated with being an independent publicly-traded company. Accordingly, you should read carefully the information set forth under “Risk Factors.”

RISK FACTORS

You should carefully consider all of the information in this Prospectus and each of the risks described below, which we believe are the principal risks that we face. Some of the risks relate to our business, others to the Spin-Off. Some risks relate principally to the securities markets and ownership of our Common Stock. The risks and uncertainties described below are not the only ones faced by us. Additional risks and uncertainties not presently known or that are currently deemed immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition, operating results and cash flows and the trading price of our Common Stock could be materially adversely affected.

Risks Relating to Our Business

We face significant competition in our business, and we expect such competition to increase.

The market for course materials, including textbooks and supplemental materials, is intensely competitive and subject to rapid change. We are experiencing growing competition from alternative media and alternative sources of textbooks and course-related materials, such as websites that sell textbooks, eBooks, digital content and other merchandise directly to students; online resources; publishers bypassing the bookstore distribution channel by selling directly to students and educational institutions; print-on-demand textbooks; textbook rental companies; and student-to-student transactions over the Internet. We also have competition from other college bookstore operators and educational content providers, including Follett Corporation, a contract operator of campus bookstores, which recently acquired Nebraska Book Company, a contract operator of on-campus and off-campus bookstores; Amazon.com, an e-commerce operator and a provider of contract services to colleges and universities, BBA Solutions, a college textbook retailer; Chegg.com, an online textbook rental company; CourseSmart, a digital course materials provider; Akademos, a virtual bookstore and marketplace for academic institutions; Rafter, a course materials management solution for higher educational institutions; bn.com, the e-commerce platform of Barnes & Noble and MBS Direct, an online bookstore provider; providers of eTextbooks, such as Apple iTunes, CourseSmart, Blackboard, Rafter and Google; and various private textbook rental websites. In addition, Amazon, Akademos and Rafter have recently begun to develop relationships with colleges and universities to provide online bookstore solutions. Many students purchase from multiple textbook providers, are highly price sensitive and can easily shift spending from one provider or format to another. As a consequence, in addition to being competitive in the service we provide to our customers, our textbook business faces significant price competition. Some of our competitors have adopted, and may continue to adopt, aggressive pricing policies and devote substantial resources to marketing, website and systems development. In addition, a variety of business models are being pursued for the provision of print textbooks, some of which may be more profitable or successful than our business model.

We may not be able to enter into new contracts and contracts for existing or additional college and university affiliated bookstores may not be profitable.

An important part of our business strategy is to expand sales for our college bookstore operations by being awarded additional contracts to manage bookstores for colleges and universities. Our ability to obtain those additional contracts is subject to a number of factors that we are not able to control. In addition, the anticipated strategic benefits of new and additional college and university bookstores may not be realized at all or may not be realized within the time frames contemplated by management. In particular, contracts for additional managed stores may involve a number of special risks, including adverse short-term effects on operating results, diversion of management’s attention and other resources, standardization of accounting systems, dependence on retaining, hiring and training key personnel, unanticipated problems or legal liabilities, and actions of our competitors and customers. Because certain terms of any contract are generally fixed for the initial term of the contract and involve judgments and estimates that may not be accurate, including for reasons outside of our control, we have contracts that are not profitable and may have such contracts in the future. Even if we have the right to terminate a contract, we may be reluctant to do so even when a contract is unprofitable due to, among other factors, the potential effect on our reputation.

We may not be able to successfully retain or renew our managed bookstore contracts on profitable terms.

We face significant competition in retaining existing store contracts and when renewing those contracts as they expire. Our contracts are typically for five years with renewal options but can range from two to 15 years, and most contracts are cancelable by either party without penalty, typically with 120 days’ notice. We may not be successful in retaining our current contracts, renewing our current contracts or renewing our current contracts on terms that provide us the opportunity to improve or maintain the profitability of managing the store.

Our business is dependent on the overall economic environment, college enrollment and consumer spending patterns.

A deterioration of the current economic environment could have a material adverse effect on our financial condition and operating results, as well as our ability to fund our growth and strategic business initiatives. Our business is affected by funding levels at colleges and universities and by changes in enrollments at colleges and universities, changes in student enrollments and lower spending on textbooks and general merchandise. The growth of our business depends on our ability to attract new students and to increase the level of engagement by existing students. To the extent we are unable to attract new students or students spend less generally, our business could be adversely affected.

We face the risk of disruption of supplier relationships and/or supply chain and/or inventory surplus.

The products that we sell originate from a wide variety of domestic and international vendors. During Fiscal 2015, our four largest suppliers accounted for approximately 47% of our merchandise purchased, with the largest supplier accounting for approximately 19% of our merchandise purchased. While we believe that our relationships with our suppliers are good, suppliers may modify the terms of these relationships due to general economic conditions or otherwise.

We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content or services, particular payment terms or the extension of credit limits. If our current suppliers were to stop selling merchandise, content or services to us on acceptable terms, including as a result of one or more supplier bankruptcies due to poor economic conditions, we may be unable to procure the same merchandise, content or services from other suppliers in a timely and efficient manner and on acceptable terms, or at all. In addition, our business is dependent on the continued supply of textbooks. The publishing industry generally has suffered recently due to, among other things, changing consumer preferences away from the print medium and the economic climate. A significant disruption in this industry generally or a significant unfavorable change in our relationships with key suppliers could adversely impact our business. In addition, any significant change in the terms that we have with our key suppliers including, payment terms, return policies, the discount or margin on products or changes to the distribution model of textbooks, could adversely affect our financial condition and liquidity. Furthermore, certain of our merchandise is sourced indirectly from outside the United States. Political or financial instability, merchandise quality issues, product safety concerns, trade restrictions, work stoppages, tariffs, foreign currency exchange rates, transportation capacity and costs, inflation, civil unrest, natural disasters, outbreaks of pandemics and other factors relating to foreign trade are beyond our control and could disrupt our supply of foreign-sourced merchandise.

In addition, we have significantly increased our textbook rental business, offering students a lower cost alternative to purchasing textbooks, which is also subject to certain inventory risks such as textbooks not being resold or re-rented due to delayed returns or poor condition, or faculty members not continuing to adopt or use certain textbooks.

Our business relies on certain key personnel.

Management believes that our continued success will depend to a significant extent upon the efforts and abilities of certain of our key personnel. The loss of the services of any of these key personnel could have a material adverse effect on our business. We do not maintain “key man” life insurance on any of our officers or other employees.

Our business is seasonal.

Our business is seasonal, with sales generally highest in the second and third fiscal quarters, when college students generally purchase textbooks for the upcoming semesters, and lowest in the first and fourth fiscal quarters. Less than satisfactory net sales during our peak fiscal quarters could have a material adverse effect on our financial condition or operating results for the year, and our results of operations from those quarters may not be sufficient to cover any losses that may be incurred in the other fiscal quarters of the year.

Our results also depend on the successful implementation of our strategic initiatives. We may not be able to implement these strategies successfully, on a timely basis or at all.

Our ability to grow depends upon a number of factors, including our ability to implement our strategic initiatives to retain and expand existing customer relationships, acquire new accounts, expand sales channels and marketing efforts, develop and market Yuzu ^TM and other higher education digital products and adapt to changing industry trends. While we believe we have the capital resources, experience, management resources and internal systems to successfully operate our business, we may not be successful in implementing these strategies. Further, even if successfully implemented, our business strategy may not ultimately produce positive results.

We face data security risks with respect to personal information.

Our business involves the receipt, storage, processing and transmission of personal information about customers and employees. We may share information about such persons with vendors and third parties that assist with certain aspects of our business. Also, in connection with our student financial aid platform and the processing of university debit cards, we secure and have access to certain student personal information that has been provided to us by the universities we serve. Our handling and use of personal information is regulated at the international, federal and state levels. Privacy and information security laws, regulations, and standards such as the Payment Card Industry Data Security Standard change from time to time, and compliance with them may result in cost increases due to necessary systems changes and the development of new processes and may be difficult to achieve. If we fail to comply with these laws, regulations and standards, we could be subjected to legal risk. In addition, even if we fully comply with all laws, regulations and standards and even though we have taken significant steps to protect personal information, we could experience a data security breach, and our reputation could be damaged, possibly resulting in lost future sales or decreased usage of credit and debit card products. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. A party that is able to circumvent our security measures could misappropriate our or our users’ proprietary information and cause interruption in our operations. Any compromise of our data security could result in a violation of applicable privacy and other laws or standards, significant legal and financial exposure beyond the scope or limits of insurance coverage, increased operating costs associated with remediation, equipment acquisitions or disposal and added personnel, and a loss of confidence in our security measures, which could harm our business or affect investor confidence. Data security breaches may also result from non-technical means, for example, actions by an employee.

Our business could be impacted by changes in federal, state, local or international laws, rules or regulations.

We are subject to general business regulations and laws relating to all aspects of our business. These regulations and laws may cover taxation, privacy, data protection, our access to student financial aid, pricing and availability of educational materials, competition and/or antitrust, content, copyrights, distribution, college distribution, mobile communications, electronic contracts and other communications, consumer protection, the provision of online payment services, unencumbered Internet access to our services, the design and operation of websites, digital content (including governmental investigations and litigation relating to the agency pricing model for digital content distribution), the characteristics and quality of products and services and employee benefits (including the costs associated with complying with the Patient Protection and Affordable Care Act). Changes in federal, state, local or international laws, rules or regulations relating to these matters could increase our costs of doing business or otherwise impact our business.

Changes in tax laws and regulations might adversely impact our businesses or financial performance.

We collected sales tax on the majority of the products and services that we sold in our respective prior fiscal years that were subject to sales tax, and we generally have continued the same policies for sales tax within the current fiscal year. While management believes that the financial statements included elsewhere in this Prospectus reflect management’s best current estimate of any potential additional sales tax liability based on current discussions with taxing authorities, we cannot assure you that the outcome of any discussions with any taxing authority will not result in the payment of sales taxes for prior periods or otherwise, or that the amount of any such payments will not be materially in excess of any liability currently recorded. In the future, our businesses may be subject to claims for not collecting sales tax on the products and services we currently sell for which sales tax is not collected. In addition, our provision for income taxes and our obligation to pay income tax is based on existing federal, state and local tax laws. Changes to these laws, in particular as they relate to depreciation, amortization and cost of goods sold, could have a significant impact on our income tax provision, our projected cash tax liability, or both.

Our expansion into new products, services and technologies subjects us to additional business, legal, financial and competitive risks.

We may require additional capital in the future to sustain or grow our business. Our gross profits and margins in our newer activities may be lower than in our traditional activities, and we may not be successful enough in these newer activities to recoup our investments in them. In addition, we may have limited or no experience in our newer products and services, and our customers may not adopt our new product or service offerings. Some of these offerings, such as our commercial digital agreement with Pearson, may present new and difficult technological challenges, and we may be subject to claims if customers of these offerings experience service disruptions or failures or other quality issues.

We may not be able to adequately protect our intellectual property rights or may be accused of infringing upon intellectual property rights of third parties.

We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology and similar intellectual property as important to our success, and we rely on trademark, copyright and patent law, domain name regulations, trade secret protection and confidentiality or license agreements to protect our proprietary rights, including our use of the Barnes & Noble trademark. Laws and regulations may not adequately protect our trademarks and similar proprietary rights. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or diminish the value of our trademarks and other proprietary or licensed rights.

We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights. The protection of our intellectual property may require the expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights. We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights.

Other parties also may claim that we infringe their proprietary rights. Because of the changes in Internet commerce and digital content businesses, current extensive patent coverage, and the rapid rate of issuance of new patents, it is possible that certain components of our products and business methods may unknowingly infringe existing patents or intellectual property rights of others.

Our digital content offerings depend in part on effective digital rights management technology to control access to digital content. If the digital rights management technology that we use is compromised or otherwise malfunctions, we could be subject to claims, and content providers may be unwilling to include their content in our service.

We do not own the Barnes & Noble trademark and instead rely on a license of that trademark and certain other trademarks, which license imposes limits on what those trademarks can be used to do.

In connection with the Spin-Off, Barnes & Noble will grant to us an exclusive, perpetual, fully paid up, non-transferable and non-assignable license to use the trademarks “Barnes & Noble College,” “B&N College,” “Barnes & Noble Education” and “B&N Education” and the non-exclusive, perpetual, fully paid up, non-transferable and non-assignable license to use the marks “Barnes & Noble,” “B&N” and “BN,” solely in connection with the contract management of college and university bookstores and other bookstores associated with academic institutions and related websites as well as education products and services (including digital education products and services) and related websites. These restrictions may materially limit our ability use the licensed marks in the expansion of our operations in the future. In addition, we are reliant on Barnes & Noble to maintain the licensed trademarks.

We rely on third-party digital content and applications, which may not be available to us on commercially reasonable terms or at all.

We contract with certain third-parties to offer their digital content. Our licensing arrangements with these third-parties do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at all. Some third-party content providers currently or in the future may offer competing products and services, and could take action to make it more difficult or impossible for us to license our content in the future. Other content owners, providers or distributors may seek to limit our access to, or increase the total cost of, such content. If we are unable to offer a wide variety of content at reasonable prices with acceptable usage rules, our business may be materially adversely affected.

Risks Relating to the Spin-Off

The Spin-Off could result in significant tax liability to Barnes & Noble and its stockholders.

The Spin-Off is conditioned on Barnes & Noble’s receipt of written opinions of Cravath, Swaine & Moore LLP and KPMG LLP to the effect that the Distribution will qualify for non-recognition of gain and loss to Barnes & Noble and its stockholders.

These opinions do not address any U.S. state or local or foreign tax consequences of the Spin-Off. The opinion assumes that the Spin-Off will be completed according to the terms of the Separation Agreement and rely on the facts as stated in the Separation Agreement, the Tax Matters Agreement, the other ancillary agreements, this Prospectus and a number of other documents. In addition, the opinion is based on certain representations as to factual matters from, and certain covenants by, Barnes & Noble and us. The opinions cannot be relied on if any of the assumptions, representations or covenants are incorrect, incomplete or inaccurate or are violated in any material respect.

The opinions are not binding on the Internal Revenue Service (“IRS”) or the courts, and we cannot assure you that the IRS or a court will not take a contrary position.

If the Spin-Off were determined not to qualify for non-recognition of gain and loss, U.S. Holders could be subject to tax. In this case, each U.S. Holder who receives our Common Stock in the Spin-Off would generally be treated as receiving a distribution in an amount equal to the fair market value of our Common Stock received, which would generally result in (i) a taxable dividend to the U.S. Holder to the extent of that U.S. Holder’s pro rata share of Barnes & Noble’s current and accumulated earnings and profits; (ii) a reduction in the U.S. Holder’s basis (but not below zero) in Barnes & Noble common stock to the extent the amount received exceeds the stockholder’s share of Barnes & Noble’s earnings and profits; and (iii) a taxable gain from the exchange of Barnes & Noble common stock to the extent the amount received exceeds the sum of the U.S. Holder’s share of Barnes & Noble’s earnings and profits and the U.S. Holder’s basis in its Barnes & Noble common stock.

If the Spin-Off were determined not to qualify for non-recognition of gain and loss, then Barnes & Noble would recognize gain in an amount up to the fair market value of our stock held by it immediately before the

Spin-Off. Under certain circumstances, we could have an indemnification obligation to Barnes & Noble with respect to tax on any such gain. See below and “Material U.S. Federal Income Tax Consequences of the Spin-Off” for more information.

We could have an indemnification obligation to Barnes & Noble if the Spin-Off were determined not to qualify for non-recognition treatment.

If, due to any of our covenants in the Tax Matters Agreement being breached, it were determined that the Spin-Off did not qualify for non-recognition of gain and loss under Section 355 of the Internal Revenue Code of 1986, as amended (the “Code”), we could be required to indemnify Barnes & Noble for the resulting taxes and related expenses. In addition, Section 355(e) of the Code generally creates a presumption that the Spin-Off would be taxable to Barnes & Noble, but not to holders, if we or our stockholders were to engage in transactions that result in a 50% or greater change by vote or value in the ownership of our stock during the four-year period beginning on the date that begins two years before the date of the Spin-Off, unless it were established that such transactions and the Spin-Off were not part of a plan or series of related transactions giving effect to such a change in ownership. If the Spin-Off were taxable to Barnes & Noble due to such 50% or greater change in the ownership of our stock Barnes & Noble would recognize gain in an amount up to the fair market value of our stock held by it immediately before the Spin-Off, and we generally would be required to indemnify Barnes & Noble for the tax on such gain and related expenses. See “Certain Relationships and Related Party Transactions—Agreements with Barnes & Noble—Tax Matters Agreement” for more information.

We intend to agree to numerous restrictions to preserve the non-recognition treatment of the Spin-Off, which may reduce our strategic and operating flexibility.

We intend to agree in the Tax Matters Agreement to covenants and indemnification obligations that address compliance with Section 355(e) of the Code. These covenants and indemnification obligations may limit our ability to pursue strategic transactions or engage in new businesses or other transactions that might maximize the value of our business, and could discourage or delay a strategic transaction that our stockholders may consider favorable. See “Certain Relationships and Related Party Transactions—Agreements with Barnes & Noble—Tax Matters Agreement” for more information.

We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Off.

We believe that, as an independent publicly-traded company, we will be able to, among other things, better focus our financial and operational resources on our specific business, implement and maintain a capital structure designed to meet our specific needs, design and implement corporate strategies and policies that are targeted to our business, more effectively respond to industry dynamics and create effective incentives for our management and employees that are more closely tied to our business performance. However, by separating from Barnes & Noble, we may be more susceptible to market fluctuations and have less leverage with suppliers, and we may experience other adverse events. In addition, we may be unable to achieve some or all of the benefits that we expect to achieve as an independent company in the time we expect, if at all. The completion of the Spin-Off will also require significant amounts of our management’s time and effort, which may divert management’s attention from operating and growing our business.

We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent publicly-traded company, and we may experience increased costs after the Spin-Off.

Barnes & Noble has provided us with various corporate services. Following the Spin-Off, Barnes & Noble will have no obligation to provide us with assistance other than the transition services described under “Certain Relationships and Related Party Transactions—Agreements with Barnes & Noble.” These services do not include every service that we have received from Barnes & Noble in the past, and Barnes & Noble is only obligated to provide these services for limited periods from the date of the Spin-Off. Accordingly, following the Spin-Off, we will need to provide internally or obtain from unaffiliated third parties the services we currently

receive from Barnes & Noble. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from Barnes & Noble. We may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently or may incur additional costs. If we fail to obtain the services necessary to operate effectively or if we incur greater costs in obtaining these services, our business, financial condition and results of operations may be adversely affected.

We have no operating history as an independent publicly-traded company, and our historical financial information is not necessarily representative of the results we would have achieved as an independent publicly-traded company and may not be a reliable indicator of our future results.

We derived the historical financial information included in this Prospectus from Barnes & Noble’s consolidated financial statements, and this information does not necessarily reflect the results of operations and financial position we would have achieved as an independent publicly-traded company during the periods presented or those that we will achieve in the future. This is primarily because of the following factors:

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Prior to the Spin-Off, we operated as part of Barnes & Noble’s broader corporate organization, and Barnes & Noble performed various corporate functions for us. Our historical financial information reflects allocations of corporate expenses from Barnes & Noble for these and similar functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent publicly-traded company.

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We will enter into transactions with Barnes & Noble that did not exist prior to the Spin-Off or modify our existing agreements with Barnes & Noble, such as Barnes & Noble’s provision of transition services, which will cause us to incur new costs.

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Our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from Barnes & Noble, including changes in our cost structure, personnel needs, tax structure, financing and business operations. As part of Barnes & Noble, we enjoyed certain benefits from Barnes & Noble’s operating diversity, size, purchasing power, borrowing leverage and available capital for investments, and we will lose these benefits after the Spin-Off. As an independent entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses or access capital markets on terms as favorable to us as those we obtained as part of Barnes & Noble prior to the Spin-Off.

Following the Spin-Off, we will also be responsible for the additional costs associated with being an independent publicly-traded company, including costs related to corporate governance, investor and public relations and public reporting. In addition, certain costs incurred by Barnes & Noble, including executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services, have historically been allocated to us by Barnes & Noble; but these allocations may not reflect the future level of these costs to us as we begin to provide these services ourselves. Therefore, our historical financial statements may not be indicative of our future performance as an independent publicly-traded company. We cannot assure you that our operating results will continue at a similar level when we are an independent publicly-traded company. For additional information about our past financial performance and the basis of presentation of our financial statements, see “Selected Historical Financial Data”, “Unaudited Pro Forma Financial Information”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and the notes thereto included elsewhere in this Prospectus.

We may not be able to access the credit and capital markets at the times and in the amounts needed on acceptable terms.

From time to time we may need to access the long-term and short-term capital markets to obtain financing. Although we believe that the sources of capital in place at the time of the Spin-Off will permit us to finance our operations for the foreseeable future on acceptable terms and conditions, we have not previously accessed the capital markets as an independent public company, and our access to, and the availability of, financing on

acceptable terms and conditions in the future will be impacted by many factors, including our financial performance, our credit ratings or absence thereof, the liquidity of the overall capital markets and the state of the economy. We cannot assure you that we will have access to the capital markets at the times and in the amounts needed or on terms acceptable to us.

Some of our contracts contain provisions requiring the consent of third parties in connection with the Spin-Off. If these consents are not obtained, we may be unable to enjoy the benefit of these contracts in the future.

Some of our contracts contain provisions that require the consent of third parties to the Spin-Off. Failure to obtain such consents on commercially reasonable and satisfactory terms may impair our entitlement to the benefit of these contracts in the future.

We may have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements with Barnes & Noble.

We will enter into agreements with Barnes & Noble related to our separation from Barnes & Noble, including the Separation Agreement, Transition Services Agreement, Tax Matters Agreement, the Trademark License Agreement and Employee Matters Agreement, while we are still part of Barnes & Noble. Accordingly, these agreements may not reflect terms that would have resulted from arms-length negotiations between unaffiliated parties. The terms of the agreements being negotiated relate to, among other things, allocations of assets, liabilities, rights, indemnifications and other obligations between Barnes & Noble and us. We may have received better terms from third parties because third parties may have competed with each other to win our business. See “Certain Relationships and Related Party Transactions” for more information.

Risks Relating to our Common Stock and the Securities Market

No market for the Common Stock currently exists, and an active trading market may not develop or be sustained after the Spin-Off. Following the Spin-Off, our stock price may fluctuate significantly.

There is currently no public market for the Common Stock. We have applied to list the Common Stock on the NYSE. We anticipate that before the Distribution Date, trading of shares of the Common Stock will begin on a “when-issued” basis and this trading will continue up to and including the Distribution Date. However, an active trading market for the Common Stock may not develop as a result of the Spin-Off or may not be sustained in the future. The lack of an active market may make it more difficult for stockholders to sell our shares and could lead to our share price being depressed or volatile.

We cannot predict the prices at which the Common Stock may trade after the Spin-Off. The market price of the Common Stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

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actual or anticipated fluctuations in our operating results due to factors related to our businesses;

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success or failure of our business strategies, including our digital education initiative;

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our quarterly or annual earnings or those of other companies in our industries;

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our ability to obtain financing as needed;

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announcements by us or our competitors of significant acquisitions or dispositions;

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changes in accounting standards, policies, guidance, interpretations or principles;

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the failure of securities analysts to cover the Common Stock after the Spin-Off;

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changes in earnings estimates by securities analysts or our ability to meet those estimates;

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the operating and stock price performance of other comparable companies;

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investor perception of our company and the college bookstore industry;

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overall market fluctuations;

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results from any material litigation or government investigation;

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changes in laws and regulations (including tax laws and regulations) affecting our business;

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changes in capital gains taxes and taxes on dividends affecting stockholders; and

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general economic conditions and other external factors.

Furthermore, our business profile and market capitalization may not fit the investment objectives of some Barnes & Noble stockholders and, as a result, these Barnes & Noble stockholders may sell their shares of our Common Stock after the Spin-Off. See “Risk Factors—Substantial sales of our Common Stock may occur in connection with the Spin-Off, which could cause our stock price to decline.” Low trading volume for our Common Stock, which may occur if an active trading market does not develop, among other reasons, would amplify the effect of the above factors on our stock price volatility.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of the Common Stock.

Substantial sales of the Common Stock may occur in connection with the Spin-Off, which could cause our stock price to decline.

Barnes & Noble stockholders receiving shares of Common Stock in the Spin-Off generally may sell those shares immediately in the public market. Although we have no actual knowledge of any plan or intention of any significant stockholder to sell our Common Stock following the Spin-Off, it is likely that some Barnes & Noble stockholders, possibly including some of its larger stockholders, will sell their shares received in the Spin-Off if, for reasons such as our business profile or market capitalization as an independent company, we do not fit their investment objectives, or, in the case of index funds, we are not a participant in the index in which they are investing. The sales of significant amounts of our Common Stock or the perception in the market that this will occur may decrease the market price of our Common Stock.

We may have shares of preferred stock that will be convertible into Common Stock.

In connection with the Spin-Off, Barnes & Noble is obligated to give notice to Series J Holders of the Spin-Off not more than 60 business days and not less than 20 business days prior to the effective date of the Spin-Off, and upon receipt of such notice, Series J Holders may elect to exchange all or a portion of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock and Barnes & Noble Exchange Preferred Stock. Any Mirror Preferred Stock will have an initial conversion rate equal to the product of (x) the conversion rate applicable to the Series J Preferred Stock on the effective date of the Spin-Off (which, as of June 26, 2015, would have been 58.8235) and (y) the Distribution Ratio. As of June 26, 2015, the Mirror Preferred Stock would have had a conversion rate of 37.176452. The conversion rate will be subject to customary anti-dilution adjustments.

As of June 26, 2015, after giving effect to the conversion of the Converted Preferred Shares, Barnes & Noble would have had 100,005 shares of Series J Preferred Stock outstanding. See “Summary—Recent Developments”. As of June 26, 2015, after giving effect to such conversion, assuming the remaining Series J Holders elect to exchange all of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock, we would have had 100,005 shares of Mirror Preferred Stock outstanding after the Spin-Off, which would be convertible into at least 3,717,831 shares of our Common Stock, representing approximately 8.4% of our estimated outstanding Common Stock following the Spin-Off. These shares of Common Stock could create an excess supply of our stock if any significant resale were to occur after the conversion.

In addition, since the liquidation preference for any Mirror Preferred Stock issued to Series J Holders (and the related Exchange Preferred Stock) will be based on the relative trading values of our Common Stock and the Barnes & Noble common stock during the five trading days immediately following the Spin-Off, the trading price of the Barnes & Noble common stock and our Common Stock could be affected during this period.

The concentration of our capital stock ownership may limit our stockholders’ ability to influence corporate matters and may involve other risks.

Leonard Riggio, the founder of Barnes & Noble, is currently the beneficial owner of an aggregate of approximately 18.8% of Barnes & Noble’s outstanding common stock as of May 30, 2015 (or 17.2% after giving effect to the New Barnes & Noble Shares). Upon completion of the Spin-Off, it is expected that Leonard Riggio would hold the same percentage of our outstanding Common Stock.

This significant ownership may limit the ability of our other stockholders to influence corporate matters and, as a result we may take actions with which its other stockholders do not agree. In addition, there may be risks related to the relationships Leonard Riggio and other members of the Riggio family have with the various entities with which we have related party transactions.

We do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our Common Stock must come from increases in the fair market value and trading price of our Common Stock.

We do not intend to pay cash dividends on our Common Stock in the foreseeable future. We expect to retain future earnings, if any, for reinvestment in our business. Also, any credit agreements, which we may enter into, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our Board and will be dependent upon our financial condition, results of operations, cash requirements, future prospects and any other factors our Board deems relevant. Therefore, any return on your investment in our Common Stock must come from increases in the fair market value and trading price of our Common Stock. For more information, see “Dividend Policy.”

Your percentage ownership in the Company may be diluted in the future.

Your percentage ownership in the Company may be diluted in the future because of equity awards that we expect to grant to our directors, officers and other employees. Prior to the Spin-Off, we expect to approve an incentive plan that will provide for the grant of Common Stock-based equity awards to our directors, officers and other employees. In addition, we may issue equity as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future or as necessary to finance our ongoing operations. Also, to the extent Mirror Preferred Stock is issued in connection with the Spin-Off and such Mirror Preferred Stock is subsequently converted, the number of shares of Common Stock outstanding will increase.

Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and of Delaware law may prevent or delay an acquisition of the Company, which could affect the trading price of the Common Stock.

Prior to the Spin-Off, we will amend and restate our certificate of incorporation and by-laws. Those amended and restated documents will contain provisions, which together with applicable Delaware law, may discourage, delay or prevent a merger or acquisition that our stockholders consider favorable, including provisions that:

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divide our Board into three staggered classes of directors that are each elected to three-year terms;

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prohibit stockholder action by written consent;

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authorize the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive;

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provide that special meetings of the stockholders may be called only by or at the direction of a majority of our Board or the chairman of our Board; and

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require advance notice to be given by stockholders for any stockholder proposals or director nominations.

In addition, Section 203 of the General Corporation Law of the State of Delaware, or DGCL, may affect the ability of an “interested stockholder” to engage in certain business combinations, for a period of three years following the time that the stockholder becomes an “interested stockholder”.

These provisions may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of the Company, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their Common Stock at a price above the prevailing market price. See “Description of Our Capital Stock—Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws” for more information.

Our Amended and Restated By-laws will designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Amended and Restated By-laws will provide that, subject to limited exceptions, the state and federal courts of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-laws or (d) any other action asserting a claim that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and to have consented to these provisions. This provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find this provision of our Amended and Restated By-laws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements and information relating to our business that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “forecasts,” “projections,” and similar expressions, as they relate to us or our management, identify forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including, among others:

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general competitive conditions, including actions our competitors may take to grow their businesses;

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trends and challenges to our business and in the locations in which we have stores;

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decisions by colleges and universities to outsource their bookstore operations or change the operation of their bookstores;

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non-renewal of contracts;

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the general economic environment, college enrollment and consumer spending patterns, including decreases in university spending;

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decreased consumer demand for our products, low growth or declining sales;

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disruptions to our computer systems, data lines, telephone systems or supply chain, including the loss of suppliers;

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changes to payment terms, return policies, the discount or margin on products or other terms with our suppliers;

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risks associated with data privacy, information security and intellectual property;

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work stoppages or increases in labor costs;

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our ability to attract and retain employees;

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possible increases in shipping rates or interruptions in shipping service, effects of competition;

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obsolete or excessive inventory;

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product shortages;

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our ability to successfully implement our strategic initiatives;

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the performance of our online, digital and other initiatives, including possible delays in the deployment of, and further enhancements to, Yuzu ^TM and any future higher education digital products;

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technological changes;

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risk that digital sales growth is less than expectations and the risk that it does not exceed the rate of investment spend;

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higher-than-anticipated store closings;

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changes in law or regulation;

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the amount of our indebtedness and ability to comply with covenants applicable to any future debt financing;

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our ability to satisfy future capital and liquidity requirements;

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our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;

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adverse results from litigation, governmental investigations or tax-related proceedings or audits;

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changes in accounting standards;

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the potential adverse impact on our business resulting from the Spin-Off; and

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the other risks and uncertainties detailed in the section titled “Risk Factors.”

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Prospectus except to the extent required by law.

THE SPIN-OFF

Background

On February 26, 2015, Barnes & Noble announced plans for the complete legal and structural separation of the Company from Barnes & Noble. Barnes & Noble will distribute all of its equity interest in us, consisting of all of the outstanding shares of our Common Stock, to Barnes & Noble’s stockholders on a pro rata basis. Following the Spin-Off, Barnes & Noble will not own any equity interest in us, and we will operate independently from Barnes & Noble. No approval of Barnes & Noble’s common stockholders is required in connection with the Spin-Off, and Barnes & Noble’s common stockholders will not have any appraisal rights in connection with the Spin-Off.

The Spin-Off is subject to the satisfaction, or the Barnes & Noble board of directors’ waiver, of a number of conditions. In addition, Barnes & Noble has the right not to complete the Spin-Off if, at any time, the Barnes & Noble Board determines, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Barnes & Noble or its stockholders or is otherwise not advisable. For a more detailed description, see “The Spin-Off—Conditions to the Spin-Off.”

Reasons for the Spin-Off

The Barnes & Noble board of directors considered the following potential benefits in deciding to pursue the Spin-Off:

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Guided by input from business units and strategy, tax and legal teams, as well as outside advisors, the Barnes & Noble board of directors considered, among other factors, the college business’ history as a standalone company prior to 2009, each business’ historic ownership and usage of assets, incurrence of liabilities, relationships with other entities and accounting treatment, as well as administrative costs and efficiencies, to determine the terms of the separation of the Company and Barnes & Noble. The Distribution Ratio was set by the Barnes & Noble board of directors, taking into account advice from its advisors, primarily to target a desired trading range for our Common Stock based on an expected valuation range for the Company and the number of shares that will be outstanding after the Distribution.

When and How You Will Receive Company Shares

Barnes & Noble will distribute to its stockholders, as a pro rata dividend, 0.632 shares of our Common Stock for every share of Barnes & Noble common stock outstanding as of 5:00 p.m., New York City time, on , 2015, the Record Date of the Distribution.

Prior to the Spin-Off, Barnes & Noble will deliver all of the issued and outstanding shares of our Common Stock to the distribution agent. Computershare will serve as distribution agent in connection with the Distribution and as transfer agent and registrar for our Common Stock.

If you own Barnes & Noble common stock as of 5:00 p.m., New York City time, on , 2015, the shares of our Common Stock that you are entitled to receive in the Distribution will be issued to your account as follows:

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Registered stockholders . If you own your shares of Barnes & Noble common stock directly through Barnes & Noble’s transfer agent, Computershare, you are a registered stockholder. In this case, the distribution agent will credit the whole shares of our Common Stock you receive in the Distribution by way of direct registration in book-entry form to a new account with our transfer agent. Registration in book-entry form refers to a method of recording share ownership where no physical stock certificates are issued to stockholders, as is the case in the Distribution. You will be able to access information regarding your book-entry account holding our shares at Computershare. Commencing on or shortly after the Distribution Date, the distribution agent will mail to you an account statement that indicates the number of whole shares of our Common Stock that have been registered in book-entry form in your name. We expect it will take the distribution agent up to two weeks after the Distribution Date to complete the distribution of the shares of our Common Stock and mail statements of holding to all registered stockholders.

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“ Street name ” or beneficial stockholders . Most Barnes & Noble stockholders own their shares of Barnes & Noble common stock beneficially through a bank, broker or other nominee. In these cases, the bank, broker or other nominee holds the shares in “street name” and records your ownership on its books. If you own your shares of Barnes & Noble common stock through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our Common Stock that you receive in the Distribution on or shortly after the Distribution Date. We encourage you to contact your bank, broker or other nominee if you have any questions concerning the mechanics of having shares held in “street name.”

If you sell any of your shares of Barnes & Noble common stock on or before the Distribution Date, the buyer of those shares may in some circumstances be entitled to receive the shares of our Common Stock to be distributed in respect of the Barnes & Noble shares you sold. See “The Spin-Off—Trading Prior to the Distribution Date” for more information.

We are not asking Barnes & Noble stockholders to take any action in connection with the Spin-Off. No approval of the holders of Barnes & Noble common stock is required for the Spin-Off. We are not asking you for a proxy and request that you not send us a proxy. We are also not asking you to make any payment or surrender or exchange any of your shares of Barnes & Noble common stock for shares of our Common Stock. The number of outstanding shares of Barnes & Noble common stock will not change as a result of the Spin-Off.

Number of Shares You Will Receive

On the Distribution Date, you will receive 0.632 shares of our Common Stock for every share of Barnes & Noble common stock you hold on the Record Date.

Treatment of Fractional Shares

“when-issued” trades will generally settle within four trading days following the Distribution Date. See “The Spin-Off—Trading Prior to the Distribution Date” for additional information regarding “when-issued” trading. The distribution agent will, in its sole discretion, without any influence by Barnes & Noble or us, determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent is not, and any broker-dealer used by the distribution agent will not be, an affiliate of either Barnes & Noble or us.

The distribution agent will send to each registered holder of Barnes & Noble common stock entitled to a fractional share a check in the cash amount deliverable in lieu of that holder’s fractional share as soon as practicable following the Distribution Date. We expect the distribution agent to take about 15 business days after the Distribution Date to complete the distribution of cash in lieu of fractional shares to Barnes & Noble stockholders. If you hold your shares through a bank, broker or other nominee, your bank, broker or nominee will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales. No interest will be paid on any cash you receive in lieu of a fractional share. The cash you receive in lieu of a fractional share will generally be taxable to you for U.S. federal income tax purposes. See “Material U.S. Federal Income Tax Consequences of the Spin-Off” for more information.

Results of the Spin-Off

After the Spin-Off, we will be an independent publicly-traded company. Immediately following the Spin-Off, we expect to have approximately 1,800 holders of shares of our Common Stock and approximately 44.4 million shares of our Common Stock outstanding, based on the number of Barnes & Noble stockholders and shares of Barnes & Noble common stock outstanding on May 31, 2015 after giving effect to the New Barnes & Noble Shares. The actual number of shares of our Common Stock Barnes & Noble will distribute in the Spin-Off will depend on the actual number of shares of Barnes & Noble common stock outstanding on the Record Date, which will reflect any issuance of new shares or exercises of outstanding options pursuant to Barnes & Noble’s equity plans, and any repurchase of Barnes & Noble shares by Barnes & Noble under its common stock repurchase program, on or prior to the Record Date. The Spin-Off will not affect the number of outstanding shares of Barnes & Noble common stock or any rights of Barnes & Noble stockholders, although we expect the trading price of shares of Barnes & Noble common stock immediately following the Distribution to be lower than immediately prior to the Distribution because the trading price of Barnes & Noble common stock will no longer reflect the value of the Company. Furthermore, until the market has fully analyzed the value of Barnes & Noble without the Company, the trading price of shares of Barnes & Noble common stock may fluctuate. In addition, since the liquidation preference for any Mirror Preferred Stock issued to Series J Holders (and the related Exchange Preferred Stock) will be based on the relative trading values of our Common Stock and the Barnes & Noble common stock immediately following the Spin-Off, the trading price of the Barnes & Noble common stock could be affected during this period.

Before our separation from Barnes & Noble, we intend to enter into a Separation Agreement and several other agreements with Barnes & Noble related to the Spin-Off. These agreements will govern the relationship between us and Barnes & Noble up to and after completion of the Spin-Off and allocate between us and Barnes & Noble various assets, liabilities, rights and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions—Agreements with Barnes & Noble.”

Listing and Trading of the Common Stock

As of the date of this Prospectus, we are a wholly owned subsidiary of Barnes & Noble. Accordingly, no public market for our Common Stock currently exists, although a “when-issued” market in the Common Stock may develop prior to the Spin-Off. See “The Spin-Off—Trading Prior to the Distribution Date” below for an explanation of a “when-issued” market. We intend to list the Common Stock on the NYSE under the symbol “BNED.” Following the Spin-Off, Barnes & Noble common stock will continue to trade on the NYSE under the symbol “BKS.”

Neither we nor Barnes & Noble can assure you as to the trading price of Barnes & Noble common stock or our Common Stock after the Spin-Off, or as to whether the combined trading prices of our Common Stock and the Barnes & Noble common stock after the Spin-Off will be less than, equal to or greater than the trading prices of Barnes & Noble common stock prior to the Spin-Off. The trading price of our Common Stock may fluctuate significantly following the Spin-Off. See “Risk Factors—Risks Relating to Our Common Stock and the Securities Market” for more detail.

The shares of our Common Stock distributed to Barnes & Noble stockholders will be freely transferable, except for shares received by individuals who are our affiliates. Individuals who may be considered our affiliates after the Spin-Off include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. These individuals may include some or all of our directors and executive officers. Individuals who are our affiliates will be permitted to sell their shares of our Common Stock only pursuant to an effective registration statement under the Securities Act, or an exemption from the registration requirements of the Securities Act, such as those afforded by Section 4(1) of the Securities Act or Rule 144 thereunder.

Trading Prior to the Distribution Date

We anticipate that trading in the Common Stock will begin on a “when-issued” basis as early as two trading days prior to the Record Date for the Distribution and continue up to and including the Distribution Date. “When-issued” trading in the context of a spin-off refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. If you own shares of Barnes & Noble common stock at the close of business on the Record Date, you will be entitled to receive shares of the Common Stock in the Distribution. You may trade this entitlement to receive shares of our Common Stock, without the shares of Barnes & Noble common stock you own, on the “when-issued” market. We expect “when-issued” trades of the Common Stock to settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, we expect that “when-issued” trading of the Common Stock will end and “regular-way” trading will begin.

We also anticipate that, as early as two trading days prior to the Record Date and continuing up to and including the Distribution Date, there will be two markets in Barnes & Noble common stock: a “regular-way” market and an “ex-distribution” market. Shares of Barnes & Noble common stock that trade on the regular-way market will trade with an entitlement to receive shares of our Common Stock in the Distribution. Shares that trade on the ex-distribution market will trade without an entitlement to receive shares of the Common Stock in the Distribution. Therefore, if you sell shares of Barnes & Noble common stock in the regular-way market up to and including the Distribution Date, you will be selling your right to receive shares of our Common Stock in the Distribution. However, if you own shares of Barnes & Noble common stock at the close of business on the Record Date and sell those shares on the ex-distribution market up to and including the Distribution Date, you will still receive the shares of our Common Stock that you would otherwise be entitled to receive in the Distribution.

Following the Distribution Date, we expect shares of our Common Stock to be listed on the NYSE under the trading symbol “BNED.” If “when-issued” trading occurs, the listing for our Common Stock is expected to be under a trading symbol different from our regular-way trading symbol. We will announce our “when-issued” trading symbol when and if it becomes available. If the Spin-Off does not occur, all “when-issued” trading will be null and void.

Conditions to the Spin-Off

We expect that the separation will be effective on the Distribution Date, provided that the following conditions shall have been satisfied or waived by Barnes & Noble:

•

the Barnes & Noble board of directors shall have authorized and approved the Distribution and not withdrawn such authorization and approval, and shall have declared the dividend of our Common Stock to Barnes & Noble stockholders;

•

the Separation Agreement and the ancillary agreements contemplated by the Separation Agreement shall have been executed by each party to those agreements;

•

we shall have entered into a credit facility and any other financing we determine to be necessary or advisable, in each case, on terms and conditions acceptable to us;

•

Barnes & Noble shall have obtained an amendment to or replacement of the B&N Credit Facility permitting the Spin-Off;

•

the SEC shall have declared effective our Registration Statement on Form S-1, of which this Prospectus is a part, under the Securities Act, and no stop order suspending the effectiveness of our Registration Statement shall be in effect and no proceedings for that purpose shall be pending before or threatened by the SEC;

•

our Common Stock shall have been accepted for listing on the NYSE or another national securities exchange approved by Barnes & Noble, subject to official notice of issuance;

•

Barnes & Noble shall have received the written opinions of Cravath, Swaine & Moore LLP and KPMG LLP, which shall remain in full force and effect, that, subject to the accuracy of and compliance with certain representations, warranties and covenants, the Distribution will qualify for non-recognition of gain and loss to Barnes & Noble and its stockholders;

•

no order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing consummation of the Distribution shall be in effect, and no other event outside the control of Barnes & Noble shall have occurred or failed to occur that prevents the consummation of the Distribution;

•

prior to the Distribution Date, this Prospectus shall have been mailed to the holders of Barnes & Noble common stock;

•

Barnes & Noble shall have duly elected the individuals to be listed as members of our post-Distribution board of directors in this Prospectus, and such individuals shall be the members of our board of directors, which we refer to as our “Board,” immediately after the Distribution; provided that our current directors shall appoint at least one independent director to serve on our Board and each of our Audit, Compensation and Corporate Governance and Nominating Committees prior to the date on which “when-issued” trading of our Common Stock commences;

•

Barnes & Noble shall have received a certificate signed by our Chief Financial Officer, dated as of the Distribution Date, certifying the satisfaction of certain conditions.

Barnes & Noble shall, in its sole and absolute discretion, determine the Record Date, the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition and notwithstanding anything to the contrary set forth in this Prospectus, Barnes & Noble may at any time and from time to time until the Distribution decide to abandon the Distribution including by accelerating or delaying the

timing of the consummation of all or part of the Distribution or modifying or changing the terms of the Distribution if, at any time, the Barnes & Noble board of directors determines, in its sole and absolute discretion, that the Distribution is not in the best interests of Barnes & Noble or its stockholders or is otherwise not advisable.

Reasons for Furnishing this Prospectus

We are furnishing this Prospectus solely to provide information to Barnes & Noble’s stockholders who will receive shares of our Common Stock in the Distribution. You should not construe this Prospectus as an inducement or encouragement to buy, hold or sell any of our securities or any securities of Barnes & Noble. We believe that the information contained in this Prospectus is accurate as of the date set forth on the cover. Changes to the information contained in this Prospectus may occur after that date, and neither we nor Barnes & Noble undertakes any obligation to update the information except in the normal course of our and Barnes & Noble’s public disclosure obligations and practices and except as required by applicable law.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SPIN-OFF

Consequences to U.S. Holders of Barnes & Noble Common Stock

The following is a summary of the material U.S. federal income tax consequences to holders of Barnes & Noble common stock in connection with the Distribution. This summary is based on the Code, the Treasury Regulations promulgated under the Code and judicial and administrative interpretations of those laws, in each case as in effect and available as of the date of this Prospectus and all of which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.

This summary is limited to holders of Barnes & Noble common stock that are U.S. Holders, as defined immediately below, that hold their Barnes & Noble common stock as a capital asset. A “U.S. Holder” is a beneficial owner of Barnes & Noble common stock that is, for U.S. federal income tax purposes:

•

an individual who is a citizen or a resident of the United States;

•

a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia;

•

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust if a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or, in the case of a trust that was treated as a domestic trust under law in effect before 1997, a valid election is in place under applicable Treasury Regulations.

This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as:

•

dealers or traders in securities or currencies;

•

tax-exempt entities;

•

banks, financial institutions or insurance companies;

•

real estate investment trusts, regulated investment companies or grantor trusts;

•

persons who acquired Barnes & Noble common stock pursuant to the exercise of employee stock options or otherwise as compensation;

•

stockholders who own, or are deemed to own, 10% or more, by voting power or value, of Barnes & Noble equity;

•

stockholders owning Barnes & Noble common stock as part of a position in a straddle or as part of a hedging, conversion or other risk reduction transaction for U.S. federal income tax purposes;

•

certain former citizens or long-term residents of the United States;

•

stockholders who are subject to the alternative minimum tax; or

•

persons who own Barnes & Noble common stock through partnerships or other pass-through entities.

This summary does not address any U.S. state or local or foreign tax consequences or any estate, gift or other non-income tax consequences.

If a partnership, or any other entity treated as a partnership for U.S. federal income tax purposes, holds Barnes & Noble common stock, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to its tax consequences.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND FOREIGN TAX CONSEQUENCES OF THE DISTRIBUTION.

General

Subject to the qualifications and limitations set forth herein (including the discussion below relating to the receipt of cash in lieu of fractional shares), Cravath, Swaine & Moore LLP, counsel to Barnes & Noble, and KPMG LLP, tax advisor to the Company, are of the opinion that for U.S. federal income tax purposes:

•

no gain or loss will be recognized by, or be includible in the income of, a U.S. Holder as a result of the Distribution, except with respect to any cash received in lieu of fractional shares;

•

the aggregate tax basis of the Barnes & Noble common stock and Common Stock held by each U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of the Barnes & Noble common stock held by the U.S. Holder immediately before the Distribution, allocated between the Barnes & Noble common stock and our Common Stock in proportion to their relative fair market values on the date of the Distribution (subject to reduction upon the deemed sale of any fractional shares); and

•

the holding period of our Common Stock received by each U.S. Holder will include the holding period of their Barnes & Noble common stock, provided that such Barnes & Noble common stock is held as a capital asset on the date of the Distribution.

U.S. Holders that have acquired different blocks of Barnes & Noble common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted tax basis among, and the holding period of, shares of our Common Stock distributed with respect to such blocks of Barnes & Noble common stock.

If a U.S. Holder receives cash in lieu of a fractional share of Common Stock as part of the Distribution, the U.S. Holder will be treated as though it first received a distribution of the fractional share in the Distribution and then sold it for the amount of cash actually received. Provided the fractional share is considered to be held as a capital asset on the date of the Distribution, the U.S. Holder will generally recognize capital gain or loss measured by the difference between the cash received for such fractional share and the U.S. Holder’s tax basis in that fractional share, as determined above. Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the Barnes & Noble common stock is more than one year on the date of the Distribution.

The opinions do not address any U.S. state or local or foreign tax consequences of the Spin-Off. The opinions assume that the Spin-Off will be completed according to the terms of the Separation Agreement and rely on the facts as stated in the Separation Agreement, the Tax Matters Agreement, the other ancillary agreements, this Prospectus and a number of other documents. In addition, the opinions are based on certain representations as to factual matters from, and certain covenants by, Barnes & Noble and us. The opinions cannot be relied on if any of the assumptions, representations or covenants are incorrect, incomplete or inaccurate or are violated in any material respect.

The opinions are not binding on the IRS or the courts, and we cannot assure you that the IRS or a court will not take a contrary position.

If the Distribution were determined not to qualify for non-recognition of gain and loss, the above consequences would not apply and U.S. Holders could be subject to tax. In this case, each U.S. Holder who receives our Common Stock in the Distribution would generally be treated as receiving a distribution in an amount equal to the fair market value of our Common Stock received, which would generally result in:

•

a taxable dividend to the U.S. Holder to the extent of that U.S. Holder’s pro rata share of Barnes & Noble’s current and accumulated earnings and profits;

•

a reduction in the U.S. Holder’s basis (but not below zero) in Barnes & Noble common stock to the extent the amount received exceeds the stockholder’s share of Barnes & Noble’s earnings and profits; and

•

a taxable gain from the exchange of Barnes & Noble common stock to the extent the amount received exceeds the sum of the U.S. Holder’s share of Barnes & Noble’s earnings and profits and the U.S. Holder’s basis in its Barnes & Noble common stock.

Backup Withholding and Information Statement

Payments of cash in lieu of a fractional share of our Common Stock may, under certain circumstances, be subject to “backup withholding,” unless a U.S. Holder provides proof of an applicable exemption or a correct taxpayer identification number, and otherwise complies with the requirements of the backup withholding rules. Corporations will generally be exempt from backup withholding, but may be required to provide a certification to establish their entitlement to the exemption. Backup withholding is not an additional tax, and it may be refunded or credited against a U.S. Holder’s U.S. federal income tax liability if the required information is timely supplied to the IRS.

Treasury Regulations require each Barnes & Noble stockholder that, immediately before the Distribution, owned 5% or more (by vote or value) of the total outstanding stock of Barnes & Noble to attach to such stockholder’s U.S. federal income tax return for the year in which the Distribution occurs a statement setting forth certain information related to the Distribution.

Consequences to Barnes & Noble

The following is a summary of the material U.S. federal income tax consequences to Barnes & Noble in connection with the Spin-Off that may be relevant to holders of Barnes & Noble common stock.

Subject to the qualifications and limitations set forth herein, Cravath, Swaine & Moore LLP, counsel to Barnes & Noble, and KPMG LLP, tax advisor to the Company, are of the opinion that the Distribution will qualify for non-recognition of gain and loss under Section 355 of the Code for U.S. federal income tax purposes. The opinions are subject to the same qualifications and limitations as are set forth above in relation to the opinion of counsel regarding consequences to U.S. Holders.

If the Distribution were determined not to qualify for non-recognition of gain and loss under Section 355 of the Code, then Barnes & Noble would recognize gain in an amount up to the fair market value of our stock held by it immediately before the Distribution.

Indemnification Obligation

If, due to any of our covenants in the Tax Matters Agreement being breached, it were determined that the Distribution did not qualify for non-recognition of gain and loss under Section 355 of the Code we could be required to indemnify Barnes & Noble for taxes resulting from the recognition of gain described above and related expenses. In addition, current tax law generally creates a presumption that the Distribution would be taxable to Barnes & Noble, but not to Barnes & Noble’s stockholders, if we or our stockholders were to engage in transactions that result in a 50% or greater change by vote or value in the ownership of our stock during the four-year period beginning on the date that begins two years before the date of the Distribution, unless it were established that such transactions and the Distribution were not part of a plan or series of related transactions giving effect to such a change in ownership. If the Distribution were taxable to Barnes & Noble due to such a 50% or greater change in ownership of our stock, Barnes & Noble would recognize gain in an amount up to the fair market value of our Common Stock held by it immediately before the Distribution and we generally would be required to indemnify Barnes & Noble for the tax on such gain and related expenses.

USE OF PROCEEDS

We will not receive any proceeds from the Distribution of the Common Stock in the Spin-Off.

DETERMINATION OF OFFERING PRICE

No consideration will be paid for the shares of Common Stock distributed in the Spin-Off.

DIVIDEND POLICY

We do not intend, following the Spin-Off, to pay cash dividends on our Common Stock in the foreseeable future. We expect to retain future earnings, if any, for reinvestment in our business. We will not be permitted to pay dividends on our Common Stock, unless all dividends on any Mirror Preferred Stock that may be issued have been paid in full. Also, any credit agreements which we may enter into may restrict our ability to pay dividends. The payment of dividends in the future will be subject to the discretion of our Board and will depend, among other things, on our financial condition, results of operations, cash requirements, future prospects and any other factors our Board deems relevant.

CAPITALIZATION

The following table sets forth our cash and capitalization as of May 2, 2015 on an actual basis and on a pro forma basis to give effect to the cash settlement of certain related party receivables in connection with the Spin-Off. The following table should be read in conjunction with “Selected Historical Financial Data”, “Unaudited Pro Forma Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated financial statements and the notes thereto included elsewhere in this Prospectus.


	As of May 2, 2015
(In thousands)	As Reported		Pro Forma
Cash and cash equivalents (a)	$	59,714	$	95,105

Long-term debt	$	—	$	—
Preferred membership interests		—		—
Parent company investment (b)		790,128		790,128

Total Capitalization	$	790,128	$	790,128

(a)	Represents the cash settlement with Barnes & Noble of related party receivable net against the upfront fees paid for the new revolving credit facility.

(b)	Represents the elimination of Barnes & Noble net investment in us and the distribution of our Common Stock to Barnes & Noble shareholders.

In connection with the Spin-Off, Series J Holders may elect to exchange all or a portion of their shares of Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock. Holders of the Mirror Preferred Stock will be entitled to receive cumulative cash dividends, payable quarterly in arrears, that will accrue daily at a per annum per share dividend rate of 7.75% of the per share liquidation preference of the Mirror Preferred Stock (the “Liquidation Preference”). The exact amount of the Liquidation Preference will not be calculable until at least five consecutive full trading days have elapsed following the Spin-Off, commencing with the effective date of the Spin-Off.

As of June 26, 2015, after giving effect to the conversion of the Converted Preferred Shares, and assuming the remaining Series J Holders elect to exchange all of their shares of Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock, we would have had 100,005 shares of Mirror Preferred Stock outstanding after the Spin-Off, which would be convertible into at least 3,717,831 shares of our Common Stock, representing approximately 8.4% of our estimated outstanding Common Stock following the Spin-Off. For more information, see “Description of Our Capital Stock” and “Risk Factors—We may have shares of preferred stock that will be convertible into Common Stock.”

SELECTED HISTORICAL FINANCIAL DATA

The following historical financial data should be read in conjunction with “Risk Factors”, “Capitalization” and “Management’s Discussions and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this Prospectus. Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. Our statement of operations data for the 52 weeks ended May 2, 2015 (Fiscal 2015), 53 weeks ended May 3, 2014 (Fiscal 2014) and 52 weeks ended April 27, 2013 (Fiscal 2013), and the balance sheet data as of May 2, 2015 and May 3, 2014 are derived from our audited consolidated financial statements which are included elsewhere in this Prospectus. Our balance sheet data as of April 27, 2013 is derived from our audited consolidated financial statements, which are not included elsewhere in this Prospectus. Our statement of operations data for the 52 weeks ended April 28, 2012 (Fiscal 2012) and 52 weeks ended April 30, 2011 (Fiscal 2011) and the balance sheet data as of April 28, 2012 and April 30, 2011 are derived from our consolidated financial statements not included elsewhere in this Prospectus. Historical results are not necessarily indicative of the results to be expected for any future periods.


	Fiscal Year
(In thousands of dollars except for share amounts)	2015			2014			2013			2012			2011
STATEMENT OF OPERATIONS DATA:
Sales:
Product sales and other (a)	$	1,544,975		$	1,536,180		$	1,631,454		$	1,647,014		$	1,744,062
Rental income (b)		228,023			211,742			131,793			96,161			34,097

Total sales		1,772,998			1,747,922			1,763,247			1,743,175			1,778,159

Cost of sales and occupancy:
Product and other cost of sales and occupancy		1,198,300			1,180,727			1,270,381			1,284,691			1,374,731
Rental cost of sales and occupancy		131,125			130,430			88,250			64,046			24,388

Total cost of sales and occupancy		1,329,425			1,311,157			1,358,631			1,348,737			1,399,119

Gross profit		443,573			436,765			404,616			394,438			379,040

Selling and administrative expenses		359,504			330,426			302,902			283,215			287,851
Depreciation and amortization		50,509			48,014			46,849			45,343			43,148

Operating profit		33,560			58,325			54,865			65,880			48,041
Interest expense, net		210			385			4,871			5,684			10,576

Earnings before taxes		33,350			57,940			49,994			60,196			37,465
Income taxes		14,218			22,834			19,820			23,771			14,799

Net earnings	$	19,132		$	35,106		$	30,174		$	36,425		$	22,666

Income per common share
Basic (c)	$	0.33		$	0.88		$	0.78		$	0.99		$	0.63
Diluted (d)	$	0.33		$	0.88		$	0.78		$	0.99		$	0.63
Weighted average common shares (thousands)
Basic (c)		38,452			37,270			36,812			36,237			35,764
Diluted (d)		38,452			37,270			36,812			36,237			35,764
OTHER OPERATING DATA:
EBITDA (e)	$	84,069		$	106,339		$	101,714		$	111,223		$	91,189
Comparable store sales increase (decrease) (f)		0.1	%		(2.7	)%		(1.2	)%		(0.3	)%		(0.8	)%
Number of stores at period end		724			700			686			647			636
Capital expenditures	$	48,452		$	38,253		$	38,760		$	40,479		$	35,004
BALANCE SHEET DATA (at period end):
Total assets	$	1,129,924		$	1,143,760		$	1,026,460		$	974,858		$	1,185,055
Total liabilities		339,796			335,825			315,938			302,323			280,861
Long-term debt (g)		—			—			—			—			—
Preferred membership interests		—			383,397			381,627			—			—
Parent company equity		790,128			424,538			328,895			672,535			904,194

(a)	Product sales and other revenue include sales of new and used physical and digital textbooks, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items, graduation products and other.

(b)	Rental income includes the rental of physical and digital textbooks.

(c)

Basic earnings per share and weighted-average basic shares outstanding are based on the number of shares of Barnes & Noble common stock outstanding on May 2, 2015, adjusted for an assumed distribution ratio of 0.632 share of our Common Stock for every one share of Barnes & Noble common stock held on the record date for the Spin-Off.

(d)

Diluted earnings per share and weighted-average diluted shares outstanding reflect potential common shares from Barnes & Noble equity plans in which our employees participate based on the distribution ratio. While the actual future impact will depend on various factors, including employees who may change employment from one company to another, we believe the estimate yields a reasonable approximation of the future dilutive impact of our equity plans.

(e)

To supplement our consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”) included in this Prospectus, we use the non-GAAP financial measure of EBITDA. We define EBITDA as net earnings plus (1) depreciation and amortization; (2) interest expense and (3) income taxes. We believe that EBITDA is a useful performance measure, and it is used by us to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business than measures under GAAP can provide alone. Our Board and management also use EBITDA as one of the primary methods for planning and forecasting overall expected performance and for evaluating on a quarterly and annual basis actual results against such expectations. We review this non-GAAP measure internally to evaluate our performance and manage our operations. We believe that the inclusion of EBITDA results provide investors useful and important information regarding our operating results.

EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results reported under GAAP. The limitations of EBITDA include: (i) it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, our working capital needs; (iii) it does not reflect income tax payments we may be required to make; and (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any requirements for such replacements.

To properly and prudently evaluate our business, we encourage you to review our consolidated financial statements included elsewhere in this Prospectus and the reconciliation from EBITDA to net earnings, the most directly comparable financial measure presented in accordance with GAAP, set forth in the table below. All of the items included in the reconciliation from EBITDA to net earnings are either (i) non-cash items or (ii) items that management does not consider in assessing our on-going operating performance.


	Fiscal Year
(In thousands of dollars)	2015		2014		2013		2012		2011
EBITDA	$	84,069	$	106,339	$	101,714	$	111,223	$	91,189
Subtract:
Depreciation and amortization		50,509		48,014		46,849		45,343		43,148
Interest expense, net (h)		210		385		4,871		5,684		10,576
Income taxes		14,218		22,834		19,820		23,771		14,799

Net earnings	$	19,132	$	35,106	$	30,174	$	36,425	$	22,666

(f)

rental fees received, to provide a more representative comparable store sales figure. Beginning with the 26 weeks ended November 1, 2014, as a result of the significant expansion of the textbook rental business as compared to prior periods, our comparable store sales are determined based upon the actual revenue received from textbook rentals and are no longer adjusted to reflect the equivalent textbook retail selling price.

(g)

We are party to an amended and restated credit facility with Barnes & Noble, as the Lead Borrower, and Bank of America, N.A., as administrative agent, collateral agent and swing line lender, and other lenders, dated as of April 29, 2011 (as amended and modified to date, the “B&N Credit Facility”). The B&N Credit Facility provides for up to $1.0 billion in aggregate commitments under a five-year asset-backed revolving credit facility expiring on April 29, 2016. The B&N Credit Facility is secured by eligible inventory and accounts receivable with the ability to include eligible real estate and related assets. We are currently a borrower and co-guarantor of all amounts owing under the B&N Credit Facility. Prior to or at the time of the Spin-Off, we will be released from all obligations, including as a borrower and a co-guarantor, under the B&N Credit Facility. In connection with the Spin-Off, we expect to enter into a new credit facility (the “New Credit Facility”) to fund working capital and other liquidity needs. The New Credit Facility is expected to provide (subject to availability under a borrowing base) for aggregate maximum commitments of approximately $400.0 million. We expect the New Credit Facility will be undrawn at the time of the Spin-Off.

(h)	All outstanding debt under the B&N Credit Facility was recorded on Barnes & Noble’s balance sheet. Currently, we do not believe that our cash flow is needed to service any Barnes & Noble debt now or in the foreseeable future.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following tables present our unaudited pro forma consolidated financial statements and reflect adjustments to our historical consolidated financial statements to give effect to our separation from Barnes & Noble, the distribution of our shares of Common Stock and related financing transactions. The unaudited pro forma consolidated balance sheet as of May 2, 2015 has been prepared as though the separation, distribution and related financing transactions occurred on May 2, 2015. The unaudited pro forma consolidated statement of operations for the year ended May 2, 2015 has been prepared as though the separation, distribution and related financing transactions occurred on May 4, 2014. The pro forma adjustments are based upon available information and assumptions that we believe are reasonable.

The pro forma adjustments are based upon available information, preliminary estimates and certain assumptions that we believe are reasonable based on information currently available, and are described in the accompanying notes. The unaudited pro forma consolidated financial statements are for informational purposes only and do not purport to represent or be indicative of actual results that would have been achieved had the transactions described above been consummated on the dates indicated and do not purport to indicate or project results of operations for any future period. The pro forma adjustments are based upon available information and assumptions that management believes are reasonable, that reflect the expected impacts of events directly attributable to the Distribution and related transaction agreements and that are factually supportable and, for purposes of the statement of operations, that are expected to have a continuing impact on us. However, such adjustments are subject to change based on the finalization of the terms of the Distribution and related agreements and such changes could be material.

The unaudited pro forma consolidated financial statements should be read in conjunction with “Prospectus Summary—Summary Historical Financial and Other Data,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this Prospectus. All dollar amounts are presented in thousands except per share amounts.

Our historical consolidated financial statements included elsewhere in this Form S-1 Registration Statement include intercompany charges for corporate shared services. After the Distribution, certain services will continue to be provided by Barnes & Noble under transition services agreements. These agreements are more fully described under “Certain Relationships and Related Party Transactions” included elsewhere in this Registration Statement on Form S-1.

The operating expenses reported in our historical consolidated statements of operations include allocations of certain Barnes & Noble costs. These costs include allocation of Barnes & Noble corporate costs, shared services and other operating and administration costs that benefit us. As a stand-alone public company, we expect our recurring costs to approximate the expenses historically allocated to us from Barnes & Noble.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS


	Fiscal 2015
	As Reported		Pro Forma Adjustments				Pro Forma
(In thousands, except per share data)
Sales	$	1,772,998	$	—			$	1,772,998
Cost of sales and occupancy		1,329,425		—				1,329,425

Gross profit		443,573		—				443,573

Selling and administrative expenses		359,504		(2,189	)	(a)		357,315
Depreciation and amortization		50,509		—				50,509

Operating income		33,560		2,189				35,749
Interest expense, net		210		360		(b)		570

Income before income taxes (benefit)		33,350		1,829				35,179
Income taxes (benefit)		14,218		729		(c)		14,947

Net income	$	19,132	$	1,100			$	20,232

Earnings Per Share:
Basic	$	0.33					$	0.36	(d)
Diluted	$	0.33					$	0.36	(e)
Weighted-Average Shares Outstanding
Basic		38,452						38,452	(d)
Diluted		38,493						38,493	(e)

PRO FORMA CONSOLIDATED BALANCE SHEET

(Unaudited)


	As of May 2, 2015
(In thousands)	As Reported		Pro Forma Adjustments				Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	59,714	$	35,391		(f)(g)	$	95,105
Receivables, net		76,551		(38,241	)			38,310
Merchandise inventories, net		297,424		—				297,424
Textbook rental inventories		47,550		—				47,550
Prepaid expenses and other current assets		4,625		570		(f)		5,195
Short-term deferred taxes		24,358		—				24,137

Total current assets	$	510,222		570			$	507,721

Property and equipment:
Buildings and leasehold improvements		149,065		—				149,065
Fixtures and equipment		335,403		—				335,403

		484,468		—				484,468

Less accumulated depreciation and amortization		376,911		—				376,911

Net property and equipment		107,557		—				107,557

Goodwill		274,070		—				274,070
Intangible assets, net		198,190		—				198,190
Other noncurrent assets		39,885		1,710		(f)		42,165

Total assets	$	1,129,924	$	2,280			$	1,129,924

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	170,101	$	—			$	170,101
Accrued liabilities		97,575		—				97,575

Total current liabilities		267,676		—				267,676

Deferred income taxes		66,091		—				66,091
Other long-term liabilities		6,029		—				6,029
Parent company investment		790,128		2,280				790,128
Commitments and contingencies		—		—				—

Total liabilities and shareholders’ equity	$	1,129,924	$	2,280			$	1,129,924

See accompanying Notes to the Unaudited Pro Forma Consolidated Financial Statements

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(a)

The adjustment to selling and administration expenses removes $2.4 million of expenses incurred during the year ended May 2, 2015 that are directly related to the separation. These costs were primarily related to tax, accounting and other professional fees. As these costs represent material, nonrecurring costs directly related to the separation, a pro forma adjustment was performed to reverse the costs.

(b)

(c)

The provision for income taxes related to the pro forma adjustments have been estimated based on Barnes & Noble’s historic effective tax rate for the period. The effective tax rate of Barnes & Noble Education could be different (either higher or lower) depending on activities subsequent to the Distribution.

(d)

Pro forma basic earnings per share and pro forma weighted-average basic shares outstanding are based on the number of Barnes & Noble, Inc. common shares outstanding on May 31, 2015, adjusted for an assumed Distribution Ratio of 0.632 shares of our Common Stock for every share of Barnes & Noble, Inc. common stock held on the record date.

(e)

Pro forma diluted earnings per share and pro forma weighted-average diluted shares outstanding reflect potential common shares from Barnes & Noble, Inc. equity plans in which our employees participate based on the Distribution Ratio. While the actual future impact will depend on various factors, including employees who may change employment from one company to another, we believe the estimate yields a reasonable approximation of the future dilutive impact of our equity plans after the Distribution.

(f)

We expect to enter into a five year revolving credit facility for $400.0 million and incur debt issuance costs of $2.9 million which will be amortized over the life of the facility. The current portion of the debt issuance costs of $0.6 million were recorded in prepaid expenses and other current assets. The long term portion of the debt issuance costs of $2.3 million were recorded in other non-current assets.

(g)

Represents the cash settlement of $38.2 million of related party receivables due from Barnes & Noble.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. As used in this section, “Fiscal 2015” represents the 52 weeks ended May 2, 2015, “Fiscal 2014” represents the 53 weeks ended May 3, 2014 and “Fiscal 2013” represents the 52 weeks ended April 27, 2013.

Overview

On February 26, 2015, Barnes & Noble announced plans for the complete legal and structural separation of the Company from Barnes & Noble (the “Spin-Off”). Barnes & Noble will distribute all of its equity interest in us, consisting of all of the outstanding shares of our Common Stock, to Barnes & Noble’s stockholders on a pro rata basis. Following the Spin-Off, Barnes & Noble will not own any equity interest in us, and we will operate independently from Barnes & Noble.

Our consolidated financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Barnes & Noble. Our consolidated financial statements reflect our financial position, results of operations and cash flows as we were historically managed, in conformity with accounting principles generally accepted in the United States (“GAAP”). Our consolidated financial statements include certain assets and liabilities that have historically been held at the Barnes & Noble corporate level but are specifically identifiable or otherwise attributable to us.

All intercompany transactions between us and Barnes & Noble have been included in our financial statements and are considered to be effectively settled for cash in our consolidated financial statements at the time the Spin-Off becomes effective. The total net effect of the settlement of these intercompany transactions is reflected in our consolidated statements of cash flow as a financing activity and in our consolidated balance sheets as “Parent company investment.”

The historical costs and expenses reflected in our financial statements include an allocation for certain corporate shared service functions historically provided by Barnes & Noble, including, but not limited to, executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated sales, headcount, tangible assets or other measures considered to be a reasonable reflection of the historical utilization levels of these services.

Our management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general corporate expenses from Barnes & Noble, are reasonable. Nevertheless, our financial statements may not include all of the actual expenses that would have been incurred had we operated as a stand-alone company during the periods presented and may not reflect our consolidated results of operations, financial position and cash flows had we operated as a stand-alone company during the periods presented. Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Following the Spin-Off, we will perform these functions using our own resources or contracted services. Upon execution of a Transition Services Agreement with Barnes & Noble, we expect some of these functions will continue to be provided by Barnes & Noble.

educational mission of the institution, enlivening campus culture and delivering an important revenue stream to partner schools. We typically operate our stores under multi-year management service agreements granting us the right to operate the official school bookstore on campus. In turn, we pay the school a percentage of store sales and, in some cases, a minimum fixed guarantee.

As of May 2, 2015, we operated 724 stores nationwide, which reach 24% of the total United States college and university student enrolled population. Our stores are operated under 453 contracts, some of which cover multiple store locations, and 154 of our college and university affiliated bookstores are co-branded with the Barnes & Noble name. We build relationships and derive sales by actively engaging and marketing to over 5 million students and their faculty on the campuses we serve and offer a full assortment of items in our campus stores, including course-related materials, which include new and used print textbooks and digital textbooks, all of which are available for sale or rent, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. We are a multi-channel marketer, and our largest growth area is sales through the school-branded e-commerce sites we operate for each store, allowing students and faculty to purchase textbooks, course materials and other products online.

Trends and Other Factors Affecting Our Business

Sales trends are primarily impacted by new store openings, increasing the students and faculty served, as well as changes in comparable store sales. We are awarded additional contracts for stores as colleges and universities decide to outsource their bookstore, and we also obtain new contracts for stores that were previously operated by others. We close stores at the end of their contract terms due to low profitability or because the new contract has been awarded to a competitor. As we expanded our textbook rental offerings, students have been shifting away from higher priced textbook purchases to lower priced rental options, which has resulted in lower textbook sales and increasing rental income. After several years of comparable store sales declines, primarily on lower textbook unit volume, during the 52 weeks ended May 2, 2015, our comparable store sales trends have improved for both textbook and general merchandise. Over the last three years, we have consistently opened new stores increasing our total number of stores open from 647 at April 29, 2012 to 724 as of May 2, 2015.

Occupancy costs, which are primarily the payments we make to the colleges and universities to operate their official bookstores, have increased as a percentage of sales during all the reported periods, driven by increased competition for renewals and new store contracts.

Selling and administrative expenses have increased primarily as a result of our continuing investments in Yuzu ^TM , our digital education platform and increased infrastructure costs to support growth through all reported periods.

Elements of Results of Operations

Our sales are primarily derived from the sale of course materials (which include new and used textbooks and digital textbooks), emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. Our rental income is primarily derived from the rental of physical and digital textbooks.

Our cost of sales and occupancy primarily includes costs such as merchandise costs, textbook rental amortization and management service agreement costs related to our college and university contracts and by other facility related expenses.

Our selling and administrative expenses consist primarily of store payroll and store operating expenses. Selling and administrative expenses also include general office expenses, such as executive oversight, merchandising, field support, finance, human resources, benefits, training, legal and information technology, as well as our investments in Yuzu ^TM .

Results of Operations


Financial Period (in thousands of dollars)	Fiscal 2015			Fiscal 2014			Fiscal 2013
Sales:
Product sales and other revenue	$	1,544,975		$	1,536,180		$	1,631,454
Rental income		228,023			211,742			131,793

Total sales	$	1,772,998		$	1,747,922		$	1,763,247

Net Income	$	19,132		$	35,106		$	30,174
EBITDA	$	84,069		$	106,339		$	101,714
Comparable store sales increase (decrease) (a)		0.1	%		(2.7	)%		(1.2	)%
Stores opened		48			30			49
Stores closed		24			16			10
Number of stores open at end of period		724			700			686

(a)

Comparable store sales increase (decrease) is calculated on a 52-week basis, including sales from stores that have been open for at least 15 months and does not include sales from closed stores for all periods presented. In Fiscal 2012 through Fiscal 2014, as we developed our textbook rental business, comparable store sales reflected the retail selling price of a new or used textbook when rented, rather than solely the rental fees received, to provide a more representative comparable store sales figure. Beginning with the 26 weeks ended November 1, 2014, as a result of the significant expansion of the textbook rental business as compared to prior periods, our comparable store sales are determined based upon the actual revenue received from textbook rentals, and are no longer adjusted to reflect the equivalent textbook retail selling price.

The following table sets forth, for the periods indicated, the percentage relationship that certain items bear to total sales of the Company:


Financial Period	Fiscal 2015			Fiscal 2014			Fiscal 2013
Sales:
Product sales and other revenue		87.1	%		87.9	%		92.5	%
Rental income		12.9			12.1			7.5

Total sales		100.0			100.0			100.0

Cost of sales and occupancy:
Product and other cost of sales and occupancy (a)		77.6			76.9			77.9
Rental cost of sales and occupancy (a)		57.5			61.6			67.0

Total cost of sales and occupancy		75.0			75.0			77.1

Gross margin		25.0			25.0			22.9
Selling and administrative expenses		20.3			18.9			17.2
Depreciation and amortization		2.8			2.7			2.7

Operating income		1.9			3.3			3.1
Interest expense, net		0.0			0.0			0.3

Income before taxes		1.9			3.3			2.8
Income taxes		0.8			1.3			1.1

Net income		1.1	%		2.0	%		1.7	%

(a)	Represents the percentage these costs bear to the related sales, instead of total sales.

52 weeks ended May 2, 2015 compared with the 53 weeks ended May 3, 2014

Sales

The following table summarizes our sales for the 52 weeks ended May 2, 2015 and the 53 weeks ended May 3, 2014:


	52 weeks ended		53 weeks ended
Dollars in thousands	May 2, 2015		May 3, 2014
Product sales and other	$	1,544,975	$	1,536,180
Rental income		228,023		211,742

Total Sales	$	1,772,998	$	1,747,922

Our sales increased $25.1 million, or 1.4%, to $1.773 billion during the 52 weeks ended May 2, 2015 from $1.748 billion during the 53 weeks ended May 3, 2014. The inclusion of the 53 ^rd week in the prior year contributed $14.6 million of additional sales in Fiscal 2014. Excluding the 53 ^rd week, sales increased $39.7 million, or 2.3%, for the year. New store openings over the past year increased sales by $71.0 million, partially offset by closed stores, which decreased sales by $22.9 million.

Comparable store sales increased 0.1% for the comparable sales period with a decrease in comparable store sales dollars by $13.9 million, impacted by the 53 ^rd week. General merchandise sales increased $22.2 million, or 4.7%, primarily due to strong emblematic apparel sales, partially offset by $17.9 million in decreased textbook sales as students continued to shift to lower priced rentals. General merchandise sales have continued to increase as our product assortments continue to emphasize and reflect the changing consumer trends and we evolve our presentation concepts and merchandising of product in stores and online.

We added 48 new stores and closed 24 stores during the 52 weeks ended May 2, 2015, ending the period with a total of 724 stores.

Cost of Sales and Occupancy


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		% of Related Sales			May 3, 2014		% of Related Sales
Product and other cost of sales and occupancy	$	1,198,300		77.6	%	$	1,180,727		76.9	%
Rental cost of sales and occupancy		131,125		57.5	%		130,430		61.6	%

Total Cost of Sales and Occupancy	$	1,329,425		75.0	%	$	1,311,157		75.0	%

Our cost of sales and occupancy as a percentage of sales remained flat at 75.0% during the 52 weeks ended May 2, 2015 compared to the 53 weeks ended May 3, 2014. Higher occupancy costs resulting from contract renewals increased cost of sales and occupancy as a percentage of sales by 60 basis points and comparisons to a prior year’s favorable LIFO adjustment of $7.7 million, increased cost of sales and occupancy as a percentage of sales by 45 basis points.

These variances were offset by a favorable sales mix of higher margin textbook rentals and general merchandise, which decreased costs of goods sold and occupancy as a percentage of sales by 65 basis points and margin improvements, primarily on textbook rentals, which decreased costs of goods sold and occupancy as a percentage of sales by 40 basis points.

Product and other cost of sales and occupancy increased by 70 basis points, primarily driven by the LIFO adjustment of 50 basis points and increased occupancy of 15 basis points. Rental cost of sales and occupancy decreased 410 basis points driven by higher rental margin of 740 basis points partially offset by increased occupancy of 330 basis points.

Gross Margin


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		% of Sales			May 3, 2014		% of Sales
Total Gross Margin	$	443,573		25.0	%	$	436,765		25.0	%

Our gross margin increased $6.8 million, or 1.6%, to $443.6 million during the 52 weeks ended May 2, 2015 from $436.8 million during the 53 weeks ended May 3, 2014. This increase was due to the matters discussed above.

Selling and Administrative Expenses


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		% of Sales			May 3, 2014		% of Sales
Total Selling and Administrative Expenses	$	359,504		20.3	%	$	330,426		18.9	%

Selling and administrative expenses increased $29.1 million, or 8.8%, to $359.5 million during the 52 weeks ended May 2, 2015 from $330.4 million during the 53 weeks ended May 3, 2014. Our selling and administrative expenses increased as a percentage of sales by 140 basis points to 20.3% from 18.9%. This rate increase included continued investments in Yuzu ^TM , our digital education platform, which increased $3.6 million, or 20 basis points, to $24.3 million for the 52 weeks ended May 2, 2015, as compared to $20.7 million in the comparable period a year ago. Excluding Yuzu ^TM , our selling and administrative expenses increased as a percentage of sales by 120 basis points, due primarily to higher store payroll and operating expenses, including benefits and marketing, which increased selling and administrative expenses as a percentage of sales by 60 basis points, planned infrastructure costs to support business growth, which increased selling and administrative expenses as a percentage of sales by 40 basis points, and separation-related costs, which increased selling and administrative expenses as a percentage of sales by 15 basis points.

Depreciation and Amortization


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		% of Sales			May 3, 2014		% of Sales
Total Depreciation and Amortization	$	50,509		2.8	%	$	48,014		2.7	%

Depreciation and amortization increased $2.5 million, or 5.2%, to $50.5 million during the 52 weeks ended May 2, 2015 from $48.0 million during the 53 weeks ended May 3, 2014. This increase was primarily attributable to additional capital expenditures.

Operating Profit


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		% of Sales			May 3, 2014		% of Sales
Total Operating Profit	$	33,560		1.9	%	$	58,325		3.3	%

Our operating profit decreased $24.8 million, or 42.2%, to $33.6 million during the 52 weeks ended May 2, 2015 from $58.3 million during the 53 weeks ended May 3, 2014. This decrease was due to the matters discussed above.

Interest Expense, Net


	52 weeks ended		53 weeks ended
Dollars in thousands	May 2, 2015		May 3, 2014
Interest Expense, Net	$	210	$	385

Net interest expense decreased $0.2 million, or 45.5%, to $0.2 million during the 52 weeks ended May 2, 2015 from $0.4 million during the 53 weeks ended May 3, 2014.

Income Taxes


	52 weeks ended					53 weeks ended
Dollars in thousands	May 2, 2015		Effective Rate			May 3, 2014		Effective Rate
Income Taxes	$	14,218		42.6	%	$	22,834		39.4	%

We recorded an income tax provision of $14.2 million during the 52 weeks ended May 2, 2015 compared with an income tax provision of $22.8 million during the 53 weeks ended May 3, 2014. Our effective tax rate was 42.6% for the 52 weeks ended May 2, 2015 compared with an effective tax rate of 39.4% during the 53 weeks ended May 3, 2014.

Net Income


	52 weeks ended		53 weeks ended
Dollars in thousands	May 2, 2015		May 3, 2014
Net Income	$	19,132	$	35,106

As a result of the factors discussed above, we reported net income of $19.1 million during the 52 weeks ended May 2, 2015, compared with net income of $35.1 million during the 53 weeks ended May 3, 2014.

53 weeks ended May 3, 2014 compared with the 52 weeks ended April 27, 2013

Sales

The following table summarizes our sales for the 53 weeks ended May 3, 2014 and the 52 weeks ended April 27, 2013:


	53 weeks ended		52 weeks ended
Dollars in thousands	May 3, 2014		April 27, 2013
Product sales and other revenue	$	1,536,180	$	1,631,454
Rental income		211,742		131,793

Total Sales	$	1,747,922	$	1,763,247

Our sales decreased $15.3 million, or 0.9%, to $1.748 billion during the 53 weeks ended May 3, 2014, from $1.763 billion during the 52 weeks ended April 27, 2013. The inclusion of the 53 ^rd week contributed $14.6 million in additional comparable store sales in Fiscal 2014. New store openings increased sales by $63.2 million, partially offset by closed stores, which decreased sales by $21.2 million. Comparable store sales decreased sales by 2.7% or $73.5 million. Recognition of previously deferred rental revenues increased sales by $2.0 million for the 53 weeks ended May 3, 2014.

The comparable store sales decline of 2.7% was primarily attributable to lower product and other sales of $143.4 million driven by lower textbook sales, which decreased sales by $150.0 million as students continued to shift to lower priced textbook rentals, partially offset by higher general merchandise sales, which increased sales by $14.3 million. General merchandise sales have continued to increase as our product assortments continue to emphasize and reflect the changing consumer trends and we evolve our presentation concepts and merchandising of product in stores and on the web. Rental income increased by $79.9 million, impacted by an $11.8 million decrease as students shifted to lower priced used textbook rentals.

While comparable store sales percentages are adjusted for the impact of textbook rentals, sales dollars are negatively impacted by the continued growth of textbook rentals, which have a lower price than new or used textbooks, and a portion of rental sales are deferred over the rental period. As we expanded our textbook rental offerings, students have been shifting away from higher priced textbook purchases to lower priced rental options.

We added 30 new stores and closed 16 stores during the 53 weeks ended May 3, 2014, ending the period with a total of 700 stores.

Cost of Sales and Occupancy


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		% of Related Sales			April 27, 2013		% of Related Sales
Product and other cost of sales and occupancy	$	1,180,727		76.9	%	$	1,270,381		77.9	%
Rental cost of sales and occupancy		130,430		61.6	%		88,250		67.0	%

Total Cost of Sales and Occupancy	$	1,311,157		75.0	%	$	1,358,631		77.1	%

Our cost of sales and occupancy decreased as a percentage of sales to 75.0% during the 53 weeks ended May 3, 2014, from 77.1% during the 52 weeks ended April 27, 2013. This decrease was primarily due to a favorable sales mix of higher margin textbook rentals and a favorable LIFO adjustment, partially offset by higher occupancy costs as a percentage of sales resulting from contract renewals. Product and other cost of sales and occupancy decreased by 100 basis points, primarily driven by a 64 basis point decrease due to a $7.7 million favorable LIFO adjustment in Fiscal 2014 compared to a $(2.2) million unfavorable LIFO adjustment in Fiscal 2013. Rental cost of sales and occupancy decreased by 540 basis points, driven by a 694 basis point decrease due to increased rental margin and a favorable mix of used rentals, partially offset by a 157 basis point increase due to higher occupancy costs.

Gross Margin


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		% of Sales			April 27, 2013		% of Sales
Total Gross Margin	$	436,765		25.0	%	$	404,616		22.9	%

Our consolidated gross margin increased $32.1 million, or 7.9%, to $436.8 million during the 53 weeks ended May 3, 2014 from $404.6 million during the 52 weeks ended April 27, 2013. This increase was due to the matters discussed above.

Selling and Administrative Expenses


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		% of Sales			April 27, 2013		% of Sales
Total Selling and Administrative Expenses	$	330,426		18.9	%	$	302,902		17.2	%

Selling and administrative expenses increased $27.5 million, or 9.1%, to $330.4 million during the 53 weeks ended May 3, 2014 from $302.9 million during the 52 weeks ended April 27, 2013. Our selling and administrative expenses increased as a percentage of sales by 170 basis points to 18.9% from 17.2%. This increase was primarily due to increased infrastructure costs to support growth of the business of 69 basis points as well as a 126 basis points increase due to continued investments in Yuzu ^TM . We invested $23.8 million in Yuzu ^TM in Fiscal 2014, including $21.4 million of expenses, as compared to $7.4 million of expenses in the prior year.

Depreciation and Amortization


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		% of Sales			April 27, 2013		% of Sales
Total Depreciation and Amortization	$	48,014		2.7	%	$	46,849		2.7	%

Depreciation and amortization increased $1.2 million, or 2.5%, to $48.0 million during the 53 weeks ended May 3, 2014, from $46.8 million during the 52 weeks ended April 27, 2013. This increase was primarily attributable to additional capital expenditures.

Operating Profit


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		% of Sales			April 27, 2013		% of Sales
Total Operating Profit	$	58,325		3.3	%	$	54,865		3.1	%

Our consolidated operating profit increased $3.5 million, or 6.3%, to an operating profit of $58.3 million during the 53 weeks ended May 3, 2014 from an operating profit of $54.9 million during the 52 weeks ended April 27, 2013. This increase was due to the matters discussed above.

Interest Expense, Net


	53 weeks ended		52 weeks ended
Dollars in thousands	May 3, 2014		April 27, 2013
Interest Expense, Net	$	385	$	4,871

Net interest expense decreased $4.5 million, or 92.1%, to $0.4 million during the 53 weeks ended May 3, 2014 from $4.9 million during the 52 weeks ended April 27, 2013. This decrease was attributable to Barnes & Noble capital contributions, which lowered average intercompany balances and the related interest expense.

Income Taxes


	53 weeks ended					52 weeks ended
Dollars in thousands	May 3, 2014		Effective Rate			April 27, 2013		Effective Rate
Income Taxes	$	22,834		39.4	%	$	19,820		39.6	%

We recorded an income tax provision of $22.8 million during the 53 weeks ended May 3, 2014, compared with an income tax provision of $19.8 million during the 52 weeks ended April 27, 2013. Our effective tax rate was 39.4% and 39.6% for the 53 weeks ended May 3, 2014 and the 52 weeks ended April 27, 2013, respectively.

Net Income


	53 weeks ended		52 weeks ended
Dollars in thousands	May 3, 2014		April 27, 2013
Net Income	$	35,106	$	30,174

As a result of the factors discussed above, we reported consolidated net income of $35.1 million during the 53 weeks ended May 3, 2014, compared with consolidated net income of $30.2 million during the 52 weeks ended April 27, 2013.

Liquidity and Capital Resources

Historically, our primary sources of cash are net cash flows from operating activities, funds available under the B&N Credit Facility and short-term vendor financing.


Financial Period	Fiscal 2015			Fiscal 2014			Fiscal 2013
Cash and cash equivalents at beginning of period	$	144,269		$	55,420		$	38,246
Net cash flows provided by operating activities		13,520			65,804			59,488
Net cash flows used in investing activities		(58,185	)		(37,445	)		(49,108	)
Net cash flows provided by (used in) financing activities		(39,890	)		60,490			6,794

Cash and cash equivalents at end of period	$	59,714		$	144,269		$	55,420

Cash Flow from Operating Activities

Our business is highly seasonal. Cash flows from operating activities are typically a source of cash in the second and third fiscal quarters, when students generally purchase and rent textbooks for the upcoming semesters. Cash flows from operating activities are typically a use of cash in the first and fourth fiscal quarters, when sales volumes are materially lower than the other quarters. Our quarterly cash flows also may fluctuate depending on the timing of the start of the various school’s semesters, as well as shifts in fiscal calendar dates. These shifts in timing may affect the comparability of our results across periods.

Cash flows provided by operating activities during Fiscal 2015 were $13.5 million compared to $65.8 million during Fiscal 2014. This decrease of $52.3 million was primarily due to a $38.2 million receivable from Barnes & Noble which will be paid at the time of the Spin-Off.

Cash flows provided from operating activities during Fiscal 2014 were $65.8 million compared to $59.5 million during Fiscal 2013. This increase of $6.3 million was primarily due to timing differences created by the fiscal year end date, which ended May 3, 2014 in Fiscal 2014, as compared to April 27, 2013 in Fiscal 2013.

Cash Flow from Investing Activities

Our investing activities consist principally of capital expenditures for contractual capital investments associated with renewing existing contracts, new store construction, digital initiatives and enhancements to internal systems and our website.

Cash flows used in investing activities during Fiscal 2015 were $(58.2) million compared to $(37.4) million during Fiscal 2014. Capital expenditures totaled $48.5 million and $38.3 million during Fiscal 2015 and Fiscal 2014, respectively.

Cash flows used in investing activities during Fiscal 2014 were $(37.4) million compared to $(49.1) million during Fiscal 2013. Capital expenditures totaled $38.3 million and $38.8 million during Fiscal 2014 and Fiscal 2013, respectively.

Cash Flow from Financing Activities

Cash flows used in financing activities during Fiscal 2015 were $(39.9) million compared to inflows of $60.5 million during Fiscal 2014. During Fiscal 2015, we acquired the preferred membership interests from Microsoft and Pearson, resulting in a $76.2 million payment. The receipts in Fiscal 2014 represent net transfers from Barnes & Noble, including NOOK Media partnership activities.

Cash flows provided from financing activities during Fiscal 2014 were $60.5 million compared to $6.8 million during Fiscal 2013. The receipts in Fiscal 2014 represent net transfers from Barnes & Noble, including $41.4 million in corporate allocations and $20.4 million in capital contributions. The receipts in Fiscal 2013 include proceeds from Microsoft and Pearson for the issuance of the preferred membership interests, with the balance representing net transfers to Barnes & Noble, including $34.5 million in corporate allocations and $26.7 million in dividends.

Impact of Distribution from Barnes & Noble on our Financial Statements

Following the Spin-Off, we may incur additional costs associated with being an independent company in connection with establishing, or expanding, and maintaining our own stand-alone corporate functions, including finance, human resources, information technology, facilities, and legal for which we currently receive expense allocations from Barnes & Noble. See “Unaudited Pro Forma Financial Information.” These allocations are included in operating expenses and totaled $23.1 million, $19.1 million and $14.7 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. See Note 4 to our consolidated financial statements included elsewhere in this Prospectus for further details related to Barnes & Noble corporate allocations.

Management considers the expense allocation methodology and results to be reasonable for all periods presented. However, our financial statements do not necessarily include all of the expenses that would have been incurred had we been a separate, stand-alone entity and may not necessarily reflect our results of operations, financial position and cash flows had we been a stand-alone company during the periods presented. Furthermore, we may also incur additional costs associated with being a stand-alone publicly listed company that were not included in the expense allocations and, therefore, would result in additional costs that are not reflected our historical results of operations, financial position and cash flows. Nevertheless, we believe that cash flow from operations will be sufficient to fund the anticipated increases in corporate expenses.

The Series J Preferred Stock of Barnes & Noble provides the Series J Holders with the option to exchange a portion of their shares of Series J Preferred Stock in Barnes & Noble for shares of our Mirror Preferred Stock having terms and rights that are identical, or as nearly so as is practicable, to those of the Series J Preferred Stock of Barnes & Noble. Holders of the Mirror Preferred Stock will be entitled to receive cumulative cash dividends, payable quarterly in arrears, that will accrue daily at a per annum per share dividend rate of 7.75% of the per share liquidation preference of the Mirror Preferred Stock (the “Liquidation Preference”). We will not be permitted to pay dividends on our Common Stock, unless all dividends on the Mirror Preferred Stock have been paid in full. The exact amount of the Liquidation Preference will not be calculable until at least five consecutive full trading days have elapsed following the Spin-Off, commencing with the effective date of the Spin-Off. The Mirror Preferred Stock may also be converted into our Common Stock at a certain conversion rate, subject to customary anti-dilution adjustments, which will have a dilutive effect on our common stockholders on an as-converted basis.

As of June 26, 2015, after giving effect to the conversion of the Converted Preferred Shares, and assuming the remaining Series J Holders elect to exchange all of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock, we would have had 100,005 shares of Mirror Preferred Stock outstanding after the Spin-Off, which would be convertible into at least 3,717,831 shares of our Common Stock, representing approximately 8.4% of our estimated outstanding Common Stock following the Distribution. For more information, see “Description of Our Capital Stock—Preferred Stock” and “Risk Factors—We may have shares of preferred stock that will be convertible into Common Stock.”

Financing Arrangements

We are party to the B&N Credit Facility. The B&N Credit Facility provides for up to $1.0 billion in aggregate commitments under a five-year asset-backed revolving credit facility expiring on April 29, 2016. The B&N Credit Facility is secured by eligible inventory and accounts receivable with the ability to include eligible real estate and related assets. We are currently a borrower and co-guarantor of all amounts owing under the B&N Credit Facility. Prior to or at the time of the Spin-Off, we will be released from all obligations, including as a borrower and a co-guarantor, under the B&N Credit Facility.

In connection with the Spin-Off, we expect to enter into a new five year revolving credit facility (the “New Credit Facility”) to fund working capital and other liquidity needs. The New Credit Facility is expected to provide (subject to availability under a borrowing base) for aggregate maximum commitments of approximately $400.0 million. We expect the New Credit Facility will be undrawn at the time of the Spin-Off.

We and certain of our subsidiaries will be permitted to borrow under the New Credit Facility. The New Credit Facility will be secured by substantially all of the inventory and accounts receivable and related assets of the borrowers and guarantors under the New Credit Facility (collectively, the “Loan Parties”), but excluding the equity interests in the Company and its subsidiaries, intellectual property, equipment and certain other property. The Company has the option to request the increase in commitments under the New Credit Facility by up to $100.0 million subject to certain restrictions. Interest under the New Credit Facility will accrue, at the election of the Company, at Base Rate or LIBO Rate, plus, in each case, an applicable interest rate margin, which is determined by reference to the level of excess availability under the New Credit Facility. Loans will initially bear interest at LIBOR plus 2.000% per annum, in the case of LIBO Rate borrowings, or at the alternate base rate plus 1.000%, in the alternative, and thereafter the interest rate will fluctuate between LIBOR plus 2.000% per annum and LIBOR plus 1.750% per annum (or between the alternate base rate plus 1.000% per annum and the alternate base rate plus 0.750% annum), based upon the excess availability under the New Credit Facility at such time. The New Credit Facility limits the our ability to, subject to customary exceptions, incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the New Credit Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements) would be triggered and the lenders will assume dominion and control over the Loan Parties’ cash.

We believe that our future cash from operations, access to borrowings under the New Credit Facility and short-term vendor financing will provide adequate resources to fund our operating and financing needs for the foreseeable future. Our access to, and the availability of, financing in the future will be impacted by many factors, including our credit rating, the liquidity of the overall capital markets and the current state of the economy. There can be no assurances that we will have access to capital markets on acceptable terms.

All outstanding debt under the B&N Credit Facility was recorded on Barnes & Noble’s balance sheet. Currently, we do not believe that our cash flow is needed to service any Barnes & Noble debt now or in the foreseeable future.

Contractual Obligations

The following table sets forth our contractual obligations as of May 2, 2015 (in millions):


Contractual Obligations	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Capital lease obligations	$	0.3	$	0.2	$	0.1	$	—	$	—
School management contract and other lease obligations (a)		733.5		119.7		227.0		192.3		194.5
Purchase obligations (b)		5.0		4.7		0.3		—		—
Other long-term liabilities reflected on the balance sheet under GAAP (c)		—		—		—		—		—

Total	$	738.8	$	124.6	$	227.4	$	192.3	$	194.5

(a)	Excludes obligations under store leases for property insurance and real estate taxes, which totaled approximately 2.8% of the minimum rent payments under those leases.

(b)	Includes information technology contracts.

(c)	Excludes $0.2 million of unrecognized tax benefits, for which we cannot make a reasonably reliable estimate of the amount and period of payment. See Note 13 to the Notes to Consolidated Financial Statements.

Off-Balance Sheet Arrangements

As of May 2, 2015, we have no off-balance sheet arrangements as defined in Item 303 of Regulation S-K.

Critical Accounting Policies

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” analysis discusses our carve-out financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. In preparing these financial statements, management has made its best estimates and judgments with respect to certain amounts included in the financial statements, giving due consideration to materiality. We do not believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.

Revenue Recognition

Revenue from sales of our products is recognized at the time of sale or shipment. Revenue from sales of products ordered through our websites is recognized upon delivery and receipt of the shipment by our customers. Sales taxes collected from our customers are excluded from reported revenues. All of our sales are recognized as revenue on a “net” basis, including sales in connection with any periodic promotions offered to customers. We do not treat any promotional offers as expenses.

We rent both physical and digital textbooks. Revenue from the rental of physical textbooks is deferred and recognized over the rental period commencing at point of sale. Revenue from the rental of digital textbooks is recognized at time of sale. A software feature is imbedded within the content of our digital textbooks, such that upon expiration of the rental term the customer is no longer able to access the content. While the digital rental allows the customer to access digital content for a fixed period of time, once the digital content is delivered to the customer our performance obligation is complete. The Company offers a buyout option to allow the purchase of a rented book at the end of the semester. The Company records the buyout purchase when the customer exercises and pays the buyout option price. In these instances, the Company would accelerate any remaining deferred rental revenue at the point of sale.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Cost is determined primarily by the retail inventory method. Our textbook and trade book inventories are valued using the last-in first-out, or LIFO, method, where the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2015 compared to a favorable LIFO adjustment of $7.7 million in Fiscal 2014 and an unfavorable LIFO adjustment of $(2.2) million in Fiscal 2013 recorded through the cost of goods sold.

Market value of our inventory is determined based on its estimated net realizable value, which is generally the selling price. Reserves for non-returnable inventory are based on our history of liquidating non-returnable inventory. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate the non-returnable inventory reserve. However, if assumptions based on our history of liquidating non-returnable inventory are incorrect, we may be exposed to losses or gains that could be material. A 10% change in actual non-returnable inventory would have affected pre-tax earnings by approximately $5.4 million in Fiscal 2015.

We also estimate and accrue shortage for the period between the last physical count of inventory and the balance sheet date. Shortage rates are estimated and accrued based on historical rates and can be affected by changes in merchandise mix and changes in actual shortage trends. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate shortage rates. However, if our estimates regarding shortage rates are incorrect, we may be exposed to losses or gains that could be material. A 10 basis point change in actual shortage rates would have affected pre-tax earnings by approximately $1.1 million in Fiscal 2015.

Rental Cost of Goods Sold

Physical textbooks out on rent are categorized as textbook rental inventories. At the time a rental transaction is consummated, the book is removed from merchandise inventories and moved to textbook rental inventories at cost. The cost of the book is amortized down to its estimated residual value over the rental period. The related amortization expense is included in cost of goods sold. At the end of the rental period, upon return, the book is removed from textbook rental inventories and recorded in merchandise inventories at its amortized cost. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to calculate rental cost of goods sold. However, if our estimates regarding residual value are incorrect, we may be exposed to losses or gains that could be material. A 1% change in rental cost of goods sold would have affected pre-tax earnings by approximately $1.3 million in Fiscal 2015.

Research and Development Costs for Software Products

We follow the guidance in Accounting Standards Codification (ASC) 985-20, Cost of Software to Be Sold, Leased or Marketed, regarding software development costs to be sold, leased, or otherwise marketed. Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. A certain amount of judgment and estimation is required to assess when technological feasibility is established, as well as the ongoing assessment of the recoverability of capitalized costs. Our products reach technological feasibility shortly before the products are available for sale and therefore research and development costs are generally expensed as incurred.

Stock-Based Compensation

inputs into the Black-Scholes option pricing model: (1) expected volatility and (2) expected term. Barnes & Noble estimates expected volatility based on traded option volatility of Barnes & Noble’s stock over a term equal to the expected term of the option granted. The expected term of stock option awards granted is derived from historical exercise experience under Barnes & Noble’s stock option plans and represents the period of time that stock option awards granted are expected to be outstanding. The assumptions used in calculating the fair value of stock-based payment awards represent Barnes & Noble management’s best estimates, but these estimates involve inherent uncertainties and the application of Barnes & Noble management’s judgment. As a result, if factors change and we use different assumptions, stock-based compensation expense could be materially different in the future. In addition, Barnes & Noble is required to estimate the expected forfeiture rate, and only recognize expense for those shares expected to vest. If their actual forfeiture rate is materially different from their estimate, our stock-based compensation expense could be significantly different from what we recorded in the current period. See Note 7 to the Consolidated Financial Statements for a further discussion of Barnes & Noble’s stock-based incentive plans.

We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to determine stock-based compensation expense. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to changes in stock-based compensation expense that could be material. If actual results are not consistent with the assumptions used, the stock-based compensation expense reported in our financial statements may not be representative of the actual economic cost of the stock-based compensation. A 10% change in our stock-based compensation expense would have affected pre-tax earnings by approximately $0.5 million in Fiscal 2015.

Other Long-Lived Assets

Our other long-lived assets include property and equipment and amortizable intangibles. We had $198.2 million and $208.4 million of amortizable intangible assets, net of amortization, at May 2, 2015 and May 3, 2014, respectively. These amortizable intangible assets relate to our customer relationships with our colleges and university clients. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets . We evaluate long-lived assets for impairment at the school contract combined store level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the assets to the school contract combined store level’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying amount of the assets, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the assets to the school contract combined store level’s fair value based on its estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. Impairment losses included in selling and administrative expenses totaled $0.01 million, $0.01 million and $0.2 million during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to calculate long-lived asset impairment losses. However, if actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material. A 10% decrease in our estimated discounted cash flows would not have materially affected the results of our operations in Fiscal 2015.

Goodwill and Unamortizable Intangible Assets

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying balance sheet.

We had $274.1 million of goodwill and no unamortizable intangible assets (those with an indefinite useful life) at May 2, 2015 and May 3, 2014. ASC 350-30, Goodwill and Other Intangible Assets , requires that goodwill and other unamortizable intangible assets no longer be amortized, but instead be tested for impairment at least

annually or earlier if there are impairment indicators. We perform a two-step process for impairment testing of goodwill as required by ASC 350-30. The first step of this test, used to identify potential impairment, compares the fair value of a reporting unit with our carrying amount. The second step (if necessary) measures the amount of the impairment. We completed our annual goodwill impairment test as of the first day of the third quarter. In performing the valuations, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions. Based on the results of the step one testing, our fair value as of that date exceeded their carrying values; therefore, the second step of the impairment test was not required to be performed and no goodwill impairment was recognized. Goodwill is subject to risk of impairment if our digital projections fall short of expectations. A 10% decrease in our estimated discounted cash flows in the evaluation of goodwill and unamortizable intangible assets would result in the failure of the first step in our goodwill impairment test. The second step related to our goodwill testing would then need to be performed to determine the potential impact, if any, on the results of operations.

Income Taxes

Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. In the ordinary course of business, tax issues may arise where the ultimate outcome is uncertain. Additionally, our tax returns are subject to audit by various tax authorities. Consequently, changes in our estimates for contingent tax liabilities may materially impact our results of operations or financial position. A 1% variance in our effective tax rate would have affected our results of operations in Fiscal 2015 by $0.3 million.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method nor have we determined the impact of adoption on our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

We limit our interest rate risk by investing certain of our excess cash balances in short-term, highly-liquid instruments with an original maturity of one year or less. We do not expect any material losses from our invested cash balances and we believe that our interest rate exposure is modest. As of May 2, 2015, our cash and cash equivalents totaled approximately $59.7 million. A 25 basis point increase in interest rates would have increased our interest income by $0 million in Fiscal 2015. Conversely, a 25 basis point decrease in interest rates would have reduced interest income by $0 million in Fiscal 2015.

We may from time to time borrow money under the B&N Credit Facility at various interest rate options based on the Base Rate or LIBO Rate (each term as defined therein) depending upon certain financial tests. Accordingly, we may be exposed to interest rate risk on borrowings under Barnes & Noble’s credit facility. We had no borrowings under B&N Credit Facility at May 2, 2015 and May 3, 2014. A 25 basis point increase in interest rates would have increased our interest expense by $0 million in Fiscal 2015. Conversely, a 25 basis point decrease in interest rates would have reduced interest expense by $0 million in Fiscal 2015.

We do not have any material foreign currency exposure as nearly all of our business is transacted in United States currency.

BUSINESS

Our Mission

Our mission is to enhance the academic and social purpose of educational institutions. We do this by delivering essential educational content and tools within a dynamic retail environment. We improve academic outcomes, provide value and support to students and create loyalty and retention, while supporting the financial goals of the colleges and universities we serve.

Industry Overview

The market for educational materials is undergoing unprecedented change. Overall spending on education, including tuition, continues to increase dramatically. As tuition and other costs rise, colleges and universities face increasing pressure to attract and retain students and provide them with innovative, affordable educational content and tools that support their educational development. The demand for alternative forms of educational materials, including digital, media-rich content and study aids, is growing rapidly as educational platforms continue to evolve.

Students and faculty can now choose from a wider variety of educational content and tools than ever before, delivered across both traditional and digital platforms. In addition to the campus bookstore, course materials are sold through off-campus bookstores, e-commerce outlets, digital platform companies, publishers’ direct sales to institutions and students and student-to-student marketplaces. The evolving market for educational content is increasingly competitive, with a broad array of content providers, digital content delivery platforms, educational enterprise providers and campus store operators that compete to serve this approximately $13 billion market in educational books alone. Our efforts are aimed at providing solutions that can help students achieve success in their coursework. For example, adaptive texts and resources, which seek to improve student outcomes by personalizing the learning experience, are increasingly popular, as are multimedia materials. Whereas some companies are creating digital delivery systems that would seek to make traditional textbooks obsolete, others are developing new technologies to complement traditional offerings.

The traditional college bookstore market is very fragmented, with approximately 4,500 college and university affiliated bookstores nationwide, according to the National Association of College Stores (NACS). Approximately 52% of college and university affiliated bookstores are owned and operated by the college or university (institutional stores). The campus store continues to be the main source for books, course materials and general merchandise such as school-branded apparel and gifts, computer products, school and dormitory supplies, café and convenience items. According to NACS, college and university store sales totaled approximately $10.3 billion during 2012.

Historically, increasing enrollment has been a significant driver of sales growth at campus bookstores, a trend that is expected to continue. According to the National Center for Education Statistics of the U.S. Department of Education (NCES), total enrollment in post-secondary degree-granting institutions is expected to increase 13.9%, from 21.0 million in 2012 to 23.9 million in 2022 driven by increased demand for educational services.

LOGO

Source: U.S. Department of Education, 2013

The way course materials are distributed and consumed is changing significantly, a trend that is expected to continue. Whether it is a start-up promoting free online textbooks and generating revenue from related services, institutions licensing digital materials and providing them to students for a fee or the surge of textbook rental programs in campus bookstores and online platforms, it is clear that significant change in the distribution of course materials is already underway. However, today, traditional print textbooks sold remain the first choice of students, according to the Student Monitor LLC, with 77% preferring a physical textbook (whether new, used, purchased or rented) over other options. In addition, printed course materials are the primary instructional resource for most courses and the highest revenue generator for most higher education publishers.

Market Opportunity

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Business Overview

We are one of the largest contract operators of bookstores on college and university campuses in the United States. We create and operate campus stores that are focal points for college life and learning, enhancing the educational mission of the institution, enlivening campus culture and delivering an important revenue stream to partners. We typically operate our stores under multi-year management service agreements granting us the right to operate the official college or university bookstore on campus. In turn, we pay the school a percentage of store sales and, in certain cases, a minimum fixed guarantee.

As of May 2, 2015, we operated 724 stores nationwide, which reach 24% of the total United States college and university student enrolled population. Our stores are operated under 453 contracts, some of which cover multiple store locations, and 154 of our college and university affiliated bookstores are co-branded with the Barnes & Noble name. We build relationships and derive sales by actively engaging and marketing to over 5 million students and their faculty on the campuses we serve and a full assortment of items in our campus stores, including course-related materials, which include new and used print textbooks and digital textbooks, all of which are available for sale or rent, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products. We are a multi-channel marketer, and our largest growth area is sales through the school-branded e-commerce sites we operate for each store, allowing students and faculty to purchase textbooks, course materials and other products online.

Our operating philosophy is to cement the campus bookstore as the students’ first choice for course materials and merchandise and deliver a dynamic and relevant retail social hub for students, faculty and the entire campus community that is a significant financial asset for our school partners.

Fiscal 2015 was a very strong year for new store signings, and we continue to have a strong pipeline of prospective new business. During the year ended May 2, 2015, we opened 48 new stores with estimated first year annual sales of $90 million. In addition, as of June 18, 2015, we have signed additional contracts for another 24 new stores with estimated first year annual sales of $48 million. We expect these new stores to open during our fiscal year 2016.

Our Ecosystem

We leverage our physical bookstores, e-commerce sites and digital platform to serve and interact with the key constituents in our business ecosystem.

course materials and general merchandise which includes emblematic apparel and gifts and school supplies. We provide faculty with valuable tools, resources and insights that allow them to gain a deeper understanding of student needs and higher education trends. We also offer over 7,000 publishers access to one of the largest distribution networks of college education materials in the United States, which includes access to Yuzu ^TM , the next generation digital content distribution platform that we are developing.

Strengths

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Large Footprint with Well-Recognized Brand : We are one of the largest operators of bookstores on college and university campuses in the United States, with 724 stores in 42 states and the District of Columbia as of May 2, 2015, which reach 24% of the total United States college student enrolled population. Our brand, Barnes & Noble, is virtually synonymous with bookselling, and we believe it is one of the most widely recognized and respected brands in the United States. Our large footprint and well-known brand not only support our marketing efforts to universities, students and faculty but it is also important for leading publishers who value and rely on us as one of their primary distribution channels.

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Well-Established Relationships : We have strong partnerships with college and university administrators, which are reflected by our average relationship tenure of 15 years. We generate value for our college and university partners, and our relationships are supported by innovative engagement programs and educational initiatives together with a decentralized management structure that empowers local teams to make decisions based on the local campus needs and foster collaborative working relationships. We have long term relationships with over 7,000 publishers as well as a unique strategic partnership with Pearson Education, Inc. In addition, our stores serve as social hubs for over 5 million students and their faculty that we serve, allowing us to forge deep customer relationships and incorporate systems that seamlessly link bookstore technology with most student and faculty facing platforms.

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Track Record of Innovation: Our flexible research channels help us stay ahead of the rapidly changing needs and behaviors of our customers and pro-actively respond with dynamic solutions to the needs of the customer constituency we serve. This commitment fuels our innovation and leadership in areas such as digital education with Yuzu ^TM , affordable course materials and student engagement.

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Strategies

Our primary business strategies to grow our business are as follows:

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Grow digital sales by accelerating marketing, product development efforts and the acquisition of content to support the Yuzu ^™ digital education product: Yuzu ^™ , our digital education platform, offers not only electronic reading and note-taking functionality but also engaging supplemental content that we provide in conjunction with strategic publisher partners. Accelerating our product development and content acquisition efforts for Yuzu ^™ will enable us to access the growing educational technology market on a national level by leveraging our existing campus relationships with faculty and students. We believe that as textbooks continue to convert to digital and students and faculty demand increased functionality and content from their online platforms, the digital solutions we offer through Yuzu ^™ will help grow digital sales both on a school-by-school basis in the institutions we serve and on a national basis.

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Products & Services

We currently serve the academic and social needs of approximately 24% of the students enrolled in U.S. higher education.

Traditional Products and Services

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Textbook and Course Material Sales : Textbooks continue to be a core product offering of our business. We work directly with faculty to insure the correct textbooks are available in required formats before the start of classes. We provide students with affordable textbook solutions and educate them about each format through e-mail, social media engagement and new student orientation programs and in our stores.

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Textbook and Course Material Rentals : We are an industry leader in textbook rentals. An increasing number of students now rent from our robust title list. The majority of all titles are available for rent. These include custom course packs and adaptive learning materials, along with traditional textbooks. In addition, during Fiscal 2014, we began offering a convenient buyout option to allow the customer to purchase the rented book at the end of the semester, thereby enhancing our revenue and improving our inventory management processes.

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General Merchandise : General merchandise sales are generated in-store, as well as online through school-branded e-commerce sites. Our stores feature collegiate and athletic apparel relating to a school and/or its athletic programs and other custom-branded school spirit products, technology, supplies and convenience items. We offer a comprehensive athletic merchandise program that leverages innovative promotional campaigns and showcases the apparel industry’s top selling performance apparel categories from leading brands including Under Armour and Nike. Other merchandise, such as laptops and other technology products, notebooks, backpacks, school and dormitory supplies and related items are also offered. In addition, we operate 78 customized cafés and 17 stand-alone convenience stores featuring Starbucks coffee as well as diverse grab-and-go options including organic, vegan and gluten-free, and ethnic fare for students on the move. These offerings increase traffic and the amount of time customers spend in our stores.

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Trade : We carry an extensive selection of trade, academic and reference books along with education toys and games and schedule store events, such as author signings, that extend to the entire community. The majority of our bookstores carry the most popular campus bestsellers along with academically relevant titles.

Technology Platform and Services

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Digital Education Platform (Yuzu™) : Launched in the spring of 2014, the Yuzu ^TM digital education platform is our innovative cloud-based approach to digital learning and content delivery that may be accessed via the web or mobile app. Built by a team drawn from many of the best technology companies, Yuzu™ is focused on enabling educational content that was “born digital” to reach its fullest potential. For students, Yuzu™ combines an electronic reading and note-taking experience in a simple app, with access to a rich, engaging catalog of content. It allows students to replace or supplement multiple textbooks with an app that holds and organizes all their digital content, by course and term, annotate and highlight text, add bookmarks and “sticky notes” to important pages and use a keyword search function to find a desired passage or annotation using an interface that is simple and easy to use. Using the same platform educators will be able to share their own content more easily. Yuzu’s self-authoring and publishing tool will allow educators to create and publish custom texts reflecting course-specific needs and objectives, granting students more flexibility in their course material options. Students, faculty, institutions and their communities have access to the cloud-based Yuzu™ platform wherever they have internet access. Yuzu™ product offerings also are integrated into the campus bookstore experience. The product is enriched by our strategic partnership with Pearson Education, the largest higher education publisher, who provides content and contributes strategic insights.

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e-Commerce Platform : With an active digital community of over 4.4 million customers, our custom-branded school websites drove over $360 million of sales in Fiscal 2015, with transactions up over 14% over the prior fiscal year. Designed to appeal to students, parents and alumni, the school-branded

sites offer simple and seamless textbook purchasing with free in-store pick up or shipping to any location, general merchandise promotions and collections that are customized to the individual user, as well as faculty course material adoption tools and customer service support. Our segmentation strategy has allowed us to connect and personalize our promotions directly to new students, parents and alumni, helping drive our online general merchandise sales. Additionally, our access to alumni through university alumni offices, including over 615,000 alumni with existing customer accounts, allows us to leverage our digital marketing strategies focused on athletic Game Day and other milestone events for further general merchandise penetration in school-spirit apparel and related items.

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FacultyEnlight ^TM : Our proprietary online platform enhances content search, discovery and adoption (i.e., textbook selection) by faculty on each campus. Faculty members using FacultyEnlight ^TM are able to:

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compare and contrast key decision-making factors, such as cost to students and format availability;

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read peer product reviews; and

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contribute fresh perspectives and experiences and see what textbooks are being used by colleagues at other colleges and universities.

This wealth of available information enables faculty to find and select the course materials that are both relevant to their subject matter and affordable to their students.

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Campus Connect Technologies ^TM : We enhance the academic and social purpose of higher education institutions by integrating our technology and systems with the school’s technology and organizational infrastructure, to forge a bond with the school and its constituencies. Our customizable technology delivers a seamless experience that enables faculty to research and select, and enables students to find and purchase, the most affordable course materials, maximizing savings and sales Campus Connect Technologies ^TM platform includes:

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Simple Registration Integration : By linking the online course registration process to the bookstore’s e-commerce site, students can easily find their specific required course materials and purchase those materials immediately. They can view the list of necessary course materials and select their preferred format, delivery and payment method.

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Seamless LMS Integration : By tying directly into the school’s Learning Management System (LMS), faculty and students are able to easily purchase their course materials and leverage our single-sign on functionality. This enables stronger connection between student and faculty as well as the campus bookstore.

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Real-Time Financial Aid Platform : To help simplify financial aid transactions, we provide a sophisticated, Student Financial Aid (SFA) platform that works in real-time and is fully-integrated with any college or university’s financial aid systems and point-of-sale technology. This integration provides a direct and simple way for students to use their financial aid dollars in our stores and online.

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Dynamic Point of Sale (POS) Platform : We deliver a fast and streamlined checkout experience, greatly expediting and simplifying a student’s shopping experience. Campus debit cards, financial aid and all major forms of tender are fully integrated, allowing students to check out from any register, regardless of the form of payment.

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Flexible Course Fee Solution: Through this model, all required course materials for a particular course or program are included in the cost of tuition. Students are guaranteed the course materials they need in the format they prefer. Course materials can be picked up at the campus store, shipped directly to the student or delivered digitally.

Stores

As of May 2, 2015, we managed 724 bookstores nationwide across 42 states and the District of Columbia, serving over 5 million students and their faculty. During the period of April 2012 through May 2015, the number of stores we operated increased by 77, or approximately 12%, from 647 to 724, as a result of the increased demand for outsourcing in this market and the awarding of contracts for stores previously run by our competitors.

LOGO


Store Count Over Time

	Fiscal Year
	2015			2014			2013			2012			2011
Stores open at beginning of period		700			686			647			636			637
Stores opened during the period		48			30			49			32			15
Stores closed during the period		(24	)		(16	)		(10	)		(21	)		(16	)

Stores open at end of period		724			700			686			647			636

Formats

As of May 2, 2015, we operated 688 bookstores in our traditional format on campuses of state universities, private universities and community colleges of various sizes. Our typical bookstore is located on campus in a location convenient to students and faculty. We also operate 36 academic superstores at select major campuses, including the Harvard Coop, University of Pennsylvania, Yale University, the College of William and Mary, Boston University, DePaul University, Vanderbilt University and Georgia Institute of Technology. Our academic superstores include a café and carry a large selection of trade and reference books, as well as our campus bookstore offerings of course-required textbooks, supplies, emblematic clothing and gifts. Our academic superstores are positioned in locations that attract customers from the neighborhood community as well as students and faculty from the college or university. They are open extended hours and have ongoing events such as author signings. These stores differ from our traditional-format stores because the majority has a customer base that includes the general public and sales which are less dependent on course-required materials.

Contracts

Our stores are typically operated under management agreements with the college or university to be the official university bookstore and the exclusive seller of course materials and supplies, including physical and

digital products sold in-store, online or through learning management systems. Agreements are typically five years with renewal options, but can range from one to 15 years, and are typically cancelable by either party with 90-120 days’ notice. We pay the school a percentage of sales for the right to be the official college or university bookstore and the use of the premises; more than half of our agreements do not have a minimum guaranteed amount to be paid to our partners. In addition we have the non-exclusive right to sell all items typically sold in a college bookstore both in-store and on the web, including emblematic apparel and gifts, computer products, school and dorm supplies, café and convenience items and graduation products. We also have the ability to integrate our systems with the university’s systems in order to accept student financial aid, university debit cards and other forms of payment. We are able to obtain student and faculty email lists for direct communication which provide for seamless integration into the university community.

Over the past three years, we have renewed 93% of our agreements, with the majority of the agreements being renewed before their expiration dates and without going through a formal bid process.

Staffing

Our management team includes experts in marketing, merchandising and store operations and tenure that is unique in our industry. Field management includes territory vice presidents and regional managers supervising multiple store locations. Our store and marketing vice presidents have been with us for an average of 26 years, while our regional managers’ average tenure is 15 years and our store managers’ average tenure is 10 years.

Each of our stores generally employs a store manager and assistant store manager, a textbook manager and a range of full- and part-time booksellers, with the larger stores staffed with up to approximately 200 employees during peak seasons. The large employee base provides us with experienced booksellers to fill positions in new stores. We maintain a dynamic industry leading management development program, Leadership Edge, which delivers multi-platform training to support continuous growth and development of all positions in our field leadership and store teams. In addition, over 200 student employees were selected to participate in The Bestseller Management Program, which generates a steady stream of knowledgeable retail professionals who are critical to support our growth strategies. We anticipate that a significant percentage of the talent required to manage our new stores will continue to come from within our existing operations.

Field management for all of our stores, including territory vice presidents, regional managers and store managers, participate in an incentive program tied to store productivity. We believe that the compensation of our field management is competitive with that offered by other specialty retailers of comparable size.

Merchandising and Supply Chain Management

Our purchasing procedures vary by product type (textbooks, general merchandise or trade books). Purchases are made at the store level based on the relationships our managers have with the faculty, with strategic corporate oversight, while maintaining appropriate inventory levels. After titles are adopted for an upcoming term, we determine how much inventory we will need to purchase based on several factors, including student enrollment and the previous term’s textbook sales history. We first use our automated sourcing systems to determine if our stores have the necessary new or used books on hand and may transfer the inventory to the appropriate store. After internal sourcing, we purchase books from outside suppliers. As part of our contracts with institutions, we guarantee that we will order textbooks for all courses.

Our primary suppliers of new textbooks include Pearson Education, Cengage Learning, McGraw-Hill, MPS, MBS Textbook Exchange, Inc. (“MBS”), and John Wiley & Sons. Our primary suppliers of used textbooks are students, through returns of previously rented books, and MBS. The stores offer a Cash for Books program in which students can sell their books back to the store at the end of the semester. Buybacks are heaviest in December and May. Students typically receive 50% of the price they originally paid for the book if it has been adopted for a future class or the current wholesale price if it has not. Both unsold textbooks and trade books are generally returnable to publishers for full credit. For textbook sales and rentals, we utilize our sophisticated inventory management platforms to manage pricing and inventory across all our stores.

The larger stores feature an expanded selection of trade books and use the Barnes & Noble Book Master system, a proprietary merchandising system licensed from Barnes & Noble. Our home office merchants meet with publishers on a regular basis to identify new titles and trends to support this changing business. In the smaller stores, trade (general reading) book purchasing is controlled at the store level.

General merchandise vendors and products are initially selected by our home office merchants using the analytics and insights from our planning and allocation systems. This data is used to establish benchmarks across school type, region and the socio-economics of each of our partner institution’s student base to help local store management team forecast sales and trends. Recommended assortments are provided to the stores, and stores then make selections based on the perceived needs of each campus, reaching back out to the home office merchants with their recommendations on any additional campus specific needs.

Marketing

Students

Our expertise in millennial marketing is supported by our active digital community of over 4.4 million, which includes engaged email subscribers and our continuous dialogue with customers on our school-customized social media channels, including Facebook, Instagram and Twitter, as well as our student blog, The College Juice. Our exclusive Student POV online panel, consisting of thousands of students nationwide, helps us understand their attitudes, values and behaviors. Using a marketing automation platform, we segment students based on demographics and purchasing behavior to ensure the right audience receives the relevant message and experience. Our dynamic email campaigns educate students on format and affordability options as well as ongoing promotions from game day to graduation. Through our search engine marketing strategies, we have been able to grow online textbook and apparel sales significantly.

One example of our commitment to turning our research insights into action is our Igniting the New Student Connection initiative. We connect with new students starting with their acceptance letters, allowing us to capture textbook sales from day one and building loyalty with new students, and their parents, that continues over the lifecycle of their academic experience.

As rewarding and helpful as our connections are for new students, they also drive revenue. Nationwide, during the current fiscal year, we have built more than 650,000 connections with incoming students and their parents, resulting in increased revenue for our campus partners. These efforts have also significantly slowed the decline in textbooks sales for the first time in the last four fiscal years as students return to shop our campus bookstores. We also form the same personal connections with the alumni base, creating a customized loyalty program that builds and enhances relationships with them while driving revenue for the bookstore. We have connected with over 615,000 new alumni customers since Fiscal 2013 who helped drive our biggest online general merchandise sales day in our history on CyberMonday 2014.

Faculty

As a partner and year-round support system for faculty, we conduct extensive research, gaining insights into what faculty need and want from the campus store. These insights lay the foundation to develop and nurture collaborative, productive relationships with faculty, providing valuable tools and resources, including education and training materials, as well as relevant and up-to-date information on industry trends.

A key component of our Igniting the Faculty Connection initiative is our FacultyEnlight ^TM online platform, which enhances the adoption experience while ensuring course material revenue remains on campus. As with all of our strategies, we began development of FacultyEnlight ^TM by conducting extensive, nationwide research, gathering feedback on faculty preferences, needs and challenges when it comes to the textbook adoption process. FacultyEnlight ^TM provides us a direct line to faculty to deliver our affordability message, effectively minimizing publisher disintermediation and further enhancing our relationships.

Brand Partnerships

As an official partner to the colleges and universities we serve, we are in a unique position to provide leading brands the ability to directly access our 5 million students. Our partnership marketing team, Barnes & Noble College Marketing (“BNCM”), builds and maintains partnerships with companies such as Adobe, zipcar, Verizon and Sony PlayStation. BNCM is a full-service youth marketing agency that works in partnership with our network of 724 college and university affiliated bookstores and e-commerce sites to deliver a portfolio of marketing capabilities for brands looking to connect with the college consumer. It supports our mission to be a social hub and destination on campus with offerings and events geared toward the student audience.

Technology

We use technology from a variety of leading industry providers. This approach reduces the risk of being dependent on a single supplier for our technology needs.

Store technology is focused on the customer experience and connects into our main data centers for backend processing and reporting. Our store technologies integrate with the colleges’ and universities’ technology ecosystem, including their student financial aid systems, student information system, learning management system and faculty material discovery/adoptions to provide a seamless on-campus experience. Beyond our brick and mortar stores, our websites fulfill needs of students, faculty, administration and alumni by offering textbooks and general merchandise at all times. Additionally, our agile technology allows for “pop-up” stores to be quickly operational in support of sporting events and peak busy seasons. These pop-up stores utilize the same technologies as our traditional stores in order to maintain data security and the overall customer experience.

Technologies supporting all stores reside within our production data centers. These data centers are leased space within global co-location provider facilities. Our two primary production co-location spaces are located in New Jersey and Georgia. In addition to this co-location space, Cloud services are leveraged from leading providers to allow for flexible on-demand capacity and increased resiliency. We continuously monitor all environments and leverage outside consultants to perform security and integrity validation of our locations and data.

Competition

Approximately 52% of college and university affiliated bookstores in the United States are operated by the educational institutions themselves. The following companies compete directly with us: Follett Corporation, a contract operator of campus bookstores, which recently acquired Nebraska Book Company, a contract operator of on-campus and off-campus bookstores; Amazon.com, an e-commerce operator and a provider of contract services to colleges and universities; BBA Solutions, a college textbook retailer; Chegg.com, an online textbook rental company; CourseSmart, a digital course materials provider; Akademos, a virtual bookstore and marketplace for academic institutions; Rafter, a course materials management solution for higher educational institutions; bn.com, the e-commerce platform of Barnes & Noble and MBS Direct, an online bookstore provider.

Publishers are increasing efforts to sell directly to students, and technology companies, such as Apple, Google and Blackboard, are also increasing their digital offerings to students. In addition, student-to-student transaction are taking place on campuses and over the Internet.

Employees

As of May 2, 2015, we had approximately 5,300 full time and regularly scheduled part-time employees. In addition, we typically hire approximately 10,000 or more additional temporary employees during peak periods. Our employees are not represented by unions, with the exception of 30 employees, and we believe that our relationship with our employees is good.

Facilities

We lease approximately 74,000 square feet of space for our corporate headquarters in Basking Ridge, New Jersey pursuant to a lease that expires in October 2020. We also lease approximately 34,000 square feet of space in Mountain View, CA pursuant to a lease that expires in December 2019.

Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of its business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, securities, personal injuries and other matters.

The litigation matter described below is the only material legal proceeding in which we are involved. Under the Separation Agreement, Barnes & Noble will indemnify us against any expenses and liabilities incurred in connection with the matter.

Adrea LLC v. Barnes & Noble, Inc., NOOK Digital LLC (formerly known as barnesandnoble.com llc) and NOOK Media LLC

On June 14, 2013, Adrea LLC (“Adrea”) filed a complaint against Barnes & Noble, NOOK Digital LLC (formerly known as barnesandnoble.com llc) and NOOK Media LLC (“Barnes & Noble”) in the United States District Court for the Southern District of New York alleging that various Barnes & Noble NOOK products and related online services infringe U.S. Patent Nos. 7,298,851, 7,299,501 and 7,620,703. Barnes & Noble filed its Answer on August 9, 2013, denying infringement and asserting several affirmative defenses. At the same time, Barnes & Noble filed counterclaims seeking declaratory judgments of non-infringement and invalidity with respect to each of the patents-in-suit. Following the claim construction hearing held on November 1, 2013 (as to which the Court issued a claim construction order on December 1, 2013), the Court set a further amended case management schedule, under which fact discovery was to be (and has been) substantially completed by November 20, 2013, and concluded by December 9, 2013; and expert disclosures and discovery were to be (and have been) completed by January 17, 2014. According to the amended case management schedule, summary judgment motion briefing was to have been, and has now been completed as of February 21, 2014. The final pretrial conference, originally scheduled to be held on February 28, 2014, was adjourned by the Court until April 10, 2014. On that date the summary judgment motions were orally argued to the Court, and the Court reserved decision on such motions until a later date. The parties then discussed various pretrial proceedings with the Court, and the Court set the date of October 6, 2014 for trial. Subsequently, on July 1, 2014, the Court issued a decision granting partial summary judgment in Barnes & Noble’s favor, and in particular granting Barnes & Noble’s motion to dismiss one of Adrea’s infringement claims, and granting Barnes & Noble’s motion to limit any damages award with respect to another of Adrea’s infringement claims.

Beginning October 7, 2014, through and including October 22, 2014, the case was tried to a jury in the Southern District of New York. The jury returned its verdict on October 27, 2014. The jury found no infringement with respect to the ‘851 patent, and infringement with respect to the ‘501 and ‘703 patents. It awarded damages in the amount of $1.3 million. The jury further found no willful infringement with respect to any patent.

To date, the Court has yet to enter judgment, as it has requested post-trial briefing with respect to certain legal issues raised by the parties. Once it determines those issues and enters judgment, it is anticipated that the parties will file post-judgment motions, including, on Barnes & Noble’s part, a motion for judgment in its favor as a matter of law, notwithstanding the jury’s verdict.

MANAGEMENT

Board of Directors Following the Spin-Off

The following sets forth information regarding individuals who are currently expected to serve as directors after the Spin-Off (ages as of June 25, 2015):


Name		Age
Michael Huseby – Executive Chairman		60
Daniel A. DeMatteo*		67
Jerry Sue Thornton*		68
David G. Golden*		56
Max J. Roberts		62
John R. Ryan*		68
David A. Wilson*		73

*	Expected to be independent for purposes of the SEC and NYSE corporate governance listing standards

Prior to or at the time of the Spin-Off, each current Barnes & Noble director and/or officer listed below will resign as a director and/or officer of Barnes & Noble.

Michael P. Huseby will serve as our Executive Chairman. He has served as the Chief Executive Officer and a member of the board of directors of Barnes & Noble since January 2014. Previously, Mr. Huseby was appointed Chief Executive Officer of NOOK Media LLC and President of the Company in July 2013, and Chief Financial Officer of the Company in March 2012. From 2004 to 2011, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Cablevision Systems Corporation, a leading telecommunications and media company. He served on the Cablevision Systems Corporation Board in 2000 and 2001. Prior to joining Cablevision, Mr. Huseby served as Executive Vice President and Chief Financial Officer of Charter Communications, Inc., the fourth largest cable operator in the United States. Mr. Huseby was appointed to the Board of Directors of Charter Communications in May 2013. From 1999 to 2002, Mr. Huseby served as Executive Vice President, Finance and Administration, of AT&T Broadband, a provider of cable television services. In addition, Mr. Huseby spent over 20 years at Arthur Andersen, LLP and Andersen Worldwide, S.C., where he held the position of Global Equity Partner.

Qualifications, Experience, Attributes and Skills . Mr. Huseby has more than 15 years of financial and executive experience, having served as a senior executive at the Company, Cablevision Systems Corporation and AT&T Broadband. Mr. Huseby’s experience also includes his service as a director and audit committee member of Charter Communications and as a member of Cablevision Systems Corporation’s Board. This experience allows Mr. Huseby to bring to the Board substantial knowledge and a wide range and depth of insights in telecommunications, technology, retail, financial and business matters.

Daniel A. DeMatteo will serve on our Board. Mr. DeMatteo has served as Gamestop, Inc.’s Director and Executive Chairman since June 2010, and previously held other roles with Gamestop including Chief Executive Officer from August 2008 to June 2010, Vice Chairman and Chief Operating Officer from March 2005 to August 2008, and President and Chief Operating Officer of Gamestop or its predecessor companies since November 1996. Mr. DeMatteo has served as an executive officer in the video game industry since 1988.

Qualifications, Experience, Attributes and Skills . Mr. DeMatteo brings to the Board over 25 years of experience as an executive officer, including 19 years of experience growing GameStop and its predecessor companies into the world’s largest multichannel video game retailer. As one of the founders of GameStop, Mr. DeMatteo has demonstrated a record of leadership, innovation and achievement. With his experience in the

roles of Executive Chairman, Vice Chairman, Chief Executive Officer, President and Chief Operating Officer, Mr. DeMatteo provides the Board a unique and valuable perspective on corporate operations, strategy and business, including his perspective on the formula for success that has brought Gamestop to its current industry-leading position. The Board also benefits from Mr. DeMatteo’s entrepreneurial spirit and his extensive network of contacts and relationships within the video game industry.

Jerry Sue Thornton will serve on our Board. Dr. Thornton currently serves as Chief Executive Officer of Dream Catcher Educational Consulting, a consulting firm that provides coaching and professional development for newly selected college and university presidents. She also serves as a director of FirstEnergy Corp., Applied Industrial Technologies, Inc. and RPM, Inc. Dr. Thornton previously served as President of Cuyahoga Community College from 1992 to 2013 (for which she is now President Emeritus), and as a director of American Greetings Corporation from 2000 to 2013.

Qualifications, Experience, Attributes and Skills . Dr. Thornton has extensive executive management and board experience, including her board service for other public companies and her participation on numerous key board committees. She is a recognized leader in the Northeast Ohio community. Dr. Thornton brings to the Board broad leadership and business skills, together with her extensive board service for public companies and community organizations.

David G. Golden will serve on our Board. Mr. Golden has served as a director of Barnes & Noble since October 2010. Mr. Golden currently serves on the Audit and Compensation Committees of Barnes & Noble. Mr. Golden has been a Managing Partner at Revolution Ventures, an early-stage venture affiliate of Revolution LLC, since January 2013. From March 2006 until December 2011, Mr. Golden was a Partner, Executive Vice President and Strategic Advisor at Revolution LLC, a private investment company. Mr. Golden also served as Executive Chairman of Code Advisors, a private merchant bank focused on the intersections of technology and media from its founding in 2010 through 2012. Previously, Mr. Golden served in various senior positions over an 18-year period at JPMorgan Chase & Co. (“JPMorgan”), a financial services firm, and a predecessor company, Hambrecht & Quist Capital Management LLC (“Hambrecht & Quist”). Prior to that, Mr. Golden worked as a corporate attorney at Davis Polk & Wardwell LLP. Mr. Golden is a member of the boards of Blackbaud, Inc. and Everyday Health Inc., where he currently serves on their respective Audit Committees. Mr. Golden also is a member of the advisory boards of Granite Ventures LLC, a technology venture capital firm, and Partners for Growth LLC, a venture lending firm, and a member of the board of Vinfolio, Inc.

Qualifications, Experience, Attributes and Skills. Mr. Golden has over 20 years of technology and finance experience as an investment banker specializing in the technology sector at JPMorgan, Hambrecht & Quist and Allen & Company Incorporated, and more recently as a partner and executive of Revolution LLC and Executive Chairman of Code Advisors LLC, a next-generation investment bank focused on the intersection of technology and media. Mr. Golden’s technology experience also includes his service as a director and Advisory Board member of several technology companies including Blackbaud, Inc., a global provider of software services specifically designed for nonprofit organizations. Mr. Golden’s finance experience at Hambrecht & Quist and JPMorgan included significant work with mergers, capital markets and principal investing, and he has participated as lead merger advisor, equity underwriter or investor on over 150 transactions. Mr. Golden’s prior public company board directorships include CFI ProServices, Inc., Tocor II, Inc., Gaiam, Inc. and Vanguard Airlines Incorporated. Given this experience, Mr. Golden brings to the Board substantial knowledge of the technology sector and meaningful insight into the financial, strategic and capital-related issues technology companies face.

John R. Ryan will serve on our Board. Vice Admiral Ryan has served as director of Barnes & Noble since July 2014. Vice Admiral Ryan joined the Center for Creative Leadership’s Board of Governors in 2002 and has served as its President since 2007. From 2005 to 2007, he served as Chancellor of the State University of New York. Previously, Vice Admiral Ryan served as President of the State University of New York Maritime College from 2002 to 2005, Interim President of the State University of New York at Albany from 2004 to 2005 and

Superintendent of the United States Naval Academy, Annapolis, Maryland from 1998 to 2002. Vice Admiral Ryan served in the United States Navy from 1967 to his retirement in 2002, including as Commander of the Fleet Air Mediterranean from 1995 to 1998, Commander of the Patrol Wings for the United States Pacific Fleet from 1993 to 1995 and Director of Logistics for the South Pacific Command from 1991 to 1993. Vice Admiral Ryan is also Lead Director of CIT Group, Inc., a Director of Cablevision Systems Corporation (“Cablevision”) and Chairman of the U.S. Naval Academy Foundation Board.

Qualifications, Experience, Attributes and Skills . Vice Admiral Ryan has a total of more than 35 years in military service, more than 12 years as a leader at major universities, and over a decade of executive and board-level experience, including his service as Lead Director of CIT Group. Vice Admiral Ryan has substantial experience serving on public company boards undergoing strategic transactions such as separations, including serving as a director of Cablevision during its 2010 spinoff of Madison Square Garden, L.P. its 2011 spinoff of AMC Networks, Inc., and its 2013 sales of Clearview Cinemas and Optimum West to Bow Tie Cinemas and Charter Communications, respectively. This experience allows Vice Admiral Ryan to bring to the Board leadership and expertise in managing large complex organizations, and in particular the environment in which the Company operates.

David A. Wilson will serve on our Board. Mr. Wilson has served as a director of the Barnes & Noble since October 2010. Dr. Wilson currently serves as Chair of Barnes & Noble’s Audit Committee. From 1995 to December 2013, Dr. Wilson served as President and Chief Executive Officer of the Graduate Management Admission Council, a not-for-profit education association dedicated to creating access to graduate management and professional education that provides the Graduate Management Admission Test (GMAT). From 2009 to 2010, Dr. Wilson was a Director of Terra Industries Inc., a producer and marketer of nitrogen products, where he was a member of the Audit Committee. From 2002 to 2007, Dr. Wilson was a Director of Laureate Education, Inc. (formerly Sylvan Learning Systems, Inc.), an operator of an international network of licensed campus-based and online universities and higher education institutions, where he was Chairman of the Audit Committee beginning in 2003. From 1978 to 1994, Dr. Wilson was employed by Ernst & Young LLP (and its predecessor, Arthur Young & Company), serving as an Audit Principal through 1981, as an Audit Partner from 1981 to 1983 and thereafter in various capacities including Managing Partner, National Director of Professional Development, Chairman of Ernst & Young’s International Professional Development Committee and as a Director of the Ernst & Young Foundation. From 1968 to 1978, Dr. Wilson served as a faculty member at Queen’s University (1968-1970), the University of Illinois at Urbana-Champaign (1970-1972), the University of Texas (1972-1978), where he was awarded tenure, and Harvard Business School (1976-1977). Dr. Wilson is also Director of CoreSite Realty Corporation and the chair of its Audit Committee.

Qualifications, Experience, Attributes and Skills . Dr. Wilson has a total of more than 30 years of executive and board-level experience, including serving on the boards of Terra Industries Inc. and Laureate Education, Inc. while those companies were involved in strategic transactions, as well as serving as President and Chief Executive Officer of the Graduate Management Admission Council. Dr. Wilson also has more than 16 years of financial and accounting expertise, including as an Audit Partner at Ernst & Young LLP (and its predecessor, Arthur Young & Company). This experience allows Dr. Wilson to bring to the Board substantial financial and accounting knowledge and valuable insights.

Upon completion of the Spin-Off, our Board will be divided into three classes. The directors designated as Class I directors will have terms expiring at the first annual meeting of stockholders following the Spin-Off, which will be held in 2016. The directors designated as Class II directors will have terms expiring at the 2017 annual meeting of stockholders, and the directors designated as Class III directors will have terms expiring at the 2018 annual meeting of stockholders. Messrs. Huseby and Wilson will be designated as Class I directors, Messrs. Golden and Roberts and Dr. Thornton will be designated as Class II directors and Mr. DeMatteo and Vice Admiral Ryan will be designated as Class III directors. Commencing with the first annual meeting of stockholders following the Spin-Off, directors for each class will be elected at the annual meeting of stockholders held in the year in which the term for that class expires and thereafter will serve for a term of three years.

Executive Officers Following the Spin-Off

The following sets forth information regarding individuals who are currently expected to serve as our executive officers after the Spin-Off, including their positions (ages as of June 25, 2015):


Name	Age		Position
Michael Huseby		60	Executive Chairman
Max J. Roberts		62	Chief Executive Officer
Patrick Maloney		59	Executive Vice President and Chief Operating Officer
William Maloney		66	Executive Vice President
Barry Brover		54	Chief Financial Officer
Lisa Malat		55	Vice President, Operations and Chief Consumer Marketing Officer
Joel Friedman		64	Vice President, Chief Merchandising Officer
Stephen Culver		50	Vice President, Chief Information Officer
JoAnn Magill		61	Vice President, Human Resources
Kanuj Malhotra		48	Chief Strategy and Development Officer
Thomas D. Donohue		45	Vice President, Investor Relations and Treasurer
Philip O’Reilly		47	Vice President, Tax

Max J. Roberts, age 62, will serve as our Chief Executive Officer. Mr. Roberts joined our company in 1996 as President and has served as Chief Executive Officer of Barnes & Noble College since August of 2013. Prior to joining Barnes & Noble, Mr. Roberts held senior executive positions at Petrie Retail, R.H. Macy & Company and May Department Stores. Mr. Roberts started his professional career at the global public accounting firm of Touche Ross & Company (currently Deloitte). Mr. Roberts is a Certified Public Accountant and graduated cum laude with a degree in Accounting from Oklahoma Christian University.

Qualifications, Experience, Attributes and Skills . Mr. Roberts has been the President/CEO of Barnes & Noble College for nearly 20 years. In this capacity, Mr. Roberts has executive oversight for all strategic, operational strategies as well as full P&L responsibilities. In addition, having served in senior management positions at R. H. Macy & Company and Petrie Retail for 15 years, Mr. Roberts brings extensive experience in technology, consumer marketing, senior financial management and strategic initiatives. These combined experiences allow Mr. Roberts to bring to the Board substantial knowledge and a wide range and depth of insights in education, technology, retail, financial and business matters.

Patrick Maloney , age 59, will serve as our Executive Vice President and Chief Operating Officer. Mr. Maloney has served as Executive Vice President and Chief Operating Officer of Barnes & Noble College since May 2007. In that role he oversees operations at all bookstores nationwide, including bookstore e-commerce, store design & construction, internal operations, learning and development, and book and general merchandising departments. Mr. Maloney began his career at Barnes & Noble as a student and assistant manager at SUNY Stony Brook University.

William Maloney , age 66, will serve as our Executive Vice President. Mr. Maloney has served as Executive Vice President of Barnes & Noble College since 1995. In that role he oversees campus relations activities, builds partnerships and handles strategic planning and corporate marketing activities. Mr. Maloney began his career at Barnes & Noble as a Regional Manager and Operations Director before his appointment as Executive Vice President in 2002.

Barry Brover , age 54, will serve as our Chief Financial Officer. Mr. Brover has served as Chief Financial Officer of Barnes & Noble College since 2006. In that role he oversees all financial functions including accounting, financial reporting, inventory control, accounts payable, internal audit, tax, financial planning and analysis. Mr. Brover joined Barnes & Noble College in 1986 and has held various executive positions with increasing responsibility. Prior to joining Barnes & Noble College, Mr. Brover started his career at KPMG where he earned his CPA and was supervising audits. He has a B.B.A from Hofstra University in New York.

Lisa Malat , age 55, will serve as our Vice President of Marketing & Operations. Lisa provides strategic direction and executive oversight to Barnes & Noble College’s campus stores in the areas of consumer and corporate marketing, learning and development and in-store and eCommerce strategy and operational efficiencies. Prior to joining Barnes & Noble College in 1996, Lisa held several senior-level management positions at Macy’s, including roles in Store Operations, Process Re-Engineering, Distribution, Customer Service, and Learning and Development.

Joel Friedman , age 64, will serve as our Vice President of General Merchandising. During Joel’s 17 years at Barnes & Noble College, he has managed the non-book sales, developed store concepts and directed the planning, design and interior build outs of the company’s many store renovations and new store projects. He joined B&N in 1998 after a 20 year career in department store merchandising of Men’s Wear apparel in Boston with Federated based Filene’s and Jordan Marsh, a five year stint in product development and sourcing of Men’s Wear & Children’s Wear with Fredrick Atkins and a one year term with Capital Mercury, a wholesale importer, running their product development and design department.

Stephen Culver , age 50, will serve as our Vice President and Chief Information Officer and will be responsible for overseeing the company’s IT operations and strategic development. Prior to joining Barnes & Noble College in 2005, Stephen held leadership positions in both the private and public sectors. He owned and presided over an IT consulting company, which specialized in the retail and wholesale industries. As CIO of Giorgio Armani Corporation, he lead the IT operations during the development and expansion of their North American operations.

JoAnn Magill , age 61, will serve as our Vice President, Human Resources. During her 12 years with Barnes & Noble College, JoAnn has been responsible for the development, implementation, and coordination of policies, practices and programs to include employee relations, recruitment, benefits, payroll and compensation for the bookstores, Home Office and Yuzu ^™ Team. She joined the company in 2003 after a five year career as the Vice President of Human Resources for the AT&T Broadband Media Services Team. Prior to that she had an extensive 25 year career with Pathmark Supermarkets, where she held a variety of Field and Corporate leadership roles after initially entering the organization as a part-time employee.

Kanuj Malhotra, age 48, will serve as our Chief Strategy and Development Officer. Mr. Malhotra was appointed Chief Financial Officer of NOOK Media in July 2013. He joined Barnes & Noble as Vice President of Corporate Development in May 2012. Prior to joining the Company, Mr. Malhotra was Vice President and Finance Head for Kaplan Test Prep, a division of The Washington Post Company, from 2011 to 2012. At Kaplan, he led a business transformation from physical test centers to a digital online learning platform. From 2008 to 2010, Mr. Malhotra was Chief Financial Officer of Sloane Square Partners LLC. Between 2005 and 2007, he was the Chief Financial Officer for the International Division of the Cendant Marketing Group and Affinion International, which was divested by Cendant Corporation to Apollo Management. Mr. Malhotra began his career in Mergers and Acquisitions at Lehman Brothers. Mr. Malhotra earned his MBA in Finance and his BA in Economics from New York University.

Thomas D. Donohue , age 45, will serve as our Vice President of Investor Relations and Treasurer. Mr. Donohue has served as Treasurer of Barnes & Noble since June 2012. In that role he was responsible for the leadership and direction of all treasury activities including corporate finance, capital structure, cash management, financial risk management, international finance, debt management and relationships with financial institutions. Prior to joining Barnes & Noble, he worked at The Interpublic Group of Companies for 12 years, a global provider of advertising and marketing services, where he served as Vice President, Assistant Treasurer, International. He graduated from Loyola University in Maryland and received his MBA from the University of Notre Dame.

Philip O’Reilly , age 47, will serve as our Vice President, Tax and will be responsible for overseeing all aspects of the income, sales, use and other taxes to which we are subject. Phil has been the Vice President, Global Taxes for Barnes & Noble, Inc. since September 2013. He joined Barnes & Noble, Inc., after serving as

the Global Head of Tax for MF Global Holdings Inc. for more than five years. Prior to that, Phil was a partner in the New York office of McDermott, Will & Emery, LLP, where he advised clients on the tax aspects of a wide range of operational structuring, acquisitions, dispositions and reorganizations.

Director Independence

It is anticipated that a majority of the members of our Board following the Spin-Off will meet the criteria for independence as defined by the listing standards of the NYSE and the corporate governance guidelines to be adopted by our Board.

Committees of the Board of Directors

Effective upon the completion of the Spin-Off, our Board will have the following committees, each of which will operate under a written charter.

Audit Committee

The Audit Committee will be established in accordance with Section 3(a)(58)(A) and Rule 10A-3 under the Exchange Act. The responsibilities of the Audit Committee will be more fully described in our Audit Committee Charter and will include, among other duties:

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oversee the quality and integrity of our financial statements, accounting practices and financial information we provide to the SEC or the public;

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review our annual and interim financial statements, the report of our independent registered public accounting firm on our annual financial statements, Management’s Report on Internal Control over Financial Reporting and the disclosures under Management’s Discussion and Analysis of Financial Condition and Results of Operations;

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select and appoint an independent registered public accounting firm;

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pre-approve all services to be provided to us by our independent registered public accounting firm;

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review with our independent registered public accounting firm and our management the accounting firm’s significant findings and recommendations upon the completion of the annual financial audit and quarterly reviews;

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review and evaluate the qualification, performance, fees and independence of our registered public accounting firm;

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meet with our independent registered public accounting firm and our management regarding our internal controls, critical accounting policies and practices and other matters;

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discuss with our independent registered public accounting firm and our management earnings releases prior to their issuance;

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oversee our internal audit function; and

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oversee our compliance program, response to regulatory actions involving financial, accounting and internal control matters, internal controls and risk management policies.

The Audit Committee will consist entirely of independent directors, each of whom will meet the independence requirements set forth in the listing standards of the NYSE, Rule 10A-3 under the Exchange Act and our Audit Committee Charter. Each member of the Audit Committee will be financially literate, and at least one member of the Audit Committee will have accounting and related financial management expertise and satisfy the criteria to be an “audit committee financial expert” under the rules and regulations of the SEC, as those qualifications are interpreted by our Board in its business judgment. The initial members of the Audit Committee will be determined prior to the Spin-Off.

Compensation Committee

The responsibilities of the Compensation Committee will be more fully described in our Compensation Committee Charter and will include, among other duties:

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setting and reviewing our general policy regarding executive compensation;

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determining the compensation of our Chief Executive Officer and other executive officers;

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approving employment agreements for our Chief Executive Officer and other executive officers;

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reviewing the benefits provided to our Chief Executive Officer and other executive officers;

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overseeing our overall compensation structure, practices and benefits plans;

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administering our executive bonus and equity-based incentive plans; and

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assessing the independence of compensation consultants, legal counsel and other advisors to the Compensation Committee and hiring, approving the fees and overseeing the work of, and terminating the services of such advisors.

The Compensation Committee will consist entirely of independent directors. The members of the Compensation Committee will be “non-employee directors” (within the meaning of Rule 16b-3 under the Exchange Act) and “outside directors” (within the meaning of Section 162(m) of the Code). The initial members of the Compensation Committee will be determined prior to the Spin-Off.

Corporate Governance and Nominating Committee

The responsibilities of the Corporate Governance and Nominating Committee will be more fully described in Corporate Governance and Nominating Committee Charter and will include, among other duties:

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overseeing our corporate governance practices;

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reviewing and recommending to our Board amendments to our committee charters and other corporate governance guidelines;

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reviewing and making recommendations to our Board regarding the structure of our various board committees;

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identifying, reviewing and recommending to our Board individuals for election to the board;

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adopting and reviewing policies regarding the consideration of board candidates proposed by stockholders and other criteria for board membership; and

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overseeing our board’s annual self-evaluation.

The Corporate Governance and Nominating Committee will consist entirely of independent directors, each of whom will meet the independence requirements set forth in the listing standards of the NYSE and our Corporate Governance and Nominating Committee Charter. The initial members of the Corporate Governance and Nominating Committee will be determined prior to the Spin-Off.

Corporate Governance Guidelines

Prior to the completion of the Spin-Off, we will adopt written corporate governance guidelines to assist the board in implementing effective corporate governance practices. The guidelines will be reviewed regularly by the Corporate Governance and Nominating Committee in the light of changing circumstances in order to continue serving our best interests and the best interests of our stockholders.

Code of Business Conduct and Ethics

Prior to the completion of the Spin-Off, we will adopt a written code of ethics that is designed to deter wrongdoing and to promote, among other things:

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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

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the protection of the confidentiality of our non-public information;

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the responsible use of and control over our assets and resources;

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full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and other regulators and in our other public communications;

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compliance with applicable laws, rules and regulations; and

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accountability for adherence to the code and prompt internal reporting of any possible violation of the code.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

The following Compensation Discussion and Analysis summarizes the material elements of our compensation programs for our named executive officers (“NEOs”). For Fiscal 2015, our NEOs were:


Executive		Position
Max J. Roberts		Chief Executive Officer
Barry Brover		Vice President, Chief Financial Officer
Patrick Maloney		Executive Vice President, Chief Operating Officer
William Maloney		Executive Vice President
Joel Friedman		Vice President, General Merchandising

We are currently in the process of determining the composition of the Compensation Committee of our Board and the philosophy and design of our compensation plans and programs.

Background

We currently operate as a business segment of Barnes & Noble and will continue to do so until the completion of the Distribution. As a result, Barnes & Noble has determined the compensation of our employees, including our NEOs, and will continue to do so until the completion of the Spin-Off. Accordingly, except as otherwise indicated, the compensation arrangements discussed in this Compensation Discussion and Analysis are those of Barnes & Noble. References to “College” in this section refer to Barnes & Noble’s existing College business segment.

Barnes & Noble Compensation Philosophy and Objectives

Barnes & Noble Strives to Attract, Incentivize and Retain Talented Individuals . It is imperative that Barnes & Noble attract, incentivize and retain individuals whose skills are critical to the current and long-term success of Barnes & Noble.

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Barnes & Noble pays competitively . The compensation program is designed to be competitive relative to the compensation provided by peer group companies. Barnes & Noble generally considers market median compensation for its peer group and from certain competitive survey data when preparing offers of employment and assessing the competitiveness of executive compensation levels.

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Retention is a key objective of the compensation program . Because the implementation of Barnes & Noble’s business strategy requires long-term commitments on the part of our executives, and because competition for top talent is intense in our industry, retention is a key objective of the compensation program.

Barnes & Noble Pays for Performance . Barnes & Noble firmly believes that pay should be tied to performance. Superior performance enhances stockholder value and is a fundamental objective of Barnes & Noble’s compensation program.

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Barnes & Noble rewards attainment of established goals . The compensation program is designed to reward our executives for attaining established goals that require the dedication of their time, effort, skills and business experience to the success of Barnes & Noble and the maximization of stockholder value.

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Performance-based annual incentive compensation is a key component of Barnes & Noble’s compensation program . Annual performance is rewarded through performance-based annual incentive compensation, and is based on Barnes & Noble’s and College’s financial results in the applicable fiscal

year measured principally by Barnes & Noble’s consolidated EBIT (earnings before interest and taxes) and Barnes & Noble’s and College’s EBITDA (earnings before interest, taxes, depreciation and amortization), each as adjusted as described below, if applicable, as well as each individual executive’s contribution to those results.

Barnes & Noble Aligns Pay to Business Objectives and Long-Term Strategy . The compensation program is designed to reward and motivate the executive’s individual and team performance in attaining business objectives and maximizing stockholder value. Compensation decisions are based on the principle that the long-term interests of the executives should be aligned with those of Barnes & Noble’s stockholders.

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Barnes & Noble grants incentive awards recognizing that Barnes & Noble is undergoing a transition . Barnes & Noble currently is undergoing significant transitions, and the Barnes & Noble stock price has experienced volatility relating to such transitions and the overall environment in its industry. The Barnes & Noble Compensation Committee therefore believes that awarding annual incentives with focused goals provides greater control over the incentives created for the executives (and employees generally) than would a regular annual long-term equity incentive program.

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Barnes & Noble grants long-term equity incentive awards on a case-by-case basis . While Barnes & Noble has not established a regular annual long-term equity incentive award program, Barnes & Noble primarily uses equity incentive awards as a recruitment and retention incentive and to align the interests of executives with Barnes & Noble’s stockholders’ interests. In determining to grant long-term equity incentive awards, the Barnes & Noble Compensation Committee generally considers similar awards granted by Barnes & Noble’s peers with whom Barnes & Noble competes for key talent, as well as the necessary means to ensure stockholder alignment and the retention of executives during this critical period as Barnes & Noble implements its business strategy.

Pay Mix

Compensation for our executives is weighted towards at-risk variable compensation, where actual amounts earned may differ from target amounts. Each of our NEOs has a target performance-based annual incentive compensation opportunity that is assessed annually by the Barnes & Noble Compensation Committee to ensure alignment with Barnes & Noble compensation objectives and market practice. In addition, each of our NEOs may, from time to time, receive long-term equity compensation awards that ultimately deliver value based on the returns realized by Barnes & Noble stockholders, aligning the executive’s interests with those of Barnes & Noble’s stockholders.

Barnes & Noble’s Executive Compensation Framework

In support of its compensation philosophy, Barnes & Noble generally considers market median compensation of both a peer group of retail companies and a general industry comparator group to determine an appropriate total value and mix of pay for our executives. Barnes & Noble’s Compensation Committee reviews these peer and competitor groups on an annual basis.

However, market median compensation is just one factor that is considered in determining compensation levels for our executive officers. The following are additional considerations: (a) Barnes & Noble’s business performance; (b) each NEO’s job responsibilities, experience, prior performance and anticipated future performance; (c) relative compensation among our NEOs; (d) industry-wide business conditions; and (e) the recommendations of the Barnes & Noble Executive Chairman and the Barnes & Noble Chief Executive Officer (and our Chief Executive Officer, in the case of Messrs. Brover, P. Maloney, W. Maloney and Friedman).

Barnes & Noble’s peer group for Fiscal 2015 consisted of the following companies, which were selected based on their size and market capitalization and the complexity of their businesses, as well as the availability of comparative data. Additionally, the Barnes & Noble Compensation Committee recognizes that Radio Shack has

filed for bankruptcy and will not be included in the peer group for Fiscal 2016. Furthermore, if any of the companies below cease to be independent publicly traded companies they may be excluded from future peer groups.

Barnes & Noble’s Fiscal 2015 Peer Group


Adobe Systems Incorporated		Intuit Inc.
Bed Bath & Beyond Inc.		L Brands Inc.
Cabela’s Incorporated		Netflix, Inc.
Dick’s Sporting Goods, Inc.		Office Depot Inc.
eBay Inc.		Priceline Group Inc.
Expedia, Inc.		Radio Shack, Corp.
GameStop Corp.		Williams-Sonoma, Inc.
The Gap, Inc.		Yahoo! Inc.
GNC Holdings, Inc.

Given the differences between the expected market capitalization of our company and Barnes & Noble, as well as other relevant factors that impact executive compensation, we expect that the group of peer companies selected by our Compensation Committee following completion of this Distribution will differ from Barnes & Noble’s peer group for Fiscal 2015, although some of Barnes & Noble’s peer companies may continue to serve as peer companies for us.

Process for Determining the Compensation of Our Named Executive Officers

Roles of the Barnes & Noble Compensation Committee and Barnes & Noble’s Management

The Barnes & Noble Compensation Committee has responsibility for establishing, implementing and overseeing Barnes & Noble’s compensation program, and reviews and approves Barnes & Noble’s compensation philosophy and objectives. The Barnes & Noble Compensation Committee also annually reviews and approves the annual base salary levels, the performance-based annual incentive opportunity levels, the long-term incentive opportunity levels, the employment and severance agreements and any special or supplemental benefits, in each case, as, when and if appropriate, for each of the executive officers of Barnes & Noble (including Mr. Roberts) and any other executives of Barnes & Noble earning a base salary of $400,000 or more (including Messrs. Brover, P. Maloney, W. Maloney and Friedman). In addition, the Barnes & Noble Compensation Committee annually reviews and makes recommendations to the Barnes & Noble board of directors with respect to the compensation programs and policies applicable to Barnes & Noble’s directors and officers, including incentive compensation plans and equity-based plans, and approves all new incentive plans and major benefit programs. The Barnes & Noble Compensation Committee also administers Barnes & Noble’s equity incentive plan.

The Barnes & Noble Executive Chairman and the Barnes & Noble Chief Executive Officer annually review the performance of each of our NEOs. In the case of Messrs. Brover, P. Maloney, W. Maloney and Friedman, Mr. Roberts also reviews their performance and makes compensation recommendations to the Barnes & Noble Executive Chairman and the Barnes & Noble Chief Executive Officer. The compensation recommendations from the Barnes & Noble Executive Chairman and Barnes & Noble Chief Executive Officer following their review are presented to the Barnes & Noble Compensation Committee. The Barnes & Noble Compensation Committee considers all key elements of compensation separately and also reviews the full compensation package afforded by Barnes & Noble to our NEOs. In accordance with Barnes & Noble’s compensation philosophy and objectives, the Barnes & Noble Compensation Committee considers the compensation package provided to each of our NEOs in light of: (a) Barnes & Noble’s business performance; (b) each NEO’s experience, prior performance and anticipated future performance; (c) relative compensation among our NEOs; (d) industry-wide business conditions and (e) compensation provided by Barnes & Noble’s peers. When approving equity awards, the

Barnes & Noble Compensation Committee considers the size and vesting schedule of outstanding awards. Based on its judgment and expertise, the Barnes & Noble Compensation Committee may exercise its judgment to modify any or all recommended elements of compensation or awards to our NEOs.

In connection with the Distribution, we will appoint a Compensation Committee that will operate under a written charter. The Compensation Committee will be responsible for establishing and reviewing policies governing salaries and benefits, annual performance awards, long-term incentive compensation and the terms and conditions of employment for the Chief Executive Officer and each of the other NEOs. The Board will examine the composition of the Compensation Committee to ensure that its members meet both the independence requirements set forth in the listing standards of the New York Stock Exchange and the requirements of the Compensation Committee charter. See “Management—Committees of the Board of Directors—Compensation Committee” for more information.

Role of Barnes & Noble’s Compensation Consultant

The Barnes & Noble Compensation Committee has retained Frederic W. Cook & Co., Inc. (“Cook & Co.”), an independent nationally recognized compensation consulting firm, to provide information, analyses and advice regarding executive compensation and other matters. In order to ensure that the consultant’s advice to the Barnes & Noble Compensation Committee remains objective and is not unduly influenced by Barnes & Noble’s management, the consultant reports to and takes direction from the Barnes & Noble Compensation Committee itself and not from Barnes & Noble’s management. With the consent of the Barnes & Noble Compensation Committee, the consultant may contact Barnes & Noble’s management for information necessary to fulfill its assignments, such as information regarding personnel responsibilities and salaries. The consultant may also, and frequently does, provide reports and presentations to and on behalf of the Barnes & Noble Compensation Committee that Barnes & Noble management also receives. Barnes & Noble management’s contact with the compensation consultant in this regard is at the Barnes & Noble Compensation Committee’s direction. All decisions with respect to the amount and form of director and executive compensation are made by the Barnes & Noble Compensation Committee alone, subject to the approval of the full Barnes & Noble board of directors with respect to the compensation of the directors, and may reflect factors and considerations other than the information and advice provided by the compensation consultant.

During Fiscal 2015, Cook & Co. provided assistance on the operation of the performance-based annual incentive compensation program and grants of long-term equity incentive awards. Cook & Co. does not provide other services to Barnes & Noble in addition to providing compensation consulting services to the Barnes & Noble Compensation Committee. The Barnes & Noble Compensation Committee has assessed the independence of Cook & Co., as required by both the SEC rules and the New York Stock Exchange Listing Standards, and concluded that no conflict of interest exists with respect to its services to the Barnes & Noble Compensation Committee.

Overview of Barnes & Noble’s Compensation Program Design

The below section outlines the process by which Barnes & Noble determined the design of its Fiscal 2015 executive compensation program as it relates to our NEOs.

Elements of Pay

Consistent with the Barnes & Noble Compensation Committee’s compensation philosophy and objectives, the following elements make up the compensation of our NEOs:

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Base Salary

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Performance-Based Annual Incentive Compensation

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Long-Term Equity Incentive Awards

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Retirement, Other Benefits and Limited Perquisites

Base Salary

Barnes & Noble pays our NEOs a base salary to provide them with a guaranteed minimum compensation level for their annual services. An NEO’s base salary is determined by evaluating the responsibilities of the position held, the individual’s experience and the competitive marketplace for executive talent. The base salary is a component of total direct compensation, which is reviewed periodically for competitiveness relative to the total direct compensation paid to executives at peer group companies with comparable qualifications, experience and responsibilities, as discussed above. In Fiscal 2015, the Barnes & Noble Compensation Committee approved merit-based salary increases for Messrs. Roberts, Brover, P. Maloney, W. Maloney and Friedman in connection with the performance of the College business.

The table below sets forth the base salaries of each NEO as of the end of Fiscal 2014 and Fiscal 2015.


Executive Name	Final Base Salary in Fiscal 2014		Final Base Salary in Fiscal 2015
Max J. Roberts	$	783,000	$	850,000
Barry Brover	$	460,000	$	485,000
Patrick Maloney	$	682,000	$	732,000
William Maloney	$	640,000	$	660,000
Joel Friedman	$	398,000	$	410,000

Performance-Based Annual Incentive Compensation

In Fiscal 2015, our NEOs were granted performance-based annual incentive compensation awards with a target payout opportunity expressed as a percentage of annual base salary under either the Amended and Restated Barnes & Noble, Inc. 2009 Incentive Plan (the “Barnes & Noble Incentive Plan”), with respect to Mr. Roberts, or the Barnes & Noble College Booksellers, LLC Incentive Compensation Plan (the “College Incentive Plan”), with respect to Messrs. Brover, P. Maloney, W. Maloney and Friedman.

Mr. Roberts was granted performance-based annual incentive compensation awards in the form of cash-settled performance units that vest over a one-year period, payable in accordance with the Barnes & Noble Incentive Plan. The cash-settled performance units were structured so that achievement of an Adjusted EBIT* target was required for eligibility for any payout of the awards, following the achievement of which actual payout levels were determined based on the achievement of other corporate and individual goals.

“Adjusted EBIT” is defined as Barnes & Noble’s income from ongoing operations (excluding income on investments and foreign currency gains) on a consolidated basis, before deduction of interest payments and income taxes, as reported in Barnes & Noble’s income statement for Fiscal 2015, prior to accrual for any amounts for payment under the Fiscal 2015 performance unit awards, and adjusted to exclude the effects of charges for (a) restructurings, discontinued operations, acquisitions, divestitures, debt restructuring or early repayment, inventory or asset write-downs, severance costs incurred in connection with any restructuring, divestiture or reorganization, extraordinary items and other unusual on non-recurring items, (b) any event either not directly related to the operations of Barnes & Noble or not within reasonable control of Barnes & Noble’s management, (c) the cumulative effect of tax or accounting changes or restatement, (d) any costs or expenses related to any effort to prepare for or implement or resulting from, a partial or complete separation of one or more of Barnes & Noble’s businesses, (e) non-routine litigation expenses such as shareholder derivative actions and (f) the termination of the Barnes & Noble Employees’ Retirement Plan, in each case, as determined in accordance with generally accepted accounting principles and identified in the Barnes & Noble financial statements, notes to the financial statements or management’s discussion and analysis with respect to the financial statements as filed with the Securities and Exchange Commission.

The Barnes & Noble Compensation Committee set the target payout percentage for Mr. Roberts at 150% of base salary, with a maximum payout of 117% of target. Given Mr. Roberts’ responsibility for the College business, including the scope of his duties and his individual capacity to affect the overall performance of the College business, Mr. Roberts’ performance-based annual incentive compensation was structured to be based, after achievement of the Adjusted EBIT target, 25% on Barnes & Noble Consolidated EBITDA, 50% on College Adjusted EBITDA and 25% on individual performance goals, each as described below.

Messrs. Brover, P. Maloney, W. Maloney and Friedman are responsible for more focused areas of the College business. For that reason, each of these NEOs participated in the College Incentive Plan for Fiscal 2015, which provides for a performance-based annual incentive payment to each executive, 75%, or solely in the case of Mr. Friedman, 50%, which was based on the College Adjusted EBITDA performance target and 25%, or solely in the case of Mr. Friedman, 50%, of which was based on each executive’s individual performance goals, each as described below.

Fiscal 2015 Performance-Based Incentive Compensation Metrics. For Fiscal 2015, the Barnes & Noble Compensation Committee chose Barnes & Noble Consolidated EBITDA as the company-wide performance metric in order to incentivize the Barnes & Noble named executive officers (including Mr. Roberts) to work to advance Barnes & Noble’s continuing efforts to realize operational efficiencies and to provide a superior and seamless experience for customers . Additionally, to reflect the fact that Messrs. Roberts, Brover, P. Maloney, W. Maloney and Friedman maintain a primary focus in the College business during Fiscal 2015, the Barnes & Noble Compensation Committee chose to allocate a percentage of such executive’s overall award opportunity to Adjusted EBITDA calculated with respect to the College business . The Barnes & Noble Compensation Committee established targets for the various performance metrics based on the prior-year performance of the Barnes & Noble and the College businesses, the Barnes & Noble board of directors’ expectations for future performance and the Barnes & Noble Compensation Committee’s desire to appropriately motivate our NEOs . In addition, each of our NEO’s performance-based annual incentive compensation opportunity is subject to achievement of individual performance goals established by the Barnes & Noble Compensation Committee at the beginning of Fiscal 2015.

Set forth below is a chart showing the various performance metrics that comprise each of our NEO’s performance-based annual incentive compensation award opportunity and their weighting relative to the NEO’s total award opportunity.

Percentage of Overall Award Opportunity


NEO	Barnes & Noble Consolidated EBITDA			College Adjusted EBITDA			Individual Performance Goals
Max J. Roberts		25	%		50	%		25	%
Barry Brover		0	%		75	%		25	%
Patrick Maloney		0	%		75	%		25	%
William Maloney		0	%		75	%		25	%
Joel Friedman		0	%		50	%		50	%

“Barnes & Noble Consolidated EBITDA” is calculated by adding Depreciation and Amortization to Operating Income/(Loss) as reported in the Barnes & Noble’s audited financial statements.

“College Adjusted EBITDA” is defined and determined in the same manner as Barnes & Noble Consolidated EBITDA, but only with respect to the College operating segment, and adjusted to exclude the current year LIFO inventory adjustments.

Threshold Performance Requirement for Cash-Settled Performance Units. During the first quarter of Fiscal 2015, the Barnes & Noble Compensation Committee, in consultation with the Barnes & Noble Executive Chairman and Barnes & Noble’s compensation consultant, established a threshold Adjusted EBIT target of negative $145,749,000 with respect to performance-based annual incentive compensation awards granted under the Barnes & Noble Incentive Plan, which was set to ensure a minimum level of performance for payment of these annual incentives . The threshold level for Adjusted EBIT was a negative number because the Barnes & Noble Digital business was expected to have significant cash flow requirements in Fiscal 2015.

The Barnes & Noble Compensation Committee considers Adjusted EBIT to be an appropriate performance metric for annual incentives because it reflects the financial performance of Barnes & Noble and aligns performance-based annual incentive compensation with the interests of stockholders . Following the close of Fiscal 2015, the Barnes & Noble Compensation Committee certified that Barnes & Noble had achieved the Adjusted EBIT goal, which enabled the Barnes & Noble Compensation Committee to award annual incentive compensation to Mr. Roberts.

Application of the Fiscal 2015 Performance-Based Incentive Compensation Metrics to the Cash-Settled Performance Units. After the threshold Adjusted EBIT target was achieved, the Barnes & Noble Compensation Committee then applied the Barnes & Noble Consolidated EBITDA and College Adjusted EBITDA goals and individual performance goals to determine the actual payment amounts . The process is illustrated in the diagram below.

LOGO

Fiscal 2015 Performance Targets and Results. Set forth below is a chart showing the payout scale on which the Barnes & Noble Consolidated EBITDA and College Adjusted EBITDA portion of annual incentive compensation was based.


Level of Achievement of Barnes & Noble Consolidated EBITDA Target	Payout Percentage (% of Target Payout)	Level of Achievement of College Adjusted EBITDA Targets	Payout Percentage (% of Target Payout)
0% – less than 60%	0%	0% – less than 84%	0%
60% – less than 75%	25%	84% – less than 88%	50%
75% – less than 100%	62.5%	88% – less than 92%	75%
100% – less than 112.5%	100%	92% – less than 108%	100%
112.5% – less than 125%	108.5%	108% – less than 112%	105%
125% or more	117%	112% or more	117%

Set forth below is a chart showing the target and actual EBITDA or Adjusted EBITDA results for Barnes & Noble and the College business, respectively, for Fiscal 2015 . The chart also shows how the EBITDA or Adjusted EBITDA results correlate to a percentage of target and translate into a percentage of target pay.


EBITDA or Adjusted EBITDA	Target ($) (in millions)		Actual ($) (in millions)		% Target Achieved			% Target Pay
Barnes & Noble Consolidated	$	226.0	$	346.2		153.2	%		117	%
College	$	83.5	$	93.6		112.1	%		117	%

Fiscal 2015 Individual Performance Results. The Barnes & Noble Compensation Committee determined the accomplishment of Barnes & Noble’s strategic objectives with respect to Fiscal 2015, as well as the achievement of Barnes & Noble Consolidated EBITDA and the College Adjusted EBITDA goals at the maximum and above target levels, respectively, represented extraordinary work for Barnes & Noble executives. The Barnes & Noble Compensation Committee specifically determined that our NEOs had achieved the individual performance goals discussed below.

Mr. Roberts. The Barnes & Noble Compensation Committee noted that under Mr. Roberts’ leadership in Fiscal 2015 the College business had exceeded the College Adjusted EBITDA target, signed 19 new accounts and renewed 91 accounts (which translates into a client retention rate of 93%) and enhanced the Yuzu™ product line.

Mr. Brover. The Barnes & Noble Compensation Committee considered Mr. Brover’s contribution to exceeding the College Adjusted EBITDA target, leading the integration of the financial information of digital education into College systems and his participation in the executive team leading the General Merchandise system configuration.

Mr. P. Maloney. The Barnes & Noble Compensation Committee focused on Mr. P. Maloney’s contribution to exceeding the College Adjusted EBITDA target, increasing General Merchandise web sales by more than 35%, increasing rental conversion rate to 52.4% (an increase from the prior year) and achieving an increase in margin year over year from 67% to 72%.

Mr. W. Maloney. The Barnes & Noble Compensation Committee recognized Mr. W. Maloney’s contribution to exceeding the College Adjusted EBITDA and leadership in developing and carrying out the Company’s marketing strategy.

Mr. Friedman. The Barnes & Noble Compensation Committee noted Mr. Friedman’s contribution to increasing web sales of General Merchandise by more than 35%, increasing the rebate budget by 17% and improving comparable store gross margin by 0.6% over budget.

Fiscal 2015 Performance-Based Annual Incentive Compensation Payment Amounts. Set forth below is a chart showing target, maximum and actual Fiscal 2015 performance-based annual incentive compensation for our NEOs.


Name	Target Payout as a % of Salary			Payout Range as a % of Target			Target Incentive Compensation Award		Maximum Award		Actual Award		Actual Award as a % of Target
Max J. Roberts		150	%		0-117	%	$	1,275,000	$	1,491,750	$	1,437,563		112.75	%
Barry Brover		75	%		0-117	%	$	363,750	$	425,858	$	410,128		112.75	%
Patrick Maloney		125	%		0-117	%	$	915,000	$	1,070,550	$	1,031,663		112.75	%
William Maloney		100	%		0-117	%	$	660,000	$	772,200	$	744,150		112.75	%
Joel Friedman		40	%		0-158.5	%	$	164,000	$	259,940	$	218,940		133.50	%

The performance-based annual incentive awards earned by our NEOs under the annual incentive plans for Fiscal 2015 will be set forth in the “Summary Compensation Table” elsewhere in this Prospectus . The threshold, target and maximum incentive award opportunities for each of our NEOs for Fiscal 2015 are set forth in the “2015 Grants of Plan-Based Awards Table” elsewhere in this Prospectus.

Long-Term Equity Incentives

The grant of long-term equity incentive awards under the Barnes & Noble Incentive Plan is an additional element of Barnes & Noble’s compensation program . In Fiscal 2015, none of our executives received equity awards under the Barnes & Noble Incentive Plan.

Prior to the Distribution, the amounts, terms and conditions of the equity awards granted to our NEOs have been determined by the Barnes & Noble Compensation Committee . Equity awards granted to our NEOs following the Distribution will be determined by our Compensation Committee . Additionally, all stock options held by the NEOs will vest as of the Distribution and each NEO may exercise such options during the 180-day period following the Distribution . All outstanding restricted stock units held by the NEOs payable in shares of Barnes & Noble common stock or the value of which is determined by reference to the value of shares of Barnes & Noble common stock will be converted into a restricted stock unit award payable in, or the value of which is determined by reference to, our Common Stock on the same terms and conditions as were applicable under such Barnes & Noble restricted stock unit immediately prior to the Distribution, with respect to a number of shares of Company common stock with a fair market value equal to the aggregate fair market value of Barnes & Noble restricted stock units as of immediately prior to the Distribution.

Other Components of Compensation

Barnes & Noble Savings Plan. Each of our NEOs is entitled to participate in Barnes & Noble’s tax-qualified defined contribution 401(k) plan on the same basis as all other eligible employees . The 401(k) plan provides Barnes & Noble employees, including our NEOs, with a means for accumulating tax-deferred savings for retirement purposes . Barnes & Noble matches the contributions of participants, subject to certain criteria . Under the terms of the 401(k) plan, as prescribed the Code, the contribution of any participating employee is limited to the lesser of 75% of annual salary before taxes or a maximum dollar amount ($18,000 for 2015), subject to a $5,500 increase for participants who are age 50 or older . The amount of Barnes & Noble’s matching contributions for each of our NEOs is set forth in footnotes to the “Summary Compensation Table” elsewhere in this Prospectus.

Limited Perquisites and Other Compensation. Barnes & Noble does not have a formal program providing perquisites to our executives . Instead, certain of our executives are entitled to the limited perquisites set forth in their employment agreements.

Severance and Change of Control Payments and Benefits. The employment agreement that was effective during Fiscal 2015 (each, an “Old Employment Agreement”) for each of Messrs. Roberts, Brover, P. Maloney and W. Maloney provided for certain severance payments and benefits upon termination of employment by College without cause or by the NEO for good reason (including upon termination within two years following a change of control) . The triggering events that would have resulted in the severance payments and benefits and the amount of those payments and benefits were selected to provide our NEOs with financial protection upon loss of employment in order to support our executive retention goals and to enable our NEOs to focus on the interests of Barnes & Noble, the College business and Barnes & Noble’s stockholders in the event of a potential change of control . When the employment agreements of our NEOs were entered into, the triggering events and amounts were considered to be competitive with severance protection being offered by other companies with whom we compete for highly qualified executives . The compensation that could be received by each of our NEOs upon termination or change of control is set forth in the “Potential Payments Upon Termination or Change of Control Table” below. Mr. Friedman does not have an employment agreement.

Employment Agreements with our NEOs

For a summary of the material terms of the employment agreements with our NEOs that were effective during Fiscal 2015 and affect the amounts set forth in the tables following this Compensation Discussion and Analysis, see the discussion in the “Narrative to the Summary Compensation Table and the Grants of Plan-Based Awards Table—Employment Agreements with our NEOs.”

Our Anticipated Compensation Program Following This Distribution

We are currently in the process of determining the compensation programs we anticipate implementing for our senior executives, including our NEOs following the Distribution.

Amended and Restated Employment Agreements

Upon the Distribution, the amended and restated employment agreements for Messrs. Roberts, Brover, P. Maloney and W. Maloney will become effective (the “Amended Employment Agreements”). Messrs. Roberts, Brover, P. Maloney and W. Maloney entered into the Amended Employment Agreements in connection with the Distribution. The Amended Employment Agreements contain the following changes to the Old Employment Agreements:

•

the NEOs will be eligible for awards under the Barnes & Noble Education, Inc. Equity Incentive Plan instead of the Amended and Restated Barnes & Noble, Inc. 2009 Incentive Plan;

•

the definition of “change of control” will reference the voting securities and directors of the Company instead of Barnes & Noble and will not contain an exception for acquisitions by Mr. Riggio and his affiliates;

•

the definition of “good reason” will require relocation of College’s principal executive offices outside of both the New York City metropolitan area and the Basking Ridge, NJ area instead of solely the New York City metropolitan area; and

•

the initial term of the Amended Employment Agreements will begin on the date the agreements are executed and will continue until the third anniversary of such date.

Huseby Employment Agreement

Mr. Huseby entered into an employment agreement on June 26, 2015 in connection with the Distribution, pursuant to which he will serve as our Executive Chairman. The employment agreement will continue for two years thereafter, and renew automatically for one year unless either party gives notice of non-renewal at least three months prior to automatic renewal. Pursuant to his employment agreement, Mr. Huseby’s annual base salary can be no less than $500,000 during the term of his employment. Under his employment agreement, Mr. Huseby is eligible for an annual incentive compensation award as determined by our Compensation Committee and grants of equity-based awards with an aggregate target value of 300% of his annual base salary at the same time and of the same type of such awards granted to other executive officers of the Company. Mr. Huseby is also entitled to all other benefits afforded to executive officers and employees of the Company. Under his employment agreement, Mr. Huseby is subject to certain restrictive covenants regarding competition, solicitation, confidentiality and disparagement, which apply during his employment and for the two-year period following the termination of his employment. The confidentiality and non-disparagement covenants apply during the term of his employment and at all times thereafter.

If Mr. Huseby’s employment is terminated by the Company without “cause” or by him for “good reason,” he is entitled, provided he signs a release of claims against the Company, to a lump-sum severance payment equal to two-times: (a) annual base salary, (b) the average annual incentive compensation paid to him with respect to the preceding three completed years (or such lesser number of completed fiscal years) and (c) the cost of benefits. Further, if Mr. Huseby’s employment is terminated by the Company without “cause” or by him for “good reason,” within two years (or the remainder of his term of employment under his employment agreement, whichever is longer) following a “change of control” of the Company, he is entitled, regardless of whether he signs a release of claims against the Company, to a lump-sum severance payment equal to three times: (a) annual base salary, (b) the average annual incentive compensation paid to him with respect to the preceding three completed years (or such lesser number of completed fiscal years) and (c) the cost of benefits. However, if such severance payments trigger the “golden parachute” excise tax under Sections 280G and 4999 of the Code, Mr. Huseby’s severance benefits would be reduced if such reduction would result in a greater after-tax benefit to him.

Our Compensation Committee

Following the Distribution, our Compensation Committee, which will be appointed by our Board, will determine the design of our executive compensation program . Our Compensation Committee will review and

evaluate our executive compensation program to ensure that the program is aligned with our compensation philosophy . It is anticipated that our Compensation Committee will engage an independent compensation consultant to advise it in connection with its considerations and decisions.

Other Compensation Related Information

Unless otherwise stated, the compensation tables included in this section reflect amounts paid or payable or awards granted to our NEOs by Barnes & Noble under Barnes & Noble’s compensation plans and programs during Fiscal 2015, which ended May 2, 2015 . Following the completion of the Distribution, our NEOs will receive compensation and benefits under our compensation plans and programs.

Summary Compensation Table


Name and Principal Position	Fiscal Year		Salary (1)		Stock Awards (2)		Non-Equity Incentive Plan Compensation (3)		All Other Compensation (4)		Total
Max J. Roberts		2015	$	840,981	$	—	$	1,473,563	$	47,452	$	2,325,996
Chief Executive Officer		2014	$	788,019	$	2,952,000	$	873,045	$	31,119	$	4,644,183
Chief Executive Officer		2013	$	725,000	$	583,450	$	543,750	$	29,990	$	1,882,190

Barry Brover		2015	$	481,154	$	—	$	410,128	$	41,411	$	932,693
Vice President, Chief Financial Officer		2014	$	461,058	$	664,200	$	259,325	$	31,450	$	1,416,033
Vice President, Chief Financial Officer		2013	$	415,000	$	200,040	$	207,500	$	29,988	$	852,528

Patrick Maloney		2015	$	724,308	$	—	$	1,031,663	$	35,743	$	1,791,714
Executive Vice President, Chief Operating Officer		2014	$	684,385	$	738,000	$	751,905	$	32,260	$	2,206,550
Executive Vice President, Chief Operating Officer		2013	$	620,000	$	200,040	$	620,000	$	30,248	$	1,470,288

William Maloney		2015	$	656,923	$	—	$	744,150	$	27,023	$	1,428,096
Executive Vice President		2014	$	648,846	$	—	$	689,600	$	26,860	$	1,365,306
Executive Vice President		2013	$	620,000	$	—	$	620,000	$	25,977	$	1,265,977

Joel Friedman		2015	$	408,154	$	—	$	218,940	$	20,882	$	647,976
Vice President, General Merchandising		2014	$	403,923	$	184,500	$	200,592	$	21,303	$	810,318
Vice President, General Merchandising		2013	$	385,989	$	66,680	$	139,680	$	20,451	$	612,800

(1)	This column represents base salary earned.

(2)

This column represents the aggregate grant date fair value of stock awards granted in Fiscal 2014 and Fiscal 2013, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation (“ASC 718”) . None of the NEOs received stock awards in Fiscal 2015 . The stock awards value is determined to be the fair market value of the underlying Barnes & Noble shares on the grant date, which is determined based on the closing price of Barnes & Noble’s common stock on the grant date . These amounts reflect an estimate of the grant date fair value and may not be equivalent to the actual value recognized by the NEO . For additional information, see the discussions in the “Compensation Discussion and Analysis—Overview of Barnes & Noble’s Compensation Program Design, Long-Term Equity Incentives” section of this Prospectus.

(3)

This column represents the dollar value of performance-based annual incentive compensation earned for performance in Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively . Refer to the “2015 Grants of Plan-Based Awards Table” for information on awards made in Fiscal 2015 . For additional information, see the discussions in the “Compensation Discussion and Analysis—Overview of Barnes & Noble’s Compensation Program Design, Performance-Based Annual Incentive Compensation” section of this Prospectus.

(4)	This column represents the value of all other compensation, as detailed in the table below:

All Other Compensation Table


Name	Fiscal Year		Long-Term Disability Insurance ^(a)		Life and AD&D Insurance ^(b)		Car Allowance		401(k) Company Match		Total Other Income
Max J. Roberts		2015	$	12,874	$	6,309	$	18,000	$	10,269	$	47,452
		2014	$	1,560	$	1,230	$	18,000	$	10,329	$	31,119
		2013	$	1,645	$	1,230	$	18,000	$	9,115	$	29,990

Barry Brover		2015	$	9,690	$	2,975	$	18,000	$	10,746	$	41,411
		2014	$	1,640	$	348	$	18,000	$	11,462	$	31,450
		2013	$	1,640	$	348	$	18,000	$	10,000	$	29,988

Patrick Maloney		2015	$	6,295	$	356	$	18,000	$	11,092	$	35,743
		2014	$	1,900	$	348	$	18,000	$	12,012	$	32,260
		2013	$	1,900	$	348	$	18,000	$	10,000	$	30,248

William Maloney		2015	$	1,560	$	356	$	18,000	$	7,107	$	27,023
		2014	$	1,620	$	348	$	18,000	$	6,892	$	26,860
		2013	$	1,560	$	348	$	18,000	$	6,069	$	25,977

Joel Friedman		2015	$	1,560	$	356	$	8,400	$	10,566	$	20,882
		2014	$	1,620	$	348	$	8,400	$	10,935	$	21,303
		2013	$	1,560	$	348	$	8,400	$	10,143	$	20,451

(a)	This represents the premiums paid by Barnes & Noble for the long-term disability insurance.

(b)	This represents the premiums paid by Barnes & Noble for life and accidental death and dismemberment insurance .

Barnes & Noble compensates Messrs. Roberts, Brover, P. Maloney and W. Maloney taking into account the terms of their respective employment agreements, and the information reported in the Summary Compensation Table reflects the terms of such agreements . Mr. Friedman does not have an employment agreement. Barnes & Noble compensates Mr. Friedman taking into account competitive survey data, business performance, industry-wide conditions and recommendations from Mr. Roberts. For more information about our NEOs’ employment agreements, see the discussion below in the “Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements with our NEOs—Old Employment Agreements—General Provisions” section of this Prospectus.

Grants of Plan-Based Awards Table

The following “2015 Grants of Plan-Based Awards Table” provides additional information about non-equity incentive awards and long-term incentive awards granted to our NEOs by Barnes & Noble during Fiscal 2015.

2015 Grants of Plan-Based Awards Table


Name	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)				All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($)
			Target ($)		Maximum (2) ($)
Max J. Roberts		07/16/2014	$	1,275,000	$	1,491,750		—		—		—		—
Barry Brover		07/16/2014	$	363,750	$	425,858		—		—		—		—
Patrick Maloney		07/16/2014	$	915,000	$	1,070,550		—		—		—		—
William Maloney		07/16/2014	$	660,000	$	772,200		—		—		—		—
Joel Friedman		07/16/2014	$	164,000	$	259,940		—		—		—		—

(1)

These columns represent the target payout level and maximum payout level for the performance-based incentive compensation awards under the Barnes & Noble Incentive Plan, in the case of Mr. Roberts, and under the College Incentive Plan, in the case of Messrs. Brover, P. Maloney, W. Maloney and Friedman. For additional information regarding the performance-based annual incentive compensation program, see the discussion in the “Compensation Discussion and Analysis—Overview of Barnes & Noble’s Compensation Program Design, Performance-Based Annual Incentive Compensation” section of this Prospectus.

(2)

The maximum amounts shown in the column reflect values derived from each NEO’s target incentive compensation percentage of salary. For additional information regarding the performance-based annual incentive compensation program, see the discussion in the “Compensation Discussion and Analysis—Overview of Barnes & Noble’s Compensation Program Design, Performance-Based Annual Incentive Compensation” section of this Prospectus.

Narrative to the Summary Compensation Table and the Grants of Plan-Based Awards Table

Employment Agreements with our NEOs

The Old Employment Agreements with each of Messrs. Roberts, Brover, P. Maloney and W. Maloney provided for certain severance payments and benefits upon termination of employment by College without “cause” or by the NEO for “good reason” (including upon termination within two years following a change of control). As discussed above under “—Employment Agreements with our NEOs”, each of our NEOs entered into an Amended Employment Agreement after Fiscal 2015, but the terms of the Old Employment Agreements are described below because they affect the compensation tables in this section. Mr. Friedman does not have an employment agreement. The benefits he received in Fiscal 2015 are described below and are generally the same as those provided to other employees. He is entitled to be considered for severance, as other employees generally.

Old Employment Agreements—General Provisions

College has entered into an employment agreement with each of Messrs. Roberts, Brover, P. Maloney and W. Maloney, and the compensation of each of these NEOs is based on their respective employment agreement as well as their job responsibilities. The terms of the employment agreement with Mr. Roberts commenced on June 23, 2014, with each of Messrs. Brover and P. Maloney commenced on June 30, 2014 and with

Mr. W. Maloney commenced on September 30, 2009, and will continue for three years or, solely in the case of Mr. W. Maloney, two years thereafter, and renew each year automatically for one year unless either party gives notice of non-renewal at least three months prior to automatic renewal.

Pursuant to their employment agreements, the annual base salaries of Messrs. Roberts, Brover, P. Maloney and W. Maloney can be no less than $850,000, $485,000, $732,000 and $600,000, respectively, during the terms of their employment. With respect to Messrs. Roberts, Brover, P. Maloney and W. Maloney, the NEO is eligible for a minimum target annual incentive compensation award of 150%, 75%, 125% and 100% of his base salary, respectively. The employment agreements also provide that the NEO is eligible for grants of equity-based awards under the Amended and Restated Barnes & Noble, Inc. 2009 Incentive Plan, or solely in the case of Mr. W. Maloney, restricted stock awards under Barnes & Noble’s 2009 Incentive Plan, and provide for a $1,500 monthly car allowance. The employment agreements for Messrs. Roberts, Brover and P. Maloney also provide for $1,000,000 of life insurance and long-term disability (providing for monthly payments of $12,800) payable during the disability period through the earlier of death or the attainment of age 65. Each of our NEOs is entitled to all other benefits afforded to executive officers and employees of College.

Under their respective employment agreements with College, Messrs. Roberts, Brover, P. Maloney and W. Maloney are subject to certain restrictive covenants regarding competition, solicitation, confidentiality and disparagement. The non-competition and non-solicitation covenants apply during each of the employment of Messrs. Roberts, Brover, P. Maloney and W. Maloney and for the two-year period following the termination of employment of Messrs. Roberts, Brover, P. Maloney and W. Maloney. The confidentiality and non-disparagement covenants apply during the term of each respective employment agreement of Messrs. Roberts, Brover, P. Maloney and W. Maloney and at all times thereafter.

Old Employment Agreements—Severance and Change of Control Benefits

The employment agreements provide that the employment of Messrs. Roberts, Brover, P. Maloney and W. Maloney may be terminated by College upon death or disability or for “cause”, and by the NEO without “good reason”. If the employment of Messrs. Roberts, Brover, P. Maloney or W. Maloney is terminated by College upon death, disability or for “cause,” or by the NEO without “good reason”, the NEO is entitled to payment of base salary through the date of death, disability or termination of employment.

If the employment of Messrs. Roberts, Brover or P. Maloney is terminated by College without “cause” or by the executive for “good reason,” the NEO is entitled, provided he signs a release of claims against College, to a lump-sum severance payment equal to two-times (or, in the case of Messrs. Brover and P. Maloney, one times) (a) annual base salary, (b) the average annual incentive compensation paid to him with respect to the preceding three completed years and (c) the cost of benefits. Mr. W. Maloney is entitled to one times his annual base salary if his employment is terminated by the Company without “cause” or by him for “good reason”.

Further, if the employment of Messrs. Roberts, Brover or P. Maloney is terminated by the Company without “cause” or by the NEO for “good reason” within two years (or the remainder of his term of employment under his employment agreement, whichever is longer) following a “change of control” of Barnes & Noble, the NEO is entitled, regardless of whether he signs a release of claims against College, to a lump-sum severance payment equal to three times (or, in the case of Messrs. Brover and P. Maloney, two times) (a) annual base salary, (b) the average annual incentive compensation paid to him with respect to the preceding three completed years and (c) the cost of benefits. However, if such severance payments trigger the “golden parachute” excise tax under Sections 280G and 4999 of the Code, the severance benefits for Messrs. Roberts, Brover and P. Maloney would be reduced if such reduction would result in a greater after-tax benefit to him. Mr. W. Maloney is entitled to two times his annual base salary if his employment is terminated by the Company without “cause” or by him for “good reason” within two years (or the remainder of his term of employment under his employment agreement, whichever is longer) following a “change of control” of Barnes & Noble.

Except as otherwise provided by the applicable award agreement, if the successor company assumes or substitutes for an outstanding equity award such award will continue in accordance with its applicable terms and will not be accelerated. Under the option award agreements, if the holder were terminated within 24 months following a change of control, then the unvested options underlying the award or substitute award would immediately vest. Furthermore, under the restricted stock unit award agreements, if the holder were terminated other than for “cause” at any time following a change of control, then the unvested restricted stock units underlying the award would immediately vest. Under the stock option and restricted stock unit award agreements executed under the Barnes & Noble 2009 Incentive Plan (prior to its amendment and restatement), “change of control” generally means any of the following: (a) a change in the ownership of Barnes & Noble; (b) a change in the effective control of Barnes & Noble; or (c) a change in the ownership of a substantial portion of Barnes & Noble’s assets, in each case, within the meaning of Section 409A of the Code and the regulations promulgated thereunder. Under the stock option and restricted stock unit award agreements executed under the Barnes & Noble Incentive Plan, “change of control” generally means any of the following: (a) during any period of 24 consecutive months, a change in the composition of a majority of Barnes & Noble’s directors, as constituted on the first day of such period, that was not supported by a majority of the incumbent directors; (b) the consummation of certain mergers or consolidations of Barnes & Noble with any other corporation, or the sale of all or substantially all the assets of Barnes & Noble, following which Barnes & Noble’s then current stockholders cease to own more than 50% of the combined voting power of the surviving entity; or (c) the acquisition by a third party (other than Mr. Riggio and his affiliates) of 40% or more of the combined voting power of the then outstanding voting securities of Barnes & Noble. Under the restricted stock unit award agreements, “cause” generally means (a) a material failure by the holder to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with Barnes & Noble after written notice of such breach or failure and the holder failed to cure such breach or failure to Barnes & Noble’s reasonable satisfaction within five days after receiving such written notice; or (b) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of Barnes & Noble or its funds, properties, assets or other employees.

The estimated payments to be made by College to our NEOs in the event of a change of control are set forth below in the “Potential Payments Upon Termination or Change of Control Table”.

Old Employment Agreements—Defined Terms

“cause”, for purposes of the employment agreements generally means any of the following: (a) the NEO engaging in intentional misconduct or gross negligence that, in either case, is injurious to College; (b) the NEO’s indictment, entry of a plea of nolo contendere or conviction by a court of competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (c) any gross negligence, intentional acts or intentional omissions by the NEO that constitute fraud, dishonesty, embezzlement or misappropriation in connection with the performance of the NEO’s duties and responsibilities; (d) the NEO engaging in any act of intentional misconduct or moral turpitude reasonably likely to adversely affect College or its business; (e) the NEO’s abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects the NEO’s job performance; (f) the NEO’s willful failure or refusal to properly perform the duties, responsibilities or obligations of the NEO’s service for reasons other than disability or authorized leave, or to properly perform or follow any lawful direction by College; or (g) the NEO’s material breach of the agreement or of any other contractual duty to, written policy of, or written agreement with, College.

“change of control”, for purposes of the employment agreements generally means any of the following: (a) the acquisition by any person or group (other than the executive or his or her affiliates or Mr. Riggio or any of his heirs or affiliates) of 40% or more of Barnes & Noble’s voting securities; (b) Barnes & Noble’s directors immediately prior to a merger, consolidation, liquidation or sale of assets cease within two years thereafter to constitute a majority of the Barnes & Noble’s board of directors; or (c) Barnes & Noble’s directors immediately prior to a tender or exchange offer for Barnes & Noble’s voting securities cease within two years thereafter to constitute a majority of the Barnes & Noble board of directors.

“good reason”, for purposes of the employment agreements, generally means any of the following: (a) a material diminution of authority, duties or responsibilities; (b) a greater than 10% reduction in base salary; (c) the relocation of College’s principal executive offices outside of the New York City metropolitan area; or (d) a failure by College to make material payments under the agreement.

Outstanding Equity Awards at Fiscal Year End

The following table summarizes the equity awards Barnes & Noble made to our NEOs that were outstanding as of the end of Fiscal 2015. In accordance with the applicable SEC disclosure guidance, this table and the accompanying footnotes do not account for any awards that may have been exercised or have vested pursuant to their terms in the ordinary course since the end of Fiscal 2015.

2015 Outstanding Equity Awards at Fiscal Year End


	Option Awards										Stock Awards
Name	Option Grant Date		Number of Securities Underlying Unexercised Options (1)				Option Exercise Price		Option Expiration Date		Stock Award Grant Date		Number of Shares or Units of Stock That Have Not Vested (2)		Market Value of Shares or Units of Stock That Have Not Vested (3)
			Exercisable		Unexercisable
Max J. Roberts		11/15/2011		30,000		30,000	$	15.78		11/14/2021		05/23/2011		10,834	$	245,932
												03/05/2013		26,250	$	595,875
												02/07/2014		133,333	$	3,026,659

Barry Brover		11/15/2011		15,000		15,000	$	15.78		11/14/2021		05/23/2011		5,843	$	132,432
												03/05/2013		9,000	$	204,300
												02/07/2014		30,000	$	681,000

Patrick Maloney		11/15/2011		17,500		17,500	$	15.78		11/14/2021		05/23/2011		7,500	$	170,250
												03/05/2013		9,000	$	204,300
												02/07/2014		33,333	$	756,659
William Maloney		11/15/2011		17,500		17,500	$	15.78		11/14/2021		05/23/2011		7,500	$	170,250

Joel Friedman		—		—		—		—		—		03/05/2013		3,000	$	68,100
												02/07/2014		8,334	$	189,182

(1)	This column represents outstanding grants of options. Set forth in the table below are the remaining vesting dates of all unvested options:


Name	Option Grant Date		Number of Shares or Units of Stock That Have Not Vested		Vesting Dates
Max J. Roberts		11/15/11		30,000	50% on 11/15/15
Barry Brover		11/15/11		15,000	50% on 11/15/15
Patrick Maloney		11/15/11		17,500	50% on 11/15/15
William Maloney		11/15/11		17,500	50% on 11/15/15
Joel Friedman		—		—	—

(2)	This column represents outstanding grants of shares of restricted stock units. Set forth in the table below are the remaining vesting dates of all unvested restricted stock unit awards:

Name

Stock Award
Grant Date

Number of
Shares or Units of
Stock That Have
Not Vested

Vesting Dates

Max J. Roberts

05/23/2011

10,834

25% on 05/23/14 and 50% on 05/23/15

03/05/2013

26,250

25% on 03/05/16 and 50% on 03/05/17

02/07/2014

133,333

33.3% on 02/07/16 and 33.4% on 02/07/17

Barry Brover

05/23/2011

5,834

25% on 05/23/14 and 50% on 05/23/15

03/05/2013

9,000

25% on 03/05/16 and 50% on 03/05/17

02/07/2014

30,000

33.3% on 02/07/16 and 33.4% on 02/07/17

Patrick Maloney

05/23/2011

7,500

25% on 05/23/14 and 50% on 05/23/15

03/05/2013

9,000

25% on 03/05/16 and 50% on 03/05/17

02/07/2014

33,333

33.3% on 02/07/16 and 33.4% on 02/07/17

William Maloney

05/23/2011

7,500

25% on 05/23/14 and 50% on 05/23/15

Joel Friedman

03/05/2013

3,000

25% on 03/05/16 and 50% on 03/05/17

02/07/2014

8,334

33.3% on 02/07/16 and 33.4% on 02/07/17

(3)	Market values have been calculated using a stock price of $22.70 (closing price of Barnes & Noble’s common stock on May 1, 2015, the last trading day of Fiscal 2015).

The following “2015 Option Exercises and Stock Vested” table provides additional information about the value realized by our NEOs on option award exercises and the vesting of stock or stock unit awards during the fiscal year ended May 2, 2015.

Option Exercises and Stock Vested

2015 Option Exercises and Stock Vested


			Option Awards				Stock Awards
Name	Fiscal Year		Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ⁽¹⁾ ($)
Max J. Roberts		2015		—	$	—		80,833	$	1,921,923
Barry Brover		2015		—	$	—		20,916	$	486,708
Patrick Maloney		2015		—	$	—		23,416	$	541,061
William Maloney		2015		—	$	—		3,750	$	63,150
Joel Friedman		2015		—	$	—		5,166	$	125,696

(1)	The amounts in this column are calculated by multiplying the number of shares vested by the closing price of Barnes & Noble’s common stock on the date of vesting.

Potential Payments Upon Termination or Change of Control

The following table shows the estimated benefits payable upon a hypothetical termination of employment under the applicable employment agreement and under various termination scenarios as of the fiscal year ended May 2, 2015.

Potential Payments Upon Termination or Change of Control Table (1)


Event	Max J. Roberts		Barry Brover		Patrick Maloney		William Maloney		Joel Friedman
Involuntary Termination or Voluntary Termination with Good Reason
Cash severance payment (2)	$	3,640,375	$	817,943	$	1,564,894	$	660,000	$	—
Accelerated equity-based awards (3)	$	—	$	—	$	—	$	—	$	—

Total	$	3,640,375	$	817,943	$	1,564,894	$	660,000	$	—
Death
Cash severance payment (2)	$	—	$	198,332	$	220,369	$	—	$	55,092
Accelerated equity-based awards (3)	$	3,868,466	$	1,017,732	$	1,131,209	$	170,250	$	257,282
Health benefits (4)	$	1,605	$	5,011	$	1,605	$	3,404	$	1,605

Total	$	3,870,071	$	1,221,075	$	1,353,183	$	173,654	$	313,979
Disability
Cash severance payment (2)	$	—	$	198,332	$	220,369	$	—	$	55,092
Accelerated equity-based awards (3)	$	3,868,466	$	1,017,732	$	1,131,209	$	170,250	$	257,282
Health benefits (5)	$	6,047	$	8,757	$	6,047	$	8,757	$	6,047

Total	$	3,874,513	$	1,224,821	$	1,357,625	$	179,007	$	318,421

Change of Control with Involuntary Termination (without Cause) or Termination with Good Reason
Cash severance payment (2)	$	5,460,563	$	1,834,217	$	3,350,156	$	1,320,000	$	55,092
Accelerated equity-based awards (3)	$	4,076,066	$	1,121,532	$	1,252,309	$	291,350	$	257,282

Total	$	9,536,629	$	2,955,749	$	4,602,465	$	1,611,350	$	312,374

(1)

The values in this table reflect estimated payments associated with various termination scenarios, assume a stock price of $22.70 (closing price of Barnes & Noble’s common stock on May 1, 2015, the last trading day of Fiscal 2015) and include all outstanding grants through the assumed termination date of May 2, 2015. Actual value will vary based on changes in Barnes & Noble’s common stock price.

(2)

For Messrs. Roberts, Brover and P. Maloney, cash severance is equal to the sum of (i) the NEO’s annual base salary, (ii) the average of annual incentive compensation actually paid to the NEO with respect to the three completed years preceding the date of termination and (iii) the aggregate annual cost of benefits, times the named executive officer’s severance multiple as follows: two times (or, in the case of Messrs. Brover and P. Maloney, one times) for non- change of control and three times (or, in the case of Messrs. Brover and P. Maloney, two times) for change of control. Mr. W. Maloney is entitled to one times his annual base salary if his employment is terminated by the Company without “cause” or by him for “good reason” and two times his annual base salary if such termination is within two years (or the remainder of his term of employment under his employment agreement, whichever is longer) following a “change of control”. Messrs. Brover, P. Maloney and Friedman are parties to retention agreements that provide that upon a termination of the employment of each of Messrs. Brover, P. Maloney and Friedman without “Cause,” or

due to death or “Permanent and Total Disability” (in each case as defined in the retention agreement), the NEO will receive a pro-rata portion of 50% of the total retention bonus payable under such retention agreement. The amount of cash severance attributable to the amounts payable under the retention agreements of Messrs. Brover, P. Maloney and Friedman is $198,332, $220,369 and $55,092, respectively, assuming such a termination occurs on May 2, 2015.

(3)

This row represents the value of restricted stock unit awards that would automatically vest upon a termination due to death or disability and the value of stock options and restricted stock unit awards upon a termination following a change of control. Except as provided below, in the event of a change of control, unless otherwise provided by the applicable award agreement, if the successor company assumes or substitutes for an outstanding equity award such award will continue in accordance with its applicable terms and not be accelerated. Absent a change of control, in the event of involuntary termination, termination for “cause” or resignation for any reason, each stock option and restricted stock unit award will be forfeited. Furthermore, except as provided below, in the event of (i) a termination within 24 months following a change of control, each stock option will immediately vest, (ii) a termination at any time following a change of control, also provided the termination is other than for “cause,” each restricted stock unit award will immediately vest and (iii) the holder’s death or disability, each restricted stock unit award will immediately vest and each option will be forfeited, unless otherwise determined by the Barnes & Noble Compensation Committee.

(4)	Following the termination of employment for Messrs. Roberts, Brover and P. Maloney due to death, Barnes & Noble provides the NEO’s spouse three months of premiums for medical and dental insurance in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

(5)	Following the termination of employment for Messrs. Roberts, Brover and P. Maloney due to disability, Barnes & Noble provides the NEO a seven-month subsidy for premiums for medical and dental insurance in accordance with COBRA.

For the table above, the amount of potential payments to our NEOs in the event of a termination of their employment in connection with a change of control was calculated assuming that a change of control occurred on the last business day of Fiscal 2015 (May 1, 2015), each NEO’s employment terminated on that date due to involuntary termination without cause or for good reason and the successor company did not assume the NEO’s stock option and restricted stock unit awards.

For a summary of the provisions of the employment agreements with our NEOs that were effective as of May 2, 2015 and the outstanding equity awards that were held by our NEOs as of May 2, 2015, and therefore affect the amounts set forth in the table above in the event of involuntary termination without cause or for good reason or a change of control, see the discussions in the “Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements and Individual Arrangements with our NEOs—Old Employment Agreements—General Provisions” and “Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table—Employment Agreements and Individual Arrangements with our NEOs—Old Employment Agreements—Severance and Change of Control Benefits” sections of this Prospectus.

Director Compensation

Annual Retainer

We have not yet paid any compensation to our directors. Following the Spin-Off, each non-employee director will receive an annual Board retainer fee of $65,000, paid in quarterly installments. The Lead Director of the Board will receive an additional $25,000 annual cash retainer. Audit Committee members will receive an additional $15,000 annual cash retainer, and the Chair of the Audit Committee will receive an additional $30,000 annual cash retainer. Compensation Committee members will receive an additional $10,000 annual cash retainer, and the Chair of the Compensation Committee will receive an additional $20,000 annual cash retainer. Corporate Governance and Nominating Committee members will receive an additional $10,000 annual cash retainer, and the Chair of the Corporate Governance and Nominating Committee will receive an additional $17,500 annual cash retainer. Directors who are our employees will not receive additional compensation for serving on our Board or its committees. All directors will also be reimbursed for travel, lodging and related expenses incurred in attending Board meetings.

Equity Compensation

Each non-employee director will be eligible for equity award grants under the Company’s proposed incentive plan. These will be in the form of restricted stock awards with an aggregate grant date value of $120,000.

The Barnes & Noble Education Incentive Plan

A general description of the principal terms of the proposed Barnes & Noble Education, Inc. Equity Incentive Plan (the “Incentive Plan”) is set forth below. However, the summary does not purport to be a complete description of the Incentive Plan. The description is qualified in its entirety by the terms of the Incentive Plan, as proposed to be adopted, which will be filed as an exhibit to an amendment to our Registration Statement on Form S-1, of which this Prospectus is a part.

Purpose of the Incentive Plan

The purpose of the Incentive Plan is to assist the Company and its affiliates in attracting and retaining selected individuals to serve as non-employee directors, employees, consultants and/or advisors of the Company who are expected to contribute to the Company’s success and to achieve long-term objectives which will inure to the benefit of all stockholders of the Company through the additional incentives inherent in the awards granted under the Incentive Plan.

Effective Date

The Incentive Plan will become effective on the date of the approval of the Distribution and will terminate ten years from the date of such approval, unless sooner terminated by the Board.

Stock Limits

The maximum number of shares of the Company’s common stock available for grant under the Incentive Plan will be 5% of the shares of the Company’s common stock outstanding on the Distribution Date. Any stock that is the subject of an award under the Incentive Plan shall be counted against the limit as one share for every share issued. In general, stock is counted against the limit only to the extent that it is actually issued. Thus, stock subject to any award under the Incentive Plan which terminates by expiration, forfeiture, cancellation or otherwise is settled in cash in lieu of stock, or exchanged for awards not involving stock, shall again be available for grant. Awards that are required to be settled in cash will not reduce the number of shares of the Company’s common stock available for grant. Substitute awards shall not reduce the shares authorized for issuance under the Incentive Plan or authorized for grant to a participant in any calendar year. If shares issued upon vesting or settlement of an award other than an option or SAR, or shares owned by a participant, are surrendered or tendered to the Company in payment of any taxes required to be withheld in respect of such award, such surrendered or tendered shares shall again become available to be delivered pursuant to awards under the Incentive Plan.

Additionally, the Incentive Plan imposes certain per-participant award limits. In any fiscal year of the Company (subject to certain adjustments resulting from corporate transactions as discussed in the following paragraph), no participant may (i) be granted options or SARs with respect to more than 1.5 million shares or (ii) be paid more than 1.5 million shares (or the equivalent in cash) pursuant to restricted stock awards, performance awards or other stock unit awards, to the extent such awards are intended to be performance-based compensation under Code Section 162(m). Additionally, the maximum dollar value payable to any participant in any fiscal year of the Company with respect to performance awards and/or other stock unit awards that are valued with reference to property other than stock (including cash) is $10 million to the extent such awards are intended to be performance-based compensation under Code Section 162(m). Canceled awards will continue to be counted towards these limitations. The aggregate grant date fair value (computed as of the date of grant in

accordance with applicable financial accounting rules) of all awards granted to any non-employee director during any single fiscal year (excluding awards made at the election of such director in lieu of all or a portion of annual and committee cash retainers) shall not exceed $500,000.

The number, class and kind of securities that may be issued, the number, class and kind of securities subject to outstanding awards, the option price or base price applicable to outstanding awards, the per-participant award limits, and other value determinations are subject to adjustment by the Compensation Committee of the board of directors of the Company (the “Compensation Committee”) to reflect stock dividends, stock splits, reverse stock splits and other corporate events or transactions. The Compensation Committee may also make adjustments to reflect unusual or nonrecurring events such as mergers, recapitalizations, consolidations, spin-offs and other corporate reorganizations. However, the Compensation Committee cannot make any adjustments that would cause an award not otherwise “deferred compensation” within the meaning of Code Section 409A to become or create “deferred compensation” under Code Section 409A.

Other Company Plans

Stock available under the Incentive Plan may be used by the Company as a form of payment of performance-based compensation under other Company compensation plans, whether or not existing on the date hereof. To the extent any stock is used by the Company under its other compensation plans, this stock will reduce the then number of shares available under the Incentive Plan for future awards, but will not be subject to the fiscal year stock or dollar limitations referred to above.

Administration

The Compensation Committee is responsible for administering the Incentive Plan and has the discretionary power to interpret the terms and intent of the Incentive Plan and any Incentive Plan-related documentation. The Board may remove from, add members to, or fill vacancies on, the Compensation Committee. The Compensation Committee is also responsible for determining the eligibility for awards, the types, terms and conditions of awards (including when and under what circumstances awards will vest, become exercisable or be paid or settled, subject to limitations regarding the minimum period for vesting and the attainment of certain performance criteria), whether and how an award may be settled, deferred or canceled, subject to certain limitations applicable to awards subject to performance-based vesting, whether an award will have dividend equivalents, whether to accelerate the vesting or exercisability and whether to amend an outstanding award or grant a replacement award. The Compensation Committee may establish rules and regulations pertaining to the Incentive Plan and may make any determination and take any other action it deems necessary or desirable for administration of the Incentive Plan. Determinations of the Compensation Committee made under the Incentive Plan are final and binding. The Compensation Committee may delegate administrative duties and powers to a committee of one or more non-employee directors and, to the extent permitted by law, to one or more officers or a committee of officers the right to grant awards to employees who are not directors or officers of the Company and to cancel or suspend awards to employees who are not directors or officers of the Company, subject to the requirements of Rule 16b-3 of the Exchange Act and the rules of the NYSE. The full Board may at any time grant awards to non-employee directors or administer the Incentive Plan with respect to those awards.

Eligibility

Individuals eligible to receive awards under the Incentive Plan are employees and non-employee directors (including prospective employees and directors) of the Company or of any of its affiliates, and consultants and advisors (including prospective consultants and advisors) who provide services to the Company and any of its affiliates, as selected by the Compensation Committee.

Minimum Vesting Schedule

Except for awards subject to vesting in whole or part based on performance criteria or awards granted to non-employee directors, the award agreement for each award shall provide for full vesting no earlier than 12

months after the applicable grant date, or, solely in the case of awards granted prior to the first annual meeting of the stockholders of the Distribution, such period as determined by the Compensation Committee in its sole discretion, subject to any accelerated vesting and/or exercisability, as applicable, in such award agreement, the Incentive Plan or any other applicable arrangement to apply upon the occurrence of a specified event.

Options

The Compensation Committee may grant options under the Incentive Plan either alone or in addition to other awards granted under the Incentive Plan. The exercise price for options cannot be less than the fair market value of the Company’s common stock on the date of grant, which shall be the closing price of the stock as reported on the NYSE on the date of grant. The Compensation Committee may provide that an option will be automatically exercised, without further action by the holder, on the last day of such option’s exercise period if, on such day, the fair market value of the Company’s common stock to be acquired exceeds the aggregate exercise price. The Incentive Plan expressly prohibits repricing of options/canceling an option with an exercise price that exceeds the fair market value of the stock underlying such option in exchange for another award or cash (other than in connection with a change of control). The latest expiration date of an option cannot be later than the tenth anniversary of the date of grant. The exercise price may be paid with cash or its equivalent, with previously acquired stock, or by certain other means with the consent of the Compensation Committee. With respect to options intended to qualify as “incentive stock options” as defined in Code Section 422, the maximum number of shares with respect to which such options may be granted under the Incentive Plan will be 2.5% of the shares of the Company’s common stock outstanding on the Distribution Date.

Stock Appreciation Rights

The Compensation Committee may grant SARs under the Incentive Plan either alone or in addition to other awards granted under the Incentive Plan. Upon the exercise of an SAR, the holder will have the right to receive the excess of (i) the fair market value of one share on the date of exercise over (ii) the base price of the SAR on the date of grant, which will not be less than the fair market value of one share of the Company’s common stock on the date of grant. The Compensation Committee may provide that an SAR will be automatically exercised, without further action by the holder, on the last day of such SAR’s exercise period, if on such day, the fair market value of the stock to which such SAR relates exceeds the aggregate base price. The latest expiration date of an SAR cannot be later than the tenth (10th) anniversary of the date of grant. Upon the exercise of an SAR, the Compensation Committee will determine, in its sole discretion, whether payment will be made in cash, stock or other property, or any combination thereof. The Incentive Plan expressly prohibits repricing of SARs/canceling an SAR with a base price that exceeds the fair market value of the stock underlying such SAR in exchange for another award or cash (other than in connection with a change of control).

Restricted Stock

The Compensation Committee may award restricted stock either alone or in addition to other awards under the Incentive Plan. Restricted stock awards consist of stock that is granted to a participant subject to restrictions that may result in forfeiture if specified conditions are not satisfied. A holder of restricted stock is generally treated as a stockholder of the Company (subject to certain restrictions) and has the right to vote such stock and the right to receive distributions made with respect to such stock. However, the Compensation Committee may require that any dividends otherwise payable with respect to a restricted stock award will not be paid currently but will be accumulated until the applicable restricted stock award has vested. In the case of restricted stock awards that are subject to vesting based on the achievement of performance goals, a participant will not be entitled to receive payment for any cash dividends with respect to such restricted stock awards unless, until and except to the extent that the applicable performance goals are achieved or are otherwise deemed to be satisfied.

Other Stock Unit Awards

Other awards of stock and other awards that are valued in whole or in part by reference to, or are otherwise based on, stock or other property, may be granted to participants, either alone or in addition to other awards

100

granted under the Incentive Plan. Unlike restricted stock awards, other stock unit awards result in the transfer of stock to the participant only after specified conditions and the holder of such an award is treated as a stockholder with respect to the award when the stock is delivered in the future. Other stock unit awards may be paid in cash, stock, other property, or any combination thereof, in the sole discretion of the Compensation Committee at the time of payment. The Compensation Committee may require that any dividend equivalents otherwise payable with respect to any other stock unit award will not be paid currently but will be accumulated until the applicable other stock unit award has vested. In the case of other stock unit awards that are subject to vesting based on the achievement of performance goals, a participant will not be entitled to receive payment for any dividend equivalents with respect to such other stock unit awards unless, until and except to the extent that the applicable performance goals are achieved or are otherwise deemed to be satisfied.

Performance Awards

Performance awards may be granted under the Incentive Plan, either alone or in addition to other awards granted under the Incentive Plan. Performance awards will be earned only if the participant meets certain performance goals established by the Compensation Committee over a designated performance period. Performance awards may be paid in cash, stock, other property, or any combination thereof, in the sole discretion of the Compensation Committee at the time of payment. The performance goals to be achieved for each performance period will be determined by the Compensation Committee and may be based upon the criteria described below the heading “Code Section 162(m) Provisions.” Performance periods will be established by the Compensation Committee for each performance award and except for performance awards granted prior to the first annual meeting of stockholders following the Distribution, shall not be less than 12 months. No participant will be entitled to receive payment for any dividend equivalents with respect to any performance awards unless, until and except to the extent that the performance goals applicable to

Code Section 162(m) Provisions

If the Compensation Committee determines at the time restricted stock, a performance award or other stock unit award is granted to a participant who is, or is likely to be, at the end of the tax year in which the Company would claim a tax deduction in connection with such award, a “covered employee” for purposes of Code Section 162(m), then the Compensation Committee may provide that the following provisions are applicable to such award (these awards are referred to as “Covered Awards” below):

Performance Criteria. Covered Awards will be subject to the achievement of one or more objective performance goals established by the Compensation Committee, which will be based on the attainment of specified levels of one or any combination of the following: sales (including same store or comparable sales); net sales; return on sales; cash flow (including operating cash flow and free cash flow); cash flow per share (before or after dividends); cash flow return on investment; cash flow return on capital; pretax income before allocation of corporate overhead and bonus; earnings per share; net income; division, group or corporate financial goals or ratios including those measuring liquidity, activity, profitability or leverage; return on stockholders’ equity; total stockholder return; return on assets; attainment of strategic and operational initiatives; appreciation in and/or maintenance of the price of the shares or any other publicly-traded securities of the Company; market share; customer satisfaction; customer growth; user time spent online; unique users; registered users; user frequency; user retention; web page views; employee satisfaction; employee turnover; productivity or productivity ratios; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with commercial entities with respect to the marketing, distribution and sale of the Company’s products (including with group purchasing organizations, distributors and other vendors); supply chain achievements (including establishing relationships with manufacturers or suppliers of component materials and manufacturers of the Company’s products); co-development, co-marketing, profit sharing, joint venture or other similar arrangements); gross profits; gross or net profit margin; operating margin; gross profit growth; year-end cash; cash margin; revenue; net revenue; product revenue or system-wide revenue (including growth of such revenue measures); operating earnings; operating income; earnings before taxes; earnings before interest and

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taxes; earnings before interest, taxes, depreciation and amortization; economic value-added models; comparisons with various stock market indices; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications or other documents and passing pre-approval inspections (whether of the Company or the Company’s third-party manufacturer) and validation of manufacturing processes (whether the Company’s or the Company’s third-party manufacturer’s)); improvement in or attainment of expense levels or working capital levels, including cash, inventory and accounts receivable; general and administrative expense savings; inventory control; operating efficiencies; average inventory; inventory turnover; inventory shrinkage; cost of capital or assets under management; financing and other capital raising transactions (including sales of the Company’s equity or debt securities; debt level year-end cash position; book value; factoring transactions; competitive market metrics; timely completion of new product roll-outs; timely launch of new facilities (such as new store openings, gross or net); sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory or globally; or through partnering transactions); royalty income; implementation, completion or attainment of measurable objectives with respect to research, development, manufacturing, commercialization, products or projects, production volume levels, acquisitions and divestitures, succession and hiring projects, reorganization and other corporate transactions, expansions of specific business operations and meeting divisional or project budgets; factoring transactions; and recruiting and maintaining personnel; debt reduction; reductions in costs, and/or return on invested capital of the Company or any affiliate, division or business unit of the Company for or within which the participant is primarily employed. Any performance criteria that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP.

Additionally, the Compensation Committee may also exclude the impact of an event or occurrence that the Compensation Committee determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges or infrequently occurring items, (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, (c) a change in accounting standards required by generally accepted accounting principles, (d) asset write-downs, (e) litigation or claim judgments or settlements, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) tax law changes, (j) costs associated with refinancing or repurchase of bank loans or debt securities, (k) unbudgeted capital expenditures or (l) a business interruption event.

Adjustments

To prevent the dilution or enlargement of benefits or potential benefits intended to be made available under the Incentive Plan, the aggregate number, class and kind of securities that may be delivered under the Incentive Plan, including certain limitations under the Incentive Plan, the number, class and kind and option or base price of securities subject to outstanding awards, the per-participant award limits, and other value determinations are subject to adjustment by the Compensation Committee to reflect stock dividends, stock splits, reverse stock splits and other corporate events or transactions, including a Change of Control (defined below). The Compensation Committee may also make adjustments to reflect unusual or nonrecurring events such as mergers, recapitalizations, consolidations, spin-offs and other corporate reorganizations.

Dividend Equivalents

The Compensation Committee may provide for the payment of dividend equivalents with respect to any stock subject to an award that has not actually been issued under the award. As mentioned above, no participant will be entitled to receive payment for any dividend equivalents with respect to other stock unit awards subject to performance-based vesting or any performance awards unless, until and except to the extent that the performance goals applicable to such awards are achieved or are otherwise deemed to be satisfied.

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Termination of Employment

The Compensation Committee will determine how each award will be treated following termination of the holder’s employment with, or service for, the Company, including the extent to which unvested portions of the award will be forfeited and the extent to which options, SARs or other awards requiring exercise will remain exercisable.

Treatment of Awards upon a Change of Control

One or more awards may be subject to the terms and conditions set forth in a written or electronic agreement between the Company and a participant providing for different terms or provisions with respect to such awards upon a “Change of Control” (as defined in the Incentive Plan) of the Company. Unless otherwise provided in the applicable award agreement, in the event of a Change of Control, if the successor company assumes or substitutes for an outstanding award, then such award will be continued in accordance with its applicable terms and vesting will not be accelerated. If an award is not assumed or substituted for, generally it will vest and become free of all restrictions and limitations, and if the award is a performance award then the Compensation Committee will determine the portion and level of the award considered to be earned and payable. For purposes of the Incentive Plan, “Change of Control” will generally have the meaning set forth in the applicable award agreement (subject to the limitations described below). If there is no definition set forth in the applicable award agreement, “Change of Control” will mean:

(i) during any period of 24 consecutive months, a change in the composition of a majority of the Board, as constituted on the first day of such period, that was not supported by a majority of the incumbent directors;

(ii) the consummation of certain mergers or consolidations of the Company with any other corporation, or the sale of all or substantially all the assets of the Company, following which the Company’s then current stockholders cease to own more than 50% of the combined voting power of the surviving entity; or

(iii) the acquisition by a third party (other than Mr. Leonard Riggio and his affiliates) of 40% or more of the combined voting power of the then outstanding voting securities of the Company, which, for the avoidance of doubt does not include the Distribution.

Although award agreements may provide for a different definition of Change of Control than is provided for in the Incentive Plan, any definition of Change of Control set forth in any award agreement will provide that a Change of Control would not occur until consummation or effectiveness of a Change of Control of the Company, rather than upon the announcement, commencement, stockholder approval or other potential occurrence of any event or transaction that, if completed, would result in a change of control of the Company.

Amendments

The Board may at any time alter, amend, suspend or terminate the Incentive Plan, except that no amendment of the Incentive Plan will be made without stockholder approval if stockholder approval is required by applicable law or regulation. Stockholder approval is also generally required for any amendment that would: (i) increase the number of shares that may be the subject of awards; (ii) expand the types of awards available; (iii) materially expand the class of persons eligible to participate; (iv) permit options or SARs to be issued or repriced at option or base prices less than 100% of fair market value; (v) increase the maximum permissible term for options or SARs; (vi) modify the limitations on the number of shares or maximum dollar amounts that may be awarded to participants or (vii) permit awards to be transferred to third parties in exchange for value. No amendment to an award previously granted may materially impair the rights of any participant to whom such award was granted without such participant’s consent, provided, however, that the Board may amend, modify or terminate the Incentive Plan without the consent of such participant if it deems it necessary to comply with applicable law, tax rules, stock exchange rules or accounting rules, provided that all participants similarly situated are similarly affected.

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Transferability

Except to the participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the participant’s spouse, domestic partner or children or in which the participant is a beneficiary or partner) as approved by the Compensation Committee, awards are not transferable other than by will or the laws of descent and distribution. No award is transferrable to a third party in exchange for value unless the transfer is specifically approved by the Company’s stockholders.

Clawback

The Compensation Committee may provide that an award shall be cancelled if the participant, without the consent of the Company, while employed by or providing services to the Company or any affiliate of the Company or after termination of such employment or service, (a) violates a non-competition, non-solicitation or non-disclosure covenant or agreement, (b) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any of its affiliates, including fraud, or conduct contributing to any financial restatements or irregularities, as determined by the Compensation Committee in its sole discretion or (c) otherwise violates any policy adopted by the Company or any of its affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to any participant by the Company or any of its affiliates as such policy is in effect on the date of grant of the applicable award or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time. Additionally, the Compensation Committee may also provide that (i) a participant will forfeit any gain realized on the vesting or exercise of such award if the participant engages in such activities referred to in the preceding sentence, or (ii) a participant must repay the gain to the Company realized under a previously paid performance award if a financial restatement reduces the amount that would have been earned under such performance award.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

All of our Common Stock is currently beneficially owned by Barnes & Noble. After the Spin-Off, Barnes & Noble will not own any of our Common Stock. The following table provides information with respect to the expected beneficial ownership of our Common Stock after giving effect to the Spin-Off by (i) each person or entity that we believe, based on the assumptions described below, will be a beneficial owner of more than 5% of our outstanding Common Stock following the Spin-Off, (ii) each person who we expect will serve as a director following the Spin-Off and each named executive officer and (iii) all our expected directors and executive officers following the Spin-Off as a group. Except as otherwise noted in the footnotes below, we based the share amounts on each person or entity’s beneficial ownership of Barnes & Noble common stock as of May 30, 2015, adjusted for the Distribution Ratio of 0.632 shares of our Common Stock for each share of Barnes & Noble common stock.

To the extent our directors and officers own Barnes & Noble common stock at the time of the Spin-Off, they will participate in the Spin-Off on the same terms as other holders of Barnes & Noble common stock.

Except as otherwise noted in the footnotes below, each person or entity identified below has sole voting and investment power with respect to such securities.

Following the Spin-Off, based upon the approximately 64.1 million shares of Barnes & Noble common stock outstanding on May 31, 2015, and applying the Distribution Ratio of 0.632 shares of our Common Stock for each share of Barnes & Noble common stock, we estimate that approximately 40.5 million shares of our Common Stock will be issued and outstanding. The actual number of shares of our Common Stock outstanding following the Spin-Off will depend on the number of shares of Barnes & Noble common stock outstanding on the Record Date.


Name of Beneficial Owner ⁽¹⁾	Shares Beneficially Owned ⁽²⁾		Percent of Class ^{(2) (3)}
Five Percent Stockholders
Leonard Riggio ⁽⁴⁾		7,616,947		18.8	%
Dimensional Fund Advisors LP ⁽⁵⁾		3,118,130		7.7	%
Daniel Tisch ⁽⁶⁾		3,091,523		7.6	%
Abrams Capital Management LP ⁽⁷⁾		2,600,294		6.4	%
The Vanguard Group, Inc. ⁽⁸⁾		2,466,112		6.1	%
BlackRock, Inc. ⁽⁹⁾		2,458,070		6.1	%
Directors and Named Officers ⁽¹⁰⁾
Michael P. Huseby		132,641		*
Daniel DeMatteo		0		*
Jerry Sue Thornton		0		*
David G. Golden ⁽¹¹⁾		23,428		*
David A. Wilson ⁽¹²⁾		23,428		*
Max J. Roberts ⁽¹³⁾		53,546		*
John R. Ryan ⁽¹⁴⁾		3,410		*
Patrick Maloney ^{(15 )}		24,925		*
William Maloney ^{(16 )}		25,585		*
Barry Brover ⁽¹⁷⁾		23,476		*
Joel Friedman		2,075		*
All directors and executive officers as a group (17 persons) ⁽¹⁸⁾		319,983		*

* Less than 1%.

(1)	The address of all of the officers and directors listed above are in the care of Barnes & Noble Education, Inc., 120 Mountain View Blvd., Basking Ridge, NJ 07920. The address of Leonard Riggio is in the care of Barnes & Noble, Inc., 122 Fifth Avenue, New York, NY 10011.

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(2)

Shares of our Common Stock that an individual or group has a right to acquire within 60 days after May 30, 2015 pursuant to the exercise of options, warrants or other rights are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for computing the percentage ownership of any other person or group shown in the table. The 3,866,163 shares of our Common Stock we expect will be issued at the time of the Spin-Off in respect of the 6,117,347 New Barnes & Noble Shares are not deemed to be outstanding for the purpose of calculating the percentage ownership of any person, entity or group shown in the table.

(3)	We expect that, immediately following the Spin-Off, each individual director and named officer, as well as our directors and executive officers as a group, will beneficially own less than 1% of our issued and outstanding Common Stock as of such time.

(4)

We expect that, immediately following the Spin-Off, Mr. Riggio’s holdings will be comprised of (a) 4,799,718 shares held by Mr. Riggio, (b) 1,464,134 shares owned by LRBKS Holdings, Inc. (a Delaware corporation beneficially owned by Mr. Riggio and his wife), (c) 902,812 shares owned by The Riggio Foundation, a charitable trust established by Mr. Riggio, with himself and his wife as trustees and (d) 450,283 shares held in a rabbi trust established by Barnes & Noble for the benefit of Mr. Riggio pursuant to a deferred compensation arrangement. Mr. Riggio has no voting or dispositive control over the shares in the rabbi trust.

(5)

Based on a review of the Schedule 13G/A Information Statement with respect to Barnes & Noble common stock filed on February 5, 2015 by Dimensional Fund Advisors LP. Such Schedule 13G/A states that Dimensional Fund Advisors LP has the sole power to vote and direct the disposition of 4,933,750 shares of Barnes & Noble common stock. The address of such persons is listed as Building One, 6300 Bee Cave Road, Austin, Texas, 78746.

(6)

Based on a review of the Schedule 13G/A Information Statement with respect to Barnes & Noble common stock filed on January 21, 2015 by Daniel R. Tisch. Such Schedule 13G/A states that Daniel R. Tisch has the sole power to vote and direct the disposition of 4,891,650 shares of Barnes & Noble common stock. The address of such persons is listed as 460 Park Avenue, New York, New York, 10022.

(7)

Based on a review of the Schedule 13G/A Information Statement with respect to Barnes & Noble common stock filed on February 13, 2015 by David Abrams, Abrams Capital Partners II, L.P., Abrams Capital, LLC, Abrams Capital Management, LLC and Abrams Capital Management, L.P. Such Schedule 13G/A states that David Abrams has shared power to vote and direct the disposition of 4,114,389 shares of Barnes & Noble common stock; Abrams Capital Partners II, L.P. has shared power to vote and direct the disposition of 3,315,287 shares of Barnes & Noble common stock; Abrams Capital, LLC has shared power to vote and direct the disposition of 3,894,020 shares of Barnes & Noble common stock; Abrams Capital Management, LLC has shared power to vote and direct the disposition of 4,114,389 shares of Barnes & Noble common stock and Abrams Capital Management, L.P. has shared power to vote and direct the disposition of 4,114,389 shares of Barnes & Noble common stock. The address of such persons is listed as 122 Fifth Avenue, New York, New York, 10011.

(8)

Based on a review of the Schedule 13G Information Statement with respect to Barnes & Noble common stock filed on February 10, 2015 by The Vanguard Group. Such Schedule 13G states that The Vanguard Group has sole power to vote 60,005 shares of Barnes & Noble common stock, sole power to direct the disposition of 3,845,871 shares of Barnes & Noble common stock and shared power to direct the disposition of 56,205 shares of Barnes & Noble common stock. The address of such persons is listed as 100 Vanguard Blvd., Malvern, PA 19355.

(9)

Based on a review of the Schedule 13G/A Information Statement with respect to Barnes & Noble common stock filed on January 30, 2015 by BlackRock, Inc. Such Schedule 13G/A states that BlackRock, Inc. has the sole power to vote 3,552,109 shares and sole power to direct the disposition of 3,655,725 shares of Barnes & Noble common stock. The address of such persons is listed as 40 East 52nd Street, New York, New York, 10001.

(10)	Barnes & Noble directors will receive a dividend of our Common Stock in respect of their shares of restricted stock in the same manner and using the same Distribution Ratio as holders of Barnes & Noble common stock.

(11)	Of these shares, 3,410 are shares of restricted stock.

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(12)	Of these shares, 3,410 are shares of restricted stock.

(13)

Assumes that Mr. Roberts exercises his options underlying 30,000 shares of Barnes & Noble common stock prior to the Spin-Off and receives in respect of such shares of Barnes & Noble common stock, in the same manner as the other holders of Barnes & Noble common stock, a dividend of 18,960 shares of our Common Stock.

(14)	Of these shares, 3,410 are shares of restricted stock.

(15)

Assumes that Mr. P. Maloney exercises his options underlying 17,500 shares of Barnes & Noble common stock prior to the Spin-Off and receives in respect of such shares of Barnes & Noble common stock, in the same manner as the other holders of Barnes & Noble common stock, a dividend of 11,060 shares of our Common Stock.

(16)

Assumes that Mr. Brover exercises his options underlying 15,000 shares of Barnes & Noble common stock prior to the Spin-Off and receives in respect of such shares of Barnes & Noble common stock, in the same manner as the other holders of Barnes & Noble common stock, a dividend of 9,480 shares of our Common Stock.

(17)

Assumes that Mr. W. Maloney exercises his options underlying 17,500 shares of Barnes & Noble common stock prior to the Spin-Off and receives in respect of such shares of Barnes & Noble common stock, in the same manner as the other holders of Barnes & Noble common stock, a dividend of 11,060 shares of our Common Stock.

(18)	Includes only the persons listed in the tables of our directors and executive officers following the Spin-Off in the section entitled “Management” in this Prospectus.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Agreements with Barnes & Noble

Following the Spin-Off, we and Barnes & Noble will operate independently, and neither will have any ownership interest in the other. In order to govern the ongoing relationships between us and Barnes & Noble after the Spin-Off and to facilitate an orderly transition, we and Barnes & Noble intend to enter into agreements providing for various services and rights following the Spin-Off, and under which we and Barnes & Noble will agree to indemnify each other against certain liabilities arising from our respective businesses. The following summarizes the terms of the material agreements we expect to enter into with Barnes & Noble before the Distribution.

Separation Agreement

We intend to enter into a Separation Agreement with Barnes & Noble before the Distribution. The Separation Agreement will set forth our agreements with Barnes & Noble regarding the principal actions to be taken in connection with the Spin-Off. It will also set forth other agreements that govern aspects of our relationship with Barnes & Noble following the Spin-Off.

Ongoing Commercial Relationships . The Separation Agreement will contain provisions governing ongoing commercial relationships between us and Barnes & Noble, including with respect to access to Barnes & Noble’s product procurement and merchandising systems and distribution facilities. Barnes & Noble will agree to make its gift cards available to us for sale and we will honor such gift cards in our stores. Barnes & Noble will agree to provide access to the Barnes & Noble format, including store design, support, training and development material and stores fixtures and planograms used in Barnes & Noble retail stores and cafés.

Intercompany Arrangements . All agreements, arrangements, commitments and understandings, including all intercompany accounts payable or accounts receivable, between us, on the one hand, and Barnes & Noble, on the other hand, will terminate effective as of the Distribution, except specified agreements and arrangements entered into in connection with the implementation of the Distribution.

Shared Contracts . We and Barnes & Noble will work together to divide, partially assign, modify, and/or replicate the rights and obligations under and in respect of any contracts relating in any material respect to both our and Barnes & Noble’s businesses (such contracts being referred to as shared contracts), such that we are the beneficiary of the rights and responsible for the obligations related to the shared contract relating to our business, and Barnes & Noble is the beneficiary of the rights and is responsible for the obligations related to such shared contract not relating to our business. If we are not able to enter into an arrangement to accomplish this prior to the Distribution, then we and Barnes & Noble will cooperate in any lawful arrangement to provide that, for up to five years after the Distribution, we will receive the interest in the benefits and obligations of the shared contracts relating to our business, and Barnes & Noble will receive the interest in the benefits and obligations of the shared contracts not relating to our business.

Insurance Coverage . Until the Distribution Date, our employees, officers and directors will continue to be covered under Barnes & Noble’s insurance policies, and with respect to policies that are currently procured by us solely for our benefit, we will continue to maintain such coverage through the Distribution Date. The claims of our employees, officers and directors under such insurance policies arising prior to the Distribution will remain covered by Barnes & Noble’s insurance policies following the Distribution. As of the Distribution, we will obtain separate director and officer, property, crime, workers’ compensation, commercial general liability, fiduciary, cyberliability and other insurance policies.

The Distribution . The Separation Agreement will govern Barnes & Noble’s and our respective rights and obligations regarding the proposed Distribution. Prior to the Distribution, Barnes & Noble will deliver all the issued and outstanding shares of our common stock to the distribution agent. Following the Distribution Date, the

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distribution agent will electronically deliver the shares of our common stock to Barnes & Noble stockholders based on the distribution ratio. The Barnes & Noble board of directors will have the sole and absolute discretion to determine the terms of, and whether to proceed with, the Distribution.

Conditions . The Separation Agreement will also provide that several conditions must be satisfied or waived by Barnes & Noble in its sole and absolute discretion before the Distribution can occur. For further information about these conditions, see “The Spin-Off—Conditions to the Spin-Off.” The Barnes & Noble board of directors may, in its sole and absolute discretion, determine the Record Date, the Distribution Date and the terms of the Distribution and may at any time prior to the completion of the Distribution decide to abandon or modify the Distribution.

Exchange of Information . We and Barnes & Noble will agree to provide each other with information reasonably necessary to comply with reporting, disclosure, filing or other requirements of any national securities exchange or governmental authority having jurisdiction over us or Barnes & Noble, as applicable, for use in judicial, regulatory, administrative and other proceedings or to satisfy audit, accounting, litigation and other similar requests. We and Barnes & Noble will also agree to use reasonable best efforts to retain all information in accordance with our respective record retention policies as in effect on the date of the Separation Agreement. Until the end of the first full fiscal year following the Distribution, each party will also agree to use its reasonable best efforts to assist the other with its financial reporting and audit obligations.

Termination . The Barnes & Noble board of directors, in its sole and absolute discretion, may terminate the Separation Agreement at any time prior to the Distribution. Barnes & Noble may terminate the commercial matters provisions of the Separation Agreement after the Distribution if we materially breach any of those provisions, no longer operate as a going concern, no longer operate in a similar field of use, no longer use the “Barnes & Noble” name or the “B&N” abbreviation or undergo certain fundamental changes. All other provisions of the Separation Agreement that survive the Distribution will survive in any such event.

Release of Claims . We and Barnes & Noble will each agree to release the other and its affiliates (to the extent legally possible), successors and assigns, and all persons that prior to the Distribution have been the other’s stockholders, directors, officers, agents or employees, and their respective heirs, executors, administrators, successors and assigns, from certain claims against any of them that arise out of or relate to acts or events occurring or failing to occur or any conditions existing at or prior to the time of the Distribution.

Indemnification . We and Barnes & Noble will each agree to indemnify the other and each of the other’s current and former directors, officers and employees, and each of the heirs, executors, successors and assigns of any of them, against certain liabilities incurred in connection with the Spin-Off and our and Barnes & Noble’s respective businesses. The Separation Agreement will also specify procedures regarding claims subject to indemnification.

Transition Services Agreement

We intend to enter into a Transition Services Agreement pursuant to which Barnes & Noble will agree to provide us with specified services for a limited time to help ensure an orderly transition following the Distribution. The Transition Services Agreement will specify the calculation of our costs for these services. The cost of these services will be negotiated between us and Barnes & Noble and may not necessarily be reflective of prices that we could have obtained for similar services from an independent third party.

Services Provided by Barnes & Noble . Barnes & Noble will agree to provide us with (1) human resources services, including advice as to payroll administration, (2) certain finance and travel services, including employee expense reimbursement services, (3) information technology infrastructure, including payroll processing, (4) freight claim processing, (5) certain digital center services and (6) general oversight and consultation, including legal advice, investor relation and public relation advice, tax planning and compliance advice and insurance management.

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Cost of Services . The costs of some of these services are set out in the Transition Services Agreement and others will be paid at pass-through costs (direct costs of providing the services plus an allocation of related employee overhead).

Termination . We may terminate any service upon 30 days’ notice and Barnes & Noble may terminate the Transition Services Agreement if we materially breach the agreement, no longer operate as a going concern, no longer operate in a similar field of use, no longer use the “Barnes & Noble” name or the “B&N” abbreviation or undergo certain fundamental changes.

Trademark License Agreement

We intend to enter into a Trademark License Agreement pursuant to which Barnes & Noble will grant us an exclusive license in certain licensed trademarks and a non-exclusive license in other licensed trademarks. The licenses only apply in the U.S. and in the field of (i) contract management of college, university and other academic bookstores and related websites and (ii) education products and services and related websites.

Licenses . Barnes & Noble will grant us an exclusive, perpetual, fully paid up non-transferable and non-assignable license to use and display the “Barnes & Noble College”, “B&N College”, “Barnes & Noble Education” and “B&N Education” trademarks. Barnes & Noble will also grant us a non-exclusive, perpetual, fully paid up non-transferable and non-assignable license to use and display the “Barnes & Noble”, “B&N” and “BN” trademarks, subject to certain conditions. We will have the right to reasonably request additional uses of the non-exclusively licensed trademarks subject to Barnes & Noble’s reasonable approval. We also have the right to request that our licenses be expanded to other jurisdictions which will be granted under certain conditions.

Term and Termination . We can terminate the Trademark License Agreement at any time upon notice to Barnes & Noble. Barnes & Noble may terminate the Trademark License Agreement if we materially breach the agreement, no longer operate as a going concern, no longer operate in the licensed field, no longer use the “Barnes & Noble” name or the “B&N” abbreviation, cease to use the licensed trademarks in identifying our business or if we transfer all or substantially all of our assets to, or become an affiliate of, a competitor.

Tax Matters Agreement

We intend to enter into a Tax Matters Agreement with Barnes & Noble that will govern the respective rights, responsibilities and obligations of Barnes & Noble and us after the Spin-Off with respect to all tax matters (including tax liabilities, tax attributes, tax returns and tax contests).

The Tax Matters Agreement will generally provide that we will indemnify Barnes & Noble for (1) any taxes of Barnes & Noble Education, Inc. and its subsidiaries and (2) any transfer taxes allocated to us. In addition, the Tax Matters Agreement will provide that we will be required to indemnify Barnes & Noble for any taxes (and reasonable expenses) resulting from the failure of the Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal income tax law, where such taxes result from (1) breaches of covenants that we will make and agree to in connection with these transactions (including covenants containing the restrictions described below that are designed to preserve the tax-free nature of the Spin-Off), (2) the application of certain provisions of U.S. federal income tax law to these transactions or (3) any other actions that we know or reasonably should expect would give rise to such taxes. We and Barnes & Noble will generally have joint control over any audit related to such taxes.

As a member of Barnes & Noble’s consolidated U.S. federal income tax group, we have (and will continue to have following the Spin-Off) joint and several liability with Barnes & Noble to the IRS for the consolidated U.S. federal income taxes of the Barnes & Noble group relating to the taxable periods in which we were part of the group.

The Tax Matters Agreement will impose certain restrictions on us and our subsidiaries (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that will be

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designed to preserve the tax-free nature of the Spin-Off. These restrictions will apply for the two-year period after the Spin-Off. Although we will be able to engage in an otherwise restricted action if we obtain appropriate advice from counsel (or a ruling from the IRS), as described above under “Risk Factors—Risks Relating to the Spin-Off—We intend to agree to numerous restrictions to preserve the non-recognition treatment of the Spin-Off, which may reduce our strategic and operating flexibility,” these restrictions may limit our ability to pursue strategic transactions or discourage or delay others from pursuing strategic transactions that our stockholders may consider favorable.

Employee Matters Agreement

We intend to enter into an Employee Matters Agreement with Barnes & Noble that will address employment, compensation and benefits matters. The Employee Matters Agreement will address the allocation and treatment of assets and liabilities arising out of employee compensation and benefits programs in which our employees participated prior to the Distribution. We will generally be responsible for all employment liabilities (including benefit plan liabilities) relating to our employees and other service providers. Each of our employees (and his or her dependents and beneficiaries) will cease active participation in all Barnes & Noble benefit plans as of the Distribution. All stock options held by our employees will vest as of the Distribution and each employee may exercise such options during the 180-day period following the Distribution. All outstanding restricted stock units held by our employees payable in, or the value of which is determined by reference to, shares of Barnes & Noble common stock will be converted into a restricted stock unit award payable in, or the value of which is determined by reference to, our Common Stock on the same terms and conditions as were applicable under such Barnes & Noble restricted stock units as of immediately prior to the Distribution (determined based on the fair market value of a share of Barnes & Noble common stock as of the Distribution Date). Barnes & Noble directors will receive a dividend of our Common Stock in respect of their restricted shares in the same manner and using the same Distribution Ratio as holders of Barnes & Noble common stock. Barnes & Noble will retain sponsorship of the Barnes & Noble pension plan, and no assets or liabilities in respect thereof will transfer to us. We will establish a 401(k) plan and Barnes & Noble will transfer to it the assets and liabilities relating to the account balances of our employees. Barnes & Noble will be responsible for employer contributions for our employees prior to the Distribution, and we will be responsible for employer contributions for our employees after the Distribution.

Other Agreements

Barnes & Noble leases retail space in a building in which we sublease space from Barnes & Noble, pursuant to a sublease expiring in 2020. Pursuant to the sublease, Barnes & Noble charged us $1.8 million, $1.8 million and $1.0 million for the subleased space and other operating costs incurred on our behalf during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

We intend to enter into a NOOK Product Distribution Agreement with Nook Digital, LLC pursuant to which we will sell NOOK products at our stores. The NOOK Product Distribution Agreement has a three year term, with annual renewal thereafter, and does not contain any minimum purchase requirements or guarantees.

In addition, Barnes & Noble is a guarantor of all of our obligations under an office we lease in Mountain View, California. Under the Separation Agreement, any party benefitting from a guarantee by the other party that remains in place following the Spin-Off must reimburse the guaranteeing party for any payments the guaranteeing party makes pursuant to that guarantee.

Related Party Transactions

We believe that the transactions and agreements discussed below (including renewals of any existing agreements) between us and related third parties are at least as favorable to us as could have been obtained from unrelated parties at the time they were entered into.

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We have a long-term supply agreement (“Supply Agreement”) with MBS Textbook Exchange, Inc. (“MBS”), which is majority owned by Leonard Riggio and other members of the Riggio family. MBS is a new and used textbook wholesaler, which also sells textbooks online and provides bookstore systems and distant learning distribution services. Pursuant to the Supply Agreement, which terminates by its terms in 2019, subject to automatic renewals thereafter if a party does not object 180 days prior to each annual renewal date, and subject to availability and competitive terms and conditions, we will continue to purchase new and used printed textbooks for a given academic term from MBS prior to buying them from other suppliers, other than in connection with student buy-back programs. Total purchases from MBS were $54.4 million, $70.1 million and $82.3 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Additionally, the Supply Agreement provides that we may sell to MBS certain textbooks that we cannot return to suppliers or use in our stores. MBS pays us commissions based on the volume of these textbooks sold to MBS each year and with respect to the textbook requirements of certain distance learning programs that MBS fulfills on our behalf. MBS paid us $5.5 million, $7.1 million and $8.1 million related to these commissions in Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. In addition, the Supply Agreement contains restrictive covenants that limit our ability to become a used textbook wholesaler and that place certain limitations on MBS’s business activities. In addition, we entered into an agreement with MBS in Fiscal 2011 pursuant to which MBS purchases books from us, which have no resale value for a flat rate per box. Total sales to MBS under this program were $0.4 million, $0.6 million and $0.5 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Total outstanding amounts payable to MBS for all arrangements net of any amounts due were $26.4 million, $30.7 million and $24.8 million for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

Argix Direct Inc. (“Argix”), a company in which a brother of Leonard Riggio owns a 20% interest, provided us with transportation services under a separate agreement that expired April 30, 2015. The Company believes that the transportation costs paid to Argix are comparable to the transportation costs charged by third party distributors. We paid Argix $0.9 million, $1.1 million and $1.1 million for such services during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

Policy and Procedures Governing Related Person Transactions

Following the Spin-Off, our newly-appointed Audit Committee of the Board of Directors will utilize procedures in evaluating the terms and provisions of proposed related party transactions or agreements in accordance with the fiduciary duties of directors under Delaware law. Our related party transaction procedures contemplate Audit Committee review and approval of all new agreements, transactions or courses of dealing with related parties, including any modifications, waivers or amendments to existing related party transactions. We will test to ensure that the terms of related party transactions are at least as favorable to us as could have been obtained from unrelated parties at the time of the transaction. The Audit Committee will consider, at a minimum, the nature of the relationship between us and the related party, the history of the transaction (in the case of modifications, waivers or amendments), the terms of the proposed transaction, our rationale for entering into the transaction and the terms of comparable transactions with unrelated third parties. In addition, management and internal audit will annually analyze all existing related party agreements and transactions and review them with the Audit Committee.

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DESCRIPTION OF OUR CAPITAL STOCK

General

Prior to the Distribution Date, Barnes & Noble, as our sole stockholder, will approve and adopt our Amended and Restated Certificate of Incorporation, and our Board will approve and adopt our Amended and Restated By-laws. The following summarizes information concerning our capital stock, including material provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated By-laws and certain provisions of Delaware law. For the purposes of the following, we treat our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws as being in effect on the date of this Prospectus. You are encouraged to read our Amended and Restated Certificate of Incorporation and our Amended and Restated By-laws, which are filed as exhibits to our Registration Statement on Form S-1, of which this Prospectus is a part, for greater detail with respect to these provisions.

Distribution of Securities

The Company was formed on July 5, 2012, and 1,000 shares of common stock of the Company were issued to Barnes & Noble Booksellers, Inc., a subsidiary of Barnes & Noble. Subsequent to the formation of the Company, we have not sold any securities of the Company, including sales of re-acquired securities, new issues, securities issued in exchange for property, services or other securities, and new securities resulting from the modification of outstanding securities that were not registered under the Securities Act.

Authorized Capital Stock

Immediately following the Spin-Off, our authorized capital stock will consist of million shares of Common Stock, par value $0.01 per share, and million shares of preferred stock, par value $0.01 per share.

Common Stock

Shares Outstanding . Immediately following the Spin-Off, we estimate that approximately 44.4 million shares of our Common Stock will be issued and outstanding, based on 70.2 million shares of Barnes & Noble common stock outstanding as of May 31, 2015 , after giving effect to the New Barnes & Noble Shares. The actual number of shares of our Common Stock outstanding immediately following the Spin-Off will depend on the actual number of shares of Barnes & Noble common stock outstanding on the Record Date, and will reflect any issuance of new shares or exercise of outstanding options pursuant to Barnes & Noble’s equity plans and any repurchases of Barnes & Noble shares by Barnes & Noble pursuant to its common stock repurchase program, in each case on or prior to the Record Date.

Voting Rights . The holders of our Common Stock will be entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Holders of shares of our Common Stock will not have cumulative voting rights.

Other Rights . Subject to the preferential liquidation rights of any preferred stock that may be outstanding, upon our liquidation, dissolution or winding-up, the holders of our Common Stock will be entitled to share ratably in our assets legally available for distribution to our stockholders.

Fully Paid . The issued and outstanding shares of our Common Stock are fully paid and non-assessable . Any additional shares of Common Stock that we may issue in the future will also be fully paid and non-assessable.

The holders of our Common Stock will not have preemptive rights or preferential rights to subscribe for shares of our capital stock.

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Preferred Stock

Our Amended and Restated Certificate of Incorporation authorizes our Board to designate and issue from time to time one or more series of preferred stock without stockholder approval. Our Board may fix and determine the preferences, limitations and relative rights of each series of preferred stock. In connection with the Spin-Off, if Series J Holders elect to receive Mirror Preferred Stock of the Company in the Spin-Off, we will have one class of preferred stock outstanding, the Mirror Preferred Stock.

Series J Preferred Stock

Series J Holders have the option to exchange any or all of their holdings of the Series J Preferred Stock for a series of Mirror Preferred Stock having terms and rights that are identical, or as nearly so as is practicable, to those of the Series J Preferred Stock, and a series of exchange preferred stock in Barnes & Noble (the “Exchange Preferred Stock”), subject to certain exceptions. Barnes & Noble is obligated to give notice to Series J Holders of the transaction not more than 60 business days and not less than 20 business days prior to the effective date of the Spin-Off, and upon receipt of such notice, Series J Holders may elect to exchange all or a portion of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock and an equivalent number of shares of Exchange Preferred Stock. Series J Holders are not required to elect to receive the Mirror Preferred Stock and Exchange Preferred Stock until the effective date of the Spin-Off. Series J Holders may make such an election by sending notice, in the form specified in Barnes & Noble’s notice to Series J Holders, to Barnes & Noble, which notice must be received by 5:00 p.m., New York City time, on the date of the Spin-Off. Any exchange of Series J Preferred Stock for Mirror Preferred Stock and Exchange Preferred Stock will be effective as of the Distribution Date. We will not register the Mirror Preferred Stock or the Exchange Preferred Stock under the Securities Act or any state securities laws and such securities may not be offered or sold in the United States or to any U.S. persons unless such securities are registered under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act. The Mirror Preferred Stock and the Exchange Preferred Stock will be offered and issued in a private transaction not subject to the registration requirements of the Securities Act.

Mirror Preferred Stock

The rights of holders of shares of Mirror Preferred Stock will be governed by our Amended and Restated Certificate of Incorporation, which is filed as an exhibit to our Registration Statement on Form S-1, of which this Prospectus is a part. The Mirror Preferred Stock is the “Series A Preferred Stock” referred to in our Amended and Restated Certificate of Incorporation.

Holders of the Mirror Preferred Stock will be entitled to receive cumulative cash dividends payable quarterly in arrears. We will not be permitted to pay dividends on any stock junior to the Mirror Preferred Stock unless all dividends on the Mirror Preferred Stock have been paid in full. Dividends on each share of Mirror Preferred Stock will accrue daily at a per annum dividend rate of 7.75% of the per share liquidation preference of the Mirror Preferred Stock (the “Mirror Preferred Liquidation Preference”). The Mirror Preferred Liquidation Preference will initially be an amount per share equal to the product of (i) the liquidation preference per share in respect of the Series J Preferred Stock immediately prior to the Spin-Off (the “Series J Liquidation Preference”) (which, as of June 26, 2015, was approximately $1,012 and (ii) the quotient of (x) the volume-weighted average price of our Common Stock for the five consecutive full trading days commencing with the effective date of the Spin-Off (the “Barnes & Noble Education VWAP”) multiplied by the Distribution Ratio and (y) the sum of (1) the Barnes & Noble Education VWAP multiplied by the Distribution Ratio plus (2) the volume-weighted average price of Barnes & Noble’s common stock for the five consecutive full trading days commencing with the effective date of the Spin-Off (the “Barnes & Noble VWAP”). For so long as dividends on the Mirror Preferred Stock have not been paid in full, the dividend rate will be increased to 9.75% per annum. The dividend rate is also subject to increase in certain circumstances.

The Mirror Preferred Stock will have an initial conversion rate equal to the product of (x) the conversion rate applicable to the Series J Preferred Stock on the effective date of the Spin-Off without giving effect to any

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adjustment for the Spin-Off (which, as of June 26, 2015, was 58.8235) and (y) the Distribution Ratio. As of June 26, 2015, the Mirror Preferred Stock would have had a conversion rate of 37.176452. The conversion rate will be subject to customary anti-dilution adjustments. As of June 26, 2015, after giving effect to the conversion of the Converted Preferred Shares and assuming the remaining Series J Holders elect to exchange all of their Series J Preferred Stock for an equivalent number of shares of Mirror Preferred Stock and an equivalent number of shares of Exchange Preferred Stock, we would have had 100,005 shares of Mirror Preferred Stock outstanding after the Spin-Off, which in the aggregate would be convertible into at least 3,717,831 shares of our Common Stock, representing approximately 8.4% of our estimated outstanding Common Stock following the Distribution. See “Risk Factors—We may have shares of preferred stock that will be convertible into Common Stock.”

On August 18, 2021, we will be obligated to redeem, out of funds legally available therefor, all then-outstanding shares of Mirror Preferred Stock at a redemption price per share equal to the Mirror Preferred Liquidation Preference, payable in cash. If there is not a sufficient amount of funds legally available to redeem all then-outstanding shares of Mirror Preferred Stock on August 18, 2021, the dividend rate on any shares of Mirror Preferred Stock that remain outstanding will be increased by 2% per annum and will increase by an additional 2% per annum on each anniversary of such date until we redeem all outstanding shares of Mirror Preferred Stock.

At any time after August 17, 2016, we are permitted to redeem, out of funds legally available therefor, all, but not less than all, of the outstanding shares of Mirror Preferred Stock at a redemption price per share equal to the Mirror Preferred Liquidation Preference, payable in cash.

If the closing price of our Common Stock exceeds 150% of the then-applicable conversion price of the Mirror Preferred Stock for 20 consecutive trading days, we are permitted to require all, but not less than all, of the holders of shares of Mirror Preferred Stock to convert such shares into shares of Common Stock, at the then-applicable conversion rate. The Mirror Preferred Stock will have an initial conversion price equal to the Mirror Preferred Liquidation Preference divided by the conversion rate of the Mirror Preferred Stock.

In the event of a “Change of Control” (as defined in our Amended and Restated Certificate of Incorporation), each holder of shares of Mirror Preferred Stock will have the right to require us to purchase, out of funds legally available therefor, any or all of its shares of Mirror Preferred Stock at a purchase price per share, payable in cash, equal to 101% of the Mirror Preferred Liquidation Preference plus accrued and unpaid dividends.

The holders of shares of Mirror Preferred Stock will be entitled to vote on all matters presented to the holders of our Common Stock (as a single class with such holders), on an as-converted basis.

A holder of Mirror Preferred Stock will be entitled to convert each share of such holder’s Mirror Preferred Stock at any time into the number of shares of our Common Stock equal to the product of (x) a fraction, the numerator of which is the Mirror Preferred Liquidation Preference and the denominator of which is the base amount multiplied by (y) the conversion rate in effect for the Mirror Preferred Stock at such time, plus cash in lieu of fractional shares. The base amount for the purposes of the calculation above shall be calculated as the product of (x) $1,000 multiplied by (y) a fraction, the numerator of which is the Mirror Preferred Liquidation Preference and the denominator of which is the Series J Liquidation Preference.

Exchange Preferred Stock

The rights of the holders of any Exchange Preferred Stock of Barnes & Noble will be governed by a certificate of designation having terms and rights that are identical, or as nearly so as is practicable, to those of the certificate of designation for the Series J Preferred Stock.

Holders of the Exchange Preferred Stock will be entitled to receive cumulative cash dividends payable quarterly in arrears. Barnes & Noble will not be permitted to pay dividends with respect to any stock junior to the

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Exchange Preferred Stock unless all dividends on the Exchange Preferred Stock have been paid in full. Dividends on each share of Exchange Preferred Stock will accrue daily at a per annum dividend rate of 7.75% of the per share liquidation preference of the Exchange Preferred Stock (the “Exchange Preferred Liquidation Preference”). The Exchange Preferred Liquidation Preference will initially be an amount per share equal to the Series J Liquidation Preference minus the Mirror Preferred Liquidation Preference. The dividend rate with respect to the Exchange Preferred Stock will also increase under certain circumstances.

The Exchange Preferred Stock will have an initial conversion rate equal to the conversion rate applicable to the Series J Preferred Stock on the effective date of the Spin-Off without giving effect to any adjustment for the Spin-Off. As of June 26, 2015, the Exchange Preferred Stock would have had a conversion rate of 58.8235. The conversion rate will be subject to customary anti-dilution adjustments.

On August 18, 2021, Barnes & Noble will be obligated to redeem, out of funds legally available therefor, all then-outstanding shares of Exchange Preferred Stock at a redemption price per share equal to the Exchange Preferred Liquidation Preference, payable in cash. If there is not a sufficient amount of funds legally available to redeem all then-outstanding shares of Exchange Preferred Stock on August 18, 2021, the dividend rate on any shares of Exchange Preferred Stock that remain outstanding will be increased by 2% per annum and will increase by an additional 2% per annum on each anniversary of such date until Barnes & Noble redeems all outstanding shares of Exchange Preferred Stock.

At any time after August 17, 2016, Barnes & Noble is permitted to redeem, out of funds legally available therefor, all, but not less than all, of the outstanding shares of Exchange Preferred Stock at a redemption price per share equal to the Exchange Preferred Liquidation Preference, payable in cash.

If the closing price of Barnes & Noble common stock exceeds 150% of the then-applicable conversion price of the Exchange Preferred Stock for 20 consecutive trading days, Barnes & Noble is permitted to require all, but not less than all, of the holders of shares of Exchange Preferred Stock to convert such shares into shares of Barnes & Noble common stock, at the then-applicable conversion rate. The Exchange Preferred Stock will have an initial conversion price equal to the Exchange Preferred Liquidation Preference divided by the conversion rate of the Exchange Preferred Stock.

In the event of a “Change of Control” (as defined in the certificate of designation governing the Exchange Preferred Stock), each holder of shares of Exchange Preferred Stock will have the right to require Barnes & Noble to purchase, out of funds legally available therefor, any or all of its shares of Exchange Preferred Stock at a purchase price per share, payable in cash, equal to 101% of the Exchange Preferred Liquidation Preference plus accrued and unpaid dividends.

The holders of shares of Exchange Preferred Stock will be entitled to vote on all matters presented to the holders of Barnes & Noble’s common stock (as a single class with such holders), on an as-converted basis.

A holder of Exchange Preferred Stock will be entitled to convert each share of such holder’s Exchange Preferred Stock at any time into the number of shares of Barnes & Noble common stock equal to the product of (x) a fraction, the numerator of which is the Exchange Preferred Liquidation Preference and the denominator of which is the base amount described below multiplied by (y) the conversion rate in effect for the Exchange Preferred Stock at such time. The base amount described above shall be $1,000 minus the base amount applicable to the Mirror Preferred Stock.

Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws

Amended and Restated Certificate of Incorporation and Amended and Restated By-laws

Certain provisions in our Amended and Restated Certificate of Incorporation and our Amended and Restated By-laws summarized below may be deemed to have an anti-takeover effect and may delay, deter or

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prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our Board and in the policies formulated by our Board and to discourage certain types of transactions that may involve an actual or threatened change of control.

Classified Board. Our Amended and Restated Certificate of Incorporation provides that, other than directors who may be elected by the holders of preferred stock under certain circumstances, our Board will be divided into three classes of directors, with the classes as nearly equal in number as possible. As a result, approximately one-third of our Board will be elected each year, other than such directors elected by the holders of preferred stock. The classification of directors has the effect of making it more difficult for stockholders to change the composition of our board. Our Amended and Restated Certificate of Incorporation also provides that, subject to any rights of holders of preferred stock to elect additional directors under specified circumstances, the number of directors will be fixed exclusively pursuant to a resolution adopted by our Board. We currently expect that our Board will initially have seven members.

Blank Check Preferred Stock. Our Amended and Restated Certificate of Incorporation will permit us to issue, without any further vote or action by the stockholders, up to million shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting powers (if any) of the shares of the series, and the preferences and relative, participating, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series . The ability to issue such preferred stock could discourage potential acquisition proposals and could delay or prevent a change in control.

No Stockholder Action by Written Consent. Our Amended and Restated Certificate of Incorporation will expressly exclude the right of our stockholders to act by written consent . Stockholder action must take place at an annual meeting or at a special meeting of our stockholders.

Special Stockholder Meetings . Under our Amended and Restated By-laws, only the chairman of our Board or a majority of the members of our Board will be able to call a special meeting of stockholders.

Requirements for Advance Notification of Stockholder Nominations and Proposals. Under our Amended and Restated By-laws, stockholders of record will be able to nominate persons for election to our Board or bring other business constituting a proper matter for stockholder action only by providing proper notice to our secretary . Proper notice must be timely, generally between 90 and 120 days prior to the first anniversary of the prior year’s annual meeting, and must include, among other information, the name and address of the stockholder giving the notice, certain information regarding such stockholder’s beneficial ownership of our securities and any derivative instruments or other agreements the value of or return on which is based on or linked to the value of or return on our securities as of the date of the notice, certain information relating to each person whom such stockholder proposes to nominate for election as a director, including any arrangements or understandings between the nominating stockholder and the nominee, in the case of a director nomination, a representation that such stockholder is a holder of record of our Common Stock as of the date of the notice and a brief description of any other business such stockholder proposes to bring before the meeting and the reason for conducting such business, and, if such stockholder intends to solicit proxies, a representation to that effect.

Delaware Takeover Statute

Section 203 of the Delaware General Corporation Law, subject to certain exceptions, prohibits a Delaware corporation from engaging in any “business combination” (as defined below) with any “interested stockholder” (as defined below) for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the board of directors of the corporation approved either the business

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combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the Delaware General Corporation Law defines “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person. See “Risk Factors—Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and of Delaware law may prevent or delay an acquisition of the Company, which could effect the trading price of the Common Stock.”

Limitation on Liability of Directors and Indemnification of Directors and Officers

Under Delaware law, a corporation may indemnify any individual made a party or threatened to be made a party to any type of proceeding, other than an action by or in the right of the corporation, because he or she is or was an officer, director, employee or agent of the corporation or was serving at the request of the corporation as an officer, director, employee or agent of another corporation or entity against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such proceeding if (1) he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or (2) in the case of a criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful. A corporation may indemnify any individual made a party or threatened to be made a party to any threatened, pending or completed action or suit brought by or in the right of the corporation because he or she was an officer, director, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other entity, against expenses actually and reasonably incurred in connection with such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, provided that such indemnification will be denied if the individual is found liable to the corporation unless, in such a case, the court determines the person is nonetheless entitled to indemnification for such expenses. A corporation must indemnify a present or former director or officer who successfully defends himself or herself in a proceeding to which he or she was a party because he or she was a director or officer of the corporation against expenses actually and reasonably incurred by him or her. Expenses incurred by an officer or director, or any employees or agents as deemed appropriate by the board of directors, in defending civil or criminal proceedings may be paid by the corporation in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of such director, officer, employee or agent to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. The Delaware law regarding indemnification and expense advancement is not exclusive of any other rights which may be granted by our Amended and Restated Certificate of Incorporation or our Amended and Restated By-laws, a vote of stockholders or disinterested directors, agreement or otherwise.

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Under Delaware law, termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that such person is prohibited from being indemnified.

Delaware law permits a corporation to adopt a provision in its certificate of incorporation eliminating or limiting the personal liability of a director, but not an officer, in his or her capacity as such, to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except that such provision may not limit the liability of a director for (1) any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (3) unlawful payment of dividends or stock purchases or redemptions or (4) any transaction from which the director derived an improper personal benefit. Our Amended and Restated Certificate of Incorporation provides that, to the fullest extent permitted under Delaware law, no Company director shall be liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director.

Our Amended and Restated By-laws requires indemnification, to the fullest extent permitted under Delaware law, of any person who is or was a director or officer of the Company or any of its direct or indirect wholly owned subsidiaries and who is or was a party or is threatened to be made a party to, or was or is otherwise directly involved in (including as a witness), any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Company or any direct or indirect wholly owned subsidiary of the Company, or is or was serving at our request as a director, officer, employee, partner, member or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, whether the basis of such proceeding is alleged action in an official capacity or in any other capacity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding; provided that the foregoing shall not apply to a director or officer with respect to a proceeding that was commenced by such director or officer except under certain circumstances.

In addition, our Amended and Restated By-laws provide that expenses incurred by or on behalf of a current or former director or officer in connection with defending any claim, action, suit or proceeding may be advanced to the director or officer by us upon the request of the director or officer, which request, if required by law, will include an undertaking by or on behalf of the director or officer to repay the amounts advanced if ultimately it is determined that the director or officer was not entitled to be indemnified against the expenses.

The indemnification rights to be provided in our Amended and Restated By-laws are not exclusive of any other right to which persons seeking indemnification may otherwise be entitled.

As permitted by Delaware law, our Amended and Restated By-laws authorize us to purchase and maintain insurance to protect ourselves and any director, officer, employee or agent against any expenses, judgments, fines and amounts paid in settlement of or otherwise incurred by us or such persons acting in such capacities in connection with any investigation, action, suit or proceeding.

Forum Selection

Our Amended and Restated By-laws require, unless we consent in writing to the selection of an alternative forum and to the fullest extent permitted by law, that derivative actions brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders and other similar actions, may be brought only in specified courts in the State of Delaware. Although we believe this provision will benefit us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers. See “Risk Factors—Our Amended and Restated By-laws will designate courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.”

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Transfer Agent and Registrar

The transfer agent and registrar for the Common Stock is Computershare.

Listing

We intend to list our Common Stock on the NYSE under the symbol “BNED”.

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SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of our Common Stock in the public market, including shares issued upon exercise of outstanding options or warrants, or the anticipation of these sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of equity securities.

Sale of Restricted Securities

Rule 144

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated), including an affiliate, who beneficially owns “restricted securities” of a “reporting company” may not sell these securities until the person has beneficially owned them for at least six months. Thereafter, affiliates may not sell within any three-month period a number of shares in excess of the greater of: (i) 1% of the then outstanding shares of Common Stock as shown by the most recent report or statement published by the issuer; and (ii) the average weekly reported trading volume in such securities during the four preceding calendar weeks.

Sales under Rule 144 by our affiliates will also be subject to restrictions relating to manner of sale, notice and the availability of current public information about us and may be affected only through unsolicited brokers’ transactions.

Persons not deemed to be affiliates who have beneficially owned “restricted securities” for at least six months but for less than one year may sell these securities, provided that current public information about the Company is “available,” which means that, on the date of sale, we have been subject to the reporting requirements of the Exchange Act for at least 90 days and are current in our Exchange Act filings. After beneficially owning “restricted securities” for one year, our non-affiliates may engage in unlimited re-sales of such securities.

Shares received by our affiliates in the Distribution or upon exercise of stock options or upon vesting of other equity-linked awards may be “controlled securities” rather than “restricted securities.” “Controlled securities” are subject to the same volume limitations as “restricted securities” but are not subject to holding period requirements.

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LEGAL MATTERS

The validity of the Common Stock to be distributed in the Spin-Off will be passed upon for the Company by Cravath, Swaine & Moore LLP, New York, New York.

EXPERTS

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements and schedule at May 2, 2015 and May 3, 2014, and for each of the three years in the period ended May 2, 2015, as set forth in their report included in this Prospectus and elsewhere in the Registration Statement of which this Prospectus forms a part. We have included our consolidated financial statements and schedule in this Prospectus and elsewhere in the Registration Statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

Before the date of this Prospectus, we were not required to file reports with the SEC. This Prospectus and all future materials we file with the SEC may be read and copied at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC maintains a website at http://www.sec.gov that contains reports, proxy and registration statements, and other information regarding issuers that file electronically with the SEC. We maintain a website at bned.com . The information contained on or accessible through our website or the SEC’s website shall not be deemed to be a part of this Prospectus or the Registration Statement on Form S-1, of which this Prospectus is a part.

We have filed a Registration Statement on Form S-1 to register with the SEC the shares of our Common Stock to be distributed in the Spin-Off. This document constitutes a part of that Registration Statement, together with all amendments, supplements, schedules and exhibits to the registration statement.

This Prospectus does not contain all of the information in the registration statement. Each statement contained in this Prospectus as to the contents of any contract, agreement or other document filed as an exhibit to the registration statement is qualified in its entirety by reference to that exhibit for a more complete description of the matter involved.

You may request a copy of any of our filings with the SEC at no cost by writing us at the following address:

Investor Relations

Barnes & Noble Education, Inc.

120 Mountain View Blvd. Basking Ridge, NJ 07920

We intend to furnish holders of our Common Stock with annual reports containing consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles and audited and reported on by an independent registered public accounting firm.

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INDEX TO FINANCIAL STATEMENTS


	PAGE
Report of Independent Registered Public Accounting Firm Ernst & Young		F-2
Consolidated Statements of Operations		F-3
Consolidated Statements of Comprehensive Income		F-4
Consolidated Balance Sheets		F-5
Consolidated Statements of Changes in Parent Company Equity		F-6
Consolidated Statements of Cash Flows		F-7
Notes to Consolidated Financial Statements		F-8

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Barnes & Noble, Education, Inc.:

We have audited the accompanying consolidated balance sheets of Barnes & Noble Education, Inc. as of May 2, 2015 and May 3, 2014, and the related consolidated statements of operations, comprehensive income, changes in Parent Company equity and cash flows for each of the three years in the period ended May 2, 2015. Our audits also included the financial statement schedule listed at Item 16(b). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Barnes & Noble Education, Inc. at May 2, 2015 and May 3, 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended May 2, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

New York, NY

June 26, 2015

F-2

CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands, except per share data)	Fiscal 2015		Fiscal 2014		Fiscal 2013
Sales:
Product sales and other	$	1,544,975	$	1,536,180	$	1,631,454
Rental income		228,023		211,742		131,793

Total sales		1,772,998		1,747,922		1,763,247

Cost of sales and occupancy:
Product and other cost of sales and occupancy		1,198,300		1,180,727		1,270,381
Rental cost of sales and occupancy		131,125		130,430		88,250

Total cost of sales and occupancy		1,329,425		1,311,157		1,358,631

Gross profit		443,573		436,765		404,616
Selling and administrative expenses		359,504		330,426		302,902
Depreciation and amortization		50,509		48,014		46,849

Operating income		33,560		58,325		54,865
Interest expense, net		210		385		4,871

Income before income taxes		33,350		57,940		49,994
Income taxes		14,218		22,834		19,820

Net income	$	19,132	$	35,106	$	30,174

Income per common share
Basic	$	0.33	$	0.88	$	0.78
Diluted	$	0.33	$	0.88	$	0.78
Weighted average common shares outstanding
Basic		38,452		37,270		36,812
Diluted		38,493		37,275		36,812

See accompanying notes to consolidated financial statements.

F-3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(In thousands)	Fiscal 2015		Fiscal 2014		Fiscal 2013
Net income	$	19,132	$	35,106	$	30,174
Other comprehensive earnings, net of tax		—		—		—

Total comprehensive income	$	19,132	$	35,106	$	30,174

See accompanying notes to consolidated financial statements.

F-4

CONSOLIDATED BALANCE SHEETS


(In thousands)	May 2, 2015		May 3, 2014
Assets
Current assets:
Cash and cash equivalents	$	59,714	$	144,269
Receivables, net		76,551		39,001
Merchandise inventories, net		297,424		275,346
Textbook rental inventories		47,550		47,063
Prepaid expenses and other current assets		4,625		4,121
Short-term deferred tax assets, net		24,358		21,689

Total current assets		510,222		531,489

Property and equipment:
Buildings and leasehold improvements		149,065		135,421
Fixtures and equipment		335,403		311,571

		484,468		446,992
Less accumulated depreciation and amortization		376,911		347,384

Net property and equipment		107,557		99,608

Goodwill		274,070		274,070
Intangible assets, net		198,190		208,441
Other noncurrent assets		39,885		30,152

Total assets	$	1,129,924	$	1,143,760

Liabilities and Parent Company Equity
Current liabilities:
Accounts payable	$	170,101	$	165,573
Accrued liabilities		97,575		92,644

Total current liabilities		267,676		258,217

Long-term deferred taxes, net		66,091		74,753
Other long-term liabilities		6,029		2,855
Preferred membership interests		—		383,397
Parent company investment		790,128		424,538
Commitments and contingencies		—		—

Total liabilities and Parent Company equity	$	1,129,924	$	1,143,760

See accompanying notes to consolidated financial statements.

F-5

CONSOLIDATED STATEMENTS OF CHANGES IN PARENT COMPANY EQUITY


(In thousands)	Membership Interests			Parent Company Investment			Total
Balance at April 28, 2012		672,535			—			672,535
Contribution of Barnes & Noble College, LLC membership interests into Parent		(672,535	)		672,535			—
Net income		—			30,174			30,174
Net decrease in Parent company investment		—			(372,810	)		(372,810	)
Accretive dividend on preferred stockholders		—			(1,004	)		(1,004	)

Balance at April 27, 2013		—			328,895			328,895
Net income		—			35,106			35,106
Net increase in Parent company investment		—			62,307			62,307
Accretive dividend on preferred stockholders		—			(1,770	)		(1,770	)

Balance at May 3, 2014		—			424,538			424,538
Net income		—			19,132			19,132
Net decrease in Parent company investment		—			39,236			39,236
Accretive dividend on preferred stockholders		—			(6,076	)		(6,076	)
Acquisition of preferred membership interests		—			313,298			313,298

Balance at May 2, 2015	$	—		$	790,128		$	790,128

See accompanying notes to consolidated financial statements.

F-6

CONSOLIDATED STATEMENTS OF CASH FLOWS


Fiscal Year (In thousands)	Fiscal 2015			Fiscal 2014			Fiscal 2013
Cash flows from operating activities:
Net income	$	19,132		$	35,106		$	30,174
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		50,509			48,014			46,849
Non-cash impairment charges		7			11			209
Deferred taxes		(11,332	)		(9,962	)		(7,621	)
Stock-based compensation expense		2,951			1,817			1,019
Increase (decrease) in other long-term liabilities		3,174			(2,031	)		1,491
Changes in operating assets and liabilities, net		(50,921	)		(7,151	)		(12,633	)

Net cash flows provided by operating activities		13,520			65,804			59,488

Cash flows from investing activities:
Purchases of property and equipment		(48,452	)		(38,253	)		(38,760	)
Net (increase) decrease in other noncurrent assets		(9,733	)		808			(10,348	)

Net cash flows used in investing activities		(58,185	)		(37,445	)		(49,108	)

Cash flows from financing activities:
Net transfer from (to) Parent		36,285			60,490			(373,829	)
Proceeds from issuance of Preferred Membership interests		—			—			380,623
Acquisition of Preferred Membership interests		(76,175	)		—			—

Net cash flows provided by (used in) financing activities		32,527			60,490			6,794

Net increase (decrease) in cash and cash equivalents		(84,555	)		88,849			17,174
Cash and cash equivalents at beginning of period		144,269			55,420			38,246

Cash and cash equivalents at end of period	$	59,714		$	144,269		$	55,420

Changes in operating assets and liabilities, net:
Receivables, net	$	(39,890	)	$	(2,707	)	$	(5,505	)
Merchandise inventories		(22,078	)		(29,988	)		(11,891	)
Textbook rental inventories		(487	)		(3,003	)		(14,185	)
Prepaid expenses and other current assets		(504	)		(1,481	)		(479	)
Accounts payable and accrued liabilities		9,698			30,028			19,427

Changes in operating assets and liabilities, net	$	(50,921	)	$	(7,151	)	$	(12,633	)

Supplemental cash flow information:
Cash paid during the period for:
Interest paid	$	210		$	385		$	1,027
Income taxes (net of refunds)	$	25,171		$	32,796		$	27,441
Non-cash financing activity:
Acquisition of Preferred Membership Interests for 2,737,290 shares of common stock of Barnes & Noble	$	76,175		$	—		$	—

See accompanying notes to consolidated financial statements.

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

Unless the context otherwise indicates, references in these Notes to the accompanying consolidated financial statements to “we,” “us,” “our” and “the Company” refer to Barnes & Noble Education, Inc., a Delaware corporation. References to “Barnes & Noble” or “Parent” refer to Barnes & Noble, Inc., a Delaware corporation, and its consolidated subsidiaries (other than Barnes & Noble Education, Inc. and its consolidated subsidiaries) unless the context otherwise requires. References to “Barnes & Noble College” refer to our college bookstore business operated through our subsidiary Barnes & Noble College Booksellers, LLC. Barnes & Noble College is our only operating subsidiary.

Our History

On September 30, 2009, Barnes & Noble acquired Barnes & Noble College Booksellers, LLC from Leonard and Louise Riggio. From that date until October 4, 2012, Barnes & Noble College Booksellers, LLC was wholly owned by Barnes & Noble Booksellers, Inc. We were initially incorporated under the name NOOK Media Inc. in July 2012 to hold Barnes & Noble’s college and digital businesses. On October 4, 2012, Microsoft Corporation (“Microsoft”) acquired a 17.6% non-controlling preferred membership interest in our subsidiary NOOK Media LLC (the “LLC”), and through us, Barnes & Noble maintained an 82.4% controlling interest of the college and digital businesses.

On January 22, 2013, Pearson Education, Inc. (“Pearson”) acquired a 5% non-controlling preferred membership interest in the LLC, entered into a commercial agreement with the LLC relating to the college business and received warrants to purchase an additional preferred membership interest in the LLC.

On December 4, 2014, we re-acquired Microsoft’s interest in the LLC in exchange for cash and common stock of Barnes & Noble. On December 22, 2014, we also re-acquired Pearson’s interest in the LLC and certain related warrants previously issued to Pearson in exchange for cash and common stock of Barnes & Noble. In connection with these transactions, Barnes & Noble entered into contingent payment agreements with Microsoft and Pearson providing for additional payments upon the occurrence of certain events, including upon a sale of the digital business. As a result of these transactions, Barnes & Noble owns, and will own prior to the Spin-Off (as discussed in Note 2), 100% of our Company.

On May 1, 2015, we distributed to Barnes & Noble all of the membership interests in NOOK Digital LLC (formerly known as barnesandnoble.com llc), which owns the digital business and which will continue to be owned by Barnes & Noble. As a result, we will cease to own any interest in the digital business.

These consolidated financial statements retroactively reflect the reorganization of NOOK Media Inc. as described above.

Separation from Barnes & Noble, Inc.

This Spin-Off is expected to be executed by means of a pro-rata distribution of our Common Stock to Barnes & Noble’s existing stockholders and is considered to be a non-taxable event for Barnes & Noble and its stockholders.

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The distribution of our Common Stock to Barnes & Noble stockholders is conditioned on, among other things, final approval of the Spin-Off plan by the Barnes & Noble board of directors, the receipt of opinions from

external legal counsel and KPMG LLP to Barnes & Noble, confirming the tax-free status of the Spin-Off for U.S. federal income tax purposes, and the United States Securities and Exchange Commission declaring effective our Registration Statement of which this Prospectus forms a part.

Description of Business

We are one of the largest contract operators of bookstores on college and university campuses across the United States. We create and operate campus stores that are focal points for college life and learning, enhancing the educational mission of the institution, enlivening campus culture and delivering an important revenue stream to our partner schools. We typically operate our stores under multi-year management service agreements granting us the right to operate the official school bookstore on campus. In turn, we pay the school a percentage of store sales and, in some cases, a minimum fixed guarantee.

As of May 2, 2015, we operated 724 stores nationwide, which reach 24% of the total United States college and university student enrolled population. We build relationships and derive sales by actively engaging and marketing to over 5 million students and their faculty on the campuses we serve and offer a full assortment of items in our campus stores, including course materials, which includes new and used print textbooks and digital textbooks, all of which are available for sale or rent, emblematic apparel and gifts, trade books, computer products, school and dorm supplies, convenience and café items and graduation products.

Summary of Significant Accounting Policies

Basis of Presentation

All intercompany transactions between us and Barnes & Noble have been included in our consolidated financial statements and are considered to be effectively settled for cash in our consolidated financial statements at the time the Spin-Off is recorded. The total net effect of the settlement of these intercompany transactions is reflected in our consolidated statements of cash flow as a financing activity and in the consolidated balance sheets as “Parent company investment.”

The historical costs and expenses reflected in our financial statements include an allocation for certain corporate and shared service functions historically provided by Barnes & Noble including, but not limited to, executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology, and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of consolidated sales, headcount, tangible assets or other measures considered to be a reasonable reflection of the historical utilization levels of these services.

Our management believes the assumptions underlying our consolidated financial statements, including the assumptions regarding the allocation general corporate expenses from Barnes & Noble are reasonable. Nevertheless, our consolidated financial statements may not include all of the actual expenses that would have been incurred had we operated as a stand-alone company during the periods presented and may not reflect our

F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

consolidated results of operations, financial position and cash flows had we operated as a stand-alone company during the periods presented. Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Following the Spin-Off, we will perform these functions using our own resources or contracted services. Upon execution of a transition services agreement with Barnes & Noble, we expect some of these functions will continue to be provided by Barnes & Noble.

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

We consider all short-term, highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Merchandise Inventories

Merchandise inventories, which consist of finished goods, are stated at the lower of cost or market. Cost is determined primarily by the retail inventory method. Our textbook and trade book inventories are valued using the last-in first out, or LIFO, method and the related reserve was not material to the recorded amount of our inventories. There were no LIFO adjustments in Fiscal 2015 compared to a favorable LIFO adjustment of $7,692 and an unfavorable LIFO adjustment of $(2,200) through cost of goods sold in Fiscal 2014 and Fiscal 2013, respectively.

Rental Assets

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives. For tax purposes, different methods are used. Maintenance and repairs are expensed as incurred, however major maintenance and remodeling costs are capitalized if they extend the useful life of the asset. Leasehold improvements are capitalized and depreciated over the terms of the respective leases. Display fixtures and office equipment are capitalized and depreciated over 5 years while office furniture is capitalized and depreciated over 7 years. System costs are capitalized and amortized over their estimated useful lives, from the date the systems become operational. We had $107,557 and $99,608 of property and equipment, net of accumulated depreciation, at May 2, 2015 and May 3, 2014, respectively, and $40,257, $37,720 and $36,552 of depreciation expense for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Net capitalized software costs of $14,308 and $14,810 for Fiscal 2015 and Fiscal 2014, respectively, are included in property and equipment.

Other Long-Lived Assets

Our other long-lived assets include property and equipment, and amortizable intangibles. We had $198,190 and $208,441 of amortizable intangible assets, net of amortization, at May 2, 2015 and May 3, 2014, respectively. These amortizable intangible assets relates to our customer relationships with our colleges and university clients. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and consider market participants in accordance with Accounting Standards Codification (ASC) 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets . We evaluate long-lived assets for impairment at the school contract combined store level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, we first compare the carrying amount of the assets to the school contract combined store level’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying amount of the assets, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the assets to the school contract combined store level’s fair value based on its estimated discounted future cash flows. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. Impairment losses included in selling and administrative expenses totaled $7, $11 and $209 during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

Goodwill and Unamortizable Intangible Assets

The costs in excess of net assets of businesses acquired are carried as goodwill in the accompanying balance sheet.

We had $274,070 of goodwill and no unamortizable intangible assets (those with an indefinite useful life) at May 2, 2015 and May 3, 2014. ASC 350-30, Goodwill and Other Intangible Assets (“ASC 350-30”), requires that goodwill and other unamortizable intangible assets no longer be amortized, but instead be tested for impairment at least annually or earlier if there are impairment indicators. We perform a two-step process for impairment testing of goodwill as required by ASC 350-30. The first step of this test, used to identify potential impairment, compares the fair value of a reporting unit with our carrying amount. The second step (if necessary) measures the amount of the impairment. We completed our annual goodwill impairment test as of the first day of the third quarter. In performing the valuations, we used cash flows that reflected management’s forecasts and discount rates that included risk adjustments consistent with the current market conditions. Based on the results of the step one testing, our fair value as of that date exceeded their carrying values; therefore, the second step of the impairment test was not required to be performed and no goodwill impairment was recognized. Goodwill is subject to risk of impairment if our digital projections fall short of expectations.

F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

Research and Development Costs for Software Products

We follow the guidance in ASC 985-20, Cost of Software to Be Sold, Leased or Marketed, regarding software development costs to be sold, leased, or otherwise marketed. Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. A certain amount of judgment and estimation is required to assess when technological feasibility is established, as well as the ongoing assessment of the recoverability of capitalized costs. Our products reach technological feasibility shortly before the products are available for sale and therefore research and development costs are generally expensed as incurred.

Advertising Costs

The costs of advertising are expensed as incurred during the year pursuant to ASC 720-35, Advertising Costs . Advertising costs charged to selling and administrative expenses were $8,614, $8,421 and $6,695 during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

Closed Store Expenses

When we close or relocate a store, we charge unrecoverable costs to expense. These costs include the net book value of abandoned fixtures and leasehold improvements and, when a store is closed prior to the expiration of the lease or store management contract, a provision for future lease obligations, net of expected sublease recoveries. Costs associated with store closings of $(100), $481 and $2,242 during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively, are included in selling and administrative expenses in the accompanying consolidated statements of operations.

Income Taxes

The provision for income taxes includes federal, state and local income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. The deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We regularly review deferred tax assets for recoverability and establish a valuation allowance, if determined to be necessary.

F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

Barnes & Noble sponsors the share-based incentive plans in which certain of our employees participate. The calculation of stock-based employee compensation expense involves estimates that require Barnes & Noble management’s judgment. These estimates include the fair value of each of the stock option awards granted, which is estimated on the date of grant using a Black-Scholes option pricing model. There are two significant inputs into the Black-Scholes option pricing model: (1) expected volatility and (2) expected term. Barnes & Noble estimates expected volatility based on traded option volatility of Barnes & Noble’s stock over a term equal to the expected term of the option granted. The expected term of stock option awards granted is derived from historical exercise experience under Barnes & Noble’s stock option plans and represents the period of time that stock option awards granted are expected to be outstanding. The assumptions used in calculating the fair value of stock-based payment awards represent Barnes & Noble management’s best estimates, but these estimates involve inherent uncertainties and the application of Barnes & Noble management’s judgment. As a result, if factors change and we use different assumptions, stock-based compensation expense could be materially different in the future. In addition, Barnes & Noble is required to estimate the expected forfeiture rate, and only recognize expense for those shares expected to vest. If their actual forfeiture rate is materially different from their estimate, our stock-based compensation expense could be significantly different from what we recorded in the current period. See Note 7 for a further discussion of Barnes & Noble’s stock-based incentive plans.

Accounts Receivable

Accounts receivable, which primarily consists of balances due from colleges, universities and other financial aid providers, are presented on our Consolidated Balance Sheets net of allowances. An allowance for doubtful accounts is determined through an analysis of the aging of accounts receivable and assessments of collectability based on historic trends, the financial condition of our customers and an evaluation of economic conditions. We write off uncollectible trade receivables once collection efforts have been exhausted and record bad debt expenses related to textbook rentals that are not returned and we are unable to successfully charge the customer. Allowance for doubtful accounts were $2,313, $2,233 and $2,425 as of Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

Net Earnings Per Common Share

Basic earnings per share represent net earnings to common stockholders divided by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of our stock based compensation. See Note 12 for further information regarding the calculation of basic and diluted earnings per common share.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method nor have we determined the impact of adoption on our consolidated financial statements.

F-13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reporting Period

Our fiscal year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last day of April. The fiscal year periods for each of the last three fiscal years consisted of the 52 weeks ended May 2, 2015 (Fiscal 2015), 53 weeks ended May 3, 2014 (Fiscal 2014) and 52 weeks ended April 27, 2013 (Fiscal 2013).

Segment Reporting

We identify our operating segments based on the way our business is managed (focusing on the financial information distributed) and the manner in which our chief operating decision maker interacts with other members of management. We have determined that we operate within a single reportable segment within the United States.

Credit Facility

All outstanding debt under the B&N Credit Facility was recorded on Barnes & Noble’s balance sheet.

In connection with the Spin-Off, we expect to enter into a new five year revolving credit facility (the “New Credit Facility”) to fund working capital and other liquidity needs. The New Credit Facility is expected to provide (subject to availability under a borrowing base) for aggregate maximum commitments of approximately $400,000. We expect the New Credit Facility will be undrawn at the time of the Spin-Off.

Stock-Based Compensation

Barnes & Noble’s Equity Plans

Barnes & Noble maintains four share-based incentive plans for the benefit of certain officers, directors and employees, including our employees: the 1996 Incentive Plan, the 2004 Incentive Plan, the 2009 Incentive Plan and the Amended and Restated 2009 Incentive Plan. Prior to June 2, 2009, Barnes & Noble issued restricted stock and stock options under the 1996 and 2004 Incentive Plans. On June 2, 2009, Barnes & Noble’s stockholders approved the 2009 Incentive Plan. Under the 2009 Incentive Plan, Barnes & Noble issued restricted stock units, restricted stock and stock options. On September 11, 2012, Barnes & Noble’s stockholders approved the Amended and Restated 2009 Incentive Plan. Under the Amended and Restated 2009 Incentive Plan, Barnes & Noble has issued restricted stock units, restricted stock and stock options. The maximum number of shares issuable under the Amended and Restated 2009 Incentive Plan is 1,700,000, plus shares that remain available under Barnes & Noble’s shareholder-approved 2009 and 2004 Incentive Plan. At May 2, 2015, there were approximately 4,326,902 shares of Barnes & Noble common stock available for future grants under the Amended and Restated 2009 Incentive Plan.

F-14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A restricted stock award is an award of common stock that is subject to certain restrictions during a specified period. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of unvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. Barnes & Noble’s restricted stock awards vest over a period of one to four years. Barnes & Noble expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of Barnes & Noble’s common stock on the grant date.

A restricted stock unit is a grant valued in terms of Barnes & Noble’s common stock, but no stock is issued at the time of grant. Each restricted stock unit may be redeemed for one share of Barnes & Noble common stock once vested. Restricted stock units are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the units except in very limited circumstances and with the consent of the compensation committee. Shares of unvested restricted stock units have no voting rights but are entitled to receive dividends and other distributions thereon. Barnes & Noble’s restricted stock units vest over a period of one to four years. Barnes & Noble expenses the cost of the restricted stock units, which is determined to be the fair market value of the underlying shares at the date of grant, straight-line over the period during which the restrictions lapse. For these purposes, the fair market value of the restricted stock unit is determined based on the closing price of Barnes & Noble’s common stock on the grant date.

Barnes & Noble uses the Black-Scholes option-pricing model to value Barnes & Noble’s stock options for each stock option award. Using this option-pricing model, the fair value of each stock option award is estimated on the date of grant. The fair value of Barnes & Noble’s stock option awards, which are generally subject to pro-rata vesting annually over four years, is expensed on a straight-line basis over the vesting period of the stock options. The expected volatility assumption is based on traded options volatility of Barnes & Noble’s stock over a term equal to the expected term of the option granted. The expected term of stock option awards granted is derived from historical exercise experience under Barnes & Noble’s stock option plans and represents the period of time that stock option awards granted are expected to be outstanding. The expected term assumption incorporates the contractual term of an option grant, which is ten years, as well as the vesting period of an award, which is generally pro-rata vesting annually over four years. The risk-free interest rate is based on the implied yield on a U.S. Treasury constant maturity with a remaining term equal to the expected term of the option granted.

Barnes & Noble recognizes stock-based compensation costs, net of estimated forfeitures, for only those shares expected to vest on a straight-line basis over the requisite service period of the award. Barnes & Noble estimates the forfeiture rates based on its historical experience.

No stock options were granted during Fiscal 2015, Fiscal 2014 and Fiscal 2013.

F-15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation Activity

The following table presents a summary of Barnes & Noble’s stock option activity related to our employees who participate in the Barnes & Noble equity plans:


	Number of Shares (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (in thousands)
Balance, April 28, 2012		180		$	15.78		9.55 years	$	—
Granted		—			—
Exercised		—			—
Forfeited		—			—

Balance, April 27, 2013		180		$	15.78		8.55 years	$	427
Granted		—			—
Exercised		—			—
Forfeited		—			—
Balance, May 3, 2014		180		$	15.78		7.53 years	$	162

Granted		—			—
Exercised		(10	)		—
Forfeited		—			—

Balance, May 2, 2015		170		$	15.78		6.54 years	$	1,176

Vested and expected to vest in the future at May 2, 2015		170		$	15.78		6.54 years	$	1,176

Exercisable at May 2, 2015		80		$	15.78		6.54 years	$	554

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Barnes & Noble’s closing stock price on the last trading day of the related fiscal year and the exercise price, multiplied by the related in-the-money options) that would have been received by the option holders had they exercised their options at the end of the fiscal year. This amount changes based on the market value of Barnes & Noble’s common stock. The intrinsic value of options exercised is based on the difference between the Barnes & Noble’s stock price on the exercise date and the respective exercise price, multiplied by the number of options exercised. There were 10,000 options exercised during Fiscal 2015 and no options exercised during Fiscal 2014 and Fiscal 2013 related to our employees who participate in Barnes & Noble’s equity plan.

As of May 2, 2015, there was $215 of total unrecognized compensation expense related to unvested stock options granted under the Barnes & Noble’s share-based compensation plans related to our employees who participate in Barnes & Noble equity plans. That expense is expected to be recognized over a weighted average period of 0.54 years.

There were no restricted stock activity related to our employees during Fiscal 2015, Fiscal 2014 and Fiscal 2013.

F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a summary of Barnes & Noble’s restricted stock unit activity related to our employees who participate in Barnes & Noble’s equity plans:


	Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Balance, April 28, 2012		138		$	14.92
Granted		105			16.67
Vested		—			—
Forfeited		—			—

Balance, April 27, 2013		243		$	15.68
Granted		353			14.76
Vested		(35	)		14.92
Forfeited		—			—

Balance, May 3, 2014		561		$	15.15
Granted		—		$	—
Vested		(172	)		15.06
Forfeited		(23	)		15.61

Balance, May 2, 2015		367		$	15.16

Total fair value of shares of restricted stock units related to our employees that participate in the Barnes & Noble equity plan that vested during Fiscal 2015 and Fiscal 2014 were $4,009 and $626, respectively. As of May 2, 2015, there was $3,764 of unrecognized stock-based compensation expense related to nonvested restricted stock units for our employees who participate in the Barnes & Noble equity plan. That cost is expected to be recognized over a weighted average period of 1.64 years.

In Fiscal 2015, Fiscal 2014 and Fiscal 2013, Barnes & Noble allocated $3,930, $2,373 and $1,646 of stock compensation to us, which includes stock compensation related to our employees as well as an allocation from Barnes & Noble for our pro-rated share of corporate employees. This capital contribution is included in selling and administrative expenses and additional paid in capital on the Parent company equity investment.

Receivables, Net

Receivables represent customer, private and public institutional and government billings, credit/debit card, advertising and other receivables due within one year as follows at the dates indicated below:


	May 2, 2015		May 3, 2014
Trade accounts	$	26,423	$	26,460
Due from affiliate		38,241		—
Credit/debit card receivables		2,818		3,203
Other receivables		9,069		9,338

Total receivables, net	$	76,551	$	39,001

Other Long-Term Liabilities

Other long-term liabilities consist primarily of deferred management service agreement costs related to college and university contracts, which we account for under lease accounting (as deferred rent) and tax liabilities and reserves. We provide for minimum contract expense (rent expense) over the lease terms (including

F-17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the build-out period) on a straight-line basis. The excess of such rent expense over actual lease payments (net of school allowances) is classified as deferred rent. We had the following long-term liabilities at May 2, 2015 and May 3, 2014:


	May 2, 2015		May 3, 2014
Deferred rent	$	4,082	$	2,386
Tax liabilities and reserves		214		180
Other		1,733		289

Total long-term liabilities	$	6,029	$	2,855

10.

Fair Values of Financial Instruments

In accordance with ASC 820, Fair Value Measurements and Disclosures , the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions

Our financial instruments include cash, receivables, accrued liabilities and accounts payable. The fair values of cash, receivables accrued liabilities and accounts payable approximates their carrying values because of the short-term nature of these instruments, which are all considered level 1.

11.

Employees’ Retirement and Defined Contribution Plans

We maintain a defined contribution plan (the Savings Plan) for the benefit of substantially all of our employees. Total contributions charged to employee benefit expenses for the Savings Plan were $3,907, $3,475 and $3,068 during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

F-18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.

Net Earnings Per Common Share (a)(b)

The following is a reconciliation of our basic and diluted earnings per share calculation:


	Fiscal 2015			Fiscal 2014			Fiscal 2013
Numerator for basic and dilutive earnings per share:
Net earnings	$	19,132		$	35,106		$	30,174
Accretion of dividends on preferred stock		(6,076	)		(1,770	)		(1,004	)
Less allocation of earnings and dividends to participating securities		(313	)		(663	)		(473	)

Net income (loss) available to common shareholders	$	12,743		$	32,673		$	28,697

Numerator for diluted income (loss) per share:
Net income available to common shareholders	$	12,743			32,673			28,697
Accretion of dividends on preferred stock (a)		—			—			—
Allocation of earnings and dividends to participating securities		313			663			473
Less diluted allocation of earnings and dividends to participating securities		(313	)		(663	)		(473	)

Net income (loss) available to common shareholders	$	12,743		$	32,673		$	28,697

Denominator for basic and diluted loss per share:
Basic weighted average common shares		38,452			37,270			36,812

Denominator for basic and diluted loss per share:
Basic weighted average common shares		38,452			37,270			36,812
Average dilutive options		41			5			—

Diluted weighted average shares		38,493			37,275			36,812

Basic earnings per common share:
Net earnings	$	0.33		$	0.88		$	0.78

Diluted earnings per common share:
Net earnings	$	0.33		$	0.88		$	0.78

( a )

Basic earnings per share and weighted-average basic shares outstanding are based on the number of shares of Barnes & Noble common stock outstanding on May 2, 2015, adjusted for an assumed distribution ratio of 0.632 shares of our Common Stock for every one share of Barnes & Noble common stock held on the record date for the Spin-Off.

( b )

(c)

Although the Company was in a net income position during Fiscal 2015, Fiscal 2014 and Fiscal 2013, the dilutive effect of the accretion of preferred membership interests were excluded from the calculation of income per share using the two-class method because the effect would be antidilutive.

F-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.

Income Taxes

Our operating results have been included in Barnes & Noble consolidated U.S. federal and state income tax returns. Amounts presented in these consolidated financial statements related to income taxes have been determined on a separate tax return basis, and our contribution to Barnes & Noble’s net operating income and tax credits have been included in these consolidated financial statements. These amounts may not reflect tax positions taken or to be taken by Barnes & Noble after the separation from Barnes & Noble.

Income tax provisions (benefits) for Fiscal 2015, Fiscal 2014 and Fiscal 2013 are as follows:


	Fiscal 2015			Fiscal 2014			Fiscal 2013
Current:
Federal	$	22,061		$	27,574		$	23,008
State		3,489			5,222			4,433

Total current		25,550			32,796			27,441

Deferred:
Federal		(10,247	)		(8,493	)		(6,503	)
State		(1,085	)		(1,469	)		(1,118	)

Total deferred		(11,332	)		(9,962	)		(7,621	)

Total		14,218		$	22,834		$	19,820

Reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:


	Fiscal 2015			Fiscal 2014			Fiscal 2013
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		4.7			4.3			4.3
Other, net		2.9			0.1			0.3

Effective income tax rate		42.6	%		39.4	%		39.6	%

F-20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We account for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. At May 2, 2015 and May 3, 2014, the significant components of our deferred taxes consisted of the following:


	May 2, 2015			May 3, 2014			April 27, 2013
Deferred tax assets:
Estimated accrued liabilities	$	13,241		$	11,591		$	9,792
Inventory		12,941			11,936			8,695
Stock-based compensation		1,351			714			—
Insurance liability		921			903			1,028
Lease transactions		1,580			924			908
Fixed assets		4,075			385			—
Other		839			1,156			1,516

Gross deferred tax assets		34,948			27,609			21,939
Valuation allowance		—			—			—

Net deferred tax assets		30,977			27,609			21,939

Deferred tax liabilities:
Goodwill and intangible asset amortization		(76,682	)		(80,673	)		(84,866	)
Depreciation		—			—			(99	)

Gross deferred tax liabilities		(76,682	)		(80,673	)		(84,965	)

Net deferred tax liabilities	$	(41,734	)	$	(53,064	)	$	(63,026	)

As of May 2, 2015, we had $215 of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits for Fiscal 2015, Fiscal 2014 and Fiscal 2013 is as follows:


Balance at April 28, 2012	$	36
Additions for tax positions of the current period		—
Additions for tax positions of prior periods		60
Reductions due to settlements		—
Other reductions for tax positions of prior periods		—

Balance at April 27, 2013	$	96
Additions for tax positions of the current period		84
Additions for tax positions of prior periods		—
Reductions due to settlements		—
Other reductions for tax positions of prior periods		—

Balance at May 3, 2014	$	180
Additions for tax positions of the current period		35
Additions for tax positions of prior periods		—
Reductions due to settlements		—
Other reductions for tax positions of prior periods		—

Balance at May 2, 2015	$	215

F-21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our policy is to recognize interest and penalties related to income tax matters in income tax expense. As of May 2, 2015 and May 3, 2014, we had accrued $1 and $4, respectively, for net interest and penalties. The change in the amount accrued for net interest and penalties includes $3 in additions for net interest and penalties recognized in income tax expense in our Fiscal 2015 consolidated statement of operations.

We are subject to U.S. federal income tax as well as income tax in jurisdictions of each state having an income tax. The tax years that remain subject to examination are primarily from Fiscal 2007 and forward. Some earlier years remain open for a small minority of states.

14.

Intangible Assets and Goodwill

Amortizable intangible assets as of May 3, 2014 and May 2, 2015 are as follows:


			As of May 3, 2014
Amortizable intangible assets	Useful Life		Gross Carrying Amount		Accumulated Amortization			Total
Customer relationships		25	$	255,000	$	(46,750	)	$	208,250
Other		3-10		319		(128	)		191

			$	255,319	$	(46,878	)	$	208,441


			As of May 2, 2015
Amortizable intangible assets	Useful Life		Gross Carrying Amount		Accumulated Amortization			Total
Customer relationships		25	$	255,000	$	(56,950	)	$	198,050
Other		3-10		319		(180	)		139

			$	255,319	$	(57,130	)	$	198,189

All amortizable intangible assets are being amortized over their useful life on a straight-line basis, with the exception of customer relationships, which is amortized on an accelerated basis.


Aggregate Amortization Expense:
For the 52 weeks ended May 2, 2015	$	10,252
For the 53 weeks ended May 3, 2014	$	10,294
For the 52 weeks ended April 27, 2013	$	10,297

Estimated Amortization Expense:
(12 months ending on or about April 30)
2016	$	10,252
2017	$	10,252
2018	$	10,208
2019	$	10,206
2020	$	10,206

There have been no changes in the carrying amount of goodwill for Fiscal 2015 and Fiscal 2014.


	Fiscal 2015		Fiscal 2014
Goodwill	$	274,070	$	274,070

F-22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.

Microsoft Investment

On April 27, 2012, Barnes & Noble entered into an investment agreement pursuant to which Barnes & Noble transferred to NOOK Media LLC (“NOOK Media”) its digital device, digital content and college bookstore businesses, and Morrison Investment Holdings, Inc. (“Morrison”) purchased from NOOK Media 300,000 convertible preferred membership interests in NOOK Media (Series A Preferred) for an aggregate purchase price of $300,000.

Concurrently with its entry into this agreement, Barnes & Noble also entered into a commercial agreement with Microsoft, pursuant to which, among other things, NOOK Media would develop and distribute a Windows 8 application for eReading and digital content purchases, and an intellectual property license and settlement agreement with Microsoft and Microsoft Licensing GP.

The parties closed Morrison’s investment in NOOK Media and the commercial agreement became effective on October 4, 2012.

On December 3, 2014, Morrison, Microsoft, Barnes & Noble and Barnes & Noble Education entered into agreements pursuant to which Morrison’s interest in NOOK Media was purchased by Barnes & Noble Education and the Microsoft commercial agreement was terminated effective as of such date. Pursuant to the Purchase Agreement (the Purchase Agreement) among Barnes & Noble, Barnes & Noble Education, Morrison, and Microsoft, Barnes & Noble Education purchased from Morrison, and Morrison sold, all of its $300,000 convertible Series A preferred limited liability company interest in NOOK Media in exchange for an aggregate purchase price of $124,850 consisting of (i) $62,425 in cash and (ii) 2,737,290 shares of common stock, par value $0.001 per share, of Barnes & Noble. The Purchase Agreement closed on December 4, 2014. The Company accounted for this transaction in accordance with ASC 810-10, Non Controlling Interest (“ASC 810-10”) and accordingly was reflected as an equity transaction. In connection with the closing, the parties entered into a Digital Business Contingent Payment Agreement pursuant to which Microsoft is entitled to receive 22.7% of the proceeds from, among other events or transactions, (1) any future dividends or other distributions received by Barnes & Noble Education from Barnes & Noble’s digital business at any time until the date that is three years from the closing, subject to a one year extension under certain circumstances, and (2) the sale of Barnes & Noble’s digital business at any time until the date that is three years from the closing, subject to a one year extension under certain circumstances.

Investment Agreement

Microsoft’s investment represented approximately 17.6% of the common membership interests in NOOK Media on an as-converted basis as of closing, with Barnes & Noble retaining the remaining ownership interests. This investment is classified as temporary equity in the mezzanine section of the balance sheet between liabilities and permanent equity, net of investment fees. The temporary equity designation was due to a potential put feature after five years from the closing of the investment agreement on the preferred membership interests. The preferred membership interests had a liquidation preference equal to the original investment. Upon the completion of the acquisition of Microsoft’s interest in Barnes & Noble Education, the temporary equity was converted to permanent equity.

Commercial Agreement

Under the commercial agreement, NOOK Media has developed certain applications for Windows 8 for purchasing and consumption of digital reading content and use efforts to expand internationally.

The commercial agreement provided for revenue sharing for digital content purchased from NOOK Media by customers using the NOOK Media Windows 8 applications. Microsoft has made and was obligated to

F-23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

continue to make guaranteed advance payments to NOOK Media in connection with such revenue sharing equal to $60,000 per year. Microsoft also has paid and was obligated to continue to pay to NOOK Media $25,000 each year for purposes of assisting NOOK Media in acquiring local digital reading content and technology development in the performance of NOOK Media’s obligations under the commercial agreement.

The guaranteed advance payments in connection with revenue sharing as well as the amounts received for purposes of assisting NOOK Media in acquiring local digital reading content and technology development received from Microsoft were treated as debt in accordance with ASC 470-10-25-2, Sales of Future Revenues or Various Other Measures of Income . The Company estimated the cash flows associated with the commercial agreement and was amortizing the discount on the debt to interest expense over the term of the agreement in accordance with ASC 835-30-35-2, The Interest Method . Upon termination of this agreement in accordance with ASC 810-10, the remaining debt balance was converted to equity. Notwithstanding this treatment, the limited liability company agreement of NOOK Media provides that, under certain conditions, partnership losses or deductions can be allocated for income tax purposes to Microsoft in respect of amounts advanced to NOOK Media under the terms of the commercial agreement.

Settlement and License Agreement

The patent agreement provides for Microsoft and its subsidiaries to license to the Company and its affiliates certain intellectual property in exchange for royalty payments based on sales of certain devices. Additionally, the Company and Microsoft dismissed certain outstanding patent litigation between the Company, Microsoft and their respective affiliates in accordance with the settlement and license agreement. The Company recorded the royalty expense on NOOK ^® sales in the consolidated statement of operations in cost of sales and occupancy with no expense or liability for the sale of devices prior to this agreement.

16.

Pearson

On December 21, 2012, NOOK Media entered into an agreement with a subsidiary of Pearson plc (“Pearson”) to make a strategic investment in NOOK Media. That transaction closed on January 22, 2013, and Pearson invested approximately $89,500 of cash in NOOK Media in exchange for preferred membership interests representing a 5% equity stake in NOOK Media. Following the closing of the transaction, Barnes & Noble owned approximately 78.2% of the NOOK Media subsidiary and Microsoft owned approximately 16.8%. The preferred membership interests had a liquidation preference equal to the original investment. In addition, NOOK Media granted warrants to Pearson to purchase up to an additional 5% of NOOK Media under certain conditions. Upon the completion of the acquisition of Pearson’s interest in Barnes & Noble Education, as stated below, the temporary equity was converted to permanent equity.

The fair value of the preferred membership interests warrant liability was calculated using the Monte Carlo simulation approach.

This methodology values financial instruments whose value is dependent on an underlying total equity value by sampling random paths for the total equity value. The assumptions that are analyzed and incorporated into the model include closing date, valuation date, sales price of the preferred membership interests and warrants, warrant expiration date, time to liquidity event, risk-free rate, volatility, various correlations and the probability of meeting the net sales target. Based on Barnes & Noble’s analysis, the total fair value of preferred membership interests warrants as of the valuation date was $1,700 and was recorded as a noncurrent asset and a long-term liability. During the 13 weeks ended January 25, 2014, management determined that the probability of meeting the net sales target by the warrant measurement date was remote and fully wrote down the value of the warrant accordingly.

F-24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At closing, NOOK Media and Pearson entered into a commercial agreement with respect to distributing Pearson content in connection with this strategic investment. On December 27, 2013, NOOK Media entered into an amendment to the commercial agreement that extends the term of the agreement and the timing of the measurement period to meet certain revenue share milestones.

On December 22, 2014, Barnes & Noble entered into a Purchase Agreement (the “Pearson Purchase Agreement”) among Barnes & Noble, Barnes & Noble Education, NOOK Media Member Two LLC, a Delaware limited liability company (“NOOK Member Two”), Pearson Education Inc. (“Pearson Education”) and Pearson Inc., pursuant to which Barnes & Noble Education and NOOK Member Two purchased from Pearson Education all of its convertible Series B preferred limited liability company interest in NOOK Media and all of its warrants to purchase additional Series B preferred limited liability company interests, in exchange for an aggregate purchase price equal to (i) $13,750 in cash and (ii) 602,927 shares of common stock, par value $0.001 per share, of Barnes & Noble. The transactions under the Pearson Purchase Agreement closed on December 22, 2014. The Company accounted for this transaction in accordance with ASC 810-10 and accordingly was reflected as an equity transaction. As a condition to closing, the parties entered into an amended and restated Digital Business Contingent Payment Agreement, pursuant to which a Digital Business Contingent Payment Agreement dated as of December 3, 2014, by and between Barnes & Noble, NOOK Media and Pearson, was amended and restated to include provisions consistent with the Digital Business Contingent Payment Agreement entered into with Morrison on December 3, 2014.

17.

Commitments and Contingencies

We generally operate our stores pursuant to multi-year management service agreements under which a school designates us to operate the official school bookstore on campus and we provide the school with regular payments that represent a percentage of store sales and, in some cases, include a minimum fixed guaranteed payment. We account for these service agreements under lease accounting. Our contracts are typically for five to ten years, although some extend beyond ten years. Many contracts have a 90 to 120 day cancellation right by us, or by the college or university, without penalty.

Rental expense under operating leases is as follows:


	Fiscal 2015		Fiscal 2014		Fiscal 2013
Minimum rentals	$	125,388	$	118,873	$	115,085
Percentage rentals		106,011		99,025		101,773

	$	231,399	$	217,898	$	216,858

Future minimum annual rentals, excluding percentage rentals, required under our leases as of May 2, 2015 are:


Fiscal Year (a)
2016	$	119,926
2017		117,164
2018		109,885
2019		101,758
2020		90,530
After 2020		194,515

	$	733,778

(a)	Includes capital lease obligations of $232, $39, $0, $0, $0 and $0 for 2016, 2017, 2018, 2019, 2020 and after 2020, respectively.

F-25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We provide for minimum contract expense (rent expense) over the lease terms (including the build-out period) on a straight-line basis. The excess of such rent expense over actual lease payments (net of school allowances) is reflected in other long-term liabilities and accrued liabilities in the accompanying consolidated balance sheets. In addition, Barnes & Noble is a guarantor of all of our obligations under an office we lease in Mountain View, California.

Purchase obligations, which includes information technology contracts and inventory purchase commitments, as of May 2, 2015 are as follows:


Less Than 1 Year	$	4,697
1-3 Years		262

Total	$	4,959

18.

Legal Proceedings

We are involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of our business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on our financial position or results of operations.

19.

Related Party Transactions

We have a long-term supply agreement (“Supply Agreement”) with MBS Textbook Exchange, Inc. (“MBS”), which is majority owned by Leonard Riggio and other members of the Riggio family. MBS is a new and used textbook wholesaler, which also sells textbooks online and provides bookstore systems and distant learning distribution services. Pursuant to the Supply Agreement, which terminates by its terms in 2019, subject to automatic renewals thereafter if a party does not object 180 days prior to each annual renewal date, and subject to availability and competitive terms and conditions, we will continue to purchase new and used printed textbooks for a given academic term from MBS prior to buying them from other suppliers, other than in connection with student buy-back programs. Total purchases from MBS were $54,353, $70,127 and $82,323 for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Additionally, the Supply Agreement provides that we may sell to MBS certain textbooks that we cannot return to suppliers or use in our stores. MBS pays us commissions based on the volume of these textbooks sold to MBS each year and with respect to the textbook requirements of certain distance learning programs that MBS fulfills on our behalf. MBS paid us $5,512, $7,097 and $8,106 related to these commissions in Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. In addition, the Supply Agreement contains restrictive covenants that limit our ability to become a used textbook wholesaler and that place certain limitations on MBS’s business activities. We also entered into an agreement with MBS in Fiscal 2011 pursuant to which MBS purchases books from us, which have no resale value for a flat rate per box. Total sales to MBS under this program were $419, $602 and $503 for Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively. Total outstanding amounts payable to MBS for all arrangements net of any amounts due were $26,354 and $30,683 for Fiscal 2015 and Fiscal 2014, respectively.

Argix Direct Inc. (“Argix”), a company in which a brother of Leonard Riggio owns a 20% interest, provided us with transportation services under a separate agreement that expired on April 30, 2015. The Company believes that the transportation costs paid to Argix are comparable to the transportation costs charged by third party distributors. We paid Argix $936, $1,066 and $1,069 for such services during Fiscal 2015, Fiscal 2014 and Fiscal 2013, respectively.

F-26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allocation of General Corporate Expenses

Our consolidated financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Barnes & Noble.

The historical costs and expenses reflected in our financial statements include an allocation for certain corporate functions historically provided by Barnes & Noble including, but not limited to, executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology, and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of consolidated sales, headcount, tangible assets or other measures considered to be a reasonable reflection of the historical utilization levels of these services. During Fiscal 2015, Fiscal 2014 and Fiscal 2013, we were allocated $23,050, $19,095 and $14,689, respectively, of general corporate expenses incurred by Barnes & Noble which are included as cost of sales and occupancy and selling, general and administrative expenses in the consolidated statement of operations.

Our management believes the assumptions underlying our consolidated financial statements, including the assumptions regarding the allocation of general corporate expenses from Barnes & Noble are reasonable. Nevertheless, our consolidated financial statements may not include all of the actual expenses that would have been incurred had we operated as a stand-alone company during the periods presented and may not reflect our consolidated results of operations, financial position and cash flows had we operated as a stand-alone company during the periods presented. Actual costs that would have been incurred if we had operated as a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Following the Spin-Off, we will perform these functions using our own resources or contracted services. Upon execution of a transition services agreement with Barnes & Noble, we expect some of these functions will continue to be provided by Barnes & Noble.

Parent Company Equity

Net transfers from/(to) Parent are included within parent company investment on the consolidated statements of changes in parent company equity and comprehensive income. The components of the net transfers from/(to) parent as of Fiscal 2015, Fiscal 2014 and Fiscal 2013 are as follows:


	Fiscal 2015		Fiscal 2014		Fiscal 2013
Corporate allocations including income taxes	$	16,441	$	41,929	$	34,509
Net intercompany contributions/(dividends)		22,795		20,378		(26,696	)
Cash transfers from investments		—		—		(380,623	)

Total net transfers from (to) Parent	$	39,236	$	62,307	$	(372,810	)

Policy and Procedures Governing Related Person Transactions

F-27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

related parties, including any modifications, waivers or amendments to existing related party transactions. We will test to ensure that the terms of related party transactions are at least as favorable to us as could have been obtained from unrelated parties at the time of the transaction. The Audit Committee will consider, at a minimum, the nature of the relationship between us and the related party, the history of the transaction (in the case of modifications, waivers or amendments), the terms of the proposed transaction, our rationale for entering into the transaction and the terms of comparable transactions with unrelated third parties. In addition, management and internal audit will annually analyze all existing related party agreements and transactions and review them with the Audit Committee.

20.

Dividends

We paid no dividends to common stockholders during Fiscal 2015 and Fiscal 2014.

21.

Selected Quarterly Financial Information (Unaudited)

A summary of quarterly financial information for Fiscal 2014 and Fiscal 2013 is as follows:


Fiscal 2015 Quarterly Period Ended On or About	August 2, 2014			November 1, 2014		January 31, 2015		May 2, 2015			Fiscal Year 2015
Sales	$	225,741		$	751,702	$	521,554	$	274,001		$	1,772,998
Gross profit	$	47,310			173,511		121,622		101,130			443,573

Net income (loss)	$	(26,213	)	$	36,951	$	8,650	$	(256	)	$	19,132

Basic loss per common share:
Net income (loss) (a)	$	(0.71	)	$	0.95	$	0.09	$	(0.01	)	$	0.33
Diluted loss per common share:
Net income (loss) (b)	$	(0.71	)	$	0.95	$	0.09	$	(0.01	)	$	0.33


Fiscal 2014 Quarterly Period Ended On or About	July 27, 2013			October 26, 2013		January 25, 2014		May 3, 2014		Fiscal Year 2014
Sales	$	225,910		$	737,581	$	483,113	$	301,318	$	1,747,922
Gross profit	$	50,135			167,863		115,842		102,925		436,765

Net income (loss)	$	(19,570	)	$	42,021	$	12,070	$	585	$	35,106

Basic loss per common share:
Net income (loss) (a)	$	(0.55	)	$	1.10	$	0.31	$	0.00	$	0.88
Diluted loss per common share:
Net income (loss) (b)	$	(0.55	)	$	1.10	$	0.31	$	0.00	$	0.88

(a)

Basic earnings per share and weighted-average basic shares outstanding are based on the number of shares of Barnes & Noble common stock outstanding on May 2, 2015, adjusted for an assumed distribution ratio of 0.632 shares of our Common Stock for every one share of Barnes & Noble common stock held on the record date for the Spin-Off.

(b)

F-28

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth an itemization of all estimated expenses in connection with the issuance and distribution of the securities to be registered:


Item	Amount
Registration Statement filing fee	$	90,055
NYSE listing fees and expenses		235,000
Accountants fees and expenses		2,100,000
Legal fees and expenses		1,000,000
Printing		365,000
Miscellaneous		9,945

Total	$	3,800,000

Item 14. Indemnification of Directors and Officers.

Section 102 of the Delaware General Corporation Law, as amended (the “DGCL”), allows a corporation to eliminate the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of a fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the corporation’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies if (i) such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (ii) such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The power to indemnify applies to action brought by or in the right of the corporation as well, but only to the extent of defense expenses (including attorneys’ fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his or her duties to the corporation, unless a court believes that light of all the circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director who willfully and negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

The Company’s Amended and Restated Certificate of Incorporation states that no director shall be personally liable to us or any of our stockholders for monetary damages for breach of fiduciary duty as a director,

II-1

except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it exists or may be amended. A director is also not exempt from liability for any transaction from which he or she derived an improper benefit, or for violations of Section 174 of the DGCL. To the maximum extent permitted under Section 145 of the DGCL, our amended and restated certificate of incorporation authorizes us to indemnify any and all persons whom we have the power to indemnify under the law.

Our Amended and Restated By-laws provide that the Company will indemnify, to the fullest extent permitted by the DGCL, each person who was or is made a party or is threatened to be made a party in any legal proceeding by reason of the fact that he or she is or was a director or officer of the Company or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. However, such indemnification is permitted only if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. Indemnification is authorized on a case-by-case basis by (1) our board of directors by a majority vote of disinterested directors, (2) a committee of the disinterested directors, (3) independent legal counsel in a written opinion if (1) and (2) are not available, or if disinterested directors so direct, or (4) the stockholders. Indemnification of former directors or officers shall be determined by any person authorized to act on the matter on our behalf. Expenses incurred by a director or officer in defending against such legal proceedings are payable before the final disposition of the action, provided that the director or officer undertakes to repay us if it is later determined that he or she is not entitled to indemnification.

Upon the completion of the Spin-Off, the Company plans to enter into separate indemnification agreements with its directors and officers, substantially in the form of the indemnification agreement filed as an exhibit to the Registration Statement on Form S-1. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 15. Recent Sales of Unregistered Securities.

None.

II-2

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits: The list of Exhibits is set forth on page II-6 of this Registration Statement and is incorporated herein by reference.

(b) Financial Statement Schedules

Schedule II—Valuation and Qualifying Accounts.

Barnes & Noble Education, Inc.

Valuation and Qualifying Accounts

(In thousands)

For the 52 week period ended May 2, 2015, the 53 week period ended May 3, 2014 and the 52 week period ended April 27, 2013:


	Balance at beginning of period		Charge (recovery) to costs and expenses		Write-offs			Balance at end of period
Allowance for Doubtful Accounts
May 2, 2015	$	2,233	$	3,544	$	(3,464	)	$	2,313
May 3, 2014	$	2,425	$	2,666	$	(2,858	)	$	2,233
April 27, 2013	$	2,280	$	3,608	$	(3,463	)	$	2,425

	Balance at beginning of period		Addition Charged to Costs		Deductions			Balance at end of period
Sales Returns Reserves
May 2, 2015	$	153	$	9	$	—		$	162
May 3, 2014	$	123	$	30	$	—		$	153
April 27, 2013	$	119	$	4	$	—		$	123

All other schedules are omitted because the conditions requiring their filing do not exist, or because the required information is provided in the consolidated financial statements, including the notes thereto.

Item 17. Undertakings.

(a)(1) The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

(3) The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act, Barnes & Noble Education, Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, State of New York, on June 26, 2015.


BARNES & NOBLE EDUCATION, INC.

By:		/s/ Max J. Roberts
Name: Max J. Roberts
Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated.


Signature	Title	Date
/s/ Max J. Roberts Max J. Roberts	Chief Executive Officer	June 26, 2015

/s/ Barry Brover Barry Brover	Chief Financial Officer and Chief Accounting Officer	June 26, 2015

/s/ Michael P. Huseby Michael P. Huseby	Director	June 26, 2015

/s/ Allen W. Lindstrom Allen W. Lindstrom	Director	June 26, 2015

/s/ Bradley A. Feuer Bradley A. Feuer	Director	June 26, 2015

II-5

EXHIBIT INDEX


Exhibit Number		Exhibit Description

2.1		Form of Separation Agreement between Barnes & Noble, Inc. and Barnes & Noble Education, Inc.

3.1		Form of Amended and Restated Certificate of Incorporation of Barnes & Noble Education, Inc.

3.2**		Form of Amended and Restated By-laws of Barnes & Noble Education, Inc.

5.1**		Form of Opinion of Cravath, Swaine & Moore LLP

8.1**		Form of Tax Opinion of Cravath, Swaine & Moore LLP

8.2		Form of Tax Opinion of KPMG LLP

10.1		Form of Transition Services Agreement between Barnes & Noble, Inc. and Barnes & Noble Education, Inc.

10.2**		Form of Tax Matters Agreement between Barnes & Noble, Inc. and Barnes & Noble Education, Inc.

10.3		Form of Employee Matters Agreement between Barnes & Noble, Inc. and Barnes & Noble Education, Inc.

10.4		Barnes & Noble Education, Inc. Equity Incentive Plan

10.5		Barnes & Noble Education, Inc. Form of Performance Unit Award Agreement

10.6		Barnes & Noble Education, Inc. Form of Performance-Based Stock Unit Award Agreement

10.7		Barnes & Noble Education, Inc. Form of Restricted Stock Unit Award Agreement

10.8		Barnes & Noble Education, Inc. Form of Restricted Stock Award Agreement

10.9		Amended and Restated Employment Agreement, dated June 25, 2015, between Barnes & Noble Education, Inc. and Max J. Roberts

10.10		Amended and Restated Employment Agreement, dated June 24, 2015, between Barnes & Noble Education, Inc. and Barry Brover

10.11		Amended and Restated Employment Agreement, dated June 24, 2015, between Barnes & Noble Education, Inc. and Patrick Maloney

10.12		Amended and Restated Employment Agreement, dated June 24, 2015, between Barnes & Noble Education, Inc. and William Maloney

10.13		Employment Agreement, dated June 26, 2015, between Barnes & Noble Education, Inc. and Michael P. Huseby

10.14		Form of Director Indemnification Agreement

10.15		Form of Trademark License Agreement between Barnes & Noble, Inc. and Barnes & Noble Education, Inc.

21.1		List of subsidiaries of Barnes & Noble Education, Inc.

23.1		Consent of Ernst & Young LLP

23.3		Consent of Cravath, Swaine & Moore LLP (included as part of Exhibit 5.1 and Exhibit 8.1)

23.4		Consent of KPMG LLP (included as part of Exhibit 8.2)

**	Previously filed.

II-6

Exhibit 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

by and between

BARNES & NOBLE, INC.

and

BARNES & NOBLE EDUCATION, INC.

Dated as of [●], 2015

TABLE OF CONTENTS


		Page

ARTICLE I

Definitions

ARTICLE II

The Separation

SECTION 2.01.	Transfer of Assets and Assumption of Liabilities		12
SECTION 2.02.	Certain Matters Governed Exclusively by Ancillary Agreements		14
SECTION 2.03.	Termination of Agreements		15
SECTION 2.04.	Shared Contracts		15
SECTION 2.05.	Disclaimer of Representations and Warranties		16

ARTICLE III

Credit Support

SECTION 3.01.	Replacement of Credit Support		16
SECTION 3.02.	Credit Support		17

ARTICLE IV

Actions Pending the Distribution

SECTION 4.01.	Actions Prior to the Distribution		19
SECTION 4.02.	Conditions Precedent to Consummation of the Distribution		20

ARTICLE V

The Distribution

SECTION 5.01.	The Distribution		22
SECTION 5.02.	Fractional Shares		22
SECTION 5.03.	B&N Series J Preferred Stock		23
SECTION 5.04.	Sole Discretion of B&N		23



ARTICLE VI

Mutual Releases; Indemnification

SECTION 6.01.	Release of Pre-Distribution Claims	23
SECTION 6.02.	Indemnification by BNED	25
SECTION 6.03.	Indemnification by B&N	26
SECTION 6.04.	Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds	26
SECTION 6.05.	Procedures for Indemnification of Third-Party Claims	27
SECTION 6.06.	Additional Matters	28
SECTION 6.07.	Remedies Cumulative	29
SECTION 6.08.	Survival of Indemnities	29
SECTION 6.09.	Limitation on Liability	29

ARTICLE VII

Access to Information; Litigation; Confidentiality

SECTION 7.01.	Agreement for Exchange of Information; Archives	29
SECTION 7.02.	Ownership of Information	30
SECTION 7.03.	Compensation for Providing Information	30
SECTION 7.04.	Record Retention	30
SECTION 7.05.	Accounting Information	31
SECTION 7.06.	Limitations of Liability	32
SECTION 7.07.	Conduct of Pending Litigation Matters	32
SECTION 7.08.	Production of Witnesses; Records; Cooperation	32
SECTION 7.09.	Confidential Information	33

ARTICLE VIII

Insurance

SECTION 8.01.	Insurance	34

ARTICLE IX

Ongoing Commercial Matters

SECTION 9.01.	B&N Systems and Distribution Facilities	37
SECTION 9.02.	Gift Cards	37
SECTION 9.03.	Additional Access and Services	37
SECTION 9.04.	Indemnification	38
SECTION 9.05.	Term and Termination	38



ARTICLE X

Further Assurances and Additional Covenants

SECTION 10.01.	Further Assurances	39

ARTICLE XI

Termination

SECTION 11.01.	Termination	40
SECTION 11.02.	Effect of Termination	40

ARTICLE XII

Miscellaneous

SECTION 12.01.	Counterparts; Entire Agreement; Corporate Power	40
SECTION 12.02.	Governing Law; Jurisdiction	40
SECTION 12.03.	Assignability	41
SECTION 12.04.	Third-Party Beneficiaries	41
SECTION 12.05.	Notices	41
SECTION 12.06.	Severability	42
SECTION 12.07.	Publicity	42
SECTION 12.08.	Expenses	42
SECTION 12.09.	Headings	42
SECTION 12.10.	Survival of Covenants	42
SECTION 12.11.	Waivers of Default	42
SECTION 12.12.	Specific Performance	43
SECTION 12.13.	Amendments	43
SECTION 12.14.	Interpretation	43


Schedule 1(a)	-	Internal Transactions
Schedule 1(b)	-	BNED Equity Interests
Schedule 1(c)	-	BNED Assets
Schedule 1(d)	-	BNED Liabilities
Schedule 1(e)	-	B&N Retained Liabilities
Schedule 1(f)	-	Payables Transactions
Schedule 2.03	-	Terminating Intercompany Agreements
Schedule 3.01(a)	-	Surviving B&N Credit Support Instruments
Schedule 9.01(a)		Product Procurement Systems and Merchandising Systems
Schedule 9.01(b)		Distribution Facilities
Schedule 9.02		Gift Cards
Schedule 9.03		Additional Access and Services
Schedule 9.05(c)		B&N Competitor

Exhibit A		Form of Joint Defense Agreement

iii

SEPARATION AND DISTRIBUTION AGREEMENT dated as of [●], 2015, by and between Barnes & Noble, Inc., a Delaware corporation (“ B&N ”), and Barnes & Noble Education, Inc., a Delaware corporation (“ BNED ”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I hereof.

RECITALS

WHEREAS the board of directors of B&N has determined that it is in the best interests of B&N and its stockholders to distribute its entire interest in its wholly owned Subsidiary, BNED, by way of a dividend of stock to be made to holders of B&N Common Stock;

WHEREAS in furtherance of the foregoing, it is appropriate and desirable to effect the Spin-Off, as more fully described in this Agreement;

WHEREAS B&N and BNED have prepared, and BNED has filed with the Commission, the Form S-1, which includes the Prospectus;

WHEREAS B&N and BNED intend that each of the Stock Split and Distribution qualify for its Intended Tax Treatment; and

WHEREAS it is appropriate and desirable to set forth the principal corporate transactions required to effect the Spin-Off and certain other agreements that will govern certain matters relating to the Spin-Off and the relationship of B&N, BNED and their respective Subsidiaries following the Distribution.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

Definitions

For the purposes of this Agreement, the following terms shall have the following meanings:

“ Action ” means any claim, demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any Federal, state, local, foreign or international arbitration or mediation tribunal.

“ Affiliate ” of any Person means a Person that controls, is controlled by or is under common control with such Person. As used herein, “control” of any entity means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise; provided , however , that (i) BNED and the other members of the BNED Group shall not be considered Affiliates of B&N or any of the other members of the B&N Group and (ii) B&N and the other members of the B&N Group shall not be considered Affiliates of BNED or any of the other members of the BNED Group.

“ Agent ” means Computershare, the distribution agent appointed by B&N to distribute to the Record Holders, pursuant to the Distribution, the shares of BNED Common Stock held by B&N.

“ Agreement ” means this Separation and Distribution Agreement, including the Schedules and Exhibits hereto.

“ Ancillary Agreements ” means the TSA, TMA, EMA and any other instruments, assignments, documents and agreements executed in connection with the implementation of the transactions contemplated by this Agreement.

“ Assets ” means all assets, properties and rights (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible or intangible, or accrued or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, including the following:

(a) all accounting and other books, records and files, whether in paper, microfilm, microfiche, computer tape or disc, magnetic tape, electronic recording or any other form;

(b) all apparatus, computers and other electronic data processing equipment, fixtures, machinery, furniture, office and other equipment, including hardware systems, circuits and other computer and telecommunication assets and equipment, automobiles, trucks, aircraft, motor vehicles and other transportation equipment, special and general tools, test devices, prototypes and models and other tangible personal property;

(d) all interests in real property of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in real property, lessor, sublessor, lessee, sublessee or otherwise;

(e) all interests in any capital stock or other equity interests of any Subsidiary or any other Person; all bonds, notes, debentures or other securities issued by any Subsidiary or any other Person; all loans, advances or other extensions of credit or capital contributions to any Subsidiary or any other Person; all other investments in securities of any Person; and all rights as a partner, joint venturer or participant;

(f) all license agreements, leases of personal property, open purchase orders for goods, products or services, unfilled orders for goods and products and other contracts, agreements or commitments and all rights arising thereunder;

(g) all deposits, letters of credit, performance bonds and other surety bonds;

(h) all written technical information, data, specifications, research and development information, operating and maintenance manuals and materials and analyses prepared by consultants and other third parties;

(i) all United States, state, multinational and foreign intellectual property, including patents, copyrights, trade names, trademarks, service marks, slogans, logos, trade dresses and other source indicators and the goodwill of the business symbolized thereby; all registrations, applications, recordings, disclosures, renewals, continuations, continuations-in-part, divisions, reissues, reexaminations, foreign counterparts and other legal protections and rights related to any of the foregoing; mask works, trade secrets, inventions and other proprietary information, including know-how, processes, formulae, techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals, discoveries, inventions, licenses from third parties granting the right to use any of the foregoing and all tangible embodiments of the foregoing in whatever form or medium;

(j) all computer applications, programs, software and other code (in object and source code form), including operating software, network software, firmware, middleware, design software, design tools, systems documentation, instructions, ASP, HTML, DHTML, SHTML and XML files, cgi and other scripts, APIs, web widgets, algorithms, models, methodologies, files, documentation related to any of the foregoing and all tangible embodiments of the foregoing in whatever form or medium now known or yet to be created;

(k) all Internet URLs, domain names, social media handles and Internet user names;

(l) all websites, databases, content, text, graphics, images, audio, video, data and other copyrightable works or other works of authorship including all translations, adaptations, derivations and combinations thereof;

(m) all cost information, sales and pricing data, customer prospect lists, supplier records, customer and supplier lists, subscriber, customer and vendor data, correspondence and lists, product literature and other advertising and promotional materials, artwork, design and development files, vendor and customer drawings, formulations and specifications, server and traffic logs, quality records and reports and other books, records, studies, surveys, reports, plans, business records and documents;

(n) all prepaid expenses, trade accounts and other accounts and notes receivable (whether current or non-current);

(o) all claims or rights against any Person arising from the ownership of any other Asset, all rights in connection with any bids or offers, all claims, causes in action, lawsuits, judgments or similar rights, all rights under express or implied warranties, all rights of recovery and all rights of setoff of any kind and demands of any nature, in each case whether accrued or contingent, whether in tort, contract or otherwise and whether arising by way of counterclaim or otherwise;

(p) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;

(q) all licenses (including radio and similar licenses), permits, approvals and authorizations that have been issued by any Governmental Authority and all pending applications therefor;

(r) Cash, bank accounts, lock boxes and other deposit arrangements;

(s) interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements; and

(t) all goodwill as a going concern and other intangible properties.

“ Bank Debt Incurrence ” has the meaning set forth in Schedule 1(a).

“ BNED ” has the meaning set forth in the preamble.

“ BNED Assets ” means, without duplication, the following Assets:

(a) all Assets held by the BNED Group;

(b) all interests in the capital stock of, or other equity interests in, the members of the BNED Group (other than BNED) and all other equity, partnership, membership, joint venture and similar interests set forth on Schedule 1(b);

(c) all Assets reflected on the BNED Business Balance Sheet, and all Assets acquired after the date of the BNED Business Balance Sheet that, had they been acquired on or before such date and owned as of such date, would have been reflected on the BNED Business Balance Sheet if prepared in accordance with GAAP applied on a consistent basis, subject to any dispositions of such Assets subsequent to the date of the BNED Business Balance Sheet;

(d) the Assets listed or described on Schedule 1(c);

(e) the rights related to the BNED Portion of any Shared Contract;

(f) all other Assets that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be assigned to or retained by, or allocated to, any member of the BNED Group; and

(g) all Assets held by a member of the B&N Group that are determined by B&N, in good faith prior to the Distribution Date, to be primarily related to or used or held for use primarily in connection with the business or operations of the BNED Business.

Notwithstanding the foregoing, the BNED Assets shall not include (i) any Assets governed by the TMA, (ii) the rights related to the B&N Portion of Shared Contracts, (iii) any Assets determined by B&N, in good faith prior to the Distribution Date, to arise primarily from the business or operations of the B&N Business (unless otherwise expressly provided in this Agreement) and (iv) Assets required by B&N to perform its obligations under the TSA.

“ BNED Business ” means the business conducted and proposed to be conducted by BNED and its Subsidiaries as described in the Form S-1.

“ BNED Business Balance Sheet ” means the audited balance sheet of the BNED Business, including the notes thereto included in the Form S-1.

“ BNED Common Stock ” means the common stock, $0.01 par value per share, of BNED.

“ BNED Entities ” means the entities, the equity, partnership, membership, joint venture or similar interests of which are set forth on Schedule 1(b).

“ BNED Group ” means (a) BNED, (b) each Person that will be a Subsidiary of BNED immediately prior to the Distribution, including the entities set forth on Schedule 1(b) under the caption “Subsidiaries”, and (c) each Person that becomes a Subsidiary of BNED after the Distribution, including in each case any Person that is merged or consolidated with and into BNED or any Subsidiary of BNED.

“ BNED Indemnitees ” has the meaning set forth in Section 6.03.

“ BNED Liabilities ” means, without duplication, the following Liabilities:

(a) all Liabilities of the BNED Group and the BNED Entities;

(b) all Liabilities to the extent relating to, arising out of or resulting from:

(i) the operation or conduct of the BNED Business as conducted at any time prior to the Distribution (including any Liability to the extent relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority), which act or failure to act relates to the BNED Business);

(ii) the operation or conduct of the BNED Business or any other business conducted by BNED or any other member of the BNED Group at any time after the Distribution (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority));

(iii) any terminated, divested or discontinued businesses or operations of the BNED Business; or

(iv) the BNED Assets;

(c) all Liabilities reflected as liabilities or obligations on the BNED Business Balance Sheet, and all Liabilities arising or assumed after the date of the BNED Business Balance Sheet that, had they arisen or been assumed on or before such date and been existing obligations as of such date, would have been reflected on the BNED Business Balance Sheet if prepared in accordance with GAAP applied on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the BNED Business Balance Sheet;

(d) the Liabilities listed or described on Schedule 1(d);

(e) the obligations related to the BNED Portion of any Shared Contract and any other Liabilities relating to the acts or omissions of the BNED Group relating to any Shared Contract;

(f) all other Liabilities that are expressly provided by this Agreement or any Ancillary Agreement as Liabilities to be assumed or retained by, or allocated to, any member of the BNED Group; and

(g) all Liabilities to the extent relating to, arising out of or resulting from any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in, or incorporated by reference into, the Form S-1 and any other documents filed with the Commission in connection with the Spin-Off or as contemplated by this Agreement, other than with respect to the B&N Disclosure Sections.

Notwithstanding the foregoing, the BNED Liabilities shall not include (i) any B&N Retained Liabilities, (ii) any Liabilities governed by the TMA, (iii) any obligations related to the B&N Portion of any Shared Contract or (iv) any Liabilities determined by B&N, in good faith prior to the Distribution Date, to be primarily related to the business or operations of the B&N Business (unless otherwise expressly provided in this Agreement).

“ BNED Primary Credit Instrument ” means the credit instruments of BNED set forth on Schedule 3.01(a).

“ BNED Portion ” has the meaning set forth in Section 2.04.

“ Booksellers ” means Barnes & Noble Booksellers, Inc., a Delaware corporation.

“ B&N ” has the meaning set forth in the preamble.

“ B&N Assets ” means (i) all Assets of the B&N Group, (ii) any Assets held by a member of the BNED Group determined by B&N, in good faith prior to the Distribution Date, to be primarily related to or used primarily in connection with the business or operations of the B&N Business, and (iii) the rights related to the B&N Portion of any Shared Contract. Notwithstanding the foregoing, the B&N Assets shall not include (a) any Assets governed by the TMA, (b) the BNED Assets and (c) any Assets required by BNED to perform its obligations under the TSA.

“ B&N Business ” means the business and operations conducted by B&N and its Subsidiaries other than the BNED Business.

“ B&N Common Stock ” means the common stock, par value $.001 per share, of B&N.

“ B&N Competitor ” has the meaning set forth in the TLA.

“ B&N Credit Agreement ” means the Credit Agreement, dated April 29, 2011, among B&N, Bank of America N.A., as administrative agent, collateral agent and swing line lender and other lenders party thereto.

“ B&N Credit Support Instruments ” has the meaning set forth in Section 3.01(a).

“ B&N Credit Support Payment ” has the meaning set forth in Section 3.02(c)(i).

“ B&N Format ” has the meaning set forth in the TLA.

“ B&N Disclosure Sections ” means all information set forth in or omitted from the Form S-1 to the extent relating to (a) the B&N Group, (b) the B&N Liabilities, (c) the B&N Assets or (d) the substantive disclosure set forth in the Form S-1 relating to B&N’s board of directors’ consideration of the Spin-Off, including the section entitled “Reasons for the Spin-Off”.

“ B&N Group ” means B&N and each of its Subsidiaries, but excluding any member of the BNED Group.

“ B&N Indemnitees ” has the meaning set forth in Section 6.02.

“ B&N-Issued Gift Cards ” means gift cards issued by Barnes & Noble Marketing Services LLC.

“ B&N Liabilities ” means (i) all Liabilities of the B&N Group, (ii) the B&N Retained Liabilities, (iii) any obligations related to the B&N Portion of any Shared Contract and any other Liabilities relating to the acts or omissions of the B&N Group relating to any Shared Contract, or (iv) any Liabilities determined by B&N, in good faith, to be primarily related to the business or operations of the B&N Business (unless otherwise expressly provided in this Agreement). Notwithstanding the foregoing, the B&N Liabilities shall not include (a) any Liabilities governed by the TMA or (b) the BNED Liabilities.

“ B&N Portion ” has the meaning set forth in Section 2.04.

“ B&N Retained Liabilities ” means the Liabilities to be retained by the B&N Group set forth on Schedule 1(e).

“ B&N Series J Certificate ” means the certificate of designations dated August 18, 2011, with respect to B&N Series J Preferred Stock.

“ B&N Series J Preferred Stock ” means the Senior Convertible Redeemable Series J Preferred Stock, par value $.001 per share, of B&N.

“ Cash ” means cash, cash equivalents, bank deposits and marketable securities, whether denominated in United States dollars or otherwise.

“ Commission ” means the Securities and Exchange Commission.

“ Consents ” means any consents, waivers or approvals from, or notification requirements to, any Person other than a member of either Group.

“ Credit Support Instruments ” has the meaning set forth in Section 3.01(a).

“ Credit Support Period ” means the period from the Distribution Date until the date on which all Surviving B&N Credit Support Instruments are released.

“ Default Interest Rate ” means the rate of (i) 3-month LIBOR as of the date that such payment giving rise to such default was required to be made plus (ii) 3.75%.

“ Determination ” has the meaning set forth in the TMA.

“ Distribution ” means the distribution by B&N to the Record Holders, on a pro rata basis, of all of the outstanding shares of BNED Common Stock owned by B&N on the Distribution Date.

“ Distribution Date ” means the date, determined by B&N in accordance with Section 5.04, on which the Distribution occurs.

“ D&O Policies ” has the meaning set forth in Section 8.01(b).

“ EMA ” means the Employee Matters Agreement to be entered into as of the Distribution Date by and between B&N and BNED.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“ Exchange Preferred Stock ” has the meaning set forth in B&N Series J Certificate.

“ Field of Use ” has the meaning set forth in the TLA.

“ First Post-Distribution Report ” has the meaning set forth in Section 12.07.

“ Form S-1 ” means the registration statement on Form S-1 filed by BNED with the Commission to effect the registration of the distribution of the BNED Common Stock pursuant to the Securities Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time.

“ Governmental Approvals ” means any notices, reports or other filings to be given to or made with, or any Consents, registrations or permits to be obtained from, any Governmental Authority.

“ Governmental Authority ” means any Federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other legislative, judicial, regulatory, administrative or governmental authority.

“ Group ” means either the B&N Group or the BNED Group, as the context requires.

“ Indemnifying Party ” has the meaning set forth in Section 6.04(a).

“ Indemnitee ” has the meaning set forth in Section 6.04(a).

“ Indemnity Payment ” has the meaning set forth in Section 6.04(a).

“ Information ” means information, whether or not patentable, copyrightable or protectable as a trade secret, in written, oral, electronic or other tangible or intangible forms, stored in any medium now known or yet to be created, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product) and other technical, financial, employee or business information or data, documents, correspondence, materials and files.

“ Insurance Proceeds ” means those monies:

(a) received by an insured (or its successor-in-interest) from an insurance carrier;

(b) paid by an insurance carrier on behalf of the insured (or its successor-in-interest); or

(c) received (including by way of setoff) from any third party in the nature of insurance, contribution or indemnification in respect of any Liability;

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments), net of any costs or expenses incurred in the collection thereof and net of any Taxes resulting from the receipt thereof.

“ Intended Tax Treatment ” has the meaning set forth in the TMA.

“ Intercompany Accounts ” has the meaning set forth in Section 2.03(a).

“ Intercompany Agreements ” has the meaning set forth in Section 2.03(a).

“ Internal Distribution ” means the transaction in which Booksellers transfers and assigns to B&N, and B&N acquires, assumes and accepts from Booksellers, all its rights, title, obligations and interests in, to and under all the equity interests in BNED held by Booksellers, which represent 100% of the equity interests in BNED.

“ Internal Transactions ” means the Bank Debt Incurrence, Payable Transactions, Internal Distribution and Stock Split, each as described on Schedule 1(a).

“ Law ” means any statute, law, regulation, ordinance, rule, judgment, rule of common law, order, decree, government approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether now or hereinafter in effect and, in each case, as amended.

“ Liabilities ” means any and all claims, debts, demands, actions, causes of action, suits, damages, obligations, accruals, accounts payable, reckonings, bonds, indemnities and similar obligations, agreements, promises, guarantees, make-whole agreements and similar obligations, and other liabilities and requirements, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, and including those arising under any Law, Action, threatened or contemplated Action or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, including those arising under this Agreement, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.

“ Litigation Conditions ” has the meaning set forth in Section 6.05(b).

“ Mirror Preferred Stock ” has the meaning set forth in B&N Series J Certificate.

“ NYSE ” means the New York Stock Exchange.

“ Party ” means either party hereto, and “ Parties ” means both parties hereto.

“ Pass-Through Cost ” with respect to any service provided by B&N to BNED, means the sum of (i) the direct cost to B&N of providing such service plus (ii) an allocation of the related employee overhead (including compensation and benefit costs) calculated in good faith based on reasonable and rational methodologies chosen by the Service Provider, which methodologies shall be provided to the Recipient upon such request from the Recipient.

“ Payables Transactions ” means the intercompany payables transactions set forth on Schedule 1(f) to be settled as set forth on Schedule 1(f).

“ Person ” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability company, any other entity and any Governmental Authority.

“ Pre-Separation Claims-Based Insurance Claim ” means any claim made against the BNED Group or B&N Group and reported to the applicable insurer(s) prior to the Distribution Date in respect of an act or omission occurring prior to the Distribution Date that results in a Liability under a “claims-made-based” insurance policy of the B&N Group in effect prior to the Distribution Date or any extended reporting period thereof.

“ Pre-Separation Insurance Claim ” means a (i) Pre-Separation Claims-Based Insurance Claim or (ii) Action (whether made prior to, on or following the Distribution Date) in respect of a Liability occurring prior to the Distribution Date under an “occurrence-based” insurance policy of any member of the B&N Group in effect prior to the Distribution Date.

“ Prospectus ” means the prospectus contained in the Form S-1.

“ Record Date ” means the close of business on the date to be determined by the B&N board of directors as the record date for determining the shares of B&N Common Stock in respect of which shares of BNED Common Stock will be distributed pursuant to the Distribution.

“ Record Holders ” has the meaning set forth in Section 5.01(b).

“ Retail Store ” means a retail store operated by B&N or one of its Subsidiaries.

“ Retained Information ” has the meaning set forth in Section 7.04.

“ Security Interest ” means any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer or other encumbrance of any nature whatsoever.

“ Separation ” means (a) the Internal Transactions, (b) any actions to be taken pursuant to Article II and (c) any other transfers of Assets and assumptions of Liabilities, in each case, between a member of one Group and a member of the other Group, provided for in this Agreement or in any Ancillary Agreement.

“ Series J Holders ” means the holders of B&N Series J Preferred Stock.

“ Shared Contract ” means any contract or agreement of any member of either Group that relates in any material respect to both the BNED Business and the B&N Business; provided that the Parties may, by mutual consent, elect to include in, or exclude from, this definition any contract or agreement.

“ Spin-Off ” means the Separation and the Distribution.

“ Stock Split ” has the meaning set forth in Schedule 1(a).

“ Subsidiary ” of any Person means any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization, is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.

“ Surviving B&N Credit Support Instruments ” has the meaning set forth in Section 3.01(a)(i).

“ Surviving BNED Credit Support Instrument ” has the meaning set forth in Section 3.01(a)(ii).

“ Tax Opinion Representations ” has the meaning set forth in the TMA.

“ Taxes ” has the meaning set forth in the TMA.

“ Termination Event ” has the meaning set forth in Section 9.05(c).

“ Third-Party Claim ” means any assertion by a Person (including any Governmental Authority) who is not a member of the B&N Group or the BNED Group of any claim, or the commencement by any such Person of any Action, against any member of the B&N Group or the BNED Group.

“ Third-Party Proceeds ” has the meaning set forth in Section 6.04(a).

“ TLA ” means the Trademark License Agreement to be entered into as of the Distribution Date by and between B&N and BNED.

“ TMA ” means the Tax Matters Agreement to be entered into as of the Distribution Date by and between B&N and BNED.

“ TSA ” means the Transition Services Agreement to be entered into as of the Distribution Date between B&N and BNED.

ARTICLE II

The Separation

SECTION 2.01. Transfer of Assets and Assumption of Liabilities. (a) Prior to the Distribution, and subject to Section 2.01(e), the Parties shall cause the Internal Transactions to be completed.

(b) Subject to Section 2.01(e), prior to the Distribution, the Parties shall, and shall cause their respective Group members to, execute such instruments of assignment and transfer and take such other corporate actions as are necessary to (i) transfer and convey to one or more members of the BNED Group all of the right, title and interest of the B&N Group in, to and under all BNED Assets not already owned by the BNED Group, (ii) transfer and convey to one or more members of the B&N Group all of the right, title and interest of the BNED Group in, to and under all B&N Assets not already owned by the B&N Group, (iii) cause one or more members of the BNED Group to assume all of the BNED Liabilities to the extent such Liabilities would otherwise remain obligations of any member of the B&N Group and (iv) cause one or

more members of the B&N Group to assume all of the B&N Liabilities to the extent such Liabilities would otherwise remain obligations of any member of the BNED Group. Notwithstanding anything to the contrary, neither Party shall be required to transfer any Information except as required by Article VII.

(c) In the event that it is discovered after the Distribution that there was an omission of (i) the transfer or conveyance by BNED (or a member of the BNED Group) or the acceptance or assumption by B&N (or a member of the B&N Group) of any B&N Asset or B&N Liability, as the case may be, (ii) the transfer or conveyance by B&N (or a member of the B&N Group) or the acceptance or assumption by BNED (or a member of the BNED Group) of any BNED Asset or BNED Liability, as the case may be, or (iii) the transfer or conveyance by one Party (or any other member of its Group) to, or the acceptance or assumption by, the other Party (or any other member of its Group) of any Asset or Liability, as the case may be, that, had the Parties given specific consideration to such Asset or Liability prior to the Distribution, would have otherwise been so transferred, conveyed, accepted or assumed, as the case may be, pursuant to this Agreement or the Ancillary Agreements, the Parties shall use reasonable best efforts to promptly effect such transfer, conveyance, acceptance or assumption of such Asset or Liability. Any transfer, conveyance, acceptance or assumption made pursuant to this Section 2.01(c) shall be treated by the Parties for all purposes as if it had occurred immediately prior to the Distribution, except as otherwise required by applicable Law or a Determination.

(d) In the event that it is discovered after the Distribution that there was a transfer or conveyance (i) by BNED (or a member of the BNED Group) or the acceptance or assumption by B&N (or a member of the B&N Group) of any BNED Asset or BNED Liability, as the case may be, or (ii) by B&N (or a member of the B&N Group) and the acceptance or assumption by BNED (or a member of the BNED Group) of any B&N Asset or B&N Liability, the Parties shall use reasonable best efforts to promptly transfer or convey such Asset or Liability back to the transferring or conveying Party or to rescind any acceptance or assumption of such Asset or Liability, as the case may be. Any transfer or conveyance made or acceptance or assumption rescinded pursuant to this Section 2.01(d) shall be treated by the Parties for all purposes as if such Asset or Liability had never been originally transferred, conveyed, accepted or assumed, as the case may be, except as otherwise required by applicable Law or a Determination.

(e) In the event that after the Distribution (i) B&N (or a member of the B&N Group) receives any funds properly belonging to BNED (or a member of the BNED Group), or (ii) BNED (or a member of the BNED Group) receives any funds properly belonging to B&N (or a member of the B&N Group), the Parties shall use reasonable best efforts to promptly advise the other party, segregate and hold such funds in trust for the benefit of such other Party and promptly deliver such funds, together with any interest earned thereon, to an account or accounts designated in writing by such other Party.

(f) In the event that after the Distribution (i) B&N (or a member of the B&N Group) receives any communications (including, among other things, communications through B&N’s “We Listen” hotline or other similar channels of communication), notices or inquiries relating to BNED (or a member of the BNED Group), or (ii) BNED (or a member of the BNED Group) receives any communications, notices or inquiries relating to B&N (or a member of the B&N Group), the relevant Party shall use reasonable best efforts to notify the other Party thereof as promptly as reasonably practicable.

(g) To the extent that any transfer or conveyance of any Asset or acceptance or assumption of any Liability required by this Agreement to be so transferred, conveyed, accepted or assumed shall not have been completed prior to the Distribution, the Parties shall use reasonable best efforts to effect such transfer, conveyance, acceptance or assumption as promptly following the Distribution as shall be practicable. Nothing in this Agreement shall be deemed to require the transfer or conveyance of any Assets or the acceptance or assumption of any Liabilities which by their terms or operation of Law cannot be so transferred, conveyed, accepted or assumed; provided , however , that the Parties shall use reasonable best efforts to obtain any necessary Consents for the transfer, conveyance, acceptance or assumption (as applicable) of all Assets and Liabilities required by this Agreement to be so transferred, conveyed, accepted or assumed. In the event that any such transfer, conveyance, acceptance or assumption (as applicable) has not been completed effective as of and after the Distribution, the Party retaining such Asset or Liability shall thereafter hold such Asset for the use and benefit of the Party entitled thereto (at the expense of the Party entitled thereto) and retain such Liability for the account, and at the expense, of the Party by whom such Liability should have been assumed or accepted pursuant to this Agreement, and take such other actions as may be reasonably requested by the Party to which such Asset should have been transferred or conveyed, or by whom such Liability should have been assumed or accepted, as the case may be, in order to place such Party, insofar as reasonably possible, in the same position as would have existed had such Asset or Liability been transferred, conveyed, accepted or assumed (as applicable) as contemplated by this Agreement, including possession, use, risk of loss, potential for gain and control over such Asset or Liability. As and when any such Asset or Liability becomes transferable, the Parties shall use reasonable best efforts to promptly effect such transfer, conveyance, acceptance or assumption (as applicable). Any transfer, conveyance, acceptance or assumption made pursuant to this Section 2.01(e) shall be treated by the Parties for all purposes as if it had occurred immediately prior to the Distribution, except as otherwise required by applicable Law or a Determination.

(h) The Party retaining any Asset or Liability due to the deferral of the transfer and conveyance of such Asset or the deferral of the acceptance and assumption of such Liability pursuant to this Section 2.01 or otherwise shall not be obligated by this Agreement, in connection with this Section 2.01, to expend any money or take any action that would require the expenditure of money unless and to the extent the Party entitled to such Asset or the Party intended to assume such Liability advances or agrees to reimburse it for the applicable expenditures.

SECTION 2.02. Certain Matters Governed Exclusively by Ancillary Agreements. Each of B&N and BNED agrees on behalf of itself and the members of its Group that, except as explicitly provided in this Agreement or any Ancillary Agreement, (i) the TMA shall exclusively govern all matters relating to Taxes between such parties (except as explicitly provided in the EMA and TSA), (ii) the EMA shall exclusively govern the allocation of Assets and Liabilities related to employee and employee benefits-related matters (except for those matters involving the Payables Transactions which are governed by Schedule 1(f) hereto), including the existing equity plans with respect to employees and former employees of members of both the B&N Group and the BNED Group (it being

understood that any such Assets and Liabilities, as allocated pursuant to the EMA, shall constitute BNED Assets, BNED Liabilities, B&N Assets or B&N Liabilities, as applicable, hereunder and shall be subject to Article VI hereof), and (iii) the TSA shall exclusively govern all matters relating to the provision of certain services identified therein to be provided by each Party to the other on a transitional basis following the Distribution.

SECTION 2.03. Termination of Agreements. (a) Except as set forth in Section 2.03(b) or as otherwise provided by the steps constituting the Internal Transactions, in furtherance of the releases and other provisions of Section 6.01, effective as of the Distribution, BNED and each other member of the BNED Group, on the one hand, and B&N and each other member of the B&N Group, on the other hand, hereby agree they will terminate any and all agreements, arrangements, commitments and understandings, oral or written (“ Intercompany Agreements ”), including all intercompany accounts payable or accounts receivable (“ Intercompany Accounts ”), between such parties and in effect or accrued as of the Distribution and including the agreements set forth on Schedule 2.03. No such terminated Intercompany Agreement or Intercompany Account (including any provision thereof that purports to survive termination) shall be of any further force or effect after the Distribution. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing. The Parties, on behalf of the members of their respective Groups, hereby waive any advance notice provision or other termination requirements with respect to any Intercompany Agreement.

(b) The provisions of Section 2.03(a) shall not apply to any of the following Intercompany Agreements or Intercompany Accounts (or to any of the provisions thereof): this Agreement and the Ancillary Agreements (and each other Intercompany Agreement or Intercompany Account expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by either Party or any other member of its Group).

SECTION 2.04. Shared Contracts. The Parties shall, and shall cause the members of their respective Groups to, use their respective reasonable best efforts to work together (and, if necessary and desirable, to work with the third party to such Shared Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract, such that (a) a member of the BNED Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Contract relating to the BNED Business (the “ BNED Portion ”), which rights shall be a BNED Asset and which obligations shall be a BNED Liability and (b) a member of the B&N Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract not relating to the BNED Business (the “ B&N Portion ”), which rights shall be a B&N Asset and which obligations shall be a B&N Liability. If the Parties, or their respective Group members, as applicable, are not able to enter into an arrangement to formally divide, partially assign, modify and/or replicate such Shared Contract prior to the Distribution as contemplated by the previous sentence, then the Parties shall, and shall cause their respective Group members to, cooperate in any lawful arrangement to provide that, following the Distribution and until the earlier of five years after the Distribution Date and such time as the formal division, partial assignment, modification and/or replication of such Shared Contract as contemplated by the previous sentence is effected, a member of the BNED Group shall receive the interest in the benefits and obligations of the BNED Portion under such Shared Contract and a member of the B&N Group shall receive the interest in the benefits and obligations of the B&N Portion under such Shared Contract.

SECTION 2.05. Disclaimer of Representations and Warranties. Each of B&N (on behalf of itself and each other member of the B&N Group) and BNED (on behalf of itself and each other member of the BNED Group) understands and agrees that, except as expressly set forth in this Agreement, any Ancillary Agreement or the Tax Opinion Representations, no party to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement or any Ancillary Agreement is representing or warranting in any way as to any Assets or Liabilities transferred or assumed as contemplated hereby or thereby, as to the sufficiency of the Assets or Liabilities transferred or assumed hereby or thereby for the conduct and operations of the BNED Business or the B&N Business, as applicable, as to any Governmental Approvals or other Consents required in connection therewith or in connection with any past transfers of the Assets or assumptions of the Liabilities, as to the value or freedom from any Security Interests of, or any other matter concerning, any Assets or Liabilities of such party, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Asset, including any accounts receivable, of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Asset or thing of value upon the execution, delivery and filing hereof or thereof. Except as may expressly be set forth herein, any such Assets are being transferred on an “as is”, “where is” basis and the respective transferees shall bear the economic and legal risks that (a) any conveyance shall prove to be insufficient to vest in the transferee good and marketable title, free and clear of any Security Interest, and (b) any necessary Governmental Approvals or other Consents are not obtained or that any requirements of Laws or judgments are not complied with.

ARTICLE III

Credit Support

SECTION 3.01. Replacement of Credit Support. (a) (i) BNED shall use reasonable best efforts to arrange, at its sole cost and expense and effective on or prior to the Distribution Date, the replacement of all guarantees, covenants, indemnities, surety bonds, letters of credit or similar assurances or credit support (“ Credit Support Instruments ”) provided by or through B&N or any other member of the B&N Group for the benefit of BNED or any other member of the BNED Group (“ B&N Credit Support Instruments ”), other than any of the B&N Credit Support Instruments set forth on Schedule 3.01(a) (the “ Surviving B&N Credit Support Instruments ”), with alternate arrangements that do not require any credit support from B&N or any other member of the B&N Group, and shall use reasonable best efforts to obtain from the beneficiaries of such Credit Support Instruments written releases (which in the case of a letter of credit or bank guarantee would be effective upon surrender of the original B&N Credit Support Instrument to the originating bank and such bank’s confirmation to B&N of cancelation thereof) indicating that B&N or such other member of the B&N Group will, effective upon the consummation of the Distribution, have no liability with respect to such Credit Support Instruments, in each case reasonably satisfactory to B&N; provided , however , that (i) in the event that BNED shall not have obtained all such releases on or prior to the Distribution Date, Section 3.02 shall govern all such unreleased B&N Credit Support Instruments and (ii) Section 3.02 shall also govern all Surviving B&N Credit Support Instruments.

(ii) The Credit Support Instrument provided by or through BNED or any other member of the BNED Group for the benefit of B&N or any other member of the B&N Group set forth on Schedule 3.01(a) (the “ Surviving BNED Credit Support Instrument ”) shall continue following the Distribution Date and shall be governed by Section 3.02.

(b) B&N and BNED shall provide each other with written notice of the existence of all Credit Support Instruments a reasonable period prior to the Distribution.

SECTION 3.02. Credit Support. (a) B&N hereby agrees that, during the Credit Support Period and any subsequent period that a particular Surviving B&N Credit Support Instrument remains outstanding despite BNED’s having used its reasonable best efforts to cause such Credit Support Instruments to be replaced pursuant to Section 3.01(a), (i) for the benefit of BNED, it will maintain, continue, satisfy and comply in full with, and cause its subsidiaries to maintain and continue, satisfy and comply in full with, and will not take any action, or cause any of its subsidiaries to take any action, to terminate (other than at the request of BNED), the Surviving B&N Credit Support Instruments and (ii) it will, and will cause its subsidiaries to, renew or extend any such Surviving B&N Support Credit Instruments, in each case, during the Credit Support Period; provided that (x) B&N and its subsidiaries shall not be required to renew or extend any Surviving B&N Credit Support Instrument (A) beyond the expiration date of the relevant BNED Primary Credit Instrument in support or guarantee of which such Surviving B&N Credit Support Instrument has been provided or (B) which has been released or replaced pursuant to Section 3.01(a) and (y) B&N and its subsidiaries shall be permitted to terminate and shall not be required to renew or extend any Surviving B&N Credit Support Instrument so long as concurrently with such termination or expiration, it replaces such Surviving B&N Credit Support Instrument with another guarantee, letter of credit, surety bond or similar instrument or other arrangement in support of the relevant BNED Primary Credit Instrument in form and substance reasonably satisfactory to the beneficiary of such BNED Primary Credit Instrument, which replacement instrument shall be treated as a Surviving B&N Credit Support Instrument for all purposes hereunder.

(b) Additional BNED Credit Support Instruments. If at any time either of B&N or BNED shall identify a credit instrument of BNED (each, an “ Additional BNED Primary Credit Instrument ”) and corresponding guarantee or similar credit instrument of B&N or its subsidiaries in respect of such Additional BNED Primary Credit Instrument (each, an “ Additional B&N Credit Support Instrument ”) that existed prior to the Distribution Date and that, had B&N and BNED been aware of such Additional BNED Primary Credit Instrument and Additional B&N Credit Support Instrument prior to the Distribution Date, would have been identified as a BNED Primary Credit Instrument and a Surviving B&N Credit Support Instrument, respectively, on the Distribution Date, (i) such Additional BNED Primary Credit Instrument and Additional B&N Credit Support Instrument shall be deemed to be a BNED Primary Credit Instrument and a Surviving B&N Credit Support Instrument, respectively, for all purposes hereunder and (ii) BNED shall pay to B&N all amounts in respect of such Additional B&N Credit Support Instrument which it would have been obligated to pay pursuant to this Section 3.02 (including amounts payable pursuant to Section 3.02 (c) hereof) since the Distribution Date had such Additional B&N Credit Support Instrument been identified as a Surviving B&N Credit Support Instrument hereunder on the Distribution Date.

(i) If B&N or any of its subsidiaries shall make any payment (“ B&N Credit Support Payment ”) in respect of or in connection with any Surviving B&N Credit Support Instrument, including any payment in the form of collateral delivered by B&N in respect of any Surviving B&N Credit Support Instrument, BNED shall promptly, but in any event within ten business days of written demand therefor, reimburse B&N in full for the amount of such B&N Credit Support Payment, together with any interest accrued thereon. BNED’s reimbursement obligations hereunder shall not be construed to limit or waive the rights of subrogation that B&N or any of its subsidiaries may have in respect of any B&N Credit Support Payment and BNED hereby acknowledges and affirms that B&N and its subsidiaries have not waived their rights of subrogation.

(ii) BNED shall pay all reasonable and actual out-of-pocket expenses incurred by B&N and its subsidiaries (including the reasonable and actual fees, charges and disbursements of counsel for B&N) after the Distribution Date in connection with (i) Surviving B&N Credit Support Instruments (including the continuation, extension or renewal of any Surviving B&N Credit Instrument) and any agreement entered into in connection with any of the foregoing or any amendments or other modifications to any of the foregoing (whether or not the transactions contemplated hereby or thereby shall be consummated) or (ii) the enforcement or protection of its rights in connection with any of the foregoing, including its rights under this Section 3.02(c); provided that BNED shall not be required to pay any such expenses incurred in connection with the voluntary replacement by B&N of a Surviving B&N Credit Support Instrument pursuant to clause (y) of Section 3.02(a) hereof.

(iii) BNED shall defend, hold harmless, and indemnify each B&N Indemnitee from and against any charges, suits, damages, costs, expenses, judgments, penalties, claims, liabilities or losses of any kind or nature whatsoever, including reasonable attorney fees and expenses, that may be sustained or suffered by or secured against any B&N Indemnitee arising out of, in connection with, or as a result of this Section 3.02 or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby (including the continuation, extension or renewal of any Surviving B&N Credit Support Instrument), or the use of, or the proposed use of, the Surviving B&N Credit Support Instruments, or any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any B&N Indemnitee is a party thereto; provided that such indemnity shall not, as to any B&N Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are found in a judgment by a court of competent jurisdiction to have resulted from the gross negligence or wilful misconduct of such B&N Indemnitee or such B&N Indemnitee’s breach of its obligations hereunder.

(iv) All amounts due under this Section 3.02(c) shall be payable promptly after written demand therefor, and in any event within ten business days following such demand, in immediately available funds in U.S. Dollars to an account of B&N specified in writing and shall not be subject to reduction by way of setoff or counterclaim. If any payment hereunder would be due and payable on a day that is not a business day, such payment shall instead be due on the immediately preceding business day.

(v) Any amount payable hereunder shall bear interest at a rate per annum equal to the Default Interest Rate, calculated on a daily basis, from (i) in the case of any B&N Credit Support Payment, the date on which such B&N Credit Support Payment was made and (ii) in the case of any other amount payable hereunder, the date immediately following the date by which such amount was required to be paid pursuant to paragraph (iv) above until the date on which BNED shall make payment in full of such amount (including all interest accrued thereon pursuant to this paragraph (v)) to B&N.

(vi) BNED hereby authorizes B&N at any time and from time to time when any amount owed by BNED to B&N pursuant to this Section 3.02 is due and payable to it and has not been paid, to the fullest extent permitted by Law, to set off and apply any and all indebtedness at any time owing by B&N to or for the credit or the account of BNED against any of and all of the amounts payable by BNED to B&N hereunder; provided that B&N shall not be permitted to exercise any right of setoff pursuant to this paragraph unless demand for payment has been made pursuant to paragraph (iv) of this Section 3.02(c) and the period within which BNED was required to make such payment has expired. B&N shall notify BNED promptly of any such setoff and the application made by B&N of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such setoff and application. The rights of B&N under this paragraph are in addition to other rights and remedies (including other rights of setoff) which B&N may have.

(vii) The provisions of this Section 3.02 shall survive and remain in full force and effect regardless of the consummation of the Spin-Off or by any of the agreements referred to herein or the termination of this Agreement or any such other agreements or any provision hereof or thereof.

(d) Surviving B&N Credit Support Instruments . The provisions of Section 3.02(a) and (c) shall apply mutatis mutandis to the Surviving B&N Credit Instrument.

ARTICLE IV

Actions Pending the Distribution

SECTION 4.01. Actions Prior to the Distribution. (a) Subject to the conditions specified in Section 4.02 and subject to Section 5.04, B&N and BNED shall use reasonable best efforts to consummate the Distribution. Such efforts shall include taking the actions specified in this Section 4.01.

(b) Prior to the Distribution, B&N shall mail the Prospectus to the Record Holders.

(c) BNED shall prepare, file with the Commission and use its reasonable best efforts to cause to become effective any registration statements or amendments thereto required to effect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the transactions contemplated by this Agreement or any of the Ancillary Agreements.

(d) B&N and BNED shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the states or other political subdivisions of the United States or of other foreign jurisdictions in connection with the Distribution.

(e) BNED shall prepare and file, and shall use reasonable best efforts to have approved prior to the Distribution, an application for the listing of the BNED Common Stock to be distributed in the Distribution on the NYSE, subject to official notice of distribution.

(f) Prior to the Distribution, B&N shall have duly elected members of the BNED board of directors, and such individuals shall be the members of the BNED board of directors effective as of immediately after the Distribution; provided , however , that to the extent required by any Law or requirement of the NYSE or any other national securities exchange, as applicable, one independent director shall be appointed prior to the date on which “when-issued” trading of the BNED Common Stock begins on the NYSE and begin his or her term prior to the Distribution and shall serve on BNED’s Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee.

(g) Prior to the Distribution, B&N shall deliver or cause to be delivered to BNED resignations, effective as of immediately after the Distribution, of each individual who will be an employee of any member of the B&N Group after the Distribution and who is an officer or director of any member of the BNED Group immediately prior to the Distribution.

(h) As of immediately prior to the Distribution, the Amended and Restated Certificate of Incorporation and the Amended and Restated By-laws of BNED, each in substantially the form filed as an exhibit to the Form S-1, shall be in effect.

(i) B&N and BNED shall, subject to Section 5.04, take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 4.02 to be satisfied and to effect the Distribution on the Distribution Date.

SECTION 4.02. Conditions Precedent to Consummation of the Distribution. Subject to Section 5.04, as soon as practicable after the date of this Agreement, the Parties shall use reasonable best efforts to satisfy the following conditions prior to the consummation of the Distribution. The obligations of the Parties to consummate the Distribution shall be conditioned on the satisfaction, or waiver by B&N, of the following conditions:

(a) The board of directors of B&N shall have authorized and approved the Spin-Off and not withdrawn such authorization and approval, and shall have declared the dividend of BNED Common Stock to B&N stockholders.

(b) Each Ancillary Agreement shall have been executed by each party to such agreements.

(c) BNED shall have entered into a credit facility and any other financing the BNED board of directors determines to be necessary or advisable, in each case, on terms and conditions acceptable to BNED.

(d) B&N shall have obtained an amendment to or replacement of the B&N Credit Agreement permitting the Spin-Off.

(e) The Commission shall have declared effective the Form S-1, of which the Prospectus is a part, under the Securities Act of 1933, and no stop order suspending the effectiveness of the Form S-1 shall be in effect and no proceedings for that purpose shall be pending before or threatened by the Commission.

(f) The BNED Common Stock shall have been accepted for listing on the NYSE or another national securities exchange approved by B&N, subject to official notice of issuance.

(g) B&N shall have received the written opinions of Cravath, Swaine & Moore LLP and KPMG LLP, which shall remain in full force and effect, that, subject to the accuracy of and compliance with the relevant Tax Opinion Representations, the Spin-Off will qualify for its Intended Tax Treatment.

(h) The B&N board of directors shall have received a solvency opinion from a financial advisor, in the form and substance acceptable to the B&N board of directors, regarding the effect of the Spin-Off.

(i) No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Spin-Off shall be in effect, and no other event outside the control of B&N shall have occurred or failed to occur that prevents the consummation of the Spin-Off.

(j) No other events or developments shall have occurred prior to the Distribution Date that, in the judgment of the board of directors of B&N, would result in the Spin-Off having a material adverse effect on B&N or its stockholders.

(k) Prior to the Distribution Date, the Prospectus shall have been mailed to the holders of B&N Common Stock.

(l) B&N shall have duly elected the individuals listed as members of post-Spin-Off BNED board of directors in the Form S-1, and such individuals shall be the members of BNED board of directors; provided that BNED current directors shall appoint at least one independent director to serve on the Audit Committee prior to the date on which “when-issued” trading of BNED Common Stock commences.

(m) Immediately prior to the Distribution Date, the Amended and Restated Certificate of Incorporation and the Amended and Restated By-laws of BNED, each in substantially the form filed as an exhibit to the Form S-1, shall be in effect.

(n) B&N shall have received a certificate signed by the Chief Financial Officer of BNED, dated as of the Distribution Date, certifying the satisfaction of the conditions set forth in this Section 4.02.

The foregoing conditions are for the sole benefit of B&N and shall not give rise to or create any duty on the part of B&N or the B&N board of directors to waive or not waive such conditions or in any way limit the right of B&N to terminate this Agreement as set forth in Article XI or alter the consequences of any such termination from those specified in such Article. Any determination made by the B&N board of directors prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in this Section 4.02 shall be conclusive.

ARTICLE V

The Distribution

SECTION 5.01. The Distribution. (a) BNED shall cooperate with B&N to accomplish the Distribution and shall, at the direction of B&N, use its reasonable best efforts to promptly take any and all actions necessary or desirable to effect the Distribution. B&N or BNED, as the case may be, will provide, or cause the applicable member of its Group to provide, to the Agent all share certificates and any information required in order to complete the Distribution.

(b) Subject to the terms and conditions set forth in this Agreement, (i) after completion of the Internal Transactions and on or prior to the Distribution Date, for the benefit of and distribution to the holders of B&N Common Stock as of the Record Date (the “ Record Holders ”), B&N will deliver to the Agent all of the issued and outstanding shares of BNED Common Stock then owned by B&N or any other member of the B&N Group and book-entry authorizations for such shares and (ii) on the Distribution Date, B&N shall instruct the Agent to distribute, by means of a pro rata dividend based on the aggregate number of shares of B&N Common Stock held by each applicable Record Holder, to each Record Holder (or such Record Holder’s bank or brokerage firm on such Record Holder’s behalf) electronically, by direct registration in book-entry form, the number of shares of BNED Common Stock to which such Record Holder is entitled based on a distribution ratio to be determined by B&N in its sole discretion. The Distribution shall be effective at 12:01 a.m. New York City time on the Distribution Date. On or as soon as practicable after the Distribution Date, the Agent will mail to each Record Holder an account statement indicating the number of shares of BNED Common Stock that have been registered in book-entry form in the name of such Record Holder.

SECTION 5.02. Fractional Shares. The Agent and B&N shall, as soon as practicable after the Distribution Date, (a) determine the number of whole shares and fractional shares of BNED Common Stock allocable to each Record Holder, (b) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market

transactions at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests and (c) distribute to each such holder, or for the benefit of each beneficial owner, such holder’s or owner’s ratable share of the net proceeds of such sale, based upon the average gross selling price per share of BNED Common Stock after making appropriate deductions for any amount required to be withheld under applicable Tax Law and less any brokers’ charges, commissions or transfer Taxes. The Agent, in its sole discretion, will determine the timing and method of selling such fractional shares, the selling price of such fractional shares and the broker-dealer through which such fractional shares will be sold; provided , however , that the designated broker-dealer is not an Affiliate of B&N or BNED. Neither B&N nor BNED will pay any interest on the proceeds from the sale of fractional shares.

SECTION 5.03. B&N Series J Preferred Stock. Each of B&N and BNED shall promptly take all actions required by the B&N Series J Certificate in connection with the Distribution, including providing the written notice required by the B&N Series J Certificate to the Series J Holders not more than 60 business days and not less than 20 business days prior to the Distribution Date and, upon the election of Series J Holders to exchange all or a portion of their B&N Series J Preferred Stock, BNED issuing an equivalent number of shares of Mirror Preferred Stock of BNED and B&N issuing an equivalent number of shares of Exchange Preferred Stock of B&N to such Series J Holders.

SECTION 5.04. Sole Discretion of B&N. B&N shall, in its sole and absolute discretion, determine the Record Date, the Distribution Date and all terms of the Distribution, including the form, structure and terms of any transactions and/or offerings to effect the Distribution and the timing of and conditions to the consummation thereof. In addition and notwithstanding anything to the contrary set forth below, B&N may at any time and from time to time until the Distribution decide to abandon the Distribution including by accelerating or delaying the timing of the consummation of all or part of the Distribution or modifying or changing the terms of the Distribution if, at any time, the B&N board of directors determines, in its sole and absolute discretion, that the Distribution is not in the best interests of B&N or its stockholders or is otherwise not advisable.

ARTICLE VI

Mutual Releases; Indemnification

SECTION 6.01. Release of Pre-Distribution Claims. (a) Except as provided in Section 6.01(c) or elsewhere in this Agreement or the Ancillary Agreements, effective as of the Distribution, BNED does hereby, for itself and each other member of the BNED Group, their respective Affiliates, to the extent it may legally do so, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, directors, officers, agents or employees of any member of the BNED Group (in each case, in their respective capacities as such), remise, release and forever discharge B&N and the other members of the B&N Group, their respective Affiliates, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, directors, officers, agents or employees of any member of the B&N Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all BNED Liabilities whatsoever, whether at Law or in equity (including any right of

contribution), whether arising under any contract or agreement, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Spin-Off and all other activities to implement the Spin-Off.

(b) Except as provided in Section 6.01(c) or elsewhere in this Agreement or the Ancillary Agreements, effective as of the Distribution, B&N does hereby, for itself and each other member of the B&N Group, their respective Affiliates, to the extent it may legally do so, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, directors, officers, agents or employees of any member of the B&N Group (in each case, in their respective capacities as such), remise, release and forever discharge BNED, the other members of the BNED Group, their respective Affiliates, successors and assigns, and all Persons who at any time on or prior to the Distribution have been stockholders, directors, officers, agents or employees of any member of the BNED Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all B&N Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of Law or otherwise, existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Distribution, including in connection with the Spin-Off and all other activities to implement the Spin-Off.

(c) Nothing contained in Section 6.01(a) or (b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any Intercompany Agreement or Intercompany Account that is specified in Section 2.03(b) not to terminate as of the Distribution, in each case in accordance with its terms. Nothing contained in Section 6.01(a) or (b) shall release any Person from:

(i) any Liability provided in or resulting from any agreement among any members of the B&N Group or the BNED Group that is specified in Section 2.03(b) as not terminating as of the Distribution, or any other Liability specified in such Section 2.03(b) as not to terminate as of the Distribution;

(ii) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

(iii) any Liability provided in or resulting from any other agreement or understanding that is entered into after the Distribution between one Party (and/or a member of such Party’s Group), on the one hand, and the other Party (and/or a member of such Party’s Group), on the other hand;

(iv) any Liability that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or any Ancillary Agreement for claims brought against the Parties, the members of their respective Groups or any of their respective

directors, officers, employees or agents, by third Persons, which Liability shall be governed by the provisions of this Article VI or, if applicable, the appropriate provisions of the relevant Ancillary Agreement; or

(v) any Liability the release of which would result in the release of any Person not otherwise intended to be released pursuant to this Section 6.01.

(d) BNED shall not make, and shall not permit any other member of the BNED Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against B&N or any other member of the B&N Group, or any other Person released pursuant to Section 6.01(a), with respect to any Liabilities released pursuant to Section 6.01(a). B&N shall not make, and shall not permit any other member of the B&N Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against BNED or any other member of the BNED Group, or any other Person released pursuant to Section 6.01(b), with respect to any Liabilities released pursuant to Section 6.01(b).

(e) It is the intent of each of B&N and BNED, by virtue of the provisions of this Section 6.01, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date, between or among BNED or any other member of the BNED Group, on the one hand, and B&N or any other member of the B&N Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Distribution Date), except as set forth in Section 6.01(c) or elsewhere in this Agreement or in any Ancillary Agreement. At any time, at the request of the other Party, each Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.

SECTION 6.02. Indemnification by BNED. Subject to Section 6.04, BNED shall indemnify, defend and hold harmless B&N, each other member of the B&N Group and each of their respective former and current directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ B&N Indemnitees ”), from and against any and all Liabilities of the B&N Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):

(a) the BNED Liabilities (including with respect to Shared Contracts), including the failure of BNED or any other member of the BNED Group or any other Person to pay, perform or otherwise promptly discharge any BNED Liability in accordance with its terms;

(b) any breach by BNED or any other member of the BNED Group of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate indemnification therein (which shall be controlling); and

(c) any breach by BNED of any of the representations and warranties made by BNED on behalf of itself and the members of the BNED Group in Section 12.01(c).

SECTION 6.03. Indemnification by B&N. Subject to Section 6.04, B&N shall indemnify, defend and hold harmless BNED, each other member of the BNED Group and each of their respective former and current directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ BNED Indemnitees ”), from and against any and all Liabilities of the BNED Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):

(a) the B&N Liabilities (including with respect to Shared Contracts), including the failure of B&N or any other member of the B&N Group or any other Person to pay, perform or otherwise promptly discharge any B&N Liability in accordance with its terms;

(b) any breach by B&N or any other member of the B&N Group of this Agreement or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate indemnification therein (which shall be controlling); and

(c) any breach by B&N of any of the representations and warranties made by B&N on behalf of itself and the members of the B&N Group in Section 12.01(c).

SECTION 6.04. Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds. (a) The Parties intend that any Liability subject to indemnification or reimbursement pursuant to this Agreement will be net of (i) Insurance Proceeds that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability or (ii) other amounts recovered from any third party that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability (“ Third-Party Proceeds ”). Accordingly, the amount that either Party (an “ Indemnifying Party ”) is required to pay to any Person entitled to indemnification or reimbursement pursuant to this Agreement (an “ Indemnitee ”) will be reduced by any Insurance Proceeds or Third-Party Proceeds theretofore actually recovered by or on behalf of the Indemnitee from a third party in respect of the related Liability. If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party in respect of any Liability (an “ Indemnity Payment ”) and subsequently receives Insurance Proceeds or Third-Party Proceeds in respect of such Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if such Insurance Proceeds or Third-Party Proceeds had been received, realized or recovered before the Indemnity Payment was made.

(b) An insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of the indemnification provisions hereof, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a “wind-fall” ( i.e. , a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Each member of the B&N Group and BNED Group shall use reasonable best efforts to seek to collect or recover any Insurance Proceeds and any Third-Party Proceeds to which such Person is entitled in connection with any Liability for which such Person seeks indemnification pursuant to this Article VI; provided , however , that such Person’s inability to collect or recover any such Insurance Proceeds or Third-Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder.

SECTION 6.05. Procedures for Indemnification of Third-Party Claims. (a) If an Indemnitee shall receive notice or otherwise learn of a Third-Party Claim with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to this Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as reasonably practicable, but no later than 30 days after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail. Notwithstanding the foregoing, the failure of any Indemnitee or other Person to give notice as provided in this Section 6.05(a) shall not relieve the related Indemnifying Party of its obligations under this Article VI, except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice.

(b) The Indemnifying Party shall have the right, exercisable by written notice to the Indemnitee within 30 calendar days after receipt of notice from an Indemnitee in accordance with Section 6.05(a) (or sooner, if the nature of such Third-Party Claim so requires), to assume and conduct the defense of such Third-Party Claim in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitee; provided , however , (i) the defense of such Third-Party Claim by the Indemnifying Party will not, in the reasonable judgment of the Indemnitee, affect the Indemnitee or any of its controlled Affiliates in a materially adverse manner and (ii) the Third-Party Claim solely seeks (and continues to seek) monetary damages (the conditions set forth in clauses (i) and (ii), collectively, the “ Litigation Conditions ”).

(c) If the Indemnifying Party elects not to assume the defense of a Third-Party Claim in accordance with this Agreement, or fails to notify an Indemnitee of its election as provided in Section 6.05(b) or if one of the Litigation Conditions is not satisfied or waived by the Indemnitee, such Indemnitee may defend such Third-Party Claim at the cost and expense of the Indemnifying Party.

(d) If the Indemnifying Party elects to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnitees shall, subject to the terms of this Agreement, cooperate with the Indemnifying Party with respect to the defense of such Third-Party Claim.

(e) If the Indemnifying Party elects to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnifying Party will not be liable for any additional legal expenses subsequently incurred by the Indemnitee in connection with the defense of the Third-Party Claim; provided , however , that if (i) the Litigation Conditions cease to be met or (ii) the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third-Party Claim, the Indemnitee may assume its own defense, and the Indemnifying Party will be liable for all reasonable costs or expenses paid or incurred in connection with such defense. The Indemnifying Party or the Indemnitee, as the case may be, shall have the right to participate in (but, subject to the prior sentence, not control), at its own expense, the defense of any Third-Party Claim that the other is defending as provided in this Agreement. In the event, however, that such Indemnitee reasonably determines that

representation by counsel to the Indemnifying Party of both such Indemnifying Party and the Indemnitee could reasonably be expected to present such counsel with a conflict of interest, then the Indemnitee may employ separate counsel to represent or defend it in any such action or proceeding and the Indemnifying Party will pay the reasonable fees and expenses of such counsel.

(f) No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of any Third-Party Claim without the consent of the applicable Indemnitee or Indemnitees; provided , however , that such Indemnitee(s) shall be required to consent to such entry of judgment or to such settlement that the Indemnifying Party may recommend if the judgment or settlement (i) contains no finding or admission of any violation of Law or any violation of the rights of any Person, (ii) involves only monetary relief which the Indemnifying Party has agreed to pay and (iii) includes a full and unconditional release of the Indemnitee. Notwithstanding the foregoing, in no event shall an Indemnitee be required to consent to any entry of judgment or settlement if the effect thereof is to permit any injunction, declaratory judgment, other order or other nonmonetary relief to be entered, directly or indirectly, against any Indemnitee.

(g) Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, such Third-Party Claim without the Indemnifying Party’s prior written consent (such consent not to be unreasonably withheld or delayed).

SECTION 6.06. Additional Matters. (a) Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such 30-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such Party as contemplated by this Agreement.

(b) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

(c) In the event of an Action relating to a Liability that has been allocated to an Indemnifying Party pursuant to the terms of this Agreement or any Ancillary Agreement in which the Indemnifying Party is not a named defendant, if the Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant or add the Indemnifying Party as an additional named defendant, if at all practicable. If such

substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in this Section, the Indemnifying Party shall fully indemnify the named defendant against all reasonable costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts, fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.

SECTION 6.07. Remedies Cumulative. The remedies provided in this Article VI shall be cumulative and, subject to the provisions of Article X, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

SECTION 6.08. Survival of Indemnities. The rights and obligations of each of B&N and BNED and their respective Indemnitees under this Article VI shall survive the sale or other transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any Liabilities.

SECTION 6.09. Limitation on Liability. Except as may expressly be set forth in this Agreement, none of B&N, BNED or any other member of either Group shall in any event have any Liability to the other or to any other member of the other’s Group, or to any other B&N Indemnitee or BNED Indemnitee, as applicable, under this Agreement (i) with respect to any matter to the extent that such Party seeking indemnification has engaged in any knowing violation of Law or fraud in connection therewith or (ii) for any punitive or exemplary damages (except to the extent payable to a third party), whether or not caused by or resulting from negligence or breach of obligations hereunder.

ARTICLE VII

Access to Information; Litigation; Confidentiality

SECTION 7.01. Agreement for Exchange of Information; Archives. (a) Except in the case of an adversarial Action or threatened adversarial Action by either B&N or BNED or a Person or Persons in its Group against the other Party or a Person or Persons in its Group, and subject to Section 7.01(b), each of B&N and BNED, on behalf of its respective Group, shall provide, or cause to be provided, to the other Party, at any time after the Distribution, as soon as reasonably practicable after written request therefor, any Information relating to time periods on or prior to the Distribution Date in the possession or under the control of such respective Group, which B&N or BNED, or any member of its respective Group, as applicable, reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on B&N or BNED, or any member of its respective Group, as applicable (including under applicable securities laws), by any national securities exchange or any Governmental Authority having jurisdiction over B&N or BNED, or any member of its respective Group, as applicable, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, regulatory, litigation or other similar requirements or (iii) to comply with its obligations under this Agreement or any Ancillary Agreement. The receiving Party shall use any Information received pursuant to this Section 7.01(a) solely to the extent reasonably necessary to satisfy the applicable obligations or requirements described in clause (i), (ii) or (iii) of the immediately preceding sentence.

(b) In the event that either B&N or BNED determines that the exchange of any Information pursuant to Section 7.01(a) could violate any Law or agreement or waive or jeopardize any attorney-client privilege or attorney work product protection, such Party shall not be required to provide access to or furnish such Information to the other Party; provided , however , that both B&N and BNED shall take all commercially reasonable measures to permit the compliance with Section 7.01(a) in a manner that avoids any such harm or consequence. Both B&N and BNED intend that any provision of access to or the furnishing of Information pursuant to this Section 7.01 that would otherwise be within the ambit of any legal privilege shall not operate as waiver of such privilege.

(c) Each of BNED and B&N agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose or otherwise waive any privilege or protection attaching to any privileged Information relating to a member of the other Group or relating to or arising in connection with the relationship between the Groups prior to the Distribution, without providing prompt written notice to and obtaining the prior written consent of the other (not to be unreasonably withheld or delayed).

(d) B&N and BNED each agree that it will only process personal data provided to it by the other Group in accordance with all applicable privacy and data protection law obligations and will implement and maintain at all times appropriate technical and organizational measures to protect such personal data against unauthorized or unlawful processing and accidental loss, destruction, damage, alteration and disclosure. In addition, each Party agrees to provide reasonable assistance to the other Party in respect of any obligations under privacy and data protection legislation affecting the disclosure of such personal data to the other Party and will not knowingly process such personal data in such a way to cause the other Party to violate any of its obligations under any applicable privacy and data protection legislation.

SECTION 7.02. Ownership of Information. Any Information owned by one Group that is provided to the requesting Party hereunder shall be deemed to remain the property of the providing Party. Except as specifically set forth herein, nothing herein shall be construed as granting or conferring rights of license or otherwise in any such Information.

SECTION 7.03. Compensation for Providing Information. B&N and BNED shall reimburse each other for the reasonable costs, if any, in complying with a request for Information pursuant to this Article VII. Except as may be otherwise specifically provided elsewhere in this Agreement, such costs shall be computed in accordance with BNED’s or B&N’s, as applicable, standard methodology and procedures.

SECTION 7.04. Record Retention. To facilitate the possible exchange of Information pursuant to this Article VII and other provisions of this Agreement, each Party shall use its reasonable best efforts to retain all Information in such Party’s possession relating to the other Party or its businesses, Assets or Liabilities, this Agreement or the Ancillary Agreements (the “ Retained Information ”) in accordance with its respective record retention policy as in effect on the date hereof or such longer or shorter period as required by Law, this Agreement or the Ancillary Agreements.

SECTION 7.05. Accounting Information. Without limiting the generality of Section 7.01 but subject to Section 7.01(b):

(a) Until the end of the first full fiscal year of B&N occurring after the Distribution Date (and for a reasonable period of time afterwards as required by Law for B&N to prepare consolidated financial statements or complete a financial statement audit for any period during which the financial results of the BNED Group were consolidated with those of B&N), BNED shall use its reasonable best efforts to enable B&N to meet its timetable for dissemination of its financial statements and to enable B&N’s auditors to timely complete their annual audit and quarterly reviews of financial statements. As part of such efforts, to the extent reasonably necessary for the preparation of financial statements or completing an audit or review of financial statements or an audit of internal control over financial reporting, (i) BNED shall authorize and direct its auditors to make available to B&N’s auditors, within a reasonable time prior to the date of B&N’s auditors’ opinion or review report, both (x) the personnel who performed or will perform the annual audits and quarterly reviews of BNED and (y) work papers related to such annual audits and quarterly reviews, to enable B&N’s auditors to perform any procedures they consider reasonably necessary to take responsibility for the work of BNED’s auditors as it relates to B&N’s auditors’ opinion or report and (ii) until all governmental audits or other inquiries are complete, BNED shall provide reasonable access during normal business hours for B&N’s internal auditors, counsel and other designated representatives to (x) the premises of BNED and its Subsidiaries and all Information (and duplicating rights) within the knowledge, possession or control of BNED and its Subsidiaries, (y) the officers and employees of BNED and its Subsidiaries, so that B&N may conduct reasonable audits relating to the financial statements provided by BNED and its Subsidiaries, and (z) the IT systems of BNED, so that B&N may conduct reasonable testing of such IT systems in connection with the audits of financial statements; provided , however , that such access shall not be unreasonably disruptive to the business and affairs of the BNED Group.

(b) Until the end of the first full fiscal year of BNED occurring after the Distribution Date (and for a reasonable period of time afterwards or as required by Law), B&N shall use its reasonable best efforts to enable BNED to meet its timetable for dissemination of its financial statements and to enable BNED’s auditors to timely complete their annual audit and quarterly reviews of financial statements. As part of such efforts, to the extent reasonably necessary for the preparation of financial statements or completing an audit or review of financial statements or an audit of internal control over financial reporting, (i) B&N shall authorize and direct its auditors to make available to BNED’s auditors, within a reasonable time prior to the date of BNED’s auditors’ opinion or review report, both (x) the personnel who performed or will perform the annual audits and quarterly reviews of B&N and (y) work papers related to such annual audits and quarterly reviews, to enable BNED’s auditors to perform any procedures they consider reasonably necessary to take responsibility for the work of B&N’s auditors as it relates to BNED’s auditors’ opinion or report and (ii) until all governmental audits or other inquires are complete, B&N shall provide reasonable access during normal business hours for BNED’s internal auditors, counsel and other designated representatives to (x) the premises of B&N and its Subsidiaries and all Information (and duplicating rights) within the

knowledge, possession or control of B&N and its Subsidiaries and (y) the officers and employees of B&N and its Subsidiaries, so that BNED may conduct reasonable audits relating to the financial statements provided by B&N and its Subsidiaries, and (z) the IT systems of B&N, so that BNED may conduct reasonable testing of such IT systems in connection with the audits of financial statements; provided , however , that such access shall not be unreasonably disruptive to the business and affairs of the B&N Group.

(c) In order to enable the principal executive officer(s) and principal financial officer(s) (as such terms are defined in the rules and regulations of the Commission) of B&N to make any certifications required of them under Section 302 or 906 of the Sarbanes-Oxley Act of 2002, BNED shall, within a reasonable period of time following a request from B&N in anticipation of filing such reports, cause its principal executive officer(s) and principal financial officer(s) to provide B&N with certifications of such officers in support of the certifications of B&N’s principal executive officer(s) and principal financial officer(s) required under Section 302 or 906 of the Sarbanes-Oxley Act of 2002 with respect to B&N’s Quarterly Report on Form 10-Q filed with respect to the fiscal quarter during which the Distribution Date occurs (unless such quarter is the fourth fiscal quarter), each subsequent fiscal quarter through the third fiscal quarter of the year in which the Distribution Date occurs and B&N’s Annual Report on Form 10-K filed with respect to the fiscal year during which the Distribution Date occurs. Such certifications shall be provided in substantially the same form and manner as such BNED officers provided prior to the Distribution (reflecting any changes in certifications necessitated by the Spin-Off or any other transactions related thereto) or as otherwise agreed upon between B&N and BNED.

SECTION 7.06. Limitations of Liability. Neither B&N nor BNED shall have any Liability to the other Party in the event that any Information exchanged or provided pursuant to this Agreement that is an estimate or forecast, or that is based on an estimate or forecast, is found to be inaccurate in the absence of wilful misconduct by the providing Person. Neither B&N nor BNED shall have any Liability to the other Party if any Information is destroyed after reasonable best efforts by BNED or B&N, as applicable, to comply with the provisions of Section 7.04.

SECTION 7.07. Conduct of Pending Litigation Matters. BNED and B&N shall enter into one or more joint defense agreements, substantially in the form of Exhibit A hereto, with respect to litigation matters pending as of the date hereof that involve members of both the B&N Group and the BNED Group.

SECTION 7.08. Production of Witnesses; Records; Cooperation. (a) After the Distribution Date and until the third anniversary thereof, except in the case of an adversarial Action or threatened adversarial Action by either B&N or BNED or a Person or Persons in its Group against the other Party or a Person or Persons in its Group, each of B&N and BNED shall take all reasonable steps to make available, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the Persons in its respective Group (whether as witnesses or otherwise) and any books, records or other documents within its control or that it otherwise has the ability to make available, to the extent that such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any

Action or threatened or contemplated Action (including preparation for such Action) in which B&N or BNED, as applicable, may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all reasonable out-of-pocket costs and expenses in connection therewith.

(b) Without limiting the foregoing, B&N and BNED shall use their reasonable best efforts to cooperate and consult to the extent reasonably necessary with respect to any Actions or threatened or contemplated Actions, other than an adversarial Action against the other Group.

(c) The obligation of B&N and BNED to make available former, current and future directors, officers, employees and other personnel and agents or provide witnesses and experts pursuant to this Section 7.08 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to make available employees and other officers without regard to whether such individual or the employer of such individual could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 7.08(a)). Without limiting the foregoing, each of B&N and BNED agrees that neither it nor any Person or Persons in its respective Group will take any adverse action against any employee of its Group based on such employee’s provision of assistance or information to each other pursuant to this Section 7.08.

(d) Upon the reasonable request of B&N or BNED, in connection with any Action contemplated by this Article VII, B&N and BNED will enter into a mutually acceptable common interest agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of either Group.

SECTION 7.09. Confidential Information. (a) Each of B&N and BNED, on behalf of itself and each Person in its respective Group, shall hold, and cause its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives to hold, in strict confidence and not release or disclose, with at least the same degree of care, but no less than a reasonable degree of care, that it applies to its own confidential and proprietary information pursuant to policies in effect as of the Distribution Date, all Information concerning the other Group or its business that is either in its possession (including Information in its possession prior to the Distribution) or furnished by the other Group or its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives at any time pursuant to this Agreement, and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder, except, in each case, to the extent that such Information is (i) in the public domain through no fault of any member of the B&N Group or the BNED Group, as applicable, or any of its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (ii) later lawfully acquired from other sources by any of B&N, BNED or its respective Group, employees, directors or agents, accountants, counsel and other advisors and representatives, as applicable, which sources are not themselves bound by a confidentiality obligation to the knowledge of any of B&N, BNED or Persons in its respective Group, as applicable, (iii) independently generated without reference to any proprietary or confidential Information of the B&N Group or the BNED Group, as applicable, or (iv) required to be disclosed by Law; provided , however , that the Person

required to disclose such Information gives the applicable Person prompt, and to the extent reasonably practicable, prior notice of such disclosure and an opportunity to contest such disclosure and shall use commercially reasonable efforts to cooperate, at the expense of the requesting Person, in seeking any reasonable protective arrangements requested by such Person. In the event that such appropriate protective order or other remedy is not obtained, the Person that is required to disclose such Information shall furnish, or cause to be furnished, only that portion of such Information that is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Information. Notwithstanding the foregoing, each of B&N and BNED may release or disclose, or permit to be released or disclosed, any such Information concerning the other Group (x) to their respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives who need to know such Information (who shall be advised of the obligations hereunder with respect to such Information), and (y) to any nationally recognized statistical rating organization as it reasonably deems necessary, solely for the purpose of obtaining a rating of securities or other debt instruments upon normal terms and conditions; provided , however , that the Party whose Information is being disclosed or released to such rating organization is promptly notified thereof.

(b) Without limiting the foregoing, when any Information concerning the other Group or its business is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, each of B&N and BNED will, promptly after request of the other Party, either return all Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other Party, as applicable, that it has destroyed such Information (and used commercially reasonable efforts to destroy all such Information electronically preserved or recorded within any computerized data storage device or component (including any hard-drive or database)).

ARTICLE VIII

Insurance

SECTION 8.01. Insurance. (a) Until the Distribution Date, B&N shall (i) cause the members of the BNED Group and their respective employees, officers and directors to continue to be covered as insured parties under B&N’s policies of insurance in a manner which is no less favorable than the coverage provided for the B&N Group and (ii) permit the members of the BNED Group and their respective employees, officers and directors to submit claims arising from or relating to facts, circumstances, events or matters that occurred prior to the Distribution Date to the extent permitted under such policies. With respect to policies currently procured by BNED for the sole benefit of the BNED Group, BNED shall continue to maintain such insurance coverage through the Distribution Date in a manner no less favorable than currently provided. Without limiting any of the rights or obligations of the parties pursuant to Sections 8.01(b)-(e), B&N and BNED acknowledge that, as of the Distribution Date, B&N intends to take such action as it may deem necessary or desirable to remove the members of the BNED Group and their respective employees, officers and directors as insured parties under any policy of insurance issued to any member of the B&N Group by any insurance carrier effective on the Distribution Date. Except to the extent otherwise provided below or otherwise mutually agreed, the BNED Group will not be entitled from and after the Distribution Date to make any

claims for insurance thereunder to the extent such claims are based upon facts, circumstances, events or matters occurring on or after the Distribution Date or to the extent any claims are made pursuant to any B&N claims-made policies on or after the Distribution Date. No member of the B&N Group shall be deemed to have made any representation or warranty as to the availability of any coverage under any such insurance policy. Nothing in this Section 8.01(a) shall apply to any employee-related insurance matters that are expressly addressed in the EMA.

(b) Effective as of the Distribution Date, all D&O Policies of the B&N Group shall be converted to run off policies, and each of the B&N Group and the BNED Group shall purchase D&O Policies with respect to claims arising after the Distribution Date. From and after the Distribution Date, to the extent that any Pre-Separation Insurance Claim has been duly reported on or before the six-year anniversary of the Distribution Date under the directors and officers liability insurance policies (“ D&O Policies ”) maintained by members of the B&N Group, B&N shall not, and shall cause the members of the B&N Group not to, take any action that would limit the coverage of the individuals who acted as directors or officers of the B&N Group and members of the BNED Group prior to the Distribution Date under any D&O Policies maintained by the members of the B&N Group. B&N shall continue to be responsible for the deductible or retention related to any such Pre-Separation Insurance Claim under the D&O Policies, in an aggregate amount not to exceed the applicable deductible. B&N shall, and shall cause members of the B&N Group to, reasonably cooperate with the individuals who acted as directors and officers of the B&N Group or members of the BNED Group on or prior to the Distribution Date in their pursuit of any coverage claims under such D&O Policies which could inure to the benefit of such individuals.

(c) Existing primary casualty policies will remain in effect for the B&N Group and BNED until the Distribution Date. Effective as of the Distribution Date, the BNED Group shall purchase workers compensation, commercial general liability and automobile liability policies with respect to claims arising after the Distribution Date. B&N shall not, and shall cause the members of the B&N Group not to, take any action that would limit the coverage available to BNED (or members of the BNED Group) prior to the Distribution Date under any existing primary casualty policies maintained by the members of the B&N Group. Any claim fees associated with Pre-Separation losses under the existing primary casualty policies will be assumed by BNED. Assuming acceptance and agreement of the insurance carrier, on or about the six-month anniversary of the Distribution Date, BNED agrees to assume and accept any claims and liabilities with respect to BNED (or any member of the BNED group) existing under the casualty policies of the B&N Group and those liabilities are to be transferred to BNED. BNED shall bear all costs associated with such transfer and assignment. In connection with such transfer and assignment, B&N and BNED shall cooperate to reduce the letter of credit in favor of the insurers under the existing primary casualty policies with the removal of BNED from such policies.

(d) Effective as of the Distribution Date, the BNED Group shall purchase property policies in respect of real and personal property, ocean cargo and crime policies and excess liability and umbrella policies with respect to claims arising from and after the Distribution Date. After the Distribution Date, to the extent that any Pre-Separation Insurance Claim has been duly reported as having occurred prior to the Distribution Date, under property policies in respect of real and personal property, ocean cargo and crime policies and excess liability and umbrella policies maintained by members of the B&N Group, B&N shall not, and

shall cause the members of the B&N Group not to, take any action that would limit the coverage available to BNED or any member of the BNED Group prior to the Distribution Date under any such policies maintained by the members of the B&N Group. Any claim settlement funds owed to BNED under any such policies will be distributed at the conclusion of the claim.

(e) Effective as of the Distribution Date, all fiduciary policies and cyberliability policies (including relating to errors and omissions and media) of the B&N Group shall continue and the BNED Group shall purchase fiduciary policies and cyberliability policies (including relating to errors and omissions and media) with respect to claims arising after the Distribution Date. From and after the Distribution Date, to the extent that any Pre-Separation Claims-Based Insurance Claim has been duly reported on or before the Distribution Date under any insurance policies with respect to fiduciary or cyberliability losses, maintained by members of the B&N Group, B&N shall not, and shall cause the member of the B&N Group not to, take any action that would limit the coverage available under the fiduciary policies or the cyberliability policies (including relating to errors and omissions and media) maintained by the members of the B&N Group. B&N shall continue to be responsible the deductible or retention related to such Pre-Separation Insurance Claims under the fiduciary policies and the cyberliability policies (including relating to errors and omissions and media). Any claim settlement funds owed to BNED will be distributed at the conclusion of the claim.

(f) B&N shall provide, and shall cause other members of the B&N Group to provide, such cooperation as is reasonably requested by BNED in order for BNED to have in effect from and after the Distribution Date such new insurance policies as BNED deems appropriate with respect to claims reported on or after the Distribution Date. In accordance with Sections 8.01(c)-(e), B&N shall, and shall cause members of the B&N Group to, reasonably cooperate with BNED (or members of the BNED Group) in their pursuit of any coverage claims under any such policies which could inure to the benefit of such entities. Except for the policies referred to therein and to the extent otherwise required under Sections 8.01(b)-(e), the B&N Group may, at any time, without liability or obligation to the BNED Group, amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any insurance policy (and such claims will be subject to any such amendments, commutations, terminations, buy-outs, extinguishments and modifications); provided , however , that B&N will immediately notify BNED of any termination of any insurance policy.

(g) B&N shall not be liable to BNED for claims, or portions of claims, not reimbursed by insurers under any policy for any reason, including coinsurance provisions, deductibles, quota share deductibles, self-insured retentions, bankruptcy or insolvency of any insurance carrier(s), policy limitations or restrictions (including exhaustion of limits), any coverage disputes, any failure to timely file a claim by any member of the B&N Group or any member of the BNED Group or any defect in such claim or its processing. With respect to insurance claims solely of the BNED Group, BNED shall control the conduct of the resolution of any dispute with the applicable insurer and B&N shall cooperate in good faith in the resolution of any such dispute, and BNED shall reimburse B&N for all out-of-pocket costs and expenses incurred by B&N in connection therewith. In the event that insurable claims of both B&N and BNED (or the members of their respective Groups) exist relating to the same occurrence, the Parties shall jointly defend and waive any conflict of interest necessary to the conduct of the joint defense and shall not settle or compromise any such claim without the consent of the other

(which consent shall not be unreasonably withheld or delayed subject to the terms and conditions of the applicable insurance policy). Nothing in this Section 8.01 shall be construed to limit or otherwise alter in any way the obligations of the Parties, including those created by this Agreement, by operation of Law or otherwise.

(h) The parties shall use reasonable best efforts to cooperate with respect to the various insurance matters contemplated by this Section 8.01.

ARTICLE IX

Ongoing Commercial Matters

SECTION 9.01. B&N Systems and Distribution Facilities. (a) B&N shall provide to BNED, on an “as is, where is” basis (with all faults and without any representations or warranties or performance standards), non-transferable access to B&N’s product procurement systems pursuant to the terms and conditions set forth on Schedule 9.01(a). BNED shall reimburse B&N for all purchases made by BNED through B&N’s product procurement systems and merchandising systems as a result of the access contemplated by this Section 9.01 within 30 days of receipt of an invoice for such purchases from B&N.

(b) B&N shall provide to BNED, on an “as is, where is” basis (with all faults and without any representations or warranties or performance standards), non-transferable access to use B&N’s distribution facilities pursuant to the terms and conditions set forth on Schedule 9.01(b) in connection with the use of B&N’s product procurement systems as contemplated by Section 9.01(a).

(c) B&N shall be permitted to transfer its systems and facilities to be maintained by a third party. B&N shall use commercially reasonable efforts to ensure that such systems and facilities shall continue to be provided to BNED as contemplated by this Section 9.01, but there can be no assurance that any such third party(ies) shall continue to provide BNED access to such systems or facilities, as applicable. BNED shall reimburse B&N on a Pass-Through Cost basis for any costs and expenses associated with B&N’s efforts under this Section 9.01(c).

(d) B&N shall only be obligated to provide the access contemplated by this Section 9.01 and Section 9.03 to the extent consistent with applicable Law. In the event B&N determines that the continued provision of all or any portion of such access is inconsistent with applicable Law, the Parties will discuss in good faith potential modifications or alternative arrangements that would comply with applicable Law.

SECTION 9.02. Gift Cards. B&N shall (i) make available to BNED for sale in the BNED Business B&N-Issued Gift Cards and (ii) issue gift cards skinned as reasonably requested by BNED, and BNED shall honor B&N-Issued Gift Cards, pursuant to the terms and conditions set forth on Schedule 9.02.

SECTION 9.03. Additional Access and Services. (a) In connection with BNED’s conduct of the BNED Business, B&N shall provide to BNED, on a commercially reasonable and “as-is, where-is” basis (with all faults and without any representations or warranties or performance standards), non-transferable access to the information and services set forth on Schedule 9.03 relating to the B&N Format pursuant to the terms and conditions thereon.

(b) For so long as the services contemplated by Section 9.03(a) are provided, BNED shall promptly correct any deviations from the B&N Format upon written notice by B&N of any such deviations; provided , however , in the event that B&N substantially changes the B&N Format as of the date of this Agreement, BNED may choose at its sole discretion to either adhere to the B&N Format existing as of the date of this Agreement or the B&N Format existing as of the date such changes take effect. For the avoidance of doubt, B&N’s reasonable update of the B&N Format shall not constitute a substantial change hereunder, including general maintenance and normal upkeep. In the event that BNED opens any new bookstores or renovates to any material extent any of its existing bookstores, all such new or renovated bookstores shall adhere to the then-current B&N Format.

(c) B&N shall remit to BNED all showroom payments obtained from publishers with respect to purchases made by or on behalf of BNED or its subsidiaries for so long as any showroom agreement remains in effect that includes payments to B&N with respect to purchases made by or on behalf of BNED or its subsidiaries.

SECTION 9.04. Indemnification. Each of B&N and BNED shall indemnify, defend and hold harmless the other Party from any losses, costs, damages or liability incurred by the other Party arising out of or resulting from (i) B&N’s provision of access and services pursuant to Sections 9.01(a) and (b) and 9.03 and (ii) errors and data breaches for transactions involving B&N-Issued Gift Cards pursuant to Section 9.02.

SECTION 9.05. Term and Termination. (a) The term of this Article IX shall be for so long as B&N continues to utilize the products and services identified in this Article IX (the “ B&N Commercial Services ”) in the operation of its own business.

(b) BNED may terminate this Article IX and the license and rights granted to it hereunder by B&N upon written notice to B&N. Such notice shall specify the effective date of such termination.

(c) B&N may terminate this Article IX upon written notice to BNED if BNED has materially breached any provision of this Article IX and has not cured such breach within thirty (30) days after written notice of such breach has been given by B&N to BNED. Additionally, B&N may terminate this Article IX immediately in the event BNED (x) (i) no longer continues to operate as a going concern, (ii) no longer continues to operate in the Field of Use or (iii) changes its name such that it no longer includes “Barnes & Noble” or the abbreviation “B&N”, or otherwise ceases to use the Licensed Marks (as defined in the TLA Agreement) in identifying its business or (y) upon the occurrence of a BNED Fundamental Change (as defined in the TLA) (each event described in this paragraph, a “ Termination Event ”).

(d) Upon termination or expiration of this Article IX, BNED shall use commercially reasonable efforts to wind down and to cease its and its sub-licensees’ use of the B&N Commercial Services as soon as commercially practicable but in no event later than (A) with respect to each of Section 9.05(c)(i), (ii) and (iii), the end of one hundred and eighty (180) days from the date of such termination or expiration and (B) with respect to Section 9.05(c)(iv), the end of thirty (30) days from the date of such termination.

ARTICLE X

Further Assurances and Additional Covenants

SECTION 10.01. Further Assurances. (a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall, subject to Section 5.03, use reasonable best efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate and make effective the transactions contemplated by this Agreement.

(b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party shall cooperate with the other Party, without any further consideration, but at the expense of the requesting Party, (i) to execute and deliver, or use reasonable best efforts to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party, (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument, (iii) to obtain, or cause to be obtained, any Governmental Approvals or other Consents required to effect the Spin-Off and (iv) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and any transfers of Assets or assignments and assumptions of Liabilities hereunder and the other transactions contemplated hereby.

(c) On or prior to the Distribution Date, B&N and BNED, in their respective capacities as direct and indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by BNED or any other Subsidiary of B&N, as the case may be, to effectuate the transactions contemplated by this Agreement.

(d) Prior to the Distribution, if either Party identifies any commercial or other service that is needed to ensure a smooth and orderly transition of its business in connection with the consummation of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Agreement or any Ancillary Agreement, the Parties will cooperate in determining whether there is a mutually acceptable arm’s-length basis on which the other Party will provide such service.

(e) B&N and BNED shall settle the Payables Transactions in accordance with Schedule 1(f). As soon as reasonably possible following the Distribution Date, the Parties agree to determine and settle the final amounts of the Payables Transactions to the extent such amounts have not previously been settled.

ARTICLE XI

Termination

SECTION 11.01. Termination. Subject to Sections 3.02(c)(vii) and 9.05, this Agreement may be terminated by B&N at any time, in its sole discretion, prior to the Distribution.

SECTION 11.02. Effect of Termination. In the event of any termination of this Agreement prior to the Distribution, neither Party (nor any of its directors or officers) shall have any Liability or further obligation to the other Party under this Agreement or the Ancillary Agreements.

ARTICLE XII

Miscellaneous

SECTION 12.01. Counterparts; Entire Agreement; Corporate Power. (a) This Agreement may be executed in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by facsimile or PDF signature and a facsimile or PDF signature shall constitute an original for all purposes.

(b) This Agreement, the Ancillary Agreements and the Appendices, Exhibits and Schedules hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof other than those set forth or referred to herein or therein.

(c) B&N represents on behalf of itself and each other member of the B&N Group, and BNED represents on behalf of itself and each other member of the BNED Group, as follows:

(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform each of this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

(ii) this Agreement and each Ancillary Agreement to which it is a party has been (or, in the case of any Ancillary Agreement, will be on or prior to the Distribution Date) duly executed and delivered by it and constitutes, or will constitute, a valid and binding agreement of it enforceable in accordance with the terms thereof.

SECTION 12.02. Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof.

Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Commercial Division of the Supreme Court of the State of New York, New York County and the United States District Court for the Southern District of New York over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Subsidiaries, Affiliates, successors and assigns under or related to this Agreement or any document executed pursuant to this Agreement or any of the transactions contemplated hereby or thereby.

SECTION 12.03. Assignability. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party. Any purported assignment without such consent shall be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns. No assignment permitted by this Section 12.03 shall release the assigning Party from liability for the full performance of its obligations under this Agreement.

SECTION 12.04. Third-Party Beneficiaries. Except for the indemnification rights under this Agreement of any B&N Indemnitee or BNED Indemnitee in their respective capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.

SECTION 12.05. Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given when (a) delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service or (c) upon the earlier of confirmed receipt or the fifth business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to B&N, to:

Barnes & Noble, Inc.

122 Fifth Avenue

New York, NY 10011

Attn: Vice President, General Counsel & Secretary

Facsimile: (212) 463-5683

If to BNED, to:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attn: Vice President, General Counsel & Secretary

Facsimile: [●]

Either Party may, by notice to the other Party, change the address to which such notices are to be given.

SECTION 12.06. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.

SECTION 12.07. Publicity. Each of B&N and BNED shall consult with the other, and shall, subject to the requirements of Section 7.09, provide the other Party the opportunity to review and comment upon, any press releases or other public statements in connection with the Spin-Off or any of the other transactions contemplated hereby and any filings with any Governmental Authority or national securities exchange with respect thereto, in each case prior to the issuance or filing thereof, as applicable (including the Form S-1, the Parties’ respective Current Reports on Form 8-K to be filed on the Distribution Date, the Parties’ respective Quarterly Reports on Form 10-Q filed with respect to the fiscal quarter during which the Distribution Date occurs, or if such quarter is the fourth fiscal quarter, the Parties’ respective Annual Reports on Form 10-K filed with respect to the fiscal year during which the Distribution Date occurs (each such Quarterly Report on Form 10-Q or Annual Report on Form 10-K, a “ First Post-Distribution Report ”)). Each Party’s obligations pursuant to this Section 12.07 shall terminate on the date on which such Party’s First Post-Distribution Report is filed with the Commission.

SECTION 12.08. Expenses. Except as expressly set forth in this Agreement or in any Ancillary Agreement, all third-party fees, costs and expenses paid or incurred in connection with the Spin-Off will be paid by the Party incurring such fees or expenses, whether or not the Distribution is consummated, or as otherwise agreed by the Parties. Subject to the preceding sentence, B&N shall bear the costs and expenses in connection with the Distribution.

SECTION 12.09. Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

SECTION 12.10. Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the liabilities for the breach of any obligations in this Agreement shall survive the Spin-Off and shall remain in full force and effect.

SECTION 12.11. Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall any single or partial

exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default.

SECTION 12.12. Specific Performance. Subject to Section 5.03 and notwithstanding the procedures set forth in Article X, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the affected Party shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The other Party shall not oppose the granting of such relief on the basis that money damages are an adequate remedy. The Parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived.

SECTION 12.13. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each Party.

SECTION 12.14. Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires. The terms “hereof,” “herein” “and “herewith” and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the Schedules hereto) and not to any particular provision of this Agreement. Article, Section or Schedule references are to the articles, sections and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement or to any Ancillary Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement or the Ancillary Agreement to which such Schedule is attached, as applicable. Any reference herein to this Agreement, unless otherwise stated, shall be construed to refer to this Agreement as amended, supplemented or otherwise modified from time to time, as permitted by Section 12.13. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive.

IN WITNESS WHEREOF, the Parties have caused this Separation and Distribution Agreement to be executed by their duly authorized representatives.


BARNES & NOBLE, INC.,

	by

		Name:
		Title:

BARNES & NOBLE EDUCATION, INC.,

	by

		Name:
		Title:

SCHEDULE 1(a)

Schedule 1(a)

Internal Transactions

The Internal Transactions will take place in the following steps, all of which have occurred or will occur prior to the Distribution in the following order, unless otherwise determined by the Parties:

Step 1: Bank Debt Incurrence

BNED establishes a revolving credit facility with a syndicate of third-party lenders (the “ Bank Debt Incurrence ”).

Step 2: Payable Transactions

BNED completes the Payables Transactions on the terms set forth in Schedule 1(f).

Step 3: Internal Distribution

B&N completes the Internal Distribution.

Step 4: Stock Split

BNED effects a stock split of BNED Common Stock to result in the number of shares needed to be distributed in the Distribution in accordance with the distribution ratio as set forth on the Form S-1(the “ Stock Split ”).

SCHEDULE 1(b)

Schedule 1(b)

BNED Equity Interests

Part 1 - Subsidiaries

NOOK Media Member Two LLC

B&N Education, LLC

Barnes & Noble College Booksellers, LLC

Part 2 - Joint Ventures and Minority Investments

Minority Investments

Flashnotes, Inc.

SCHEDULE 1(c)

Schedule 1(c)

BNED Assets

1.	bncampus.com

2.	bncampusworks.com

3.	bncampusworks.net

4.	bnescholar.com

5.	bnscholar.com

6.	bnscholar.net

7.	bnsmarts.com

8.	bnsmarts.net

SCHEDULE 1(d)

Schedule 1(d)

BNED Liabilities

Lease Agreement between CDV III Riverpark LLC and Nook Digital, LLC (f/k/a barnesandnoble.com llc and successor in interest to Barnes & Noble, Inc.) dated as of 03.28.2012

SCHEDULE 1(e)

Schedule 1(e)

B&N Retained Liabilities

Any and all liabilities arising out of or relating to the following:

Adrea LLC v. Barnes & Noble, Inc., Nook Digital, LLC (formerly known as barnesandnoble.com llc) and B&N Education, LLC (formerly known as Nook Media LLC)

SCHEDULE 1(f)

Schedule 1(f)

Payables Transactions

The following actions constituting the Payables Transactions will take place as and at such times specified below, unless otherwise determined by the Parties:

An intercompany single tax payable will be contributed to the equity of BNED by B&N immediately prior to the Distribution.

All other intercompany payable transactions shall be settled through cash payments to be made prior to the Distribution Date.

SCHEDULE 2.03

Schedule 2.03

Terminating Intercompany Agreements

For the avoidance of doubt, the following agreements shall be terminated upon the Distribution:

Retail Agreement between B&N and B&N Education, LLC (f/k/a NOOK Media LLC) dated as of October 4, 2012

Separation Agreement between B&N and B&N Education, LLC (f/k/a NOOK Media LLC) dated as of October 4, 2012

Transition Services Agreement between B&N and B&N Education, LLC (f/k/a NOOK Media LLC) dated as of October 4, 2012

Tax Sharing Agreement among B&N and certain of its subsidiaries, dated as of October 4, 2012, as it relates to BNED only

Tax Sharing Agreement among B&N Education LLC (f/k/a NOOK Media LLC) and certain of its subsidiaries, dated as of October 4, 2012]

Section 2 of the Assignment and Assumption Agreement between B&N and BNED dated as of April 30, 2015 (the “ Assignment and Assumption Agreement ”), relating to the indemnification by BNED of B&N for any payments made by B&N Group pursuant to the Microsoft Agreement or the Pearson Agreement (each as defined in the Assignment and Assumption Agreement)

SCHEDULE 3.01(a)

Schedule 3.01(a)

Surviving B&N Credit Support Instruments

Guarantee by B&N Education, LLC (f/k/a NOOK Media LLC) of the obligations of Nook Digital, LLC in connection with the lease for 300 Hamilton Avenue, Palo Alto, California 94301.

Guarantee by B&N of the obligations of Barnes & Noble College Booksellers, LLC in connection with the lease for 355-365 Ravendale Drive, Mountain View, California 94043.

SCHEDULE 9.01(a)

Schedule 9.01(a)

Product Procurement Systems and Merchandising Systems


Description of Commercial Matter/Service:	End Date:	Fee:
BookMaster, IMM and SRS: Pursuant to Section 9.01(a) and subject to the following terms and conditions, B&N shall provide BNED access to B&N’s product procurement systems and merchandising systems, including BookMaster, IMM and SRS. B&N shall provide BNED access to B&N’s product master system, report, training documentation, file interfaces, BookMaster store WiFi, Level 2 and 3 Support, new store setup and installation, ID access management and ongoing updates, fixes and patches.	Perpetual unless a Termination Event shall have occurred, in which case the end date shall be the Termination Date.	Annual fee of $100,000 for up to 100 stores; and $ 1,000 per additional store, plus Pass-Through Cost.

Such access is provided to BNED (i) solely for use in the BNED Business, (ii) as such systems are in effect on the date of this Agreement, (iii) to the extent such systems continue to be used and supported by B&N in its sole discretion, (iv) to the extent such access is not prohibited by applicable Law or contractual restrictions on B&N, (v) to the extent all third party licenses or permissions have been obtained, and (vi) in the case of BookMaster, solely in the stores in which such system is used. BNED shall not receive any rights or licenses in such systems or software.

BNED’s Right to Return BNED shall have the right to return merchandise purchased through such systems (and receive credit for such returns) in accordance with the return practices in effect as of the date this Agreement.

Image Service (Book Jacket): B&N shall provide BNED access to B&N’s image service to the extent BNED shall have the right to use the images provided by B&N.	The second anniversary of the date of the Distribution unless a Termination Event	Pass-Through Cost

SCHEDULE 9.01(a)


Description of Commercial Matter/Service:	End Date:	Fee:
	shall have occurred, in which case the end date shall be the Termination Date.

	BNED has the right to extend the term for another year, in which case the end date shall be the third anniversary of the Distribution.
System Upgrades: B&N shall provide BNED the supporting hardware and networking equipment for upgrading the product procurement systems and merchandising systems at the same time that B&N upgrades such systems used in B&N Retail Stores generally. BNED shall upgrade such product procurement systems and merchandising systems as required by B&N so long as it has access to such systems.	Perpetual unless a Termination Event shall have occurred, in which case the end date shall be the Termination Date.	BNED shall bear its proportionate (based on the number of stores) cost of the supporting hardware and networking equipment provided by B&N in connection with the system upgrade.

SCHEDULE 9.01(b)

Schedule 9.01(b)

Distribution Facilities


Description of Service:	End Date:	Fee:
Distribution Facilities: Pursuant to Section 9.01(b) and subject to the following terms and conditions, B&N shall provide BNED access to B&N’s distribution facilities in connection with the use of B&N’s product procurement systems. Such access is provided to BNED (i) solely for use in the BNED Business, (ii) as such systems are in effect on the date of this Agreement and (iii) to the extent such access is not prohibited by applicable Law or contractual restrictions on B&N.	Perpetual unless a Termination Event shall have occurred, in which case the end date shall be the Termination Date.	Per-unit fee of $0.686 for each item shipped from a B&N distribution center plus Pass-Through Cost for any incremental costs associated with such access and services being provided to BNED and any freight costs and expenses other than those included in the per unit fee.

		The per-unit fee shall be subject to annual review by B&N and adjustment following such reviews to reflect B&N’s costs of providing such services.

SCHEDULE 9.02

Schedule 9.02

Gift Cards


Description of Service:	End Date:	Fee:
B&N-Issued Gift Cards: Pursuant to Section 9.02 and subject to the following terms and conditions, B&N shall make available to BNED for sale in the BNED Business B&N-Issued Gift Cards, and BNED shall honor B&N-issued Gift Cards.	Perpetual unless a Termination Event shall have occurred, in which case the end date shall be the Termination Date.	B&N shall charge BNED for its share of the overhead costs of issuing B&N-Issued Gift Cards, determined based on the dollar value of B&N-Issued Gift Cards redeemed by BNED divided by the total dollar value of all B&N-Issued Gift Cards that are redeemed. For the avoidance of doubt, the overhead costs of issuing B&N-Issued Gift Cards shall not include any discounts offered to third-party distributors of B&N-Issued Gift Cards. Without duplication, B&N shall charge BNED for the Pass-Through Costs directly attributable to issuing BNED client branded gift cards.
BNED Client Branded Gift Cards: Pursuant to Section 9.02, B&N shall print and issue B&N- Issued Gift Cards skinned with respect to particular clients and with the client’s permission as reasonably requested by BNED and shall make such gift cards available to BNED for sale in the BNED Business.
Remission of Proceeds: BNED shall remit to B&N, within 15 days after the end of each month, the proceeds from the sale of B&N-Issued Gift Cards in the BNED Business during such month.
Remission of Redemptions: B&N shall remit to BNED, within 15 days after the end of each month, the face-value of all B&N-Issued Gift Cards (including skinned gift cards) redeemed at BNED stores during such month.

SCHEDULE 9.03

Schedule 9.03

Additional Access and Services


Description of Service:	End Date:	Fee:
B&N Format: Pursuant to Section 9.03 and subject to the following terms and conditions, B&N shall provide BNED access to (i) all design schema used in the design and construction of Retail Stores and B&N cafés located within such stores, including new merchandise concepts, store relays and consumables ( e.g., shopping bags, B&N logo cups), (ii) store support and training and development materials for B&N’s product procurement systems as described in Section 9.01(a), and (iii) other marketing and promotional packages used in Retail Stores as set forth below.	Perpetual unless B&N discontinues the operation of Retail Stores, in which chase the end date shall be such date and otherwise if a Termination Event shall have occurred, in which case the end date shall be the Termination Date.	For services provided by B&N employees: Pass-Through Cost. For outside Service Providers: (i) all direct costs to B&N relating to such Service directly attributable to BNED plus (ii) an allocation of all other costs associated with such Service as determined in good faith by B&N.
Marketing: B&N shall provide marketing packages to BNED at the same time as such marketing packages are provided to B&N’s Retail Stores generally. Such marketing packages include retail marketing plans and calendars, monthly sign package, graphic arts, author promotions and prism.
Fixtures and Planograms: B&N shall provide BNED access to store fixtures and planograms used in B&N’s Retail Stores and B&N Cafés located within such stores.
Café Product Mix: B&N shall provide BNED advance notice related to the product mix offered at such B&N Cafés to the extent practicable.

EXHIBIT A

PRIVILEGED & CONFIDENTIAL

ATTORNEY CLIENT COMMUNICATION

ATTORNEY WORK PRODUCT

JOINT DEFENSE MATERIAL

JOINT DEFENSE AND COMMON INTEREST PRIVILEGE AGREEMENT

1. This Joint Defense and Common Interest Privilege Agreement, dated as of [ ] [ ], 2015 (this “ Agreement ”), by and among [List B&N and BNED parties to the relevant litigation] (collectively, the “ Parties ”) and their counsel, will memorialize certain understandings pertaining to the common interest and defense of the Parties hereto in each matter set forth on Schedule A hereto (each, a “ Matter ” and, collectively, the “ Litigation ”).

2. The Parties believe that there is a mutuality of interest in their common defense in the Litigation. In this regard, the Parties wish to continue to pursue their separate but common interests, and avoid any suggestion of waiver of privileged communications.

3. Accordingly, it is the Parties’ intention and understanding that communications among the Parties, joint interviews of prospective witnesses and other sharing of information, whether written or verbal, are confidential and are protected from disclosure to any third party by the clients’ attorney-client privilege, the attorneys’ work product privileges, the joint defense privilege and the common interest privilege. Such communications and/or exchanges of information in connection with the undersigned Parties’ common defense efforts is not intended to waive any attorney-client, work product, joint defense, or common interest privileges otherwise available. The Parties consider such mutual sharing and disclosure of matters of common concern essential to the preparation of an effective defense by the clients with respect to each Matter, and essential to the effective representation by counsel of their clients. These mutual disclosures and exchanges of information, therefore, are protected by the “joint defense privilege” and “common interest privilege” recognized in cases such as In re United Mine Workers of America Employee Benefit Plans Litig ., 159 F.R.D. 307 (D.D.C. 1994).

4. It is also understood and agreed that all memoranda of law, debriefing memoranda, factual summaries, digests, draft pleadings and affidavits, and other written materials which would otherwise be protected from disclosure to third parties on grounds of privilege, and which are or have been exchanged among the undersigned counsel and their respective clients in connection with any of the Matters referenced in Paragraph 1 above, will remain confidential and protected from disclosure to any third party by the attorney-client, a attorney work product, joint defense and common interest privileges.

5. Except for purposes of enforcing this Agreement or otherwise obtaining the benefits intended to be obtained from this Agreement, the fact of this Agreement and its contents shall remain confidential and protected from disclosure to any third party by the attorney-client, attorney work product, joint defense and common interest privileges.

6. None of the documents and other information shared among the Parties and their counsel pursuant to this Agreement shall be disclosed to third parties. It is understood that information and documents obtained by counsel pursuant to this Agreement may be used by

A-1

counsel as a factual predicate to formulate questions of witnesses, including those witnesses who may be called to testify in the Matters or related proceedings. In propounding such questions, however, the protected information or documents may not be specifically described or otherwise disclosed.

7. The Parties understand and agree that all material and information disclosed or shared pursuant to this Agreement shall be used only in connection with the defense of clients involved in the Litigation and shall not be used for any other purpose without the prior express written consent of the Parties that provided the protected material.

8. Nothing in this Agreement shall obligate any of the undersigned attorneys or their respective clients to disclose or share any information or materials that he/she determines should not be disclosed. Nor shall anything in this Agreement prevent any of the undersigned attorneys or their respective clients from imposing additional conditions under which materials or information may be shared or disclosed. Notwithstanding the foregoing, nothing in this Agreement is intended to impair or limit any other agreement between or among any of the Parties with respect to access to books and records.

9. The Parties acknowledge that disclosure of any protected material in violation of the Agreement will cause irreparable harm to the undersigned and their respective clients for which there is no adequate remedy at law. Each of the Parties acknowledges that immediate injunctive relief is an appropriate and necessary remedy for any violation or threatened violation of the Agreement.

10. If any person or entity that is not a party to this Agreement requests or demands, by subpoena or otherwise, any protected material that has been provided to one of the Parties by another Party, the Party that has received the request shall immediately notify the supplying Party. Each Party will take all reasonable steps necessary to preserve all applicable rights and privileges with respect to such protected material and shall cooperate fully with the other Parties in any proceedings relating to the disclosure of such protected materials. This Agreement shall continue in effect notwithstanding any conclusion or resolution as to any Party in any of the Matters. The Parties understand and agree that they will continue to be bound by this Agreement following any such conclusion or resolution.

11. Any waiver in any particular instance of the rights and limitations contained herein shall not be deemed, and is not intended to be, a general waiver of any rights or limitations contained herein and shall not operate as a waiver beyond the particular instance.

12. The Parties and their counsel agree to the following procedures with respect to the conduct of their defense in each of the Matters:

Unless one or more of the Parties decides there is a conflict between the Parties in the conduct of the defense of any of the Matters, the Parties shall be represented by the same law firms, at [ ] expense, for each of the Matters. [ ] shall retain the right to select such additional counsel for the Parties as they agree.

A-2

[ ] and counsel for it shall control the conduct of each Matter, including, without limitation, retaining day-to-day responsibilities for the conduct of each Matter; provided , however , that [ ] and its counsel shall report periodically to [ ] regarding the conduct and progress of each such Matter.

Each of the Parties shall reasonably cooperate with each other in the defense of each Matter and shall be obligated to provide such litigation support as is deemed necessary by its counsel, including, but not limited to, identification and production of their documents (or access thereto) and identification and production of witnesses/employees (or access thereto).

The Parties shall take all steps necessary to ensure that they coordinate with the Government, prior to releasing any responses to discovery, the filing of any documents with the Court or taking any other substantive action in each Matter.

13. The Parties understand and agree that modifications of this Agreement can be made only if such modifications are in writing and signed by counsel for all Parties.

14. By signing this Agreement, each of the undersigned attorneys certifies that he/she has explained the contents of the Agreement to his/her respective client(s) and that each agrees to abide by the understandings reflected herein.

15. Counsel may become a party to this Agreement on his/her own behalf and on behalf of his/her client by executing the original of this instrument, or a counterpart thereof. The execution of counterparts shall have the same effect as if all Parties had signed the same instrument.

16. This Agreement shall inure to the benefit of, and be binding upon counsel and their party and all successors-in-interest, assigns, and affiliates of each party.

17. All Parties will exercise their utmost good faith and diligence, and cooperate with each other in carrying out the provisions of this Agreement.

18. This Agreement and all disputes or controversies arising out of or related to this Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the laws of any other jurisdiction that might be applied because of conflicts of laws principles of the State of New York.

19. The provisions of this agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.

20. Each signatory hereto represents and warrants that he, she or it has taken all steps necessary to obtain, and has in fact obtained, full authority to bind the party to the terms of this Agreement.

A-3

Each of the Parties whose signature appears below acknowledges that it has reviewed this Agreement and agrees to the terms embodied herein.


Date: , 2015				[ ]

				By:
				Name:
				Title:

Date: , 2015				[ ]

				By:
				Name:
				Title:

Date: , 2015				[ ]

				By:
				Name:
				Title:

SCHEDULE A

SCHEDULE A

LITIGATION


No.	Matter Name	Matter No.	Open Date	Case No.	Matter Type

Exhibit 3.1

FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

BARNES & NOBLE EDUCATION, INC.

BARNES & NOBLE EDUCATION, INC., a corporation organized and existing under the laws of the State of Delaware, DOES HEREBY CERTIFY AS FOLLOWS:

1. The name of the corporation is BARNES & NOBLE EDUCATION, INC. The original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on July 5, 2012 (as amended and in effect immediately prior to the adoption and effectiveness hereof, the “ Original Certificate of Incorporation ”), and the name under which the corporation was originally incorporated is NOOK Media Inc.

2. This Amended and Restated Certificate of Incorporation (the “ Certificate ”) has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware and shall be effective as of 12:01 a.m. Eastern Daylight Time on [•], 2015.

3. The Original Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:

ARTICLE I

The name of the corporation (hereinafter called the “ Corporation ”) is Barnes & Noble Education, Inc.

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 1675 South State St. Ste B, City of Dover, County of Kent, Delaware 19901. The name of the Corporation’s registered agent at such address is Capitol Services, Inc.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

SECTION 1. The total number of shares of all classes of stock which the Corporation shall have authority to issue is [•] shares, consisting of (1) [•] shares of Preferred Stock, par value $0.01 per share (“ Preferred Stock ”) and (2) [•] shares of Common Stock, par value $0.01 per share (the “ Common Stock ”). The number of authorized shares of either the Preferred Stock or the Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of the State of Delaware (or any successor provision thereto), and no vote of the holders of either the Preferred Stock or the Common Stock voting separately as a class shall be required therefor.

SECTION 2. 100,005 shares of the authorized and unissued Preferred Stock are hereby designated Series A Preferred Stock (“ Series A Preferred Stock ”). Each share of Series A Preferred Stock has the rights, preferences, powers, privileges and restrictions, qualifications and limitations, as specified below.

(a)

Dividends.

(i) Cash Dividends . Series A Holders shall be entitled to receive, if, as and when declared by the Board, or any duly authorized committee thereof, but only out of assets legally available therefor, cumulative cash dividends payable quarterly in arrears on the last day of each of the Corporation’s fiscal quarters in each year, commencing with the Corporation’s current fiscal quarter; provided , however , if any such day is not a Business Day, then payment of any dividend otherwise payable on that date will be made on the next succeeding day that is a Business Day, without any interest or other payment in respect of such delay (each such day on which dividends are payable, a “ Dividend Payment Date ”). The period from and including any Dividend Payment Date (or, prior to the first Dividend Payment Date, from and including the Issue Date) to, but excluding, the next Dividend Payment Date is a “ Dividend Period. ” Dividends on each share of Series A Preferred Stock shall accrue daily at a rate per annum equal to the Dividend Rate of the Liquidation Preference Amount per share of Series A Preferred Stock. The record date for payment of quarterly dividends on the Series A Preferred Stock will be the 15th day of the calendar month which contains the relevant Dividend Payment Date or the 15th day of the prior month if the Dividend Payment Date is on or before the 15th day of a calendar month (each, a “ Dividend Record Date ”), and the record date for payment of dividends on the Series A Preferred Stock that were not declared and paid on the relevant Dividend Payment Date shall be a date that is established by the Board and which is not more than 45 days and not fewer then 10 days prior to the date on which such dividends are paid (each, an “ Accumulated Dividend Record Date ”), in each case whether or not such day is a Business Day. Notwithstanding anything to the contrary herein, (1) in the event that the Corporation does not redeem all outstanding shares of Series A Preferred Stock in accordance with Section 2(f)(ii) as a result of insufficient funds legally available therefor, then commencing on August 18, 2021, the Dividend Rate shall be increased to a rate equal to the Dividend Rate in effect as of the close of business on August 18, 2021 plus 2% per annum and an additional 2% per annum shall be added to such increased Dividend Rate on each anniversary thereafter on which any shares of Series A Preferred Stock remains outstanding and (2) in the event that the right of the Series A Holders to exercise the right to vote their shares of Series A Preferred Stock on an “as converted” basis or the shares of Common Stock issued upon conversion of the Series A Preferred Stock is enjoined, restricted or limited in any manner (other than pursuant to any stockholder rights plan) at any time following the Issue Date, then commencing on the Issue Date, the Dividend Rate shall be increased to a rate equal to the Dividend Rate in effect immediately prior to such date plus 2% per annum, until such date as all of such voting and consent rights are no longer enjoined, restricted or limited in any manner. The amount of dividends payable will be computed on the basis of a 365-day year.

(ii) Payment; Arrearages . Dividends shall be paid in cash when, as and if declared by the Board. If the Corporation fails to declare and pay a full dividend on the Series A Preferred Stock on a Dividend Payment Date, then dividends otherwise payable on such Dividend Payment Date on the Series A Preferred Stock shall continue to accrue and cumulate at a rate per annum of 9 ³ ⁄ ₄ % (or, if greater, a rate equal to the Dividend Rate in effect immediately prior to such Dividend Payment Date plus 2% per annum) of the Liquidation Preference Amount per share, payable quarterly on each Dividend Payment Date, in arrears, for the period from and including the first Dividend Payment Date (or the Issue Date, as applicable) upon which the Corporation fails to pay a full dividend on the Series A Preferred Stock through but not including the day upon which the Corporation pays in accordance with Section 2(a)(i) all dividends on the Series A Preferred Stock that are then in arrears, including any amounts of accrued and unpaid dividends that have been added to the Liquidation Preference Amount pursuant to clause (ii) of the

definition thereof (for the avoidance of doubt, dividends following payment of such arrearages on the Series A Preferred Stock will accrue at a rate per annum of 7 ³ ⁄ ₄ % (or, if greater, a rate equal to the then-current Dividend Rate less 2% per annum) of the Liquidation Preference Amount beginning on such day, subject to adjustment). Dividends shall accumulate from the most recent date through which dividends shall have been paid, or, if no dividends have been paid, from the Issue Date, whether or not in any Dividend Period there have been funds of the Corporation legally available for the payment of such dividends.

(iii) Priority of Dividends . So long as any share of Series A Preferred Stock remains outstanding, unless full dividends on all outstanding shares of the Series A Preferred Stock have been declared and paid, including any accrued and unpaid dividends on Series A Preferred Stock that are then in arrears, or declared and a sum sufficient for the payment of those dividends has been set aside for the benefit of the Series A Holders thereof on the applicable Dividend Record Date, the Corporation will not, and will cause its Subsidiaries not to, declare or pay any dividend on, or make any distributions relating to, Junior Stock or Parity Stock, or redeem, purchase, acquire (either directly or through any Subsidiary) or make a liquidation payment relating to, any Junior Stock or Parity Stock, or make any guarantee payment with respect thereto, other than:

(1) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants;

(2) purchases of shares of Junior Stock pursuant to a contractually binding requirement to buy stock, including under a contractually binding stock repurchase plan, provided that such contract or plan was entered into prior to any default by the Corporation of its obligations to pay dividends on the Series A Preferred Stock;

(3) as a result of an exchange or conversion of any class or series of Junior Stock, or the securities of another company, for any other class or series of Junior Stock;

(4) the purchase of fractional interests in shares of Junior Stock pursuant to the conversion or exchange provisions of such Junior Stock or the security being converted or exchanged;

(5) the payment of any dividends in respect of Junior Stock where the dividend is in the form of the same stock as that on which the dividend is being paid; or

(6) distributions of Junior Stock or rights to purchase Junior Stock.

Except as provided below, for so long as any share of Series A Preferred Stock remains outstanding, if dividends are not declared and paid in full upon the shares of Series A Preferred Stock and any Parity Stock with the same dividend payment date or with a dividend payment date during a Dividend Period, all dividends declared upon shares of Series A Preferred Stock and any such Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that all accrued and unpaid dividends as of the end of the applicable Dividend Period per share of Series A Preferred Stock and any other Parity Stock (including, in the case of any such Parity Stock that bears cumulative dividends, all accrued and unpaid dividends) bear to each other.

Subject to the provisions of this Section 2(a), dividends may be declared and paid on any Junior Stock and Parity Stock from time to time out of any assets legally available for such payment, and holders of shares of Series A Preferred Stock (x) will not be entitled to participate in those dividends, other than, at the election of the Series A Holder, through the receipt of Mirror Preferred Stock and Exchange Preferred Stock and (y) as and to the extent provided in Section 2(h) of this Article IV, will be entitled to an adjustment to the Conversion Rate as a result of such dividends.

(iv) Extraordinary Dividend . So long as any shares of Series A Preferred Stock are issued and outstanding, in the event that the Corporation declares and pays a dividend that is an Extraordinary Dividend, then each share of Series A Preferred Stock shall be entitled to participate in such dividend with the holders of Common Stock and receive an amount per share of Series A Preferred Stock equal to (A) the Per Share Amount on the Record Date for such dividend, multiplied by (B) the amount per share distributed or to be distributed in such Extraordinary Dividend in respect of a share of Common Stock. The Corporation shall not declare or pay any Extraordinary Dividend on or with respect to Junior Stock (other than the Common Stock). It shall be a condition to the declaration and payment of an Extraordinary Dividend on the Common Stock that the corresponding Extraordinary Dividend be declared and paid concurrently on the Series A Preferred Stock.

(v) Conversion Following a Record Date . If the Conversion Date for any shares of Series A Preferred Stock is prior to the close of business on a Dividend Record Date or an Accumulated Dividend Record Date, the Series A Holder of such shares will not be entitled to any dividend in respect of such Dividend Record Date or Accumulated Dividend Record Date, as applicable, other than through the inclusion in the Liquidation Preference Amount of the accrued and unpaid dividends through the Conversion Date as contemplated by Section 2(b)(i) below. If the Conversion Date for any shares of Series A Preferred Stock is after the close of business on a Dividend Record Date or an Accumulated Dividend Record Date but prior to the corresponding Dividend Payment Date, the Series A Holder of such shares as of such Dividend Record Date or Accumulated Dividend Record Date, as applicable, shall be entitled to receive such dividend, notwithstanding the conversion of such shares prior to the Dividend Payment Date.

(b)

Liquidation Rights.

(i) Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, Series A Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Corporation may be made to or set aside for the holders of any Junior Stock, and subject to the rights of the holders of any Senior Stock or Parity Stock upon liquidation and the rights of the Corporation’s creditors, to receive in full a liquidating distribution in the amount per share of Series A Preferred Stock equal to the per share liquidation preference of (i) the Original Liquidation Preference, plus (ii) all accrued but unpaid dividends thereon that were not paid on the relevant Dividend Payment Date and remain unpaid, together with any Extraordinary Dividends to which a share of Series A Preferred Stock is entitled under Section 2(a)(iv) and for which payment has not been made, in each case, as of the date of the liquidation, conversion, exchange or redemption, as applicable, plus (iii) without duplication of any amount included in the foregoing clause (ii), all accrued but unpaid dividends thereon since the immediately preceding Dividend Payment Date (or with regard to the first Dividend Payment Date, the Issue Date) as of the date of liquidation, conversion, exchange or redemption, as applicable, whether or not declared, out of assets of the Corporation legally available therefor (the sum of clauses (i), (ii) and (iii), the “ Liquidation Preference Amount ”); provided , however , that the calculation of Liquidation Preference Amount shall give effect to the adjustments, if any, required by Section 2(h)(iii)(3) of

this Article IV. Series A Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation other than what is expressly provided for in this Section 2(b).

(ii) Partial Payment. If the assets of the Corporation are not sufficient to pay in full the aggregate liquidating distributions required to be paid pursuant to Section 2(a) to all Series A Holders and all holders of any Parity Stock having pari passu rights as to liquidation, the amounts distributed to the Series A Holders and to the holders of all such Parity Stock shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled.

(iii) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 2(b), the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Corporation shall not be deemed a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, nor shall the merger, consolidation, statutory exchange or any other business combination transaction of the Corporation into or with any other Person or the merger, consolidation, statutory exchange or any other business combination transaction of any other Person into or with the Corporation be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(c)

Right of the Series A Holders to Convert.

(i) Right to Consent . Each Series A Holder shall have the right, at his or her option, to convert each share of Series A Preferred Stock owned by such Series A Holder at any time into the number of shares of Common Stock (the “ Per Share Amount ”) equal to the product of (x) a fraction, the numerator of which is the Liquidation Preference Amount and the denominator of which is the Base Amount, multiplied by (y) the Conversion Rate in effect at such time (subject to the conversion procedures, and with the effect, set forth in Section 2(d)), plus cash in lieu of fractional shares as set out in Section 2(h)(1). The right of conversion may be exercised as to all or any portion of such Series A Holder’s Series A Preferred Stock from time to time.

(ii) Reservation of Shares . The Corporation shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of the Series A Preferred Stock, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series A Preferred Stock then outstanding. Any shares of Common Stock issued upon conversion of Series A Preferred Stock shall be (i) duly authorized, validly issued and fully paid and nonassessable, (ii) shall rank pari passu with the other shares of Common Stock outstanding from time to time and (iii) shall be approved for listing on the New York Stock Exchange if shares of Common Stock generally are so listed (or any other principal national securities exchange on which the Common Stock is listed or admitted to trading).

(d)

Conversion Procedures and Effect of Conversions.

(i) Conversion Procedure . A Series A Holder must do each of the following in order to convert shares of Series A Preferred Stock pursuant to this Section 2(d)(i):

(1) complete and manually sign the conversion notice provided by the Conversion Agent, and deliver such notice to the Conversion Agent;

(2) deliver to the Conversion Agent the certificate or certificates representing the shares of Series A Preferred Stock to be converted;

(3) if required, furnish appropriate endorsements and transfer documents; and

(4) if required, pay any stock transfer, documentary, stamp or similar taxes not payable by the Corporation pursuant to Section 2(o).

Clauses (2), (3) and (4) shall be conditions to the issuance of shares of Common Stock to the Series A Holders in the event of a Forced Conversion at the option of the Corporation pursuant to Section 2(g).

The “ Conversion Date ” means (i) the date on which a Series A Holder complies with the procedures in this Section 2(d)(i) or (ii) the date or time specified by the Corporation for a Forced Conversion pursuant to Section 2(g), in each case, with regard to shares of Series A Preferred Stock subject to such conversion.

(ii) Effect of Conversion. Effective immediately prior to the close of business on the Conversion Date applicable to any shares of Series A Preferred Stock, dividends shall no longer accrue or be declared on any such shares of Series A Preferred Stock and such shares of Series A Preferred Stock shall cease to be outstanding.

(iii) Record Holder of Underlying Securities as of Conversion Date. The Person or Persons entitled to receive the Common Stock and, to the extent applicable, cash, securities or other property issuable upon conversion of Series A Preferred Stock on a Conversion Date shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or cash, securities or other property as of the close of business on such Conversion Date. As promptly as practicable on or after the Conversion Date and compliance by the applicable Holder with the relevant conversion procedures contained in Section 2(d)(i) (and in any event no later than three Trading Days thereafter), the Corporation shall issue the number of whole shares of Common Stock issuable upon conversion (and deliver payment of cash in lieu of fractional shares, together with any securities or other property issuable thereon). Such delivery of shares of Common Stock, securities or other property shall be made by book-entry. In the event that a Series A Holder shall not by written notice designate the name in which shares of Common Stock and, to the extent applicable, cash (including payments of cash in lieu of fractional shares), securities or other property to be delivered upon conversion of shares of Series A Preferred Stock should be registered or paid, or the manner in which such shares, cash, securities or other property should be delivered, the Corporation shall be entitled to register and deliver such shares, securities or other property, and make such payment, in the name of the Series A Holder and in the manner shown on the records of the Corporation.

(iv) No Adjustment. Except pursuant to Section 2(h), no adjustment to shares of Series A Preferred Stock being converted on a Conversion Date or to the shares of Common Stock deliverable to the Series A Holders upon the conversion thereof shall be made in respect of dividends payable to holders of the Common Stock as of any date prior to the close of business on such Conversion Date.

(v) Status of Converted or Reacquired Shares. Shares of Series A Preferred Stock converted in accordance with this Section 2 of Article IV, or otherwise acquired by the Corporation in any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement and any filing required by the General Corporation Law of the State of Delaware become authorized but unissued shares of Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board pursuant to this Article IV.

(e)

Change of Control Sale.

(i) Change of Control . In the event of a Change of Control, each Series A Holder of outstanding shares of Series A Preferred Stock shall have the option, during the period beginning on the effective date of the Change of Control (the “ Change of Control Effective Date ”) and ending on the date that is 20 Business Days after the Change of Control Effective Date, to require the Corporation to purchase, out of funds legally available therefor, any or all of its shares of Series A Preferred Stock at a purchase price per share, payable in cash, equal to 101% of the Liquidation Preference Amount (a “ Change of Control Sale ”).

(ii) Initial Change of Control Notice. On or before the 20th Business Day prior to the date on which the Corporation anticipates consummating the Change of Control (or, if later, promptly after the Corporation discovers that the Change of Control will occur), a written notice shall be sent by or on behalf of the Corporation, by overnight courier to the Series A Holders as they appear in the records of the Corporation. Such notice shall contain:

(1) the date on which the Change of Control is anticipated to be effected (or, if applicable, the date on which a Schedule TO or other schedule, form or report disclosing a Change of Control was filed); and

(2) the date, which shall be 20 Business Days after the anticipated Change of Control Effective Date, by which the Change of Control Sale option must be exercised.

(iii) Final Change of Control Notice. On the Change of Control Effective Date, a final written notice shall be sent by or on behalf of the Corporation, by overnight courier to the Series A Holders as they appear in the records of the Corporation. Such notice shall contain:

(1) the date, which shall be no less than 20 Business Days after the Change of Control Effective Date, by which the Change of Control Sale option must be exercised;

(2) the amount of cash payable per share of Series A Preferred Stock and the purchase date for such shares, which shall be no less than 10 and no greater than 20 Business Days from the date by which the Change of Control Sale option must be exercised; and

(3) the instructions a Series A Holder must follow to exercise its Change of Control Sale option in connection with such Change of Control.

(iv) Change of Control Sale Procedure. To exercise a Change of Control Sale option, a Series A Holder must, no later than 5:00 p.m., New York City time, on the date by which such option must be exercised, surrender to the Conversion Agent the shares of Series A Preferred Stock to be sold and indicate that it is exercising its Change of Control Sale option, as applicable.

(v) Delivery upon Change of Control Sale. Upon a Change of Control Sale, the Corporation shall deliver or cause to be delivered to the Series A Holder by mail or wire transfer the purchase price payable upon the purchase by the Corporation of such Series A Holder’s shares of Series A Preferred Stock.

(vi) Unsold Shares Remain Outstanding. If a Series A Holder does not elect to exercise the Change of Control Sale option pursuant to this Section 2(e) with respect to all of its shares of Series A Preferred Stock, the shares of Series A Preferred Stock held by it and not surrendered for settlement will remain outstanding until otherwise subsequently converted, redeemed, reclassified or canceled.

(vii) Partial Exercise of Change of Control Sale. In the event that a Change of Control Sale is effected with respect to shares of Series A Preferred Stock representing less than all the shares of Series A Preferred Stock held by a Series A Holder, upon such Change of Control Sale the Corporation shall execute and the Conversion Agent shall, unless otherwise instructed in writing, countersign and deliver to such Series A Holder, at the expense of the Corporation, a certificate evidencing the shares of Series A Preferred Stock held by the Series A Holder as to which a Change of Control Sale was not effected.

(f)

Redemption.

(i) Optional Redemption . The Series A Preferred Stock may be redeemed, in whole, but not in part, at any time after August 17, 2016, at the option of the Corporation out of funds legally available therefor (but subject to the right of the Series A Holders to convert the shares of Series A Preferred Stock into shares of Common Stock prior to the Optional Redemption Date set forth in the Notice of Redemption pursuant to Section 2(f)(iii)) at a redemption price per share, payable in cash, equal to the Liquidation Preference Amount.

(ii) Mandatory Redemption. On August 18, 2021, the Corporation shall redeem all outstanding shares of Series A Preferred Stock out of funds legally available therefor at a redemption price per share, payable in cash, equal to the Liquidation Preference Amount. If there is not a sufficient amount of funds legally available to redeem all outstanding shares of Series A Preferred Stock, the Corporation shall, to the extent permitted by applicable law, take action to reduce its capital or otherwise increase its aggregate capital surplus in order to make funds legally available for such redemption. To the extent thereafter that the Corporation has insufficient funds legally available to redeem all outstanding shares of Series A Preferred Stock, the Corporation shall use any funds legally available therefor to redeem the Series A Preferred Stock on a pro rata basis with respect to each Series A Holder and shall redeem the remaining portion of the Series A Preferred Stock as promptly as reasonably practicable after the Corporation has sufficient funds legally available to effect such redemption. For the avoidance of doubt, any shares of Series A Preferred Stock that remain outstanding after August 17, 2021 shall continue to accrue dividends in accordance with the provisions in Section 2(a) for so long as such shares remain outstanding, and the Series A Holders shall retain the right to convert their shares of Series A Preferred Stock into Common Stock pursuant to the terms of this Section 2 of Article IV; provided , however , that the Corporation shall no longer have the right to force the conversion of the Series A Preferred Stock into shares of Common Stock pursuant to Section 2(g).

(iii) Redemption Procedure. In order to exercise the redemption right described in this Section 2(f), the Corporation shall provide notice of such redemption to each Series A Holder (such notice, a “ Notice of Redemption ”). In the case of a redemption pursuant to Section 2(f)(i), the date and time of redemption selected by the Corporation (the “ Optional Redemption Date ”), shall be no less than 30 days and no greater than 60 days after the date on which the Corporation provides such Notice of Redemption. In addition to any information required by applicable law or regulation, the Notice of Redemption shall state, as appropriate:

(1) in the case of a redemption pursuant to Section 2(f)(i), the Optional Redemption Date;

(2) the redemption price; and

(3) the instructions a Series A Holder must follow with respect to the redemption, including the method for surrendering the certificates for the shares of Series A Preferred Stock to be redeemed for payment of the redemption price.

(iv) Effectiveness of Redemption. If the Notice of Redemption has been duly given and if on or before the redemption date all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the Series A Holders, with a bank or trust Corporation doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share of Series A Preferred Stock so called for redemption has not been surrendered, on and after the redemption date dividends shall cease to accrue on all shares of Series A Preferred Stock so called for redemption, all shares of Series A Preferred Stock so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares of Series A Preferred Stock shall forthwith on such redemption date cease and terminate, except only the right of the Series A Holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the Series A Holders of the shares of Series A Preferred Stock so called for redemption shall look only to the Corporation for payment of the redemption price of such shares of Series A Preferred Stock.

(g)

Forced Conversion at the Option of the Corporation.

(i) Forced Conversion . The Corporation shall have the right, at its option, to cause each outstanding share of the Series A Preferred Stock to be converted into the number of shares of Common Stock equal to the Per Share Amount (plus cash in lieu of fractional shares as set forth in Section 2(h)(1)) if, for 20 consecutive Trading Days (including the last Trading Day of such period) ending on the Trading Day preceding the date the Corporation delivers a Notice of Forced Conversion, the VWAP of the Common Stock on each of such 20 consecutive Trading Days exceeds 150% of the Conversion Price of the Series A Preferred Stock (a “ Forced Conversion ”).

(ii) Notice of Forced Conversion. In order to effect a Forced Conversion, the Corporation shall provide notice of such conversion to each Series A Holder (such notice, a “ Notice of Forced Conversion ”). The Conversion Date for such Forced Conversion shall be a date selected by the Corporation and shall be no less than 10 Business Days and no greater than 20 Business Days after the date on which the Corporation provides such Notice of Forced Conversion. In addition to any information required by applicable law or regulation, the Notice of Forced Conversion shall state, as appropriate:

(1) the Conversion Date for the Forced Conversion; and

(2) the Conversion Rate as in effect on the date of the Notice of Forced Conversion (subject to adjustment as set forth herein) and the number of shares of Common Stock to be issued to such Series A Holder upon conversion of each share of Series A Preferred Stock held by such Series A Holder.

(h)

Anti-Dilution Adjustments.

(i) Adjustments. The Conversion Rate will be subject to adjustment, without duplication, under the following circumstances:

(1) the issuance of Common Stock as a dividend or distribution to all or substantially all holders of Common Stock, or a subdivision or combination of Common Stock or a reclassification of Common Stock into a greater or lesser number of shares of Common Stock, in which event the Conversion Rate will be adjusted based on the following formula:



CR1 =		CR0 x (OS1 / OS0)

CR0 =		the Conversion Rate in effect immediately prior to the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification

CR1 =		the new Conversion Rate in effect immediately after the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification

OS0 =		the number of shares of Common Stock outstanding immediately prior to the close of business on (i) the Record Date for such dividend or distribution or (ii) the effective date of such subdivision, combination or reclassification

OS1 =		the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, the completion of such event (including, for the avoidance of doubt, a number of shares of Common Stock equal to OS0 in the event of a dividend or distribution that does not involve the surrender or exchange of shares of Common Stock).

Any adjustment made pursuant to this clause (1) shall be effective immediately prior to the open of business on the Trading Day immediately following the Record Date, in the case of a dividend or distribution, or the effective date in the case of a subdivision, combination or reclassification. If any such event is declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such event shall not occur, to the Conversion Rate that would then be in effect if such event had not been declared.

(2) the dividend, distribution or other issuance to all or substantially all holders of Common Stock of rights (other than a distribution of rights issued pursuant to a stockholders rights plan, to the extent such rights are attached to shares of Common Stock (in which event the provisions of Section 2(h)(i)(5) shall apply)), options or warrants entitling them to subscribe for or purchase shares of Common Stock for a period expiring 60 days or less from the date of issuance thereof, at less than the Current Market Price as of the Record Date for such issuance, in which event the Conversion Rate will be increased based on the following formula:



CR1 =		CR0 x [(OS0 + X) / (OS0 + Y)]

CR0 =		the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend, distribution or issuance

CR1 =		the new Conversion Rate in effect immediately following the close of business on the Record Date for such dividend, distribution or issuance

OS0 =		the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend, distribution or issuance

X =		the total number of shares of Common Stock issuable pursuant to such rights, options or warrants

Y =		the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the Current Market Price as of the Record Date for such dividend, distribution or issuance

For purposes of this clause (2), in determining whether any rights, options or warrants entitle the holders to purchase the Common Stock at less than the Current Market Price as of the Record Date for such dividend, distribution or issuance, there shall be taken into account any consideration the Corporation receives for such rights, options or warrants, and any amount payable on exercise thereof, with the value of such consideration, if other than cash, to be the Fair Market Value thereof.

Any adjustment made pursuant to this clause (2) shall become effective immediately prior to the open of business on the Trading Day immediately following the Record Date for such dividend, distribution or issuance. In the event that such rights, options or warrants are not so issued, the Conversion Rate shall be readjusted, effective as of the date the Board publicly announces its decision not to issue such rights, options or warrants, to the Conversion Rate that would then be in effect if such dividend, distribution or issuance had not been declared. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights, options or warrants upon the exercise of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the dividend, distribution or issuance of such rights, options or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered.

(3) the Corporation or one or more of its subsidiaries make purchases of Common Stock pursuant to a tender offer or exchange offer (other than an exchange offer that constitutes a Distribution Transaction subject to Section 2(h)(i)(4) or 2(h)(iii)(3)) by the Corporation or a subsidiary of the Corporation for all or any portion of the Common Stock to the extent that the cash and value of any other consideration included in the payment per share of Common Stock validly tendered or exchanged exceeds the Closing Price of the Common Stock on the Trading Day prior to the last day (the “ Expiration Date ”) on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), in which event the Conversion Rate will be increased based on the following formula:



CR1 =		CR0 x [(FMV + (SP1 x OS1)] / (SP1 x OS0)

CR0 =		the Conversion Rate in effect immediately prior to the close of business on the Expiration Date

CR1 =		the new Conversion Rate in effect immediately after the close of business on the Expiration Date

FMV =		the Fair Market Value, on the Expiration Date, of the aggregate value of all cash and any other consideration paid or payable for shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the “ Purchased Shares ”)

OS1 =		the number of shares of Common Stock outstanding as of the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the “ Expiration Time ”), excluding any Purchased Shares

OS0 =		the number of shares of Common Stock outstanding immediately before the Expiration Time, including any Purchased Shares

SP1 =		the arithmetic average of the VWAP for each of the 10 consecutive full Trading Days ending on the Trading Day immediately succeeding the Expiration Date

Any adjustment made pursuant to this clause (3) shall become effective immediately prior to the open of business on the Trading Day immediately following the Expiration Date. In the event that the Corporation or any of its subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer or exchange offer but is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made.

(4) the Corporation shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock (subject to an exception for cash in lieu of fractional shares) shares of any class of Capital Stock (other than Common Stock as covered by Section 2(h)(i)(1)), evidences of its indebtedness, assets, other property or securities or rights, options or warrants to acquire Capital Stock or other securities, but excluding (A) dividends or distributions referred to in Section 2(h)(i)(1) hereof, (B) rights, options or warrants referred to in Section 2(h)(i)(2) hereof or distributed in connection with a stockholder rights plan (in which event the provisions of Section Section 2(h)(i)(5) to the

extent applicable shall apply), (C) dividends or distributions paid exclusively in cash (which, to the extent applicable, are required to be paid to the Series A Holders pursuant to Section 2(a)), or (D) Distribution Transactions as to which the provision set forth below in this Section 2(h)(i)(4) shall apply or as to which the Holder makes an election pursuant to Section 2(h)(iii)(3)to receive Mirror Preferred Stock and Exchange Preferred Stock (any of such shares of Capital Stock, indebtedness, assets, property or rights, options or warrants to acquire Common Stock or other securities, hereinafter in this Section 2(h)(i)(4) called the “ Distributed Property ”), then, in each such case the Conversion Rate shall be adjusted based on the following formula:



CR1 =		CR0 x [SP0 / (SP0 - FMV)]

CR0 =		the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution

CR1 =		the new Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution

SP0 =		the Current Market Price as of the Record Date for such dividend or distribution

FMV =		the Fair Market Value of the portion of Distributed Property distributed with respect to each outstanding share of Common Stock on the Record Date for such dividend or distribution

With respect to an adjustment pursuant to this Section 2(h)(1)(4) in connection with a Distribution Transaction, the Conversion Rate in effect immediately prior to the effective date of the Distribution Transaction shall be adjusted based on the following formula:



CR1 =		CR0 x [(FMV + MP0) / MP0]

CR0 =		(x) the Exchange Ratio, multiplied by (y) the Conversion Rate in effect immediately prior to the close of business on the effective date of the Distribution Transaction

CR1 =		the new Conversion Rate in effect immediately after the close of business on the effective date of the Distribution Transaction

FMV =		(x) the Distribution Ratio, multiplied by (y) the arithmetic average of the volume-weighted average prices for a share of the capital stock or similar equity interest distributed to holders of Common Stock on the principal U.S. securities exchange on which such capital stock or equity interest trades, as reported by Bloomberg, L.P. (or, if Bloomberg ceases to publish such price, any successor service reasonably chosen by the Corporation) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of such capital stock or equity interest on such Trading Day determined, using a volume-weighted average method, by a nationally recognized investment banking firm (unaffiliated with the Corporation) retained for such purpose by the Corporation), for each of the five consecutive full Trading Days commencing with, and including, the effective date of the Distribution Transaction (such arithmetic average, the “ Distributed Company VWAP ”)

MP0 =		(x) the Exchange Ratio, multiplied by (y) the arithmetic average of the VWAP for each of the five consecutive full Trading Days commencing with, and including, the effective date of the Distribution Transaction (such arithmetic average, the “ Distributing Company VWAP ”)

(5) If the Corporation has a stockholder rights plan in effect with respect to the Common Stock on the Conversion Date, upon conversion of any shares of the Series A Preferred Stock, Series A Holders of such shares will receive, in addition to the shares of Common Stock, the rights under such rights plan relating to such Common Stock, unless, prior to the Conversion Date, the rights have (i) become exercisable or (ii) separated from the shares of Common Stock (the first of such events to occur being the “ Trigger Event ”), in either of which cases the Conversion Rate will be adjusted, effective automatically at the time of such Trigger Event, as if the Corporation had made a distribution of such rights to all holders of the Common Stock as described in Section 2(h)(i)(2) (without giving effect to the 60-day limit on the exercisability of rights, options and warrants ordinarily subject to such Section 2(h)(i)(2)), subject to appropriate readjustment in the event of the expiration, termination or redemption of such rights prior to the exercise, deemed exercise or exchange thereof. Notwithstanding the foregoing, to the extent any such stockholder rights are exchanged by the Corporation for shares of Common Stock, the Conversion Rate shall be appropriately readjusted as if such stockholder rights had not been issued, but the Corporation had instead issued the shares of Common Stock issued upon such exchange as a dividend or distribution of shares of Common Stock subject to Section 2(h)(i)(1). Notwithstanding the preceding provisions of this paragraph, no adjustment shall be required to be made to the Conversion Rate with respect to any Series A Holder which is, or is an “affiliate” or “associate” of, an “acquiring person” under such stockholder rights plan or with respect to any direct or indirect transferee of such Series A Holder who receives Series A Preferred Stock in such transfer after the time such Series A Holder becomes, or its affiliate or associate becomes, an “acquiring person.”

(ii) Calculation of Adjustments . All adjustments to the Conversion Rate shall be calculated by the Corporation to the nearest 1/10,000th of one share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment to the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent; provided , however , that any such adjustment that is not required to be made will be carried forward and taken into account in any subsequent adjustment; provided , further that any such adjustment of less than one percent that has not been made will be made upon any Conversion Date.

(iii) When No Adjustment Required .

(1) Except as otherwise provided in Section 2(h), the Conversion Rate will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing, or for the repurchase of Common Stock.

(2) Except as otherwise provided in Section 2(h), no adjustment of the Conversion Rate need be made as a result of the issuance of, the exercise or redemption of, or the termination or invalidation of, rights pursuant to any stockholder rights plans.

(3) In the event the Corporation proposes to effect a Distribution Transaction, the Corporation shall provide each Series A Holder with written notice describing such Distribution Transaction not more than 60 Business Days and not less than 20 Business Days prior to the effective date of such Distribution Transaction. Each Series A Holder that has elected, by giving notice to the Corporation pursuant to Section 2(s) of this Article IV, to receive Mirror Preferred Stock and Exchange Preferred Stock in lieu of the adjustment set forth in Section 2(h)(i)(4)of this Article IV will have the right to exchange such number of shares of Series A Preferred Stock as such Series A Holder shall designate, effective as of the effective date of the Distribution Transaction, for an equivalent number of shares of Exchange Preferred Stock of the Corporation and an equivalent number of shares of Mirror Preferred Stock of the Distributed Entity. It shall be a condition to the right of the Corporation to complete a Distribution Transaction that the Corporation has provided the Series A Holders with notice of the pending Distribution Transaction and the opportunity to elect between the adjustment described in Section 2(h)(i)(4) of this Article IV and the receipt of Mirror Preferred Stock and Exchange Preferred Stock described in this Section 2(h)(iii)(3). The sum of the initial liquidation preference amounts of a share of Exchange Preferred Stock and a share of Mirror Preferred Stock delivered in exchange for a share of Series A Preferred Stock will equal the Liquidation Preference Amount of a share of Series A Preferred Stock on the effective date of the Distribution Transaction. A share of Mirror Preferred Stock received in respect of each share of Series A Preferred Stock will have an initial liquidation preference amount equal to the product of (i) the Liquidation Preference Amount of a share of Series A Preferred Stock exchanged therefor and (ii) the quotient of (x) the Distributed Company VWAP multiplied by the Distribution Ratio applicable to such Distribution Transaction and (y) the sum of (1) the Distributed Company VWAP multiplied by the Distribution Ratio plus (2) the Distributing Company VWAP multiplied by the Exchange Ratio (as defined below). A share of Exchange Preferred Stock received in respect of each share of Series A Preferred Stock will have an initial liquidation preference amount equal to the difference between the Liquidation Preference Amount of a share of Series A Preferred Stock exchanged therefore and the initial liquidation preference amount of a share of Mirror Preferred Stock as determined by the immediately preceding sentence. The Base Amount for purposes of Section 2(c) shall be allocated between the Mirror Preferred Stock and the Exchange Preferred Stock in the same proportion as the Liquidation Preference Amount of a share of Series A Preferred Stock is allocated between the initial liquidation preference amount of a share of Mirror Preferred Stock and the initial liquidation preference amount of a share of Exchange Preferred Stock pursuant to this Section 2(h)(iii)(3).

Each of the Mirror Preferred Stock and the Exchange Preferred Stock will have an initial conversion rate equal to the Conversion Rate applicable to the Series A Preferred Stock immediately following the Distribution Transaction (without giving effect to any adjustment under Section 2(h)(i)(4)with respect to such Distribution Transaction), except as described below:

a) To the extent the Distribution Transaction results in a reduction of the number of outstanding shares of Common Stock, the initial conversion rate applicable to the Exchange Preferred Stock will instead equal the product of (x) the Conversion Rate on the effective date of the Distribution Transaction (without giving effect to any adjustment under Section 2(h)(i)(4) with respect to such Distribution Transaction) and (y) the quotient of (1) the number of outstanding shares of Common Stock immediately following the effective date of the Distribution Transaction and (2) the number of outstanding shares of Common Stock immediately prior to the effective date of the Distribution Transaction (clause (y), the “ Exchange Ratio ”); and

b) To the extent the Distribution Ratio is greater or less than one, the initial conversion rate applicable to the Mirror Preferred Stock will instead equal the product of (x) the Conversion Rate on the effective date of the Distribution Transaction (without giving effect to any adjustment under Section 2(h)(i)(4)with respect to such Distribution Transaction) and (y) the Distribution Ratio.

The Mirror Preferred Stock will have a Conversion Price equal to the dollar amount obtained by dividing (I) the product of (x) Base Amount multiplied by (y) the quotient of (1) the Distributed Company VWAP multiplied by the Distribution Ratio, divided by (2) the sum of (A) the Distributed Company VWAP multiplied by the Distribution Ratio and (B) the Distributing Company VWAP multiplied by the Exchange Ratio, by (II) the Conversion Rate applicable to the Mirror Preferred Stock.

The Exchange Preferred Stock will have a Conversion Price equal to the dollar amount obtained by dividing (I) the product of (x) Base Amount multiplied by (y) the quotient of (1) the Distributing Company VWAP multiplied by Exchange Ratio, divided by (2) the sum of (A) the Distributed Company VWAP multiplied by the Distribution Ratio and (B) the Distributing Company VWAP multiplied by the Exchange Ratio, by (II) the Conversion Rate applicable to the Exchange Preferred Stock.

(4)

No adjustment to the Conversion Rate need be made:

a) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts in Common Stock under any plan in which purchases are made at market prices on the date or dates of purchase, without discount, and whether or not the Corporation bears the ordinary costs of administration and operation of the plan, including brokerage commissions;

b) upon the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of its subsidiaries or of any employee agreements or arrangements or programs;

c) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of [•]; or

d) for a change in the par value of the Common Stock.

(iv) Successive Adjustments . After an adjustment to the Conversion Rate under this Section 8, any subsequent event requiring an adjustment under this Section 2(h) shall cause an adjustment to each such Conversion Rate as so adjusted.

(v) Multiple Adjustments . For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Conversion Rate pursuant to this Section 2(h) under more than one subsection hereof (other than where Series A Holders are entitled to elect the applicable adjustment, in which case such election shall control), such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder; provided , however , that if more than one subsection of this Section 2(h) is applicable to a single event, the subsection shall be applied that produces the largest adjustment.

(vi) Other Adjustments . The Corporation may, but shall not be required to, make such increases in the Conversion Rate, in addition to those required by this Section 2(h), as the Board considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reason.

(vii) Notice of Adjustments . Whenever the Conversion Rate is adjusted as provided under Section 2(h), the Corporation shall as soon as reasonably practicable following the occurrence of an event that requires such adjustment (or if the Corporation is not aware of such occurrence, as soon as reasonably practicable after becoming so aware) or the date the Corporation makes an adjustment pursuant to Section 2(h)(vi):

(1) compute the adjusted applicable Conversion Rate in accordance with this Section 2(h) and prepare and transmit to the Conversion Agent an Officer’s Certificate setting forth the applicable Conversion Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and

(2) provide a written notice to the Series A Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Conversion Rate was determined and setting forth the adjusted applicable Conversion Rate.

(viii) Conversion Agent . The Conversion Agent shall not at any time be under any duty or responsibility to any Series A Holder to determine whether any facts exist that may require any adjustment of the applicable Conversion Rate or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in relying on any Officer’s Certificate delivered pursuant to Section 2(h)(vii) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, that may at the time be issued or delivered with respect to any Series A Preferred Stock; and the Conversion Agent makes no representation with respect

thereto. The Conversion Agent shall not be responsible for any failure of the Corporation to issue, transfer or deliver any shares of Common Stock pursuant to the conversion of Series A Preferred Stock or to comply with any of the duties, responsibilities or covenants of the Corporation contained in this Section 2(h).

(ix) Fractional Shares . No fractional shares of Common Stock will be delivered to the Series A Holders upon conversion. In lieu of fractional shares otherwise issuable, Series A Holders will be entitled to receive an amount in cash equal to the fraction of a share of Common Stock, multiplied by the Closing Price of the Common Stock on the Trading Day immediately preceding the applicable Conversion Date. In order to determine whether the number of shares of Common Stock to be delivered to a Series A Holder upon the conversion of such Series A Holder’s shares of Series A Preferred Stock will include a fractional share (in lieu of which cash would be paid hereunder), such determination shall be based on the aggregate number of shares of Series A Preferred Stock of such Series A Holder that are being converted on any single Conversion Date.

(i)

Adjustment for Reorganization Events.

(i)

Reorganization Events. In the event of:

(1) any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Corporation with or into another Person, in each case, pursuant to which the Common Stock (but not the Series A Preferred Stock) is changed or converted into, or exchanged for, cash, securities or other property of the Corporation or another person;

(2) any sale, transfer, lease or conveyance to another Person of all or substantially all the property and assets of the Corporation, in each case pursuant to which the Common Stock (but not the Series A Preferred Stock) is converted into cash, securities or other property; or

(3) any statutory exchange of securities of the Corporation with another Person (other than in connection with a merger or acquisition) or reclassification, recapitalization or reorganization of the Common Stock (but not the Series A Preferred Stock) into other securities;

(each of which is referred to as a “ Reorganization Event ”) each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the Series A Holders and subject to Section 2(i)(v), remain outstanding but shall become convertible into, out of funds legally available therefor, the number, kind and amount of securities, cash and other property (the “ Exchange Property ”) (without any interest on such Exchange Property and without any right to dividends or distribution on such Exchange Property which have a record date that is prior to the applicable Conversion Date, other than to the extent accrued and unpaid dividends have been added to the Liquidation Preference Amount (whether pursuant to clause (ii) or (iii) of the definition thereof)) that the Series A Holder of such share of Series A Preferred Stock would have received in such Reorganization Event had such Series A Holder converted its share of Series A Preferred Stock into the applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event, assuming that such Series A Holder is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be (any such Person, a “ Constituent Person ”), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of

the Corporation and non-Affiliates; provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof, then for the purpose of this Section 2(i)(i), the kind and amount of securities, cash and other property receivable upon such Reorganization Event will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock.

(ii) Exchange Property Election. In the event that the holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in such transaction, the Exchange Property that the Series A Holders shall be entitled to receive shall be determined by the Series A Holders of a majority of the outstanding shares of Series A Preferred Stock on or before the earlier of (i) the deadline for elections by holders of Common Stock and (ii) two Business Days before the anticipated effective date of such Reorganization Event. The number of units of Exchange Property for each share of Series A Preferred Stock converted following the effective date of such Reorganization Event shall be determined from among the choices made available to the holders of the Common Stock and based on the Per Share Amount as of the effective date of the Reorganization Event, determined as if the references to “share of Common Stock” in this Section 2 were to “units of Exchange Property.”

(iii) Successive Reorganization Events. The above provisions of this Section 2(i) shall similarly apply to successive Reorganization Events and the provisions of Section 2(h) shall apply to any shares of Capital Stock (or capital stock of any other issuer) received by the holders of the Common Stock in any such Reorganization Event.

(iv) Reorganization Event Notice. The Corporation (or any successor) shall, no less than 20 Business Days prior to the occurrence of any Reorganization Event, provide written notice to the Series A Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 2(i).

(v) Limitations . The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series A Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section 2(i), and (ii) to the extent that the Corporation is not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for the conversion of the Series A Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event, or in the case of a Reorganization Event described in Section 2(i)(i)(2), an exchange of Series A Preferred Stock for the stock of the Person to whom the Corporation’s assets are conveyed or transferred, having voting powers, preferences, and relative, participating, optional or other special rights as nearly equal as possible to those provided in this Section 2.

(j)

Voting Rights .

(i) Votes with Common Stock . The Series A shall be entitled to vote with the holders of the Common Stock on all matters submitted to a vote of the holders of Common Stock (together with any other class or series of Capital Stock then entitled to vote with the Common Stock),

except as required herein or by applicable law. Each Series A Holder shall be entitled to the number of votes equal to the largest number of whole shares of Common Stock into which all shares of Series A Preferred Stock held of record by such Series A Holder could then be converted pursuant to Section 2(c) at the record date for the determination of stockholders entitled to vote or consent on such matters or, if no such record date is established, at the date such vote or consent is taken or any written consent of stockholders is first executed. The Series A Holders shall be entitled to notice of any meeting of holders of Common Stock in accordance with the By-laws.

(ii) One Vote Per Share . Each Series A Holder will have one vote per share on any matter on which Series A Holders are entitled to vote separately as a class, whether at a meeting or by written consent.

(k) Preemptive Rights. Except as provided in an agreement between the Corporation and one or more Series A Holders, the Series A Holders shall not have any preemptive rights.

(l) Creation of Capital Stock. Notwithstanding anything set forth in this Section 2, the Board, or any duly authorized committee thereof, without the vote of the Series A Holders, may authorize and issue additional shares of Capital Stock.

(m) No Sinking Fund. Shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund.

(n) Transfer Agent, Conversion Agent, Registrar and Paying Agent. The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the Series A Preferred Stock shall be Computershare. The Corporation may, in its sole discretion, remove the Transfer Agent in accordance with the agreement between the Corporation and the Transfer Agent; provided that the Corporation shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal. Upon any such removal or appointment, the Corporation shall send notice thereof by first-class mail, postage prepaid, to the Series A Holders.

(o)

Taxes.

(i) Transfer Taxes. The Corporation shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series A Preferred Stock or shares of Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series A Preferred Stock, shares of Common Stock or other securities in a name other than that in which the shares of Series A Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.

(ii) Withholding . All payments and distributions (or deemed distributions) on the shares of Series A Preferred Stock (and on the shares of Common Stock received upon their conversion) shall be subject to withholding and backup withholding of tax to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by Series A Holders.

(p) Notices. All notices referred to herein shall be in writing and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under this Section 2) with postage prepaid, addressed: (i) if to the Corporation, to its office at Barnes & Noble Education, Inc., 120 Mountain View Blvd Basking Ridge, NJ 07920 (Attention: General Counsel), (ii) if to any Series A Holder, to such Series A Holder at the address of such Series A Holder as listed in the stock record books of the Corporation (which may include the records of the Transfer Agent) or (iii) to such other address as the Corporation or any such Series A Holder, as the case may be, shall have designated by notice similarly given.

(q)

Facts Ascertainable.

(i) When the terms of this Section 2 refer to a specific agreement or other document to determine the meaning or operation of a provision hereof, the secretary of the Corporation shall maintain a copy of such agreement or document at the principal executive offices of the Corporation and a copy thereof shall be provided free of charge to any stockholder who makes a request therefor. The secretary of the Corporation shall also maintain a written record of the Issue Date, the number of shares of Series A Preferred Stock issued to a Series A Holder and the date of each such issuance, and shall furnish such written record free of charge to any stockholder who makes a request therefor.

(ii) If any voting right identified in Section 2(a)(i)(2) hereof is enjoined, restrained or limited, the increase in the Dividend Rate provided for in Section 2(a)(i)(2) in lieu of such voting right shall be the sole and exclusive remedy for such injunction, restriction or limitation, and no Series A Holder shall have any other remedy in respect thereto.

(r) Waiver . Notwithstanding any provision in this Section 2 to the contrary, any provision contained herein and any right of the Series A Holders granted hereunder may be waived as to all shares of Series A Preferred Stock (and the holders thereof) upon the written consent of the Board (or an authorized committee thereof) and the Series A Holders of a majority of the shares of Series A Preferred Stock then outstanding.

(s) Severability . If any term of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms set forth herein which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such term unless so expressed herein.

(t) Adjustment in Shares Numbers . If, after the Issue Date, there is a subdivision, split, stock dividend, combination, reclassification or similar event (“ Adjustment Event ”) with respect to the Series A Preferred Stock, then upon the effectiveness of such Adjustment Event all references in Section 2(j) to specific numbers of such shares shall automatically be adjusted proportionately, so that the Series A Holders of such shares will retain the same rights under Section 2(j) immediately following the effectiveness of such Adjustment Event as they did immediately prior thereto.

(u) Definitions . For purposes of this Section 2,

“ Accumulated Dividend Record Date ” has the meaning set forth in Section 2(a)(i).

“ Adjustment Event ” has the meaning set forth in Section 2(t).

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For the purposes of this definition, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Base Amount ” means the initial base amount calculated in accordance with Section 10(c)(iii) of the B&N Series J Certificate of Designations, treating the Series A Preferred Stock as “Mirror Preferred Stock” for purposes of such section, subject to adjustment as provided in Section 2(h)(iii)(3).

“ B&N Series J Certificate of Designations” means the certificate of designations dated August 8, 2011, with respect to the Series J Preferred Stock, par value $.001 per share, of Barnes & Noble, Inc.

“ Business Day ” means any weekday that is not a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to be closed.

“ Capital Stock ” means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by the Corporation.

“ Change of Control ” means (i) a “Change of Control” as defined in the Credit Agreement as in effect on the Issue Date and (ii) any equivalent concept that results in an event of default or gives rise to a right of repayment or acceleration contained in the documents governing any replacement credit facility disregarding any portion thereof relating to “continuing directors”; provided that a transaction that would otherwise be a “Change of Control” shall not be a “Change of Control” for purposes of this Section 2 if (x) it results from the acquisition of beneficial ownership of shares of Capital Stock by any beneficial owner of Series A Preferred Stock or (y) the transaction constituting a Change of Control is a merger, consolidation or similar transaction that results in the conversion of all of the outstanding shares of Series A Preferred Stock into the right to receive an aggregate amount in cash equal to the amount such Series A Holders would receive if all Holders exercised the Change of Control Sale option in accordance with Section 2(e).

“ Change of Control Effective Date ” has the meaning set forth in Section 2(e)(i).

“ Change of Control Sale ” has the meaning set forth in Section 2(e)(i).

“ Closing Price ” of the Common Stock on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price, of the shares of the Common Stock on the New York Stock Exchange on such date. If the Common Stock is not traded on the New York Stock Exchange on any date of determination, the Closing Price of the Common Stock on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock in the over-the-counter market as reported by OTC Markets Group Inc. or similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by a nationally recognized investment banking firm (unaffiliated with the Corporation) retained by the Corporation for such purpose.

“ Constituent Person ” has the meaning set forth in Section 2(i)(i).

“ Conversion Agent ” means the Transfer Agent acting in its capacity as conversion agent for the Series A Preferred Stock, and its successors and assigns.

“ Conversion Date ” has the meaning set forth in Section 2(d)(i).

“ Conversion Price ” means, for each share of Series A Preferred Stock, the conversion price calculated in accordance with Section 10(c)(iii) of B&N Series J Certificate of Designations, treating the Series A Preferred Stock as “Mirror Preferred Stock” for purposes of such section.

“ Conversion Rate ” means the initial conversion rate calculated in accordance with Section 10(c)(iii) of the B&N Series J Certificate of Designations, treating the Series A Preferred Stock as “Mirror Preferred Stock” for purposes of such section. Conversion Rate is subject to adjustment as set forth herein.

“ Credit Agreement ” means that certain Credit Agreement dated as of [•], 2015, among the Company, the borrowers thereunder, the guarantors thereunder, Bank of America, N.A., as Administrative Agent, Collateral Agent and Swing Line Lender, and the other lenders and agents.

“ Current Market Price ” per share of Common Stock as of a Record Date for any issuance, distribution, dividend or other action means the arithmetic average of the VWAP per share of Common Stock, for each of the ten consecutive full Trading Days ending on the Trading Day before the Record Date with respect to such issuance, distribution, dividend or other action, appropriately adjusted to take into account the occurrence during such period of any event described in Section 2(h).

“ Distributed Company VWAP ” has the meaning set forth in Section 2(h)(i)(4).

“ Distributed Entity ” means any Subsidiary of the Corporation distributed in a Distribution Transaction.

“ Distributed Property ” has the meaning set forth in Section 2(h)(i)(4).

“ Distributing Company VWAP ” has the meaning set forth in Section 2(h)(i)(4).

“ Distribution Ratio ” means the number of shares (or fraction of a share) of the Distributed Entity received in respect of or in exchange for, as applicable, a share of Common Stock in the Distribution Transaction.

“ Distribution Transaction ” means any transaction by which a Subsidiary of the Corporation ceases to be a Subsidiary of the Corporation by reason of the distribution of such Subsidiary’s equity securities to holders of Common Stock, whether by means of a spin-off, split-off, redemption, reclassification, exchange, stock dividend, share distribution, rights offering or similar transaction.

“ Dividend Payment Date ” has the meaning set forth in Section 2(a)(i).

“ Dividend Period ” has the meaning set forth in Section 2(a)(i).

“ Dividend Rate ” means 7 ³ ⁄ ₄ % per annum, or, to the extent and during the period with respect to which such rate has been adjusted as provided herein, such adjusted rate.

“ Dividend Record Date ” has the meaning set forth in Section 2(a)(i).

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exchange Preferred Stock ” means a series of convertible preferred stock of the Corporation having terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof that are identical, or as nearly so as is practicable in the good faith judgment of the Board of Directors, to those of the Series A Preferred Stock, except that (i) the initial liquidation preference, the Base Amount, the Conversion Rate and the Conversion Price thereof will be determined as provided in Section 2(h)(iii)(3), and (ii) the running of any time periods pursuant to the terms of the Series A Preferred Stock shall be tacked to the corresponding time periods in the Exchange Preferred Stock.

“ Exchange Property ” has the meaning set forth in Section 2(i)(i).

“ Exchange Ratio ” has the meaning set forth in Section 2(h)(iii)(3).

“ Expiration Date ” has the meaning set forth in Section 2(h)(i)(3).

“ Expiration Time ” has the meaning set forth in Section 2(h)(i)(3).

“ Extraordinary Dividend ” means any dividend payable in cash to the holders of Common Stock which, when taken together with any cash dividends paid to such holders during the prior three fiscal quarters of the Corporation, exceeds the net income of the Corporation for such three fiscal quarters taken together with the estimated net income for the quarter in which such dividend is proposed to be paid, with such estimate to be determined by the Board, or an authorized committee thereof, acting in good faith.

“ Fair Market Value ” means, with respect to any security or other property, the fair market value of such security or other property as determined by the Board, or an authorized committee thereof, acting in good faith.

“ Forced Conversion ” has the meaning set forth in Section 2(g)(i).

“ Issue Date ” means, with respect to any share of Series A Preferred Stock, the date of initial issuance of such share of Series A Preferred Stock.

“ Junior Stock ” means the Common Stock and any other class or series of Capital Stock now existing or hereafter authorized other than the Series A Preferred Stock, any class or series of Parity Stock, and any class or series of Senior Stock.

“ Liquidation Preference Amount ” has the meaning set forth in Section 2(b)(i).

“ Market Disruption Event ” means any of the following events:

(a) any suspension of, or limitation imposed on, trading of the Common Stock by any exchange or quotation system on which the Closing Price is determined pursuant to the definition of the term “Closing Price” (the “ Relevant Exchange ”) during the one-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) and whether by reason of movements in price exceeding limits permitted by the Relevant Exchange as to securities generally, or otherwise relating to the Common Stock or options contracts relating to the Common Stock on the Relevant Exchange; or

(b) any event that disrupts or impairs (as determined by the Corporation in its reasonable discretion) the ability of market participants during the one-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) in general to effect transactions in, or obtain market values for, the Common Stock on the Relevant Exchange or to effect transactions in, or obtain market values for, options contracts relating to the Common Stock on the Relevant Exchange.

“ Mirror Preferred Stock ” means a series of convertible preferred stock issued by the Distributed Entity and having terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof that are identical, or as nearly so as is practicable in the good faith judgment of the Board of Directors, to those of the Series A Preferred Stock, except that (i) the initial liquidation preference, the Base Amount, the Conversion Rate and the Conversion Price thereof will be determined as provided in Section 2(h)(iii)(3), (ii) the running of any time periods pursuant to the terms of the Series A Preferred Stock shall be tacked to the corresponding time periods in the Mirror Preferred Stock and (iii) the Mirror Preferred Stock shall be convertible into the kind of securities of the Distributed Entity that the holders of Common Stock received in the Distribution Transaction.

“ Notice of Forced Conversion ” has the meaning set forth in Section 2(g)(ii).

“ Notice of Redemption ” has the meaning set forth in Section 2(f)(iii).

“ Officer’s Certificate ” means a certificate signed by the Chief Executive Officer, any Executive Vice President, the Chief Financial Officer, the Controller or the Treasurer.

“ Optional Redemption Date ” has the meaning set forth in Section 2(f)(iii).

“ Original Liquidation Preference ” means the initial liquidation preference of a share of Series A Preferred Stock calculated in accordance with Section 10(c)(iii) of the B&N Series J Certificate of Designations, treating the Series A Preferred Stock as “Mirror Preferred Stock” for purposes of such Section.

“ Parity Stock ” means any class or series of Capital Stock hereafter authorized that expressly ranks on a parity basis with the Series A Preferred Stock as to the dividend rights, rights of redemption and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

“ Per Share Amount ” has the meaning set forth in Section 2(c)(i).

“ Person ” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust or other entity.

“ Purchased Shares ” has the meaning set forth in Section 2(h)(i)(3).

“ Record Date ” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board or by statute, contract or otherwise).

“ Registrar ” means the Transfer Agent acting in its capacity as registrar for the Series A Preferred Stock, and its successors and assigns.

“ Relevant Exchange ” has the meaning set forth in the definition of the term “Market Disruption Event.”

“ Reorganization Event ” has the meaning set forth in Section 2(i)(i).

“ Senior Stock ” means any class or series of Capital Stock hereafter authorized that expressly ranks senior to the Series A Preferred Stock and has preference or priority over the Series A Preferred Stock as to dividend rights, rights of redemption or rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Corporation.

“ Series A Holder ” means a Person in whose name the shares of the Series A Preferred Stock are registered, which Person may be treated by the Corporation, Transfer Agent, Registrar, paying agent and Conversion Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling conversions and for all other purposes.

“ Subsidiary ” means any company or corporate entity for which the company owns, directly or indirectly, an amount of the voting securities, other voting rights or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, more than 50% of the equity interests of such Corporation or corporate entity).

“ Trading Day ” means a Business Day on which the Relevant Exchange is scheduled to be open for business and on which there has not occurred a Market Disruption Event.

“ Transfer Agent ” means the Corporation acting as Transfer Agent, Registrar, paying agent and Conversion Agent for the Series A Preferred Stock, and its successors and assigns.

“ Trigger Event ” has the meaning set forth in Section 2(h)(i)(5).

“ U.S. ” means the United States of America.

“ VWAP ” per share of Common Stock on any Trading Day means the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg (or, if Bloomberg ceases to publish such price, any successor service reasonably chosen by the Corporation) page “[BNED] UN Equity VAP” (or its equivalent successor if such page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized investment banking firm (unaffiliated with the Corporation) retained for such purpose by the Corporation).

SECTION 3. The Board of Directors of the Corporation (the “ Board of Directors ” or the “ Board ”) is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

SECTION 4. (a) Each holder of Common Stock, as such, shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided , however , that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware.

(b) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted to such holders by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation relating to such series).

(c) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors in its discretion shall determine.

(d) Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them.

ARTICLE V

SECTION 1. The directors, other than those who may be elected by the holders of Preferred Stock pursuant to resolutions of the Board of Directors, adopted pursuant to the provisions of this Amended and Restated Certificate of Incorporation, establishing any series of Preferred Stock and granting to holders of shares of such series of Preferred Stock rights to elect additional directors under specified circumstances, shall be classified with respect to the time for which they severally hold office into three classes, as nearly equal in number as possible, one class initially to be elected for a term expiring at the annual meeting of stockholders to be held in 2016, another class initially to be elected for a term expiring at the annual meeting of stockholders to be held in 2017 and another class initially to be elected for a term expiring at the annual meeting of stockholders to be held in 2018, with the members of each class to hold office until their successor have been elected and qualified. At each annual meeting of stockholders, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. Except as otherwise fixed by or pursuant to the provisions of Article IV of this Amended and Restated Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock, the number of the directors of the Corporation shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Board of Directors. The election of directors need not be by written ballot. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

SECTION 2. Advance notice of nominations for the election of directors shall be given in the manner and to the extent provided in the By-laws of the Corporation.

SECTION 3. Except as otherwise provided for or fixed by or pursuant to the provisions of Article IV of this Amended and Restated Certificate of Incorporation relating to the rights of the holders of any series of Preferred Stock, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, removal or other cause shall only be filled by the Board of Directors, and not by the stockholders, by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, or as otherwise provided in the By-laws of the Corporation (the “By-laws”). Any director elected in accordance with the preceding sentence of this Section 3 shall hold office until the third annual meeting of stockholders next following his or her election and until such director’s successor shall have been elected and qualified.

ARTICLE VI

Subject to the rights of the holders of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board of the Directors or the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors.

ARTICLE VII

In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors is expressly authorized to adopt, repeal, alter or amend the By-laws of the Corporation by the vote of a majority of the entire Board of Directors or such greater vote as shall be specified in the By-laws of the Corporation. In addition to any requirements of law and any other provision of this Amended and Restated Certificate of Incorporation or any resolution or resolutions of the Board of Directors adopted pursuant to Section 2 of Article IV of this Amended and Restated Certificate of Incorporation (and notwithstanding the fact that a lesser percentage may be specified by law), the affirmative vote of the holders of a majority of the combined voting power of the then outstanding shares of all classes and series of capital stock of the Corporation entitled generally to vote in the election of directors of the Corporation, voting together as a single class, shall be required for stockholders to adopt, amend, alter or repeal any provision of the By-laws of the Corporation.

ARTICLE VIII

The Corporation reserves the right to amend, alter or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are subject to this reservation.

ARTICLE IX

SECTION 1. To the fullest extent that the General Corporation Law of the State of Delaware or any other law of the State of Delaware as it exists or as it may hereafter be amended permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

SECTION 2. To the fullest extent that the General Corporation Law of the State of Delaware or any other law of the State of Delaware as it exists or as it may hereafter be amended permits, the Corporation may provide indemnification of (and advancement of expenses to) its current and former directors, officers and agents (and any other persons to which the General Corporation Law of the State of Delaware permits the Corporation to provide indemnification) through By-law provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise.

SECTION 3. No amendment to or repeal of any Section of this Article IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article IX, shall eliminate or reduce the effect of this Article IX in respect of any matter occurring, or any action or proceeding accruing or arising, prior to such amendment, repeal or adoption of an inconsistent provision.

Exhibit 8.2

[ Letterhead of]

KPMG LLP

[●], 2015

Barnes & Noble, Inc.

122 Fifth Avenue

New York, New York 10011

RE:	Tax Opinion Regarding the Spin-Off of Barnes & Noble Education, Inc.

Ladies and Gentlemen,

We have acted as a tax advisor to Barnes & Noble, Inc. (“ Barnes & Noble ”), a Delaware corporation, in connection with the spin-off (the “ Spin-Off ”) of Barnes & Noble Education, Inc. (“ Education ”), a Delaware corporation, as described in the registration statement filed with the Securities and Exchange Commission (the “ SEC ”) on Form S-1 (File No. 333-202298) under the Securities Act of 1933 (as amended through the date hereof, the “ Registration Statement ”). ¹ This letter sets forth our opinion concerning certain U.S. federal income tax consequences of the Spin-Off.

CERTAIN ASSUMPTIONS AND REPRESENTATIONS

In preparing our opinion, we have relied upon the accuracy and completeness of certain statements, representations, warranties, covenants, facts, and information provided by representatives of Barnes & Noble and Education, including the accuracy and completeness of all of the representations set forth in a letter addressed to us from Barnes & Noble and Education dated [●], 2015 (the “ Officer’s Certificate ”).

We have also relied upon the accuracy and completeness of the statements, representations, warranties, covenants, facts, and information set forth in the following documents (contained in originals or copies, certified or otherwise identified to our satisfaction):

•

the Registration Statement and all submissions filed with the SEC related to the Registration Statement;

•

the Separation and Distribution Agreement to be entered into by Barnes & Noble and Education substantially in the form of Exhibit 2.1 to the Registration Statement (the “ Separation Agreement ”);

•

the Tax Matters Agreement to be entered into by Barnes & Noble and Education substantially in the form of Exhibit 10.2 to the Registration Statement (the “ Tax Matters Agreement ”); and

•

such other documents and records as we have deemed necessary or appropriate as a basis for our opinion (collectively with the Officer’s Certificate, the Registration Statement, the Separation Agreement, and the Tax Matters Agreement, the “ Documents ”).

¹	References to any agreement or document include all schedules and exhibits thereto.

Barnes & Noble, Inc.

[●], 2015

Page 2

In rendering this opinion, we have assumed with your permission each of the following:

•

The statements, representations, warranties, and information set forth in the Documents (or draft documents which we assume will be executed in substantially identical form) or made by representatives of Barnes & Noble or Education are true, correct, and complete, and that such representations and covenants will be complied with, in each case, without regard to any qualification as to knowledge, belief, intent, materiality, or otherwise;

•

The assumptions upon which Barnes & Noble and Education have permitted us to rely, including those set forth in the Officer’s Certificate, are correct; and

•

The genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us, including in electronic format, as duplicates or copies, and the authenticity of the originals of such latter documents.

The conclusions set forth herein are based on our analysis and interpretation of the applicable authorities and our views regarding the most appropriate interpretation of such authorities. In rendering our opinion, we have considered, among other authorities and guidance, the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder and judicial and administrative interpretations thereof. These authorities are subject to change or modification retroactively and/or prospectively, and any such changes could affect the correctness of our opinion.

Our opinion is limited to the conclusions specifically set forth herein under the heading “Opinion,” and we express no opinion with respect to any other U.S. federal, state, local, or foreign tax or legal aspect of the Spin-Off or any other transaction. No inference should be drawn on any matter not specifically and expressly addressed in this opinion.

Our opinion is not binding on the Service, any other tax authority, or any court, and no assurance can be given that a position contrary to that expressed herein will not be asserted by a tax authority and ultimately sustained by a court. Our advice is based on the completeness and accuracy of any one or more of the facts, assumptions, and representations upon which we have relied. Unless separately agreed in writing, we will not update our advice contained herein for any (i) subsequent changes or modifications to the Code or the regulations thereunder, or to the judicial and administrative interpretations thereof, (ii) correction to the facts or assumptions upon which we have relied in rendering our opinion, or (iii) new or additional facts or information.

II.

OPINION

Based upon and subject to the foregoing and to the assumptions and limitations set forth herein and in the Registration Statement under the caption “Material U.S. Federal Income Tax Consequences of the Spin-Off,” we hereby state that the material U.S. Federal income tax consequences set forth in the discussion under the caption “Material U.S. Federal Income Tax Consequences of the Spin-Off” are our opinion.

We hereby consent to the use of our name under the caption “Material U.S. Federal Income Tax Consequences of the Spin-Off” in the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement. In providing this consent, we do not admit that we come within the category of persons whose consent is required under section 7 of the Securities Act of 1933 or the rules and regulations of the SEC thereunder.

Barnes & Noble, Inc.

[●], 2015

Page 3

Very truly yours,

KPMG LLP

Exhibit 10.1

TRANSITION SERVICES AGREEMENT

between

BARNES & NOBLE, INC.

and

BARNES & NOBLE EDUCATION, INC.

Dated as of [●], 2015

TABLE OF CONTENTS


		Page
ARTICLE I

Definitions

SECTION 1.01.	Defined Terms		1

ARTICLE II

Services to be Provided

SECTION 2.01.	Provision of Services		2
SECTION 2.02.	Agreement Coordinators		2
SECTION 2.03.	Performance Standard		3
SECTION 2.04.	Warranty Disclaimer		3
SECTION 2.05.	Consents		3

ARTICLE III

Term; Fees Reports

SECTION 3.01.	Service Term		3
SECTION 3.02.	Early Termination		4
SECTION 3.03.	Fees and Costs		4

ARTICLE IV

Monthly Statements; Audits; Disagreements; Taxes

SECTION 4.01.	Monthly Statements		4
SECTION 4.02.	Books and Records; Audits		4
SECTION 4.03.	Disagreements		5
SECTION 4.04.	Taxes		6

ARTICLE V

Recipient Assistance

SECTION 5.01.	Recipient Assistance		7

ARTICLE VI

Limitation on Liability

SECTION 6.01.	Limitation on Liability		7



ARTICLE VII

Force Majeure

SECTION 7.01.	Force Majeure	8

ARTICLE VIII

Miscellaneous

SECTION 8.01.	Entire Agreement; Third Party Beneficiaries	8
SECTION 8.02.	Notices	8
SECTION 8.03.	Successors and Assignment	9
SECTION 8.04.	Amendment	9
SECTION 8.05.	Waivers	9
SECTION 8.06.	Books and Records	9
SECTION 8.07.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	10
SECTION 8.08.	Severability	11
SECTION 8.09.	Counterparts	11
SECTION 8.10.	Headings	11
SECTION 8.11.	Interpretation	11

EXHIBITS


Exhibit A		Transitional Services

TRANSITION SERVICES AGREEMENT (this “ Agreement ”) dated as of [●], 2015, is between Barnes & Noble, Inc., a Delaware corporation (“ B&N ”), and Barnes & Noble Education, Inc., a Delaware corporation (“ BNED ” or “ Recipient ”, together with B&N, the “ Parties ” and each, a “ Party ”).

WHEREAS, in connection with a spin-off of BNED by B&N and concurrently with the execution of this Agreement, B&N and BNED are entering into a Separation and Distribution Agreement (the “ Separation Agreement ”);

WHEREAS, BNED desires to obtain certain of the transition services pursuant to the terms and conditions hereunder from B&N and any of B&N’s Affiliates or third parties (B&N and each such Affiliate of B&N and third party providing such services are hereinafter sometimes referred to as a “ Service Provider ”); and

WHEREAS, B&N is willing to provide to BNED the Services (as defined herein) in order to facilitate BNED’s operation of BNED Business after the date of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein, and subject to and on the terms and conditions herein set forth, the Parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. Each capitalized term used and not defined in this Agreement shall have the meaning assigned to it in the Separation Agreement. For purposes of this Agreement, the following words and phrases shall have the following meanings:

“ Damages ” means losses, liabilities, damages, deficiencies, costs and expenses directly incurred or suffered (and, if applicable, reasonable attorneys’ fees associated therewith), but shall not include indirect, incidental, consequential or special damages, or punitive damages of any kind, whether or not foreseen, in each case, whether or not based on contract, tort, warranty claims or otherwise (unless any such damages are components of any third-party claim), in connection with this Agreement.

“ Field of Use ” has the meaning set forth in the Separation Agreement.

“ Pass-Through Cost ”, with respect to any Service provided by a Service Provider, means the sum of (i) the direct cost to such Service Provider of providing such Service plus (ii) an allocation of the related employee overhead (including compensation and benefit costs) calculated in good faith based on reasonable and rational methodologies chosen by the Service Provider, which methodologies shall be provided to the Recipient upon such request from the Recipient.

“ Service Fee ”, with respect to a Service, means (a) the fee specified on Exhibit A with respect to such Service or (b) if no such fee is specified, the Pass-Through Cost with respect to such Service.

“ Taxes ” means all goods and services, value added, sales, use, gross receipts, business, consumption and other similar taxes, levies and charges (other than income taxes), including interest and penalties, imposed by applicable taxing authorities.

ARTICLE II

Services to be Provided

SECTION 2.01. Provision of Services. (a) Pursuant to the terms and conditions of this Agreement (including the Exhibit and Schedule hereto), B&N hereby agrees to furnish BNED, directly or through one or more Subsidiaries, certain services relating to the BNED Business (the “ Services ” as set forth in Exhibit A ).

(b) In the event that Recipient reasonably requests upon reasonable advance notice, and Service Provider elects to provide, any support or service not identified in Exhibit A (including in respect of any increase in the scope of any Service), such support or service shall be provided at the Pass-Through Cost. If Recipient requests that Exhibit A be amended so that the level or volume of any Service be increased or that the manner in which any Service is provided be changed such that an amendment to such Exhibit would be required, Service Provider will not be required to increase the level or volume of such Service or change the manner in which such Service is provided unless and until such an amendment is agreed to by Service Provider. If Service Provider agrees to amend the applicable Exhibit to increase the level or volume of such Service or change the manner in which such Service is provided as contemplated by the immediately preceding sentence, such support or service shall be provided at the Pass-Through Cost.

(c) Designation of Subsidiaries. Recipient may designate, with the consent of Service Provider (such consent to not be unreasonably withheld, conditioned or delayed), one or more Subsidiaries to receive Services, in which event all references herein to Recipient will be deemed to refer to such Subsidiaries, as appropriate; provided , however , that no such designation will in any event limit or affect the obligations of Recipient under this Agreement to the extent not performed by such Subsidiaries.

SECTION 2.02. Agreement Coordinators. Each Party shall designate in writing a representative to act as the primary contact person with respect to all issues relating to the provision of Services pursuant to this Agreement (each, an “ Agreement Coordinator ”) and may determine to designate from time to time additional functional experts for each of Recipient and Service Provider for specific Services to facilitate knowledge transfer and act as contact persons. The Agreement Coordinators and any functional experts so designated shall hold review meetings with each other by telephone or in person, as mutually agreed upon, on a semi-annual basis to discuss (i) issues relating to the provision of the Services, (ii) any problems identified with the provision of

Services and (iii) to the extent Service changes are agreed upon, the implementation of such changes. Each Party may replace its appointed Agreement Coordinator at any time upon written notice to the other Party; provided , however , that each Party shall use commercially reasonable efforts to preserve continuity of such Party’s Agreement Coordinator.

SECTION 2.03. Performance Standard. Service Provider shall perform, or shall cause one or more of its Service Providers to perform, each Service to be provided by such Service Provider in compliance with applicable Law and (a) if such Service has been provided by B&N or a Subsidiary thereof prior to the date of this Agreement, at a quality level and in the same manner as such Service has been provided in the 12-month period prior to the date hereof and (b) if such Service has not been so provided, at a quality level and in a manner that is commercially reasonable, unless, in each case under this Section 2.03, a different or additional standard of performance is specified in Exhibit A , with respect to such Service.

SECTION 2.04. Warranty Disclaimer. EXCEPT AS SET FORTH IN SECTION 2.03, SERVICE PROVIDER MAKES NO IMPLIED REPRESENTATION OR WARRANTY CONCERNING THE SERVICES, INCLUDING ANY APPLICABLE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SERVICE PROVIDER HEREBY EXPRESSLY DISCLAIMS ANY APPLICABLE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE SERVICES.

SECTION 2.05. Consents. Recipient shall pay any reasonable fee, cost or expense incurred by Service Provider in connection with Service Provider’s obtaining any consent, approval, permit, license or authorization required for the provision of any Service. To the extent reasonably practical, Service Provider shall provide advance notice to Recipient prior to Service Provider incurring any such cost, fee or expense; it being understood that such Service Provider’s obligation to provide any such Service is conditioned upon it obtaining such required consent, approval, permit, license or authorization. If any such consent, approval or authorization is not obtained promptly after the date of this Agreement, Service Provider shall notify Recipient and the Parties shall cooperate in good faith to devise an alternative arrangement for the provision of such Service. Service Provider shall perform such mutually satisfactory alternative arrangement and Recipient shall bear any reasonable additional costs and expenses incurred in the performance of such alternative arrangement.

ARTICLE III

Term; Fees Reports

SECTION 3.01. Service Term. The term of provision of each Service is as set forth in Exhibit A (the “ Service Period ”). At least 30 days prior to the end of any applicable Service Period, Recipient may request and Service Provider, in its sole discretion may agree to provide, an additional extension for the provision of any Service beyond the applicable Service Period. If Service Provider agrees, in its sole discretion, to grant such an additional extension, such agreement must be in writing.

SECTION 3.02. Early Termination. (a) Either Party may immediately terminate this Agreement upon the material breach of this Agreement by the other Party if such material breach is not cured within 30 days after written notice thereof to the Party in material breach.

(b) Except as otherwise agreed to by the Parties or as otherwise provided in Exhibit A , Recipient may terminate any Service in whole but not in part, as long as Recipient provides Service Provider written notice of such termination at least 30 days prior to any such termination.

(c) B&N may terminate this Agreement immediately in the event BNED (i) no longer continues to operate as a going concern, (ii) no longer continues to operate in the Field of Use, (iii) changes its name such that it no longer includes “Barnes & Noble” or the abbreviation “B&N”, or otherwise ceases to use the Licensed Marks (as defined in the TLA) or (iv) upon a termination of the TLA in connection with a BNED Fundamental Change (as defined in the TLA) (each event described in this paragraph, a “ Termination Event ”). Upon the occurrence of a Termination Event described in clause (i), (ii) or (iii) hereof, B&N shall continue to provide each Service to BNED until the earlier of (A) the end of the Service Period and (B) the 180th day after the occurrence of such Termination Event. Upon the occurrence of a Termination Event described in clause (iv) hereof, B&N and BNED shall cooperate in good faith with respect to the transition.

SECTION 3.03. Fees and Costs. In consideration for rendering the applicable Services, Service Provider shall be entitled to receive a service fee equal to the Service Fee. In the event that the Service Fee for a Service is not based on Pass-Through Cost and the cost to Service Provider of providing such Service increases, the Parties will discuss in good faith whether an adjustment to such Service Fee is appropriate under the circumstances, unless a review and adjustment mechanism is specified in the Exhibit in which such Service is described.

ARTICLE IV

Monthly Statements; Audits; Disagreements; Taxes

SECTION 4.01. Monthly Statements. Within 15 days following the end of each calendar month, Service Provider shall provide to Recipient (x) an invoice (the “ Monthly Statement ”) setting forth the Service Fees, relating to the immediately preceding calendar month. Recipient shall remit the amount set forth on the Monthly Statement within 45 days of receipt thereof.

SECTION 4.02. Books and Records; Audits. (a) During the Term and for a period of at least seven years thereafter, each of the parties will keep and maintain, and will require each of its Affiliates to keep and maintain, complete and accurate books and records related to its compliance with all terms and conditions of this Agreement (collectively, “ Audit Information ”).

(b) For the purpose of ensuring the accuracy and completeness of the amounts charged hereunder for any monthly period during the Term (including the calculation of Service Fees and Pass-Through Costs), upon not less than 30 days’ advance written notice from a party desiring to conduct an audit (“ Auditing Party ”) of another party’s (the “ Audited Party ”) Audit Information, the Audited Party will make such Audit Information available for audit by an independent certified public accounting firm (together with independent technical personnel if and as reasonably required for such accountant to perform the audit) designated by the Auditing Party and approved by the Audited Party, which approval will not be unreasonably withheld. Unless otherwise agreed by the Auditing Party and the Audited Party, any such audit will be conducted during regular business hours, at the Audited Party’s principal place of business, not more frequently than once in any period of 12 consecutive months and in a manner that does not unreasonably interfere with the Audited Party’s normal course of business. Notwithstanding the foregoing, the Auditing Party may conduct more than one audit within a 12-month period if, in the Auditing Party’s good faith judgment, the Auditing Party has a bona fide basis for any failure of the Audited Party to comply with its obligations under this Agreement. If any audit reveals an overpayment by the Audited Party, then the Audited Party will receive a credit, in the amount of such overpayment, that will be applied only against future amounts owing by the Audited Party under this Agreement. If any audit reveals an underpayment by the Audited Party, then the Audited Party will pay the amount of the underpayment within 45 days after the date of the auditor’s report. Further, if any audit reveals an underpayment of more than 5% of the total amount subject to the audit, then the Audited Party will reimburse the Auditing Party within 30 days after the Auditing Party’s request, for all costs and expenses reasonably incurred by the Auditing Party to conduct the audit.

SECTION 4.03. Disagreements. (a) In the event it disagrees with any Monthly Statement, Recipient shall give Service Provider written notice thereof (the “ Notice of Disagreement ”) as to any of the Monthly Statements or amounts set forth therein. The Notice of Disagreement shall specify in reasonable detail the nature and amount of any disagreement so asserted. If a timely Notice of Disagreement is received by Service Provider, then the Monthly Statement(s) (as revised in accordance with clause (x) or (y) below), as the case may be, shall become final and binding upon the Parties on the earlier of (x) the date the Parties hereto resolve any differences they have with respect to any matter specified in the Notice of Disagreement or (y) the date any matters in dispute are resolved by an accounting firm (in accordance with the procedure set forth in this Section 4.03) selected by Service Provider and Recipient in writing or, if the Parties are unable to agree, an independent accounting firm selected by Service Provider’s and Recipient’s independent accounting firms (such firm, the “ Accounting Firm ”).

(b) Recipient and Service Provider acknowledge and agree that, so long as both Parties are in compliance with the provisions of this Section 4.03, Sections 9.05 and 9.07 of the Separation Agreement and the provisions of Article VI of this Agreement shall not apply to any dispute described in this Section 4.03. During the 30-day period

immediately following the delivery of the Notice of Disagreement, Service Provider and Recipient shall seek in good faith to resolve in writing any differences they may have with respect to any matter specified in the Notice of Disagreement. At the end of such 30-day period, Service Provider and Recipient shall submit for review and resolution by the Accounting Firm any and all matters which remain in dispute and which were included in the Notice of Disagreement, and the Accounting Firm shall make a final determination of the amounts set forth on the Monthly Statement(s) and shall use such determination to prepare the revised Monthly Statement(s), which determination shall be binding on the Parties, it being understood that any such values shall be only within the range of the amounts proposed by Recipient and Service Provider; provided , however , the scope of such determination by the Accounting Firm shall be limited to: (i) those matters that remain in dispute and that were included in the Notice of Disagreement, (ii) whether, for each calculation on the Monthly Statement(s), such calculation was prepared in accordance with this Agreement, and (iii) whether there were mathematical errors in the Monthly Statement(s), and the Accounting Firm is not authorized or permitted to make any other determination. Without limiting the generality of the foregoing, the Accounting Firm is not authorized or permitted to make any determination as to compliance by Service Provider with any of the covenants in this Agreement or any Transaction Agreement (other than this Section 4.03).

(c) Any revised Monthly Statement(s) shall become final and binding on Recipient and Service Provider on the date the Accounting Firm delivers such revised Monthly Statement(s) to the Parties. If the amount shown on any such revised Monthly Statement(s) indicates that a Party has overpaid or underpaid the other Party for the applicable period, then the applicable Party shall promptly reimburse such overpaid or underpaid amount, or, in the case of an overpayment, receive a credit against future amounts owing by such overpaying Party, at such Party’s option. The fees and expenses of the Accounting Firm pursuant to this Section 4.03 with respect to any Monthly Statement shall be paid by Recipient unless the amount shown on any Monthly Statement exceeds the amount paid pursuant to such Monthly Statement by 5%, in which case Service Provider will pay the reasonable fees and expenses of the Accounting Firm.

SECTION 4.04. Taxes. (a) Recipient shall be responsible for Taxes attributable to the supply of Services to Recipient or any payment hereunder. If Service Provider is required to pay any part of such Taxes, Recipient shall reimburse Service Provider for such Taxes. In the event that applicable Law requires that an amount in respect of any taxes, levies or charges be withheld from any payment by Recipient to Service Provider under this Agreement, the amount payable to Service Provider shall be increased as may be necessary so that, after Recipient has withheld amounts required by applicable Law, Service Provider receives an amount equal to the amount it would have received had no such withholding been applicable, and Recipient shall withhold such adjusted amounts and pay such withheld amounts over to the applicable taxing authority in accordance with the requirements of the applicable Law.

(b) In the event applicable Law requires the charging of any Tax in connection with the Services hereunder, invoices issued with respect to such Services may include additional amounts charging such Taxes. If sums invoiced without Taxes

become subject to Taxes, then those invoices shall be deemed to be exclusive of Taxes and the party receiving the invoice shall, in addition to the sums payable, pay the invoicing party the full amount of Taxes chargeable thereon.

ARTICLE V

Recipient Assistance

SECTION 5.01. Recipient Assistance. The timely completion of Services by Service Provider may depend upon the provision of certain materials and information and the taking of certain actions by Recipient, and Service Provider shall not be responsible for the failure to provide Services to the extent that such failure results from the failure of Recipient to provide such materials or information or take such actions. Recipient shall provide to Service Provider (a) information reasonably necessary to the performance of the Services by Service Provider hereunder, (b) any necessary specific written authorizations and consents and (c) reasonable access to Recipient’s books and records necessary in Recipient’s reasonable opinion for the performance of the Services by Service Provider hereunder. Recipient will execute such documents evidencing the authority for Service Provider and its Affiliates to represent Recipient and its Affiliates as may be reasonably necessary to the performance of the Services hereunder.

ARTICLE VI

Limitation on Liability

SECTION 6.01. Limitation on Liability. (a) Except as contemplated by Section 4.03, Service Provider’s maximum liability (including any liability for the acts and omissions of any of its Affiliates or any of its or their respective directors, officers, employees, Affiliates, agents, consultants, subcontractors or representatives) to the Recipient for matters arising out of this Agreement shall be limited to the aggregate amount of the Service Fees received; provided that the foregoing shall not (i) impair the ability of the Recipient to seek any remedy of injunctive relief or specific performance against Service Provider or (ii) limit any claim of fraud or intentional or willful misrepresentation by Service Provider. In no event shall any Party or any of its Affiliates have any liability for special, punitive, exemplary, multiplied, indirect, incidental or consequential damages, including loss of profit damages, or for attorneys’ fees and costs and prejudgment interest, in each case as a result of provision of or failure to provide the Services under the terms of this Agreement; provided , however , that the foregoing shall not be construed to preclude recovery of any such Damages that are actually recovered by third parties in connection with losses indemnified hereunder.

(b) Notwithstanding anything to the contrary contained herein, (i) nothing herein shall limit or exclude any damages or claims to the extent resulting from a Party’s gross negligence, fraud, intentional breach or willful misconduct and (ii) neither Service Provider nor any of its Affiliates shall have any liability relating to the implementation, execution or use by Recipient or any of its Affiliates of the Services provided under the terms of this Agreement, except in the case of any gross negligence, fraud, intentional misrepresentation or willful misconduct.

ARTICLE VII

Force Majeure

SECTION 7.01. Force Majeure. The Parties shall be relieved of their obligations hereunder, if and to the extent that any of the following events hinder, limit or make impracticable the performance by any Party of any of its obligations hereunder: war, terrorist act, riot, fire, explosion, accident, flood, sabotage, compliance with Law, orders or actions, national defense requirements, labor strike, lockout or injunction, or any other event beyond the reasonable control and without the fault or negligence of such Party. The Party thus hindered or whose performance is otherwise affected shall promptly give the other Party written notice thereof and shall use commercially reasonable efforts to remove or otherwise address the impediment to action and to resume performance of its affected obligations as soon as practicable; provided that neither Party shall be required to settle a labor dispute other than as it may determine in its sole judgment.

ARTICLE VIII

Miscellaneous

SECTION 8.01. Entire Agreement; Third Party Beneficiaries. This Agreement constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person, other than the Parties to this Agreement, any rights or remedies hereunder.

SECTION 8.02. Notices. Any notice, instruction, direction or demand under the terms of this Agreement will be duly given upon delivery, if delivered by hand, facsimile transmission or mail, to the following addresses:

(a)

If to BNED, to:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attention: General Counsel

(b)

If to B&N, to:

Barnes & Noble, Inc.

122 Fifth Avenue

New York, NY 10011

Attention: General Counsel

Facsimile: (212) 463-5683

or to such other address as any person shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or scheduled to be received if sent by overnight delivery service. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

SECTION 8.03. Successors and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. This Agreement may not be assigned by either Party by operation of law or otherwise without the express written consent of the other Party, which consent may be granted or withheld by such Party in its sole discretion. Any such assignment made without such consent shall be null and void for all purposes.

SECTION 8.04. Amendment. This Agreement may only be amended by a written agreement executed by both Parties.

SECTION 8.05. Waivers. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the Party entitled to enforce such term, but such waiver shall be effective only if it is in writing signed by a duly authorized officer of the Party against which such waiver is to be asserted. Unless otherwise expressly provided in this Agreement, no delay or omission on the part of any Party in exercising any right or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any right or privilege under the Agreement operate as a waiver of any other right or privilege under this Agreement, nor shall any single or partial exercise of any right or privilege preclude any other or future exercise thereof or the exercise of any other right or privilege under this Agreement. No failure by either Party to take any action or assert any right or privilege hereunder shall be deemed to be a waiver of such right or privilege in the event of the continuation or repetition of the circumstances giving rise to such right unless expressly waived in writing by the Party against whom the existence of such waiver is asserted.

SECTION 8.06. Books and Records. Upon the expiration of the Agreement or upon the termination of a Service or Services with respect to which Service Provider holds books, records, files or any other documents of Recipient, Service Provider will return such books, records, files and any other documents of Recipient that Service Provider has in its possession as soon as reasonably practicable.

SECTION 8.07. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of New York.

(b) Each of the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder, brought by the other Party hereto or its successors or assigns shall be brought and determined exclusively in any state or federal court in the City of New York, Borough of Manhattan, so long as one of such courts shall have subject matter jurisdiction over such legal action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the state of New York. Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (1) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (2) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (3) to the fullest extent permitted by the applicable law, any claim that (a) the suit, action or proceeding in such court is brought in an inconvenient forum, (b) the venue of such suit, action or proceeding is improper or (c) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each Party hereto hereby irrevocably consents to the service of process in any action, suit or other proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement, on behalf of itself or its property, by U.S. registered mail to such party’s respective address set forth below, and nothing in this Section 8.07(b) shall affect the right of any Party to serve legal process in any other manner permitted by law.

(c) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 8.07(c).

SECTION 8.08. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each Party shall be construed and enforced accordingly.

SECTION 8.09. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement.

SECTION 8.10. Headings. The article, section and other headings contained in this Agreement are inserted for the convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

SECTION 8.11. Interpretation. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local or foreign Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. When a reference is made in this Agreement to a Party or to a Section or Exhibit, such reference shall be to a Party to, a Section of, or an Exhibit to, this Agreement, unless otherwise indicated. All terms defined in this Agreement shall have their defined meanings when used in any Exhibit to this Agreement or any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein. Whenever the words “include”, “includes”, “including” or “such as” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” when used in this Agreement is not exclusive. The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. Whenever used in this Agreement, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. Any agreement, instrument or statute defined or referred to herein means such agreement, instrument or statute as from time to time amended, supplemented or modified, including (i) (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and (ii) all attachments thereto and instruments incorporated therein. The words “asset” and “property” shall be construed to have the same meaning and effect. References to a Person are also to its permitted successors and permitted assigns.

IN WITNESS WHEREOF, the Parties have each caused this Agreement to be executed by its duly authorized representative as of the day and year first above written.


BARNES & NOBLE, INC.,

	by
		Name:
		Title:

BARNES & NOBLE EDUCATION, INC.

	by
		Name:
		Title:

[ Signature Page to the Transition Services Agreement ]

EXHIBIT A

Human Resources


Description of Service:	End Date:	Fee:
HR Administration: B&N shall provide BNED general advice, consultation for benefits administration, timekeeping and processing for payroll services.	December 31, 2016. BNED has the option to extend the end date of payroll processing service to December 31, 2017.	Pro rata share of HR service center costs (based upon average employee count). Pass-Through Cost for all other HR Administration services.
Learning and Development (Navex Global): B&N shall provide BNED access to the Preventing Workplace Harassment course from the Navex Global, provided such vendors consent to B&N’s provision of such access to BNED.	February 4, 2017	No cost.
Learning and Development (Trivantis): B&N shall provide BNED access to the LMS by Trivantis, provided such vendors consent to B&N’s provision of such access to BNED.	The first anniversary of the date of this Agreement.	20% of B&N’s Annual payment to Trivantis.

A-1

Finance and Travel


Description of Service:	End Date:	Fee:
Expenses: B&N shall continue to make available to BNED its expense payment services provided by Concur under contract.	The first anniversary of the date of this Agreement.	Pass-Through Cost.
Travel Services: B&N shall continue to make available to BNED its travel services provided by American Express Company under contract, provided such vendor permits B&N’s provision of such services to BNED.	The second anniversary of the date of this Agreement.	Pass-Through Cost.

A-2

Digital Content Services


Description of Service:	End Date:	Fee:
Metadata Feed for Digital Trade Books : B&N will make available metadata relating to digital trade books.	The six-month anniversary of the date of this Agreement.	$30,000 per month.
Customer Service : B&N will provide staffing oversight of third party customer service agents, review and analyze consolidated reports from third party and audit third party invoicing. B&N will also host and maintain the customer service toll-free lines staffed by third party.	The two-year anniversary of the date of this Agreement.	$2,000 per month plus Pass-Through Costs.

A-3

General Oversight and Consultation


Description of Service:	End Date:	Fee:
Legal: General legal advice and services.	The six-month anniversary of the date of this Agreement.	For services provided by B&N employees: Pass-Through Cost. For outside Service Providers, all direct costs to B&N relating to such Service directly attributable to BNED.
Treasury: General advice and consultation in the areas of cash management, management of bank lines, and management of cash investments.	The six-month anniversary of the date of this Agreement.
Investor Relations: General advice and consultation in the areas of investor relations, investor website management, investor webcast and quarterly conference call preparation, Annual Report preparation and press release preparation and dissemination.	The 60th day after the date of this Agreement.
PR: Assistance with public relations and media strategy, issuing press releases, organizing and holding briefings, author launch events, device launch events and other launch events and general media and public relations services, including through the use of and provision of access to outside public relations firms and other relevant external service providers.	The 60th day after the date of this Agreement.
SEC Reporting: General advice and consultation relating to SEC reporting obligations, including advice on filing through EDGAR.	The 90th day after the date of this Agreement.
Tax: General advice and consultation in the areas of federal and state tax planning and compliance, management of open audits, tax accounting, general advice on audit dispute resolution, calculation of estimated tax payments, tax compliance software selection, and preparation, review and filing of all tax returns.	The 18-month anniversary of the date of this Agreement.

A-4


Insurance/Risk Management: General advice, consultation and performance of duties in the areas of broker selection, review of bids, selection and monitoring of insurers/underwriters, communications with brokers and underwriters, claims management and reporting, and interpretation of reports inclusive of Worker’s Compensation plans and vendors.	The six-month anniversary of the date of this Agreement.	For services provided by B&N employees: Pass-Through Cost. For outside Service Providers, all direct costs to B&N relating to such Service directly attributable to BNED.

Payments Administration under Certain Insurance Policies : B&N shall manage and administer payments on Pre-Separation Insurance Claims under the insurance policies identified in Section 8.01(c) of the Separation Agreement on behalf of BNED in accordance with the Separation Agreement. BNED shall pay B&N for such management and administration on a monthly basis.	Until such Pre-Separation Insurance Claims are resolved.	Pass-Through Cost.

Internal Audit : General advice and consultation regarding internal audit procedures.	The six-month anniversary of the date of this Agreement.	Pass-Through Cost.

A-5

IT Systems Infrastructure


Description of Service:	End Date:	Fee:
Reflexis Eplanner System: The hosting of the Reflexis eplanner system, provided such vendor permits B&N’s provision of such services to BNED.	The first anniversary of the date of this Agreement.	$1,667 per month.
Datacenter Monitoring: B&N will monitor the uptime and performance of the datacenter during off-hours when BNED does not have staff to undertake such monitoring.	The first anniversary of the date of this Agreement.	$1,667 per month.
Payroll Processing: B&N will provide BNED with continued access to and use of the Payroll and HR/Benefits System provided by Peoplesoft’s online self-service system. The services provided include printing payroll checks, direct deposit advices, and W-2s. Incremental vendor costs, if any, shall be borne by BNED.	December 31, 2016. BNED has the option to extend the end date to December 31, 2017.	$2.50 per BNED employee per month.

A-6

Freight Claims


Description of Service:	End Date:	Fee:
Freight Claims : B&N shall process the freight claims arising out of or relating to the daily operation of BNED Business on behalf of BNED.	The first anniversary of the date of this Agreement.	Pass-Through Cost.

A-7

Exhibit 10.3

EMPLOYEE MATTERS AGREEMENT

By and Between

BARNES & NOBLE, INC.

and

BARNES & NOBLE EDUCATION, INC.

Dated as of [•]

TABLE OF CONTENTS


		Page
ARTICLE I

Definitions

SECTION 1.01.	Definitions		1
SECTION 1.02.	Glossary of Defined Terms		4

ARTICLE II

General Principles

SECTION 2.01.	BNED Employees		4
SECTION 2.02.	Transferred to BNED Employees		5
SECTION 2.03.	Collectively Bargained Employees		5
SECTION 2.04.	Liabilities		5
SECTION 2.05.	Benefit Plans		6
SECTION 2.06.	Payroll Services		6

ARTICLE III

Bonuses

SECTION 3.01.	BNED Employee Annual Bonuses		6
SECTION 3.02.	BNED Employee Retention Bonuses		6

ARTICLE IV

Service Credit

SECTION 4.01.	B&N Benefit Plans		6
SECTION 4.02.	BNED Benefit Plans		6

ARTICLE V

Severance

SECTION 5.01.	Post-Distribution Severance		7
SECTION 5.02.	Transferred To BNED Employees		7



ARTICLE VI

Certain Welfare Benefit Plan Matters

SECTION 6.01.	BNED Welfare Plans	7
SECTION 6.02.	Allocation of Welfare Benefit Claims	8
SECTION 6.03.	Workers’ Compensation Claims	8
SECTION 6.04.	COBRA	8

ARTICLE VII

Defined Benefit Pension Plan

SECTION 7.01.	B&N Defined Benefit Pension Plan	9

ARTICLE VIII

Defined Contribution Plan

SECTION 8.01.	BNED 401(k) Plan	9
SECTION 8.02.	Trust-to-Trust Transfer	9
SECTION 8.03.	Employer 401(k) Plan Contributions	10
SECTION 8.04.	Limitation of Liability	10

ARTICLE IX

Nonqualified Deferred Compensation

SECTION 9.01.	B&N Deferred Compensation Plan	10
SECTION 9.02.	Section 409A	11

ARTICLE X

Flexible Spending Arrangements; Transportation Reimbursement Arrangements

SECTION 10.01.	Flexible Spending Arrangements	11
SECTION 10.02.	Transportation Reimbursement Arrangements	11

ARTICLE XI

Vacation

SECTION 11.01.	Vacation	12



ARTICLE XII

B&N Equity Compensation Awards

SECTION 12.01.	Treatment of Outstanding B&N Stock Options	13
SECTION 12.02.	Treatment of Outstanding B&N Restricted Stock Units	13
SECTION 12.03.	Treatment of Outstanding B&N Restricted Shares	13

ARTICLE XIII

Benefit Plan Reimbursements

SECTION 13.01.	Pre-Separation Benefit Plan Matters	14

ARTICLE XIV

Cooperation; Access to Information; Litigation; Confidentiality

SECTION 14.01.	Cooperation	14
SECTION 14.02.	Access to Information; Litigation; Confidentiality	15

ARTICLE XV

Reimbursements

SECTION 15.01.	Reimbursements by the BNED Group	15
SECTION 15.02.	Invoices	15

ARTICLE XVI

Termination

SECTION 16.01.	Termination	15
SECTION 16.02.	Effect of Termination	15

ARTICLE XVII

Indemnification

SECTION 17.01.	Incorporation of Indemnification Provisions of Separation Agreement	15

iii



ARTICLE XVIII

Further Assurances; Tax Treatment of Certain Amounts Paid Pursuant to this Agreement

SECTION 18.01.	Further Assurances	15
SECTION 18.02.	Tax Treatment of Certain Amounts Paid Pursuant to this Agreement	16

ARTICLE XIX

Miscellaneous

SECTION 19.01.	Administration	17
SECTION 19.02.	Employment Tax Reporting Responsibility	17
SECTION 19.03.	Confidentiality	17
SECTION 19.04.	Additional Provisions	18

EMPLOYEE MATTERS AGREEMENT (this “ Agreement ”), dated as of [•], by and between BARNES & NOBLE, INC., a Delaware corporation (“ B&N ”), and BARNES & NOBLE EDUCATION, INC., a Delaware corporation (“ BNED ”, and together with B&N, the “ Parties ”).

R E C I T A L S

WHEREAS the Parties have entered into the Separation and Distribution Agreement (the “ Separation Agreement ”) dated as of July [ ], 2015, pursuant to which B&N intends to effect the Distribution; and

WHEREAS the Parties wish to set forth their agreements as to certain matters regarding employment, compensation and employee benefits as well as arrangements with certain non-employee service providers.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Definitions. For purposes of this Agreement, the following terms shall have the following meanings. All capitalized terms used but not defined herein shall have the meanings assigned to them in the Separation Agreement unless otherwise indicated.

“ Benefit Plan ” shall mean any plan, program, policy, agreement, arrangement or understanding that is an employment, consulting, deferred compensation, executive compensation, incentive bonus or other bonus, employee pension, profit sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation right, restricted stock, restricted stock unit, deferred stock unit, other equity-based compensation, severance pay, retention, change in control, salary continuation, life, death benefit, health, hospitalization, workers’ compensation, sick leave, vacation pay, disability or accident insurance or other employee benefit plan, program, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) (whether or not subject to ERISA) sponsored or maintained by such entity or to which such entity is a party.

“ BNED Benefit Plan ” shall mean any Benefit Plan sponsored or maintained by any member of the BNED Group or to which any member of the BNED Group is a party.

“ BNED Employee ” shall mean, as of any applicable date, each Employee employed by a member of the BNED Group, including any individual who is not actively at work due to a leave of absence (including vacation, holiday, illness, injury, short-term disability or long-term disability) from which such employee is permitted to return to active employment in accordance with the BNED Group’s personnel policies, but excluding any Former BNED Employee.

“ BNED Service Provider ” shall mean, as of an applicable date, each Service Provider providing services to a member of the BNED Group.

“ B&N Benefit Plan ” shall mean any Benefit Plan sponsored or maintained by any member of the B&N Group or to which any member of the B&N Group is a party.

“ B&N Benefit Plan Costs Reimbursement Amounts ” shall mean, with respect to any calendar month ending at or after the Distribution, the amount, if any, of the B&N Benefit Plan Costs plus the B&N COBRA Costs incurred by the members of the B&N Group during such calendar month (in each case, as set forth in Section 13.01 ), which amount shall be paid pursuant to Section 15.01 .

“ B&N Service Provider ” shall mean, as of an applicable date, each Service Provider providing services to a member of the B&N Group.

“ B&N Welfare Plan ” shall mean each Welfare Plan sponsored or maintained by a member of the B&N Group.

“ COBRA ” shall mean the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and any applicable similar state or local laws.

“ Code ” shall mean the U.S. Internal Revenue Code of 1986, as amended.

“ Employee ” shall mean any individual employed by another Person.

“ Employment Taxes ” shall mean all fees, Taxes, social insurance payments or similar contributions to a fund of a Governmental Authority with respect to wages or other compensation of an Employee or Service Provider.

“ ERISA ” shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended.

“ Fair Market Value ” of a share of B&N Common Stock or BNED Common Stock shall mean, with respect to any given date, the per share closing price of the shares of B&N Common Stock or BNED Common Stock, respectively, as reported on the New York Stock Exchange on that date (or if there was no reported closing price on such date, on the last preceding date on which the closing price was reported) or, if such stock is not then listed on the New York Stock Exchange, the per share closing price of such stock as reported on an established securities market (within the meaning of Treasury Regulations Section 1.897-1(m)) on which the shares of such stock are traded. If the B&N Common Stock or BNED Common Stock on any such date is not listed on an established securities market (within the meaning of Treasury Regulations Section 1.897-1(m)), the Fair Market Value of a share of such stock shall be determined by the Compensation Committee of B&N or BNED, as applicable, in its sole discretion using appropriate criteria. Notwithstanding the foregoing, the Fair Market Value of shares of B&N Common Stock or BNED Common Stock shall, in all events, be determined in accordance with Code Section 409A.

“ Former BNED Employee ” shall mean, as of any applicable date, each individual who (a) as of immediately prior to such individual’s termination of employment with a member of the B&N Group or the BNED Group was an Employee of the BNED Group and (b) as of such applicable date, is not an Employee of any member of the B&N Group or the BNED Group.

“ Former BNED Service Provider ” shall mean each individual that is a former Service Provider of a member of the BNED Group.

“ Regular Trading Hours ” shall mean the period beginning at 9:30 A.M. New York City time and ending at 4:00 P.M. New York City time.

“ Service Provider ” shall mean any individual providing services for another Person, whether as an independent contractor or other similar role (other than as an Employee).

“ Subsidiary ” of any Person shall mean any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided , however , that, solely for purposes of this Agreement, BNED and its Subsidiaries shall not be considered Subsidiaries of B&N (or members of the Barnes & Noble Group) prior to, on or following the Distribution.

“ Taxing Authority ” shall have the meaning set forth in the TMA.

“ Tax Return ” shall have the meaning set forth in the TMA.

“ Trading Day ” shall mean the period of time during any given calendar day, commencing with the determination of the opening price on the New York Stock Exchange and ending with the determination of the closing price on the New York Stock Exchange.

“ Welfare Plan ” shall mean each Benefit Plan that provides life insurance, health care, dental care, accidental death and dismemberment insurance, disability, severance, vacation or other group welfare or fringe benefits.

“ Workers’ Compensation Event ” shall mean the event, injury, illness or condition giving rise to a workers compensation claim with respect to a BNED Employee.

“ Workers’ Compensation Reimbursement Amounts ” shall mean the amount, if any, by which (i) the amount actually payable by the members of the B&N Group in respect of the participation of BNED Employees and Former BNED Employees in the B&N Workers Compensation Plan for any period prior to the Distribution exceeds (ii) the amount that the B&N Group charged the members of the BNED Group in respect of such period of participation.

SECTION 1.02. Glossary of Defined Terms. The following terms shall have the meanings set forth in the Sections set forth below:


Definition		Section
Agreement		Preamble
BNED		Preamble
BNED 401(k) Plan		8.01
BNED Cafeteria Plan		10.01(a)
BNED Restricted Share		12.03
BNED Transportation Plan		10.02(a)
BNED Welfare Plans		6.01
BNED Workers’ Compensation Plan		6.03
B&N		Preamble
B&N 401(k) Plan		8.01
B&N Benefit Plan Costs		13.01
B&N Cafeteria Plan		10.01(a)
B&N COBRA Costs		13.01
B&N Deferred Compensation Plan		9.01
B&N Option		12.01
B&N Pension Plan		7.01
B&N Restricted Share		12.03
B&N RSU		12.02
B&N Transportation Plan		10.02(a)
B&N Workers’ Compensation Plan		6.03
Claiming Party		18.02(f)
Converted BNED RSUs		12.02
Other Party		18.02(g)
Parties		Preamble
Separation Agreement		Recitals
Specified Welfare Plan Date		6.01
Transferred to BNED Employee		2.02

ARTICLE II

General Principles

SECTION 2.01. BNED Employees. All BNED Employees as of immediately prior to the Distribution shall continue to be employees of the BNED Group immediately following the Distribution.

SECTION 2.02. Transferred to BNED Employees. Prior to the Distribution, B&N shall, or shall cause its Subsidiaries to, transfer or cause to be transferred to a member of the BNED Group the employment of each Employee set forth on Schedule 2.02, effective as of the Distribution, such that these individuals are not Employees of the B&N Group at the time of the Distribution. Schedule 2.02 may be updated by mutual agreement of B&N and BNED from time to time prior to the Distribution. Each Employee who is transferred to the BNED Group pursuant to this Section 2.02 is referred to herein as a “ Transferred to BNED Employee ”. Following the transfer of a Transferred to BNED Employee to a member of the BNED Group, such Transferred to BNED Employee shall be deemed a BNED Employee for purposes of this Agreement.

SECTION 2.03. Collectively Bargained Employees. All provisions contained in this Agreement shall apply equally to any Employee who is covered by a collective bargaining or other labor union agreement, except to the extent that any such agreement specifically provides for the benefit contemplated by such provision and, in each such case, the agreement shall apply rather than the terms of this Agreement.

SECTION 2.04. Liabilities. Except as otherwise provided in this Agreement, the members of the BNED Group shall be responsible for all actual or potential employment Liabilities with respect to BNED Employees and Former BNED Employees arising prior to, on or following the Distribution relating to periods during which such BNED Employees and Former BNED Employees were employed by the BNED Group. Notwithstanding the immediately preceding sentence, except as otherwise specifically provided in this Agreement, effective as of the Distribution, (a) the members of the B&N Group shall be responsible for such Liabilities with respect to Transferred to BNED Employees arising prior to the Distribution during which such Transferred to BNED Employees were employed by the B&N Group and (b) the members of the BNED Group shall be responsible for all such Liabilities arising at or after the Distribution during which such Transferred to BNED Employees were employed by the BNED Group. Except as otherwise specifically provided in this Agreement, the provisions of this Agreement do not apply to BNED Service Providers and Former BNED Service Providers and the members of the BNED Group shall be responsible for all actual or potential Liabilities relating to services provided by BNED Service Providers and Former BNED Service Providers to members of the BNED Group during any period, including (i) Liabilities relating to the misclassification of any Person as a Service Provider and not as an Employee of a member of the BNED Group, (ii) Liabilities for Taxes (including any Employment Taxes) with respect to services provided by such BNED Service Provider or Former BNED Service Provider to any member of the BNED Group, (iii) accounts payable owed to any BNED Service Provider or Former BNED Service Provider by any member of the BNED Group and (iv) any claims made by any BNED Service Provider or Former BNED Service Provider with respect to benefits under any Benefit Plan accrued with respect to services provided to any member of the BNED Group.

SECTION 2.05. Benefit Plans. Except as otherwise specifically provided in this Agreement, as of the Distribution, each BNED Employee (and each of their respective dependents and beneficiaries) shall cease active participation in, and each member of the BNED Group shall cease to be a participating employer in, all B&N Benefit Plans, including the B&N Benefit Plans listed on Schedule 2.05, and, as of such time, BNED shall, or shall cause its Subsidiaries to, have in effect such corresponding BNED Benefit Plans as are necessary to comply with its obligations pursuant to this Agreement. As of immediately following the Distribution, except as otherwise specifically provided in this Agreement, (a) B&N shall, or shall cause one or more members of the B&N Group to, retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to all B&N Benefit Plans, and (b) BNED shall, or shall cause one of the members of the BNED Group to, retain, pay, perform, fulfill and discharge all Liabilities arising out of or relating to all BNED Benefit Plans.

SECTION 2.06. Payroll Services . Subject to the Transition Services Agreement, prior to, upon and after the Distribution, the BNED Group shall be solely responsible for providing payroll services to the BNED Employees and Former BNED Employees, and BNED shall be solely responsible for any Liabilities with respect to garnishments of the salary and wages of the BNED Employees.

ARTICLE III

Bonuses

SECTION 3.01. BNED Employee Annual Bonuses. On or following the Distribution, BNED shall retain all Liabilities with respect to the payment of any annual bonus awards to each eligible BNED Employee, including, for the avoidance of doubt, with respect to the year in which the Distribution occurs.

SECTION 3.02. BNED Employee Retention Bonuses. On or following the Distribution, BNED shall assume or retain all Liabilities with respect to the payment of any retention bonus awards to each eligible BNED Employee as set forth on Schedule 3.02, including, for the avoidance of doubt, with respect to any retention bonuses pursuant to plans, agreements or arrangements sponsored by any member of the B&N Group or to which any member of the B&N Group is a party.

ARTICLE IV

Service Credit

SECTION 4.01. B&N Benefit Plans. From and after the Distribution, service of BNED Employees with any member of the BNED Group or any other employer, as applicable, other than any member of the B&N Group shall not be taken into account for any purpose under the corresponding B&N Benefit Plan.

SECTION 4.02. BNED Benefit Plans. Unless prohibited by applicable law, BNED shall, and shall cause its Subsidiaries to, credit service accrued by each BNED Employee with, or otherwise recognized for benefit plan purposes by, any member of the B&N Group or the BNED Group at the time of or prior to the Distribution

for all purposes, including for purposes of (a) eligibility and vesting under each BNED Benefit Plan under which service is relevant in determining eligibility or vesting, (b) determining the amount of severance payments and benefits (if any) payable under each BNED Benefit Plan that provides severance payments or benefits and (c) determining the number of vacation days to which each such Employee will be entitled following the Distribution, in the case of clauses (a), (b) and (c), (i) to the same extent recognized by the relevant members of the B&N Group or BNED Group or the corresponding B&N Benefit Plan or BNED Benefit Plan immediately prior to the Distribution Date and (ii) except to the extent such credit would result in a duplication of benefits for the same period of service.

ARTICLE V

Severance

SECTION 5.01. Post-Distribution Severance. The BNED Group shall be solely responsible for all severance or other separation payments and benefits relating to the termination or alleged termination of any BNED Employee’s employment that occurs at the time of or following the Distribution.

SECTION 5.02. Transferred To BNED Employees. Unless required by applicable law or by the terms of any individual agreement, none of the Transferred To BNED Employees shall be deemed to have terminated employment for purposes of determining eligibility for severance or other separation payments and benefits as a result of the transfers contemplated by Section 2.02 of this Agreement; provided , however , that in the event such transfers result in severance or other separation payments or benefits to any Transferred To BNED Employee, the B&N Group shall be solely responsible for all such Liabilities.

ARTICLE VI

Certain Welfare Benefit Plan Matters

SECTION 6.01. BNED Welfare Plans. Notwithstanding Section 2.05 , effective as of the end of the calendar month in which the Distribution occurs (such date, the “ Specified Welfare Plan Date ”), BNED will establish the Welfare Plans listed on Schedule 6.01 (collectively, the “ BNED Welfare Plans ”) to provide welfare benefits to the BNED Employees (and their dependents and beneficiaries) and as of the Specified Welfare Plan Date, each BNED Employee (and his or her dependants and beneficiaries) will cease active participation in the corresponding B&N Welfare Plan. For the avoidance of doubt, for purposes of this Article VI , BNED Employees shall include any Former BNED Employee who was receiving severance payments from a member of the B&N Group or the BNED Group as of the Distribution.

SECTION 6.02. Allocation of Welfare Benefit Claims. Notwithstanding Section 2.05 , (a) the members of the B&N Group shall retain Liability and responsibility in accordance with the applicable B&N Welfare Plan for all reimbursement claims (such as medical and dental claims) for expenses incurred and for all non-reimbursement claims (such as life insurance claims) incurred by BNED Employees and Former BNED Employees (and their dependents and beneficiaries) under such plans on or prior to the Specified Welfare Plan Date and (b) the members of the BNED Group shall retain Liability and responsibility in accordance with the BNED Welfare Plans for all reimbursement claims (such as medical and dental claims) for expenses incurred and for all non-reimbursement claims (such as life insurance claims) incurred by BNED Employees (and their dependents and beneficiaries) following the Specified Welfare Plan Date. Notwithstanding the foregoing, BNED shall be obligated to reimburse B&N for the B&N Benefit Plan Costs as provided in Section 13.01 . For purposes of this Section 6.02 , a benefit claim shall be deemed to be incurred as follows: (i) health, dental, vision, employee assistance program and prescription drug benefits (including in respect of any hospital confinement), upon provision of such services, materials or supplies; and (ii) life, accidental death and dismemberment and business travel accident insurance benefits, upon the death, cessation of employment or other event giving rise to such benefits.

SECTION 6.03. Workers’ Compensation Claims. Notwithstanding Section 2.05 , in the case of any workers’ compensation claim of any BNED Employee or Former BNED Employee who participates in a workers’ compensation plan of a member of the B&N Group (a “ B&N Workers’ Compensation Plan ”), such claim shall be covered (a) under such B&N Workers’ Compensation Plan if the Workers’ Compensation Event occurred prior to the Distribution, and (b) under a workers’ compensation plan of the BNED Group (each, a “ BNED Workers’ Compensation Plan ”) if the Workers’ Compensation Event occurs on or after the Distribution. If the Workers’ Compensation Event occurs over a period both preceding and following the Distribution, the claim shall be covered jointly under the B&N Workers’ Compensation Plan and the BNED Workers’ Compensation Plan and shall be equitably apportioned between them based upon the relative periods of time that the Workers’ Compensation Event transpired preceding and following the Distribution. Notwithstanding the foregoing, BNED shall be obligated to reimburse B&N for the Workers’ Compensation Reimbursement Amounts in accordance with Section 15.01 .

SECTION 6.04. COBRA. Notwithstanding Section 2.05 , in the event that a BNED Employee or Former BNED Employee (a) was receiving, or was eligible to receive, continuation health coverage pursuant to COBRA on or prior to the Specified Welfare Plan Date, B&N and the B&N Welfare Plans shall be responsible for all Liabilities to such Employee (or his or her eligible dependents) in respect of COBRA; and (b) becomes eligible to receive continuation health coverage pursuant to COBRA following the Specified Welfare Plan Date, BNED and the BNED Welfare Plans shall be responsible for all Liabilities to such Employee (or his or her eligible dependents) in respect of COBRA. Notwithstanding the foregoing, BNED shall be obligated to reimburse B&N for the B&N COBRA Costs as provided in Section 13.01 . BNED shall indemnify, defend and hold harmless the members of the B&N Group from and against any and all Liabilities relating to, arising out of or resulting from COBRA provided by BNED, or the failure of BNED to meet its COBRA obligations, to BNED Employees, Former BNED Employees and their respective eligible dependents.

ARTICLE VII

Defined Benefit Pension Plan

SECTION 7.01. B&N Defined Benefit Pension Plan. Notwithstanding Section 2.05 or any other provision of this Agreement to the contrary, following the Distribution, the B&N Group shall retain sponsorship of the B&N, Inc. Employees’ Retirement Plan (the “ B&N Pension Plan ”) and all assets and Liabilities arising out of or relating to the B&N Pension Plan. The obligations of the members of the BNED Group to provide information to the members of the B&N Group in connection with the payment of benefits to the BNED Employees and Former BNED Employees pursuant to the B&N Pension Plan are set forth in Section 14.01 .

ARTICLE VIII

Defined Contribution Plan

SECTION 8.01. BNED 401(k) Plan. Effective as of the Distribution, BNED will establish a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (the “ BNED 401(k) Plan ”) providing benefits to the BNED Employees participating in any tax-qualified defined contribution plan sponsored by any member of the B&N Group (the “ B&N 401(k) Plan ”) as of the Distribution.

SECTION 8.02. Trust-to-Trust Transfer. As of the Distribution, a member of the B&N Group shall cause to be transferred from the B&N 401(k) Plan to the BNED 401(k) Plan the assets and liabilities relating to the account balances of the BNED Employees (whether vested or unvested) in accordance with the applicable requirements of all applicable laws, including the Code. From and after the time that the transfer is complete, as described in the immediately preceding sentence, a member of the BNED Group shall administer the accounts of BNED Employees in the BNED 401(k) Plan in accordance with all applicable laws, including the Code. Except as otherwise provided for in this Section 8.02 , such transfer of assets shall consist of cash, cash equivalents or participant loan receivables equal to all the accrued benefit Liabilities relating to all account balances referred to in the first sentence of this Section 8.02 , including such Liabilities for the beneficiaries of the BNED Employees and including such accrued benefit Liabilities arising under any applicable qualified domestic relations order. As of the Distribution, a member of the BNED Group shall direct the trustee of the BNED 401(k) Plan to accept such transfers of assets and Liabilities from the B&N 401(k) Plan. No later than 30 days prior to the date of the transfer of assets and Liabilities pursuant to this Section 8.02 , B&N shall, to the extent necessary and with the cooperation of BNED as necessary, file Internal Revenue Service Form 5310-A regarding such transfer of assets and Liabilities from the B&N 401(k) Plan to the BNED 401(k) Plan, as described in this Section 8.02 . Following the foregoing transfer, the BNED Group and/or the BNED 401(k) Plan shall assume all Liabilities of the B&N Group under the B&N 401(k) Plan with respect to all participants in the B&N 401(k) Plan whose balances were transferred to the BNED 401(k) Plan and their beneficiaries pursuant to such transfer, and

the B&N Group and the B&N 401(k) Plan shall have no Liabilities to provide such participants with benefits under the B&N 401(k) Plan following such transfer. B&N and BNED shall use reasonable efforts to minimize the duration of any “blackout period” imposed in connection with each transfer of account balances from the B&N 401(k) Plan to the BNED 401(k) Plan. BNED will cooperate with B&N in effecting a transition of all outstanding 401(k) loans of BNED Employees in a manner designed to prevent a deemed distribution. BNED shall indemnify, defend and hold harmless the members of the B&N Group from and against any and all Liabilities relating to, arising out of or resulting from the transfers described in this Section 8.02 . For the avoidance of doubt, this Section 8.02 does not apply to the account balance of any Former BNED Employee in the B&N 401(k) Plan, and prior to, on and following the Distribution the B&N 401(k) Plan shall retain all assets and Liabilities with respect to the account balance of any Former BNED Employee, and the B&N Group and the B&N 401(k) Plan shall retain responsibility to provide any such Former BNED Employee with benefits under the B&N 401(k) Plan.

SECTION 8.03. Employer 401(k) Plan Contributions. The B&N Group shall remain responsible for employer contributions under the B&N 401(k) Plan with respect to any BNED Employees relating to periods prior to the Distribution. On and following the Distribution, the BNED Group will be responsible for all employer contributions under the BNED 401(k) Plan with respect to any BNED Employees.

SECTION 8.04. Limitation of Liability. For the avoidance of doubt, (a) B&N shall have no responsibility for any failure of BNED to properly administer the BNED 401(k) Plan in accordance with its terms and applicable law, including any failure to properly administer the accounts of BNED Employees and their beneficiaries in such BNED 401(k) Plan and (b) B&N shall have no responsibility for any failure of B&N to properly administer the accounts of BNED Employees and their beneficiaries in the B&N 401(k) Plan prior to the Distribution.

ARTICLE IX

Nonqualified Deferred Compensation

SECTION 9.01. B&N Deferred Compensation Plan. Effective as of the Distribution, the participation of any BNED Employee or Former BNED Employee in the B&N, Inc. Deferred Compensation Plan (the “ B&N Deferred Compensation Plan ”) will terminate, and B&N will accelerate in accordance with Treasury Regulation Section 1.409A-3(j)(4)(v) all payments and benefits owed to the BNED Employees and Former BNED Employees pursuant to the B&N Deferred Compensation Plan. Following the payment or distribution of such amounts to the BNED Employees, the members of the B&N Group shall have no actual or potential Liabilities relating to, arising out of or resulting from the participation of the BNED Employees and Former BNED Employees in the B&N Deferred Compensation Plan.

SECTION 9.02. Section 409A. B&N and BNED shall cooperate in good faith and use reasonable best efforts to ensure that that the transactions contemplated by this Agreement and the Separation Agreement will not result in adverse tax consequences under Section 409A of the Code to any BNED Employee or Former BNED Employee (or any of their respective beneficiaries), in respect of their respective benefits under any Benefit Plan.

ARTICLE X

Flexible Spending Arrangements; Transportation Reimbursement Arrangements

SECTION 10.01. Flexible Spending Arrangements. (a) Effective as of the Distribution, BNED Employees will cease participation in the flexible spending arrangements under each cafeteria plan qualifying under Section 125 of the Code sponsored by any member of the B&N Group (the “ B&N Cafeteria Plan ”). Effective as of the Distribution, BNED or its Subsidiaries will establish flexible spending arrangements under a cafeteria plan qualifying under Section 125 of the Code (the “ BNED Cafeteria Plan ”).

(b) Promptly following the Distribution, with respect to each BNED Employee who has a flexible spending arrangement under the B&N Cafeteria Plan, B&N shall, or shall cause its Subsidiaries to, transfer to BNED or its Subsidiaries all relevant records relating to the flexible spending arrangements of such BNED Employee under the B&N Cafeteria Plan and any other information necessary for the administration of the BNED Cafeteria Plan with respect to such flexible spending arrangements. Promptly following the Distribution, BNED shall, or shall cause its Subsidiaries to, cause the BNED Cafeteria Plan to accept a spin-off with respect to the flexible spending arrangement of each individual who is a BNED Employee and who has a flexible spending arrangement under the B&N Cafeteria Plan from the account for the BNED Group in the B&N Cafeteria Plan and to honor and continue, through the end of the plan year in which the Distribution occurs, the elections made by such employee with respect to a flexible spending arrangement under the B&N Cafeteria Plan for such plan year. For the avoidance of doubt, neither Party shall be obligated to make any additional payment to the other Party with respect to any overfunding or underfunding of the account for the BNED Group in the B&N Cafeteria Plan at the time of the spin-off described in the immediately preceding sentence because such account is held separate from the accounts relating to other members of the B&N Group in the B&N Cafeteria Plan. On and after the Distribution, the BNED Group shall assume and be solely responsible for all claims by BNED Employees under the B&N Cafeteria Plan, whether incurred prior to, on or after the Distribution, that have not been paid in full as of the Distribution, and following the Distribution BNED shall indemnify, defend and hold harmless the members of the B&N Group from and against any and all Liabilities relating to, arising out of or resulting from claims for reimbursement under the B&N Cafeteria Plan with respect to BNED Employees that are not paid in full as of the Distribution.

SECTION 10.02. Transportation Reimbursement Arrangements. (a) Effective as of the Distribution, BNED Employees will cease participation in the transportation reimbursement account plan sponsored by any member of the B&N Group (the “ B&N Transportation Plan ”). Effective as of the Distribution, BNED or its Subsidiaries will establish a transportation reimbursement account plan (the “ BNED Transportation Plan ”).

(b) Promptly following the Distribution, with respect to each BNED Employee who has a transportation reimbursement account under the B&N Transportation Plan, B&N shall, or shall cause its Subsidiaries to, transfer to BNED or its Subsidiaries all relevant records relating to the transportation reimbursement account of such BNED Employee under the B&N Transportation Plan and any other information necessary for the administration of the BNED Transportation Plan with respect to such transportation reimbursement account. Promptly following the Distribution, BNED shall, or shall cause its Subsidiaries to, cause the BNED Transportation Plan to accept a spin-off with respect to the transportation reimbursement account of each individual who is a BNED Employee and who has a transportation reimbursement account under the B&N Transportation Plan from the account for the BNED Group in the B&N Transportation Plan and to honor and continue, through the end of the plan year in which the Distribution occurs, the elections made by such employee with respect to a transportation reimbursement account under the B&N Transportation Plan for such plan year. For the avoidance of doubt, neither Party shall be obligated to make any additional payment to the other Party with respect to any overfunding or underfunding of the account for the BNED Group in the B&N Transportation Plan at the time of the spin-off described in the immediately preceding sentence because such account is held separate from the accounts relating to other members of the B&N Group in the B&N Transportation Plan. On and after the Distribution, the BNED Group shall assume and be solely responsible for all claims by BNED Employees under the B&N Transportation Plan, whether incurred prior to, on or after the Distribution, that have not been paid in full as of the Distribution, and following the Distribution BNED shall indemnify, defend and hold harmless the members of the B&N Group from and against any and all Liabilities relating to, arising out of or resulting from claims for reimbursement under the B&N Transportation Plan with respect to BNED Employees that are not paid in full as of the Distribution.

ARTICLE XI

Vacation

SECTION 11.01. Vacation. The BNED Group shall retain all Liability for vacation accruals and benefits with respect to each BNED Employee and Former BNED Employee; provided , however , that with respect to each Transferred To BNED Employee, (a) for purposes of determining the number of vacation days to which such Employee shall be entitled following the Distribution, BNED and its Subsidiaries shall assume and honor all vacation days accrued or earned but not yet taken by such Employee, if any, as of the Distribution, and (b) to the extent such Employee is entitled under any applicable law or any policy of his or her respective employer that is a member of the B&N Group, as the case may be, to be paid for any vacation days accrued or earned but not yet taken by such Employee as of the Distribution, BNED shall discharge the Liability for such vacation days.

ARTICLE XII

B&N Equity Compensation Awards

SECTION 12.01. Treatment of Outstanding B&N Stock Options. Notwithstanding any provision of this Agreement or the Separation Agreement to the contrary, at the time of the Distribution, each outstanding option to purchase B&N Common Stock (each, a “ B&N Option ”) that was granted under or pursuant to any equity compensation plan of B&N, and that, at the time of the Distribution, is held by any BNED Employee, will vest as of the Distribution, and the employment with B&N of any BNED Employee who holds any such B&N Option will be treated as terminated for purposes of exercising such B&N Option. Each such Employee may exercise any B&N Option during the 180-day period following the Distribution (or, if earlier, until the expiration of such B&N Option), and will receive the number of shares of B&N common stock underlying the exercised portion of such B&N Option less the number of shares having a Fair Market Value equal to the (a) applicable exercise price of such B&N Option and (b) the employee-paid portion of any Taxes (including Employment Taxes) required to be withheld, if any, upon exercise or settlement of such B&N Option.

SECTION 12.02. Treatment of Outstanding B&N Restricted Stock Units. In connection with the Distribution, all outstanding restricted stock units payable in shares of B&N Common Stock or the value of which is determined by reference to the value of shares of B&N Common Stock that were granted under or pursuant to any equity compensation plan of B&N (each, a “ B&N RSU ”) held by any BNED Employee shall be adjusted as necessary to provide that, as of the Distribution, each B&N RSU held by a BNED Employee will be converted into a restricted stock unit award on the same terms and conditions as were applicable under such B&N RSU immediately prior to the Distribution, with respect to a number of shares of BNED Common Stock with a Fair Market Value equal to the aggregate value of such B&N RSUs as of immediately prior to the Distribution (determined based on the Fair Market Value of a share of B&N Common Stock as of the Distribution Date) (the “ Converted BNED RSUs ”). As of the Distribution, the BNED Group shall assume all the obligations of B&N with respect to the Converted BNED RSUs and the agreements evidencing the grants thereof, and shall take all corporate action necessary to reserve for issuance a sufficient number of shares of BNED Common Stock for delivery upon settlement of the Converted BNED RSUs.

SECTION 12.03. Treatment of Outstanding B&N Restricted Shares. In connection with the Distribution, each B&N Service Provider who holds restricted shares of B&N Common Stock (each, a “ B&N Restricted Share ”) will receive, as of the time of the Distribution, restricted shares of BNED Common Stock (each, a “ BNED Restricted Share ”) in accordance with the terms and conditions of the award agreements for such B&N Restricted Shares, in an amount determined in the same manner as for other shareholders of B&N Common Stock based on a distribution ratio to be determined by B&N in its sole discretion, rounded down to the nearest whole number of shares. The treatment of any fractional shares in respect of such BNED Restricted Shares will be treated in accordance with Section 5.02 of the Separation Agreement. Such BNED Restricted Shares shall be subject to the same vesting requirements and dates and other terms and conditions as the B&N Restricted Shares to which they relate (including the right to receive dividends or other distributions paid on B&N Common Stock).

ARTICLE XIII

Benefit Plan Reimbursements

SECTION 13.01. Pre-Separation Benefit Plan Matters. Following the Distribution, the members of the BNED Group shall remain responsible for reimbursing the members of the B&N Group for costs (a) relating to compensation and benefits provided to the BNED Employees and Former BNED Employees as a result of participation in the B&N Benefit Plans set forth on Schedule 13.01 prior to the Distribution, or with respect to any B&N Welfare Plan, on or prior to the Specified Welfare Plan Date (such costs, the “ B&N Benefit Plan Costs ”); and (b) relating to compensation and benefits provided to BNED Employees or Former BNED Employees pursuant to the B&N Welfare Plans in respect of COBRA (such costs, the “ B&N COBRA Costs ”), in each case, that are not charged directly to the members of the BNED Group in the ordinary course of business consistent with past practice; provided , however , that, except as otherwise specifically provided in this Agreement, in no event shall any member of the BNED Group be required to reimburse any member of the B&N Group for the cost of any Benefit Plan related Liabilities for which the B&N Group remains ultimately responsible pursuant to this Agreement.

ARTICLE XIV

Cooperation; Access to Information; Litigation; Confidentiality

SECTION 14.01. Cooperation. Following the date of this Agreement, the Parties shall, and shall cause their respective Subsidiaries to, use commercially reasonable efforts to cooperate with respect to any Employee compensation or benefits matters that either Party reasonably determines require the cooperation of the other Party in order to accomplish the objectives of this Agreement. Without limiting the generality of the preceding sentence, (a) B&N and BNED shall cooperate in connection with any audits of any Benefit Plan with respect to which such Party may have Information, (b) B&N and BNED shall cooperate in connection with any audits of their respective payroll services (whether by a Governmental Authority in the U.S. or otherwise) in connection with the services provided by one Party to the other Party, (c) B&N and BNED shall cooperate in administering the B&N Pension Plan and (d) B&N and BNED shall cooperate in good faith in connection with the notification and consultation with labor unions and other employee representatives of Employees of the B&N Group and the BNED Group. The obligations of the B&N Group and the BNED Group to cooperate pursuant to this Section 14.01 shall remain in effect until the later of (i) the date all audits of all Benefit Plans with respect to which a Party may have Information have been completed or (ii) the date the applicable statute of limitations with respect to such audits has expired.

SECTION 14.02. Access to Information; Litigation; Confidentiality. Article VII of the Separation Agreement is hereby incorporated into this Agreement mutatis mutandi .

ARTICLE XV

Reimbursements

SECTION 15.01. Reimbursements by the BNED Group. Promptly following the last business day of each calendar month following the Distribution, B&N shall provide BNED with one or more invoices that set forth the aggregate (a) Workers’ Compensation Reimbursement Amounts and (b) B&N Benefit Plan Costs Reimbursement Amounts incurred by a member of the B&N Group during such calendar quarter. Within 30 days following BNED’s receipt of each such invoice, BNED shall pay B&N an amount in cash equal to the aggregate amounts set forth on such invoice.

SECTION 15.02. Invoices. All invoices provided pursuant to this Article XIV shall be denominated in U.S. dollars.

ARTICLE XVI

Termination

SECTION 16.01. Termination. This Agreement may be terminated by B&N at any time, in its sole discretion, prior to the Distribution; provided , however , that this Agreement shall automatically terminate upon the termination of the Separation Agreement in accordance with its terms.

SECTION 16.02. Effect of Termination. In the event of any termination of this Agreement prior to the Distribution, none of the Parties (or any of its directors or officers) shall have any Liability or further obligation to any other Party under this Agreement.

ARTICLE XVII

Indemnification

SECTION 17.01. Incorporation of Indemnification Provisions of Separation Agreement. In addition to the specific indemnification provisions in this Agreement, Article VI of the Separation Agreement is hereby incorporated into this Agreement mutatis mutandi .

ARTICLE XVIII

Further Assurances; Tax Treatment of Certain Amounts Paid Pursuant to this Agreement

SECTION 18.01. Further Assurances. Article X of the Separation Agreement is hereby incorporated into this Agreement mutatis mutandi.

SECTION 18.02. Tax Treatment of Certain Amounts Paid Pursuant to this Agreement. (a) With respect to any B&N Option held by BNED Employees and Former BNED Employees that is exercised or canceled after the date of the Distribution:

(i) BNED or one of its Subsidiaries, as applicable, shall claim any U.S. Federal, state and local income Tax deduction arising as a result of such exercise or cancellation and B&N and its Subsidiaries shall not claim such deduction;

(ii) Without limiting the generality of Section 2.06, BNED or one of its Subsidiaries (as applicable) shall be responsible for remitting all Taxes required to be withheld upon such exercise, including all payroll or employment Taxes, to the appropriate Taxing Authority and shall be responsible for all obligations relating to the reporting of income producing such Taxes to the Taxing Authority, and B&N and its Subsidiaries shall not be responsible for such withholding and reporting;

(iii) The Parties shall cooperate to cause the proceeds of the sale of any shares of B&N Common Stock withheld pursuant to Section 12.01 in respect of Taxes described in Section 18.02(a)(ii) above to be deposited in a bank account of BNED; and

(iv) The intent of the Parties is for BNED and its Subsidiaries to receive the benefit of any deduction and to bear the responsibility for all Tax withholding and reporting with respect to such B&N Options, and this Agreement shall be construed (and the Parties shall cooperate) to effect such intent.

(b) Any U.S. Federal, state and local income Tax deduction arising as a result of the vesting and settlement of any Converted BNED RSU held by BNED Employees and Former BNED Employees shall, in each case, be claimed (if and when permitted by applicable Law) by BNED or one of its Subsidiaries, as applicable.

(c) Any U.S. Federal, state and local income Tax deduction arising as a result of the payment of any annual bonus award or retention bonus award to BNED Employees and Former BNED Employees pursuant to Section 3.01 or Section 3.02, respectively, shall, in each case, be claimed (if and when permitted by applicable Law) by BNED or one of its Subsidiaries, as applicable and, subject to Section 18.02(g), B&N shall not so claim.

(d) Any U.S. Federal, state and local income Tax deduction arising as a result of the vesting of any B&N Restricted Shares or BNED Restricted Shares held by an individual who is a B&N Service Provider following the Distribution shall, in each case, be claimed (if and when permitted by applicable Law) by B&N or one of its Subsidiaries, as applicable and, subject to Section 18.02(g), BNED shall not so claim.

(e) Any U.S. Federal, state and local income Tax deduction arising as a result of the vesting of any B&N Restricted Shares or BNED Restricted Shares held by an individual who is a BNED Service Provider following the Distribution shall, in each case, be claimed (if and when permitted by applicable Law) by BNED or one of its Subsidiaries, as applicable.

(f) B&N, if respect to an individual that is a B&N Service Provider following the Distribution, or one of its Subsidiaries, or BNED, if respect to an individual that is a BNED Service Provider following the Distribution, or one of its Subsidiaries shall be responsible for all obligations relating to the reporting of income resulting from the vesting of any B&N Restricted Shares or BNED Restricted Shares.

(g) Notwithstanding Sections 18.02(a)(i), (b), (c), (d) and (e), if a deduction claimed by the party with the right to claim the deduction pursuant to such Section (the “ Claiming Party ”) or one of its Subsidiaries is disallowed by a Taxing Authority for any reason, the party other than the Claiming Party (the “ Other Party ”) or one of its Subsidiaries, as applicable, shall amend its applicable Tax Return to claim such deduction and pay to the Claiming Party an amount equal to the Tax benefit actually realized by the Other Party or any of its Subsidiaries resulting from such deduction; provided , however , that the Claiming Party, upon the request of the Other Party, shall repay any amount paid to the Claiming Party under this Section 18.02(g) (plus any penalties, interest or other charges imposed by the relevant Taxing Authority) in the event the Other Party or its Subsidiary, as applicable, is required to surrender such Tax benefit.

ARTICLE XIX

Miscellaneous

SECTION 19.01. Administration. BNED hereby acknowledges that B&N has provided administration services for certain BNED Benefit Plans and BNED agrees to assume responsibility for the administration and administration costs of such plans and each other BNED Benefit Plan. The Parties shall cooperate in good faith to complete such transfer of responsibility on commercially reasonable terms and conditions effective no later than the Distribution.

SECTION 19.02. Employment Tax Reporting Responsibility. To the extent applicable, the Parties hereby agree to follow the alternate procedure for U.S. employment tax withholding as provided in Section 5 of Rev. Proc. 2004-53, I.R.B. 2004-35. Accordingly, the members of the B&N Group shall not have any employment tax reporting responsibilities, and the members of the BNED Group shall have full employment tax reporting responsibilities, for BNED Employees from and after the Distribution.

SECTION 19.03. Confidentiality. (a) Each of B&N and BNED, on behalf of itself and each Person in its respective Group, shall, and shall cause its respective directors, officers, Employees, agents, accountants, counsel and other advisors and representatives to, hold, in strict confidence and not release or disclose, with at least the same degree of care, but no less than a reasonable degree of care, that it applies to its own confidential and proprietary Information pursuant to policies in effect as of the Distribution, all Information concerning the other Group or its business that is either in its

possession (including Information in its possession prior to the Distribution) or furnished by the other Group or its respective directors, officers, Employees, agents, accountants, counsel and other advisors and representatives at any time pursuant to this Agreement and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder, except, in each case, to the extent that such Information is (i) in the public domain through no fault of any member of the B&N Group or the BNED Group, as applicable, or any of its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (ii) later lawfully acquired from other sources by any of B&N, BNED or its respective Group, Employees, directors or agents, accountants, counsel and other advisors and representatives, as applicable, which sources are not themselves bound by a confidentiality obligation to the knowledge of any of B&N, BNED or Persons in its respective Group, as applicable, (iii) independently generated without reference to any proprietary or confidential Information of the B&N Group or the BNED Group, as applicable, or (iv) required to be disclosed by law; provided , however , that the Person required to disclose such Information gives the applicable Person prompt, and to the extent reasonably practicable, prior notice of such disclosure and an opportunity to contest such disclosure and shall use commercially reasonable efforts to cooperate, at the expense of the requesting Person, in seeking any reasonable protective arrangements requested by such Person. In the event that such appropriate protective order or other remedy is not obtained, the Person that is required to disclose such Information shall furnish, or cause to be furnished, only that portion of such Information that is legally required to be disclosed and shall take commercially reasonable steps to ensure that confidential treatment is accorded such Information. Notwithstanding the foregoing, each of B&N and BNED may release or disclose, or permit to be released or disclosed, any such Information concerning the other Group (A) to their respective directors, officers, Employees, agents, accountants, counsel and other advisors and representatives who need to know such Information (who shall be advised of the obligations hereunder with respect to such Information) and (B) to any nationally recognized statistical rating agency as it reasonably deems necessary, solely for the purpose of obtaining a rating of securities upon normal terms and conditions; provided , however , that the Party whose Information is being disclosed or released to such rating agency is promptly notified thereof.

(b) Without limiting the foregoing, when any Information concerning the other Group or its business is no longer needed for the purposes contemplated by this Agreement, each of B&N and BNED will, promptly after request of the other Party, either return all Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other Party, as applicable, that it has destroyed such Information (and used commercially reasonable efforts to destroy all such Information electronically preserved or recorded within any computerized data storage device or component (including any hard-drive or database)).

SECTION 19.04. Additional Provisions. Sections 12.01 to 12.14 of the Separation Agreement are hereby incorporated into this Agreement mutatis mutandi.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.


BARNES & NOBLE, INC.

By
		Name:
		Title:

BARNES & NOBLE EDUCATION, INC.

By
		Name:
		Title:

Exhibit 10.4

BARNES & NOBLE EDUCATION, INC.

EQUITY INCENTIVE PLAN

BARNES & NOBLE EDUCATION, INC., a corporation existing under the laws of the State of Delaware, together with any successor thereto (the “Company”), hereby establishes and adopts the following Equity Incentive Plan (the “Plan”). Certain capitalized terms used in the Plan are defined in Article 2.

RECITALS

WHEREAS , the Company desires to encourage high levels of performance by those individuals who are key to the success of the Company, to attract new individuals who are highly motivated and who are expected to contribute to the success of the Company and to encourage such individuals to remain as non-employee directors, employees, consultants and/or advisors of the Company and its Affiliates by increasing their proprietary interest in the Company’s growth and success; and

WHEREAS , to attain these ends, the Company has formulated the Plan embodied herein to authorize the granting of Awards to Participants whose judgment, initiative and efforts are or have been or are expected to be responsible for the success of the Company.

NOW, THEREFORE , the Company hereby constitutes, establishes and adopts the following Plan and agrees to the following provisions:

ARTICLE 1

PURPOSE OF THE PLAN

1.1. Purpose. The purpose of the Plan is to assist the Company and its Affiliates in attracting and retaining selected individuals to serve as non-employee directors, employees, consultants and/or advisors of the Company and its Affiliates who are expected to contribute to the Company’s success and to achieve long-term objectives which will inure to the benefit of all stockholders of the Company through the additional incentives inherent in the Awards hereunder.

ARTICLE 2

DEFINITIONS

2.1. “ Affiliate ” shall mean (i) any person or entity that directly, or through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company (including any Subsidiary) or (ii) any entity in which the Company has a significant equity interest, as determined by the Committee.

2.2. “ Award ” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Dividend Equivalent, Other Stock Unit Award or any other right, interest or option relating to Shares or other property (including cash) granted pursuant to the provisions of the Plan.

2.3. “ Award Agreement ” shall mean any written or electronic agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder.

2.4. “ Board ” shall mean the board of directors of the Company.

2.5. “Change of Control” shall (a) have the meaning set forth in an Award Agreement; provided, however, that any definition of Change of Control set forth in an Award Agreement shall provide that a Change of Control shall not occur until consummation or effectiveness of a change of control of the Company, rather than upon the announcement, commencement, stockholder approval or other potential occurrence of any event or transaction that, if completed, would result in a change of control of the Company, or (b) if there is no definition set forth in an Award Agreement, mean the occurrence of any of the following events:

(i) during any period of 24 consecutive months, individuals who were Directors of the Company on the first day of such period (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board; provided, however, that any individual becoming a Director of the Company subsequent to the first day of such period whose election, or nomination for election, by the Company’s stockholders was approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director;

(ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (x) the Company or (y) any of its Subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause (A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of the Company to an entity that is not an Affiliate (a “Sale”), in each case, if such Reorganization or Sale requires the approval of the Company’s stockholders under the law of the Company’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of the Company in such Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of the securities eligible to vote for the election of the Board (“Company Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation resulting from such Reorganization or Sale (including a corporation that, as a result of such transaction, owns the Company or all or substantially all the Company’s assets either directly or through one or more subsidiaries) (the “Continuing Corporation”) in substantially the same proportions as their ownership, immediately prior to the consummation of such Reorganization or Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of the Continuing Corporation that such beneficial owners hold immediately following the consummation of the Reorganization or Sale as a result of their ownership prior to such consummation of voting securities of any company or other entity involved in or forming part of such Reorganization or Sale other than the Company), (2) no “person” (as such term is used in Section 13(d) of the Exchange Act) (each, a “Person”) (excluding (x) any employee benefit plan (or related trust) sponsored or maintained by the Continuing Corporation or any corporation controlled by the Continuing Corporation or (y) the Riggio Stockholders) beneficially owns, directly or indirectly, 40% or more of the combined voting power of the then outstanding voting securities of the Continuing Corporation and (3) at least a majority of the members of the board of directors of the Continuing Corporation were Incumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale; or

(iii) any Person, corporation or other entity or “group” (as used in Section 14(d)(2) of the Exchange Act) (other than (A) the Company, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, (C) any entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the voting power of the Company Voting Securities or (D) the Riggio Stockholders) becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company Voting Securities; provided, however, that for purposes of this subparagraph (iii), the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Company, (x) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate, (y) any acquisition by an underwriter temporarily holding such Company Voting Securities pursuant to an offering of such securities or any acquisition by a pledgee of Company Voting Securities holding such securities as collateral or temporarily holding such securities upon foreclosure of the underlying obligation or (z) any acquisition pursuant to a Reorganization or Sale that does not constitute a Change of Control for purposes of subparagraph (ii) above.

The determination as to the occurrence of a Change of Control shall be based on objective facts and, to the extent applicable, in accordance with the requirements of Code Section 409A and the regulations promulgated thereunder.

2.6. “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

2.7. “ Committee ” shall mean the Compensation Committee of the Board (or such other committee designated by the Compensation Committee of the Board).

2.8. “ Company ” has the meaning set forth in introductory paragraph of the Plan.

2.9. “ Covered Employee ” shall mean a “covered employee” within the meaning of Section 162(m)(3) of the Code, or any successor provision thereto.

2.10. “ Director ” shall mean a non-employee member (including any prospective non-employee member) of the Board or a non-employee member (including any prospective non-employee member) of the board of directors of a Subsidiary.

2.11. “ Director Award Limitations ” shall have the meaning set forth in Section 4.3.

2.12. “ Distribution ” shall mean the distribution by Barnes & Noble, Inc., a Delaware corporation, to its stockholders of all Shares.

2.13. “Dividend Equivalents ” shall have the meaning set forth in Section 12.5.

2.14. “ Employee ” shall mean any employee (including any prospective employee) of the Company or any Affiliate. Solely for purposes of the Plan, an Employee shall also mean any consultant or advisor (or prospective consultant or advisor) who provides services to the Company or any Affiliate, so long as such person (i) renders bona fide services that are not in connection with the offer and sale of the Company’s securities in a capital-raising transaction and (ii) does not directly or indirectly promote or maintain a market for the Company’s securities.

2.15. “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

2.16. “ Fair Market Value ” shall mean, with respect to any property other than Shares, the market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. The Fair Market Value of Shares as of any date shall be the per Share closing price of the Shares as reported on the New York Stock Exchange on that date (or if there was no reported closing price on such date, on the last preceding date on which the closing price was reported) or, if the Company is not then listed on the New York Stock Exchange, the per Share closing price of the Shares as reported on an established securities market (within the meaning of Treasury Regulations Section 1.897-1(m)) on which the Shares are traded. If the Company is not listed on an established securities market (within the meaning of Treasury Regulations Section 1.897-1(m)), the Fair Market Value of Shares shall be determined by the Committee in its sole discretion using appropriate criteria. Notwithstanding the foregoing, the Fair Market Value of Shares shall, in all events, be determined in accordance with Code Section 409A.

2.17. “ ISO Limitation ” shall have the meaning set forth in Section 5.7.

2.18. “ Limitations ” shall mean, collectively, (i) the Plan Share Limitation, (ii) the Director Award Limitations, (iii) the ISO Limitation and (iv) the Section 162(m) Limitations.

2.19. “ Limited Post-Distribution Period” shall mean the period commencing on the Effective Date and ending on the date of the first annual meeting of stockholders of the Company following the Distribution.

2.20. “ Option ” shall mean any right granted to a Participant under the Plan allowing such Participant to purchase Shares at such price or prices and during such period or periods as the Committee shall determine.

2.21. “ Other Stock Unit Award ” shall have the meaning set forth in Section 8.1.

2.22. “ Participant ” shall mean an Employee or Director who is selected by the Committee to receive an Award under the Plan.

2.23. “ Payee ” shall have the meaning set forth in Section 13.1.

2.24. “ Performance Award ” shall mean any Award of Performance Shares or Performance Units granted pursuant to Article 9.

2.25. “ Performance Period ” shall mean that period of no less than 12 months, or, solely in the case of Performance Awards granted during the Limited Post-Distribution Period, such period as determined by the Committee in its sole discretion, in each case, established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

2.26. “ Performance Share ” shall mean any grant pursuant to Article 9 of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

2.27. “ Performance Unit ” shall mean any grant pursuant to Article 9 of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

2.28. “ Permitted Assignee ” shall have the meaning set forth in Section 12.3.

2.29. “ Plan Share Limitation ” shall have the meaning set forth in Section 3.1.

2.30. “ Restricted Stock ” shall mean any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

2.31. “ Restricted Period ” shall have the meaning set forth in Section 7.1.

2.32. “ Restricted Stock Award ” shall have the meaning set forth in Section 7.1.

2.33. “ Riggio Stockholders ” shall mean Leonard Riggio, his spouse, his lineal descendants, trusts for the exclusive benefit of any such individuals, the executor or administrator of the estate or the legal representative of any of such individuals and any entity controlled by any of the foregoing Persons.

2.34. “ Section 162(m) Limitations ” shall have the meaning set forth in Section 10.4.

2.35. “ Shares ” shall mean the shares of common stock of the Company, par value $0.01 per share.

2.36. “ Stock Appreciation Right ” shall mean the right granted to a Participant pursuant to Article 6.

2.37. “ Subsidiary ” shall mean any entity in which the Company, directly or indirectly, possesses fifty percent (50%) or more of the total combined voting power of all classes of its stock or similar equity interests.

2.38. “ Substitute Awards ” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

2.39. “ Treasury Regulations ” shall mean the federal income tax regulations promulgated under the Code.

ARTICLE 3

SHARES SUBJECT TO THE PLAN

3.1. Number of Shares . (a) Subject to adjustment as provided in Section 12.2, a total of 5% of the common stock of the Company outstanding as of the Effective Date shall be authorized for grant under the Plan (the “Plan Share Limitation”).

(b) If any Shares subject to an Award are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for Awards under the Plan. Awards that are required to be settled in cash will not reduce the Plan Share Limitation.

(c) If Shares issued upon vesting or settlement of an Award other than an Option or Stock Appreciation Right, or Shares owned by a Participant, are surrendered or tendered to the Company in payment of any taxes required to be withheld in respect of such Award, in each case, in accordance with the terms and conditions of the Plan and any applicable Award Agreement, such surrendered or tendered Shares shall again become available to be delivered pursuant to Awards under the Plan; provided , however , that in no event shall such Shares increase the ISO Limitation and, for the avoidance of doubt, no Shares that are surrendered or tendered to the Company in payment of the exercise price of an Option or any taxes required to withheld in respect of an Option or Stock Appreciation Right shall again become available to be delivered pursuant to Awards granted under the Plan.

(d) Substitute Awards shall not reduce the Shares authorized for issuance under the Plan or authorized for grant to a Participant in any calendar year. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for issuance under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors or employees, other service providers or non-employee directors of any Affiliate prior to such acquisition or combination.

3.2. Character of Shares . Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares purchased in the open market or otherwise.

ARTICLE 4

ELIGIBILITY AND ADMINISTRATION

4.1. Eligibility . Any Employee or Director shall be eligible to be selected as a Participant.

4.2. Administration . (a) The Plan shall be administered by the Committee. The Board may remove from, add members to, or fill vacancies on, the Committee.

(b) The Committee shall have full power and authority, subject to the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select the Employees and Directors to whom Awards may from time to time be granted hereunder; (ii) determine the type or types of Awards, not inconsistent with the provisions of the Plan, to be granted to each Participant hereunder; (iii) determine the number of Shares or dollar value to be covered by each Award granted hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder (including when and under what circumstances Awards shall vest, become exercisable or be paid or settled, subject to Section 4.4) and, if certain performance criteria must be attained in order for an Award to vest or be settled or paid, establish such performance criteria and certify whether, and to what extent, such performance criteria have been attained); (v) determine whether, to what extent and under what circumstances Awards

may be settled in cash, Shares or other property; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other property and other amounts payable with respect to an Award made under the Plan shall be deferred either automatically or at the election of the Participant; (vii) determine whether, to what extent and under what circumstances any Award shall be canceled or suspended; (viii) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award Agreement; (ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem desirable to carry it into effect; (x) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xi) subject to Sections 8.1 and 9.1, determine whether any Award will have Dividend Equivalents; (xii) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, (xiii) amend an outstanding Award or grant a replacement Award for an Award previously granted under the Plan if, in its sole discretion, the Committee determines that (A) the tax consequences of such Award to the Company or the Participant differ from those consequences that were expected to occur on the date the Award was granted or (B) clarifications or interpretations of, or changes to, tax law or regulations permit Awards to be granted that have more favorable tax consequences than initially anticipated; and (xiv) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(c) Decisions of the Committee shall be final, conclusive and binding on all persons or entities, including the Company, any Participant, any stockholder and any Employee or any Affiliate. A majority of the members of the Committee may determine its actions and fix the time and place of its meetings. Notwithstanding the foregoing or anything else to the contrary in the Plan, any action or determination by the Committee specifically affecting or relating to an Award to a member of the Committee shall require the prior approval of the Board if the Award is not comparable and consistent with Awards to Directors who are not members of the Committee. The full Board may, in its sole discretion, at any time and from time to time, grant Awards to any Director or administer the Plan with respect to such Awards. In any such case, the Board shall have all the power and authority granted to the Committee herein.

(d) The Committee may delegate to a committee of one or more non-employee directors of the Company or, to the extent permitted by law, to one or more officers or a committee of officers the right to grant Awards to Employees who are not Directors or officers of the Company and to cancel or suspend Awards to Employees who are not Directors or officers of the Company. Such delegation shall be subject to the requirements of Code Section 162(m), Rule 16b-3 of the Exchange Act, and the rules of the New York Stock Exchange.

4.3. Director Award Limitations . Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Director during any single fiscal year (excluding Awards made at the election of the Director in lieu of all or a portion of annual and committee cash retainers) shall not exceed $500,000 (the “Director Award Limitations”).

4.4. Minimum Vesting Schedule . Except for Awards subject to vesting in whole or part based on performance criteria or awards granted to Directors, the Award Agreement for each Award shall provide for full vesting no earlier than 12 months after the applicable grant date, or, solely in the case of Awards granted during the Limited Post-Distribution Period, such period as determined by the Committee in its sole discretion, subject to any accelerated vesting and/or exercisability, as applicable, determined by the Committee in such Award Agreement, the Plan or any other applicable arrangement to apply upon the occurrence of a specified event.

ARTICLE 5

OPTIONS

5.1. Grant of Options . Subject to the Limitations, Options may be granted hereunder to Participants either alone or in addition to other Awards granted under the Plan. Any Option shall be subject to the terms and conditions of this Article 5 and to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall deem desirable. The provisions of Options need not be the same with respect to each recipient.

5.2. Award Agreements . All Options granted pursuant to this Article 5 shall be evidenced by a written or electronic Award Agreement in such form and containing such terms and conditions as the Committee shall determine which are not inconsistent with the provisions of the Plan. Granting of an Option pursuant to the Plan shall impose no obligation on the recipient to exercise such Option. Any individual who is granted an Option pursuant to this Article 5 may hold more than one Option granted pursuant to the Plan at the same time. The Committee may provide in the Award Agreement relating to an Option that such Option will be automatically exercised, without further action required by the holder, on the last day of such Option’s exercise period if, on such day, the Fair Market Value of the Shares to be acquired pursuant to an exercise of such Option exceeds the aggregate option price payable to exercise such Option.

5.3. Option Price . Other than in connection with Substitute Awards, the option price per each Share purchasable under any Option granted pursuant to this Article 5 shall not be less than 100% of the Fair Market Value of such Share on the date of grant of such Option. Other than pursuant to Section 12.2, the Committee shall not be permitted to (a) lower the option price per Share of an Option after it is granted, (b) cancel an Option (at a time when the option price per Share exceeds the Fair Market Value of the underlying Shares) in exchange for another Award or cash (other than in connection with a “change of control” of the Company), and (c) take any other action with respect to an Option that may be treated as a repricing under the rules and regulations of the New York Stock Exchange.

5.4. Option Period . The term of each Option shall be fixed by the Committee in its sole discretion; provided that no Option shall be exercisable after the expiration of ten years from the date the Option is granted.

5.5. Exercise of Options . Vested Options granted under the Plan shall be exercised by the Participant or by a Permitted Assignee thereof (or by the Participant’s executors, administrators, guardian or legal representative, as may be provided in an Award Agreement) as to all or part of the Shares covered thereby, by the giving of written notice of exercise to the Company or its designated agent, specifying the number of Shares to be purchased, accompanied by payment of the full purchase price for the Shares being purchased. Unless otherwise provided in an Award Agreement, full payment of such purchase price shall be made at the time of exercise and shall be made (a) in cash or by certified check or bank check or wire transfer of immediately available funds, (b) by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value), (c) with the consent of the Committee, by delivery of other consideration having a Fair Market Value on the exercise date equal to the total purchase price, (d) with the consent of the Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option, (e) through any other method specified in an Award Agreement, or (f) any combination of any of the foregoing. In connection with a tender of previously acquired Shares pursuant to clause (b) above, the Committee, in its sole discretion, may permit the Participant to constructively exchange Shares already owned by the Participant in lieu of actually tendering such Shares to the Company, provided that adequate documentation concerning the ownership of the Shares to be

constructively tendered is furnished in form satisfactory to the Committee. The notice of exercise, accompanied by such payment, shall be delivered to the Company at its principal business office or such other office as the Committee may from time to time direct, and shall be in such form, containing such further provisions consistent with the provisions of the Plan, as the Committee may from time to time prescribe. In no event may any Option granted hereunder be exercised for a fraction of a Share. No adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such issuance.

5.6. Form of Settlement . In its sole discretion, the Committee may provide, at the time of grant, that the Shares to be issued upon an Option’s exercise shall be in the form of Restricted Stock or other similar securities, or may reserve the right so to provide after the time of grant.

5.7. Incentive Stock Options . With respect to the Options that may be granted by the Committee under the Plan, the Committee may grant Options intended to qualify as “incentive stock options” as defined in Section 422 of the Code, to any employee of the Company or any Affiliate, subject to the requirements of Section 422 of the Code. Notwithstanding anything in Section 3.1 to the contrary and solely for the purposes of determining whether Shares are available for the grant of “incentive stock options” under the Plan, the maximum aggregate number of Shares with respect to which “incentive stock options” may be granted under the Plan shall be 50% of the Shares available under the Plan (the “ISO Limitation”).

ARTICLE 6

STOCK APPRECIATION RIGHTS

6.1. Grant and Exercise . Subject to the Limitations, the Committee may provide Stock Appreciation Rights either alone or in addition to other Awards granted under the Plan.

6.2. Terms and Conditions . Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following:

(a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the base price of the right on the date of grant, as specified by the Committee in its sole discretion, which, except in the case of Substitute Awards or in connection with an adjustment provided in Section 12.2, shall not be less than the Fair Market Value of one Share on such date of grant of the right or the related Option, as the case may be. The Committee may provide in the Award Agreement relating to a Stock Appreciation Right that such Stock Appreciation Right will be automatically exercised, without further action required by the holder, on the last day of such Stock Appreciation Right’s exercise period if, on such day, the Fair Market Value of the Shares to which such Stock Appreciation Right relates exceeds the aggregate base price of such rights on their date of grant.

(b) Upon the exercise of a Stock Appreciation Right, the Committee shall determine in its sole discretion whether payment shall be made in cash, in whole Shares or other property, or any combination thereof.

(d) The Committee may impose such other conditions or restrictions on the terms of exercise and the base price of any Stock Appreciation Right, as it shall deem appropriate. In connection with the foregoing, the Committee shall consider the applicability and effect of Section 162(m) of the Code. Notwithstanding the foregoing provisions of this Section 6.2(d), but subject to Section 12.2, a Stock Appreciation Right shall not have (i) a base price less than Fair Market Value on the date of grant, or (ii) a term of greater than ten years. In addition to the foregoing, other than pursuant to Section 12.2, the Committee shall not be permitted to (A) reduce the base price of any Stock Appreciation Right after it is granted, (B) cancel any Stock Appreciation Right (at a time when the base price per Share exceeds the Fair Market Value of the underlying Shares) in exchange for another Award or cash (other than in connection with a “change of control” of the Company), and (C) take any other action with respect to a Stock Appreciation Right that may be treated as a repricing under the rules and regulations of the New York Stock Exchange.

(e) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in conjunction with any Award (other than an Option) as the Committee shall determine in its sole discretion.

ARTICLE 7

RESTRICTED STOCK AWARDS

7.1. Grants . Subject to the Limitations, Awards of Restricted Stock may be issued hereunder to Participants either alone or in addition to other Awards granted under the Plan (a “Restricted Stock Award”). A Restricted Stock Award shall be subject to restrictions imposed by the Committee covering a period of time specified by the Committee (the “Restriction Period”). The provisions of Restricted Stock Awards need not be the same with respect to each recipient. The Committee has absolute discretion to determine whether any consideration (other than services) is to be received by the Company or any Affiliate as a condition precedent to the issuance of Restricted Stock.

7.2. Award Agreements . The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written or electronic Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan.

7.3. Rights of Holders of Restricted Stock. Beginning on the date of grant of the Restricted Stock Award and subject to execution of the Award Agreement, the Participant shall become a stockholder of the Company with respect to all Shares subject to the Award Agreement and shall have all of the rights of a stockholder, including, except as set forth in this Section 7.3, the right to vote such Shares and the right to receive distributions made with respect to such Shares. Subject to compliance with Code Section 409A, the Committee may require that any dividends otherwise payable with respect to a Restricted Stock Award shall not be paid currently but shall be accumulated until the applicable Restricted Stock Award has vested. Furthermore, notwithstanding any provisions of the Plan to the contrary, in the case of Restricted Stock Awards that are subject to vesting based on the achievement of performance goals, a Participant shall not be entitled to receive payment for any cash dividends with respect to such Restricted Stock Awards unless, until and except to the extent that the applicable performance goals are achieved or are otherwise deemed to be satisfied. In any event, any Shares or any other property (other than cash) distributed as a dividend or otherwise with respect to any Restricted Stock as to which the restrictions have not yet lapsed shall be subject to the same restrictions as such Restricted Stock.

ARTICLE 8

OTHER STOCK UNIT AWARDS

8.1. Stock and Administration . Subject to the Limitations, other Awards of Shares and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property (“Other Stock Unit Awards”) may be granted hereunder to Participants, either alone or in addition to other Awards granted under the Plan, and such Other Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan. Other Stock Unit Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment. Subject to the provisions of the Plan, the Committee shall have sole and complete authority to determine the Employees and Directors to whom and the time or times at which such Other Stock Unit Awards shall be made, the number of Shares to be granted pursuant to such Awards, and all other conditions of the Awards. The provisions of Other Stock Unit Awards need not be the same with respect to each recipient. Subject to compliance with Code Section 409A, the Committee may require that any Dividend Equivalents otherwise payable with respect to an Other Stock Unit Award shall not be paid currently but shall be accumulated until the applicable Other Stock Unit Award has vested. Furthermore, notwithstanding any provision of the Plan to the contrary, in the case of Other Stock Unit Awards that are subject to vesting based on the achievement of performance goals, a Participant shall not be entitled to receive payment for any Dividend Equivalents with respect to such Other Stock Unit Awards unless, until and except to the extent that the applicable performance goals are achieved or are otherwise deemed to be satisfied.

8.2. Terms and Conditions . Shares (including securities convertible into Shares) subject to Awards granted under this Article 8 may be issued for no consideration or for such minimum consideration as may be required by applicable law. Shares (including securities convertible into Shares) purchased pursuant to a purchase right awarded under this Article 8 shall be purchased for such consideration as the Committee shall determine in its sole discretion.

ARTICLE 9

PERFORMANCE AWARDS

9.1. Terms of Performance Awards . Subject to the Limitations, Performance Awards may be issued hereunder to Participants, for no consideration or for such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under the Plan. The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award. The provision of Performance Awards need not be the same with respect to each Participant. Except as provided in Article 11 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period. Performance Awards may be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the Committee at the time of payment. The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 10.2. The amount of the Award to be distributed shall be conclusively determined by the Committee. Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis. Notwithstanding any provision of the Plan to the contrary, a Participant shall not be entitled to receive payment for any Dividend Equivalents with respect to any Performance Awards unless, until and except to the extent that the performance goals applicable to such Performance Awards are achieved or are otherwise deemed to be satisfied.

ARTICLE 10

CODE SECTION 162(m) PROVISIONS

10.1. Covered Employees . Notwithstanding any other provision of the Plan, if the Committee determines at the time Restricted Stock, a Performance Award or an Other Stock Unit Award is granted to a Participant who is, or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Article 10 is applicable to such Award.

10.2. Performance Criteria . If Restricted Stock, a Performance Award or an Other Stock Unit Award is determined to be subject to this Article 10, then the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one or any combination of the following: sales (including same store or comparable sales); net sales; return on sales; cash flow (including operating cash flow and free cash flow); cash flow per Share (before or after dividends); cash flow return on investment; cash flow return on capital; pretax income before allocation of corporate overhead and bonus; earnings per share; net income; division, group or corporate financial goals or ratios including those measuring liquidity, activity, profitability or leverage; return on stockholders’ equity; total stockholder return; return on assets; attainment of strategic and operational initiatives; appreciation in and/or maintenance of the price of the Shares or any other publicly-traded securities of the Company; market share; customer satisfaction; customer growth; user time spent online; unique users; registered users; user frequency; user retention; web page views; employee satisfaction; employee turnover; productivity or productivity ratios; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property; establishing relationships with commercial entities with respect to the marketing, distribution and sale of the Company’s products (including with group purchasing organizations, distributors and other vendors); supply chain achievements (including establishing relationships with manufacturers or suppliers of component materials and manufacturers of the Company’s products); co-development, co-marketing, profit sharing, joint venture or other similar arrangements); gross profits; gross or net profit margin; operating margin; gross profit growth; year-end cash; cash margin; revenue; net revenue; product revenue or system-wide revenue (including growth of such revenue measures); operating earnings; operating income; earnings before taxes; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; economic value-added models; comparisons with various stock market indices; regulatory achievements (including submitting or filing applications or other documents with regulatory authorities or receiving approval of any such applications or other documents and passing pre-approval inspections (whether of the Company or the Company’s third-party manufacturer) and validation of manufacturing processes (whether the Company’s or the Company’s third-party manufacturer’s)); improvement in or attainment of expense levels or working capital levels, including cash, inventory and accounts receivable; general and administrative expense savings; inventory control; operating efficiencies; average inventory; inventory turnover; inventory shrinkage; cost of capital or assets under management; financing and other capital raising transactions (including sales of the Company’s equity or debt securities; debt level year-end cash position; book value; factoring transactions; competitive market metrics; timely completion of new product roll-outs; timely launch of new facilities (such as new store openings, gross or net); sales or licenses of the Company’s assets, including its intellectual property, whether in a particular jurisdiction or territory or globally; or through partnering transactions); royalty income; implementation, completion or attainment of measurable objectives with respect to research, development, manufacturing, commercialization, products or projects, production volume levels, acquisitions and divestitures, succession and hiring projects, reorganization and other corporate transactions, expansions of specific business operations and meeting divisional or project

budgets; factoring transactions; and recruiting and maintaining personnel; debt reduction; reductions in costs, and/or return on invested capital of the Company or any Affiliate, division or business unit of the Company for or within which the Participant is primarily employed. Any Performance Criteria that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”), or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP. Such performance goals also may be based solely by reference to the Company’s performance or the performance of an Affiliate, division or business unit of the Company, or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies. The Committee may also exclude the impact of an event or occurrence which the Committee determines should appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges or infrequently occurring items, (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, (c) a change in accounting standards required by generally accepted accounting principles, (d) asset write-downs, (e) litigation or claim judgments or settlements, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) tax law changes, (j) costs associated with refinancing or repurchase of bank loans or debt securities, (k) unbudgeted capital expenditures or (l) a business interruption event. Such performance goals shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m) of the Code, or any successor provision thereto, and the regulations thereunder. For the avoidance of doubt, consistent with Sections 7.3, 8.1 and 9.1, in the case of any Awards that are subject to this Article 10, a Participant shall not be entitled to receive payment for any dividends or Dividend Equivalents with respect to such Awards unless, until and except to the extent that the performance goals applicable to such Awards are achieved or are otherwise deemed to be satisfied.

10.3. Restrictions . The Committee shall have the power to impose such other restrictions on Awards subject to this Article 10 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

10.4. Limitations on Grants to Individual Participant . In any fiscal year of the Company, subject to adjustment as provided in Section 12.2, no Participant may (i) be granted Options or Stock Appreciation Rights with respect to more than 1.5 million Shares or (ii) be paid more than 1.5 million Shares (or the equivalent thereof in cash determined based on the per-Share Fair Market Value as of the relevant vesting, payment or settlement date), pursuant to Restricted Stock Awards, Performance Awards and/or Other Stock Unit Awards, in the case of clause (ii), to the extent intended to be “performance-based compensation” under Code Section 162(m). In addition to the foregoing, the maximum dollar value payable to any Participant in any fiscal year of the Company with respect to Performance Awards and/or Other Stock Unit Awards that are valued with reference to property other than Shares (including cash), to the extent intended to be “performance-based compensation” under Code Section 162(m), is $10 million (the foregoing limitations in this Section 10.4, the “Section 162(m) Limitations”). If an Award is cancelled, the cancelled Award shall continue to be counted toward the applicable Limitations.

10.5. Other Company Compensation Plans . Shares available for Awards under the Plan may be used by the Company as a form of payment of performance based compensation under other Company compensation plans, whether or not existing on the date hereof. Notwithstanding anything in this Article 10 to the contrary, to the extent any Shares are used as such by the Company, such Shares will reduce the then number of Shares available under Article 3 of the Plan for future Awards, but will not be subject to the Share or dollar limitations set forth in Section 10.4 above.

ARTICLE 11

CHANGE OF CONTROL PROVISIONS

11.1. Assumption Upon Change of Control . Unless otherwise provided in the Award Agreement evidencing the applicable Award, in the event of a Change of Control, if the successor company assumes or substitutes for an outstanding Award (or in which the Company is the ultimate parent corporation and continues the Award), then such Award shall be continued in accordance with its applicable terms and shall not be accelerated as described in Section 11.2. For the purposes of this Section 11.1, an Award shall be considered assumed or substituted for if, following the Change of Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change of Control, the consideration (whether stock, cash or other securities or property) received in the transaction constituting a Change of Control by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the transaction constituting a Change of Control is not solely common stock of the successor company, the Committee may, with the consent of the successor company, provide that the consideration to be received upon the exercise or vesting of an Award, for each Share subject thereto, will be solely common stock of the successor company substantially equal in fair market value to the per share consideration received by holders of Shares in the transaction constituting a Change of Control. The determination of such substantial equality of value of consideration shall be made by the Committee in its sole discretion and its determination shall be conclusive and binding. Notwithstanding the foregoing, on such terms and conditions as may be set forth in an Award Agreement, in the event of a termination of a Participant’s employment in such successor company within a specified time period following such Change of Control, each Award held by such Participant at the time of the Change of Control shall be accelerated as described in Section 11.2. Notwithstanding the foregoing, no Award shall be assumed or substituted pursuant to this Section 11.1 if such action would cause an Award not otherwise “deferred compensation” within the meaning of Code Section 409A to become or create “deferred compensation” within the meaning of Code Section 409A.

11.2. Acceleration Upon Change of Control . Notwithstanding Section 11.1, and except as provided in the applicable Award Agreement, in the event of a Change of Control, unless provision is made in connection with the Change of Control for assumption or continuation of Awards previously granted or substitution of such Awards in accordance with Section 11.1, upon the Change of Control (a) Options and Stock Appreciation Rights outstanding as of the date of the Change of Control shall immediately vest and become fully exercisable, (b) restrictions on Restricted Stock shall lapse and the Restricted Stock shall become free of all restrictions and limitations and become fully vested, (c) all Performance Awards shall be considered to be earned and payable (either in full or pro-rata based on the portion of Performance Period completed as of the date of the Change of Control and at the level determined by the Committee), and any deferral or other restriction shall lapse and such Performance Awards shall be immediately settled or distributed, (d) the restrictions and other conditions applicable to any Other Stock Unit Awards or any other Awards shall lapse, and such Other Stock Unit Awards or such other Awards shall become free of all restrictions, limitations or conditions and become fully vested, and (e) such other additional benefits as the Committee deems appropriate shall apply, subject in each case to any terms and conditions contained in the Award Agreement evidencing such Award. Notwithstanding any provision of this Section 11.2, unless otherwise provided in the applicable Award Agreement, if any amount payable pursuant to an Award constitutes deferred compensation within the meaning of Code Section 409A, in the event of a Change of Control that does not qualify as an event described in Code Section 409A(a)(2)(A)(v), such Award (and any other Awards that constitute deferred compensation that vested prior to the date of such Change of Control but are outstanding as of such date) shall not be settled

until the earliest permissible payment event under Code Section 409A following such Change of Control. Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine that, upon the occurrence of a Change of Control of the Company, (i) each Option and Stock Appreciation Right outstanding shall terminate within a specified number of days after notice to the Participant, and such Participant shall receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount equal to the excess of the Fair Market Value of such Share immediately prior to the occurrence of such Change of Control over the option or base price, as applicable, per Share of such Option and/or Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property (including the stock or property, if any, payable in the transaction) or in a combination thereof, as the Committee, in its discretion, shall determine and (ii) each Option and Stock Appreciation Right outstanding at such time with an option or base price, as applicable, per Share that exceeds the Fair Market Value of such Share immediately prior to the occurrence of such Change of Control shall be canceled for no consideration.

ARTICLE 12

GENERALLY APPLICABLE PROVISIONS

12.1. Amendment and Modification of the Plan . The Board may, from time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable, subject to any requirement for stockholder approval imposed by applicable law, including the rules and regulations of the New York Stock Exchange or any rule or regulation of any stock exchange or quotation system on which Shares are listed or quoted; provided that the Board may not amend the Plan in any manner that would result in noncompliance with Rule 16b-3 of the Exchange Act; and further provided that the Board may not, without the approval of the Company’s stockholders, amend the Plan to (a) increase the number of Shares that may be the subject of Awards under the Plan (except for adjustments pursuant to Section 12.2), (b) expand the types of awards available under the Plan, (c) materially expand the class of persons eligible to participate in the Plan, (d) amend any provision of Section 5.3 or Section 6.2(d), (e) increase the maximum permissible term of any Option or Freestanding Stock Appreciation Right specified by Section 5.4 or Section 6.2(d), as applicable, (f) amend any provision of Section 10.4 or (g) amend the penultimate sentence of Section 12.3. In addition, no amendments to, or termination of, the Plan shall materially impair the rights of a Participant under any Award previously granted without such Participant’s consent, provided, however, that the Board may amend, modify or terminate the Plan without the consent of such Participant if it deems such action necessary to comply with applicable law, tax rules, stock exchange rules or accounting rules, provided such action affects the rights of all similarly situated Participants.

12.2. Adjustments . To prevent the dilution or enlargement of benefits or potential benefits intended to be made available under the Plan, in the event of any corporate transaction (including any Change of Control) or event such as a merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property), stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, such adjustments and other substitutions shall be made to the Plan and to Awards as the Committee, in its sole discretion, deems equitable or appropriate, including such adjustments in the aggregate number, class and kind of securities that may be delivered under the Plan, including each of the Plan Share Limitation, the ISO Limitation and the Section 162(m) Limitations, and, in the aggregate or to any one Participant, in the number, class, kind and option or base price of securities subject to outstanding Awards granted under the Plan (including, if the Committee deems appropriate, the substitution of similar options to purchase the shares of, or other awards denominated in the shares of, another company) as the Committee may determine to be appropriate in its sole discretion; provided, however, that the number of Shares subject to any Award shall always be a whole number. Notwithstanding the foregoing, no Award shall be adjusted,

substituted or otherwise modified pursuant to this Section 12.2 if such action would cause an Award not otherwise “deferred compensation” within the meaning of Code Section 409A to become or create “deferred compensation” within the meaning of Code Section 409A.

12.3. Transferability of Awards . Except as provided below, no Award and no Shares subject to Awards described in Article 8 that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s guardian or legal representative. Notwithstanding the foregoing, a Participant may assign or transfer an Award with the consent of the Committee (each transferee thereof, a “Permitted Assignee”) to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner); provided that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan and the Award Agreement relating to the transferred Award and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan. Notwithstanding the foregoing, in no event shall any Award (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 12.3.

12.4. Termination of Employment . The Committee shall determine and set forth in each Award Agreement whether any Awards granted in such Award Agreement will continue to be exercisable, and the terms of such exercise, on and after the date that a Participant ceases to be employed by or to provide services to the Company or any Affiliate (including as a Director), whether by reason of death, disability, voluntary or involuntary termination of employment or services, or otherwise. The date of termination of a Participant’s employment or services will be determined by the Committee, which determination will be final.

12.5. Dividend Equivalents . Subject to the provisions of the Plan and any Award Agreement, the recipient of an Award may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property dividends, or cash payments in amounts equivalent to cash, stock or other property dividends on Shares (“Dividend Equivalents”) with respect to the number of Shares covered by the Award. For the avoidance of doubt, consistent with Sections 8.1 and 9.1, in the case of any Other Stock Unit Awards that are subject to vesting based on the achievement of performance goals or any Performance Awards, a Participant shall not be entitled to receive payment for any Dividend Equivalents with respect to such Awards unless, until and except to the extent that the performance goals applicable to such Awards are achieved or are otherwise deemed to be satisfied. Such Dividend Equivalents shall not be granted if the terms of the grant of such Dividend Equivalents would either cause an amount to be considered “deferred compensation” within the meaning of Code Section 409A that would otherwise not be considered “deferred compensation” or cause an amount to be included in an Award recipient’s income under Code Section 409A.

ARTICLE 13

MISCELLANEOUS

13.1. Tax Withholding . The Company shall have the right to make all payments or distributions pursuant to the Plan to a Participant (or a Permitted Assignee thereof) (any such person, a “Payee”) net of

any applicable Federal, State and local taxes required to be paid or withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event occurring pursuant to the Plan. The Company or any Affiliate shall have the right to withhold from wages or other amounts otherwise payable to such Payee such withholding taxes as may be required by law, or to otherwise require the Payee to pay such withholding taxes. If the Payee shall fail to make such tax payments as are required, the Company or its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Payee or to take such other action as may be necessary to satisfy such withholding obligations. The Committee shall be authorized to establish procedures for election by Participants to satisfy such obligation for the payment of such taxes by tendering previously acquired Shares (either actually or by attestation, valued at their then Fair Market Value) that have been owned for a period of at least six months (or such other period to avoid accounting charges against the Company’s earnings), or by directing the Company to retain Shares (up to the employee’s minimum required tax withholding rate or such other rate that will not cause adverse accounting consequences and is permitted under applicable Internal Revenue Service withholding rules) otherwise deliverable in connection with the Award.

13.2. Right of Discharge Reserved; Claims to Awards . Nothing in the Plan nor the grant of an Award hereunder shall confer upon any Employee or Director the right to continue in the employment or service of the Company or any Affiliate or affect any right that the Company or any Affiliate may have to terminate the employment or service of (or to demote or to exclude from future Awards under the Plan) any such Employee or Director at any time for any reason. Except as specifically provided by the Committee, the Company shall not be liable for the loss of existing or potential profit from an Award granted in the event of termination of an employment or other relationship. No Employee or Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

13.3. Prospective Recipient . The prospective recipient of any Award under the Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed an agreement or other instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise complied with the then applicable terms and conditions.

13.4. Stop Transfer Orders . All certificates for Shares delivered under the Plan pursuant to any Award shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

13.5. Nature of Payments . All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Company or any Affiliate, division or business unit of the Company. Any income or gain realized pursuant to Awards under the Plan constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Company or any Affiliate except as may be determined by the Committee or by the Board or board of directors of the applicable Affiliate.

13.6. Other Plans . Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

13.7. Severability . If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof, each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan.

13.8. Construction . All references in the Plan to “ Section ”, “ Sections ”, or “ Article ” are intended to refer to the Section, Sections or Article, as the case may be, of the Plan. As used in the Plan, the words “ include ” and “ including ”, and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “ without limitation ”, and the word “ or ” shall not be deemed to be exclusive.

13.9. Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the Shares or payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan.

13.10. Governing Law . The Plan and all determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed accordingly.

13.11. Effective Date of Plan; Termination of Plan . The Plan shall be effective on the date of the approval of the Distribution by the board of directors of Barnes & Noble, Inc. (the “Effective Date”). The Plan shall be null and void and of no effect if the foregoing condition is not fulfilled and in such event each Award shall, notwithstanding any of the preceding provisions of the Plan, be null and void and of no effect. Awards may be granted under the Plan at any time and from time to time on or prior to the tenth anniversary of the effective date of the Plan, on which date the Plan will expire except as to Awards then outstanding under the Plan. Such outstanding Awards shall remain in effect until they have been exercised or terminated, or have expired.

13.12. Foreign Employees . Awards may be granted to Participants who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those applicable to Awards to Employees employed in the United States as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Employees on assignments outside their home country.

13.13. Captions . The captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

13.14. Code Section 409A . All provisions of the Plan shall be interpreted in a manner consistent with Code Section 409A, and the regulations and other guidance promulgated thereunder. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of participation in the Plan under Code Section 409A or any other federal, state, or local tax law. Tax consequences will depend, in part, upon the application of relevant tax law, including Code Section 409A, to the relevant facts and circumstances. Participant should consult a competent and independent tax advisor regarding the tax consequences of the Plan.

13.15. Clawback . Notwithstanding anything to the contrary contained herein, an Award Agreement may provide that an Award granted thereunder shall be cancelled if the Participant, without the consent of the Company, while employed by or providing services to the Company or any Affiliate or after termination of such employment or service, (a) violates a non-competition, non-solicitation or non-disclosure covenant or agreement, (b) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities, as determined by the Committee in its sole discretion or (c) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to any Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the applicable Award or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time. The Committee may also provide in an Award Agreement that (i) a Participant will forfeit any gain realized on the vesting or exercise of such Award if the Participant engages in any activity referred to in the preceding sentence, or (ii) a Participant must repay the gain to the Company realized under a previously paid Performance Award if a financial restatement reduces the amount that would have been earned under such Performance Award.

Exhibit 10.5

PERFORMANCE UNIT AWARD AGREEMENT (CASH)

Issued Pursuant to the

Barnes & Noble Education, Inc. Equity Incentive Plan

THIS PERFORMANCE UNIT AWARD AGREEMENT (this “Agreement”), effective as of the grant date (the “Grant Date”) set forth in the attached Performance Unit Award Certificate (the “Certificate”), represents the grant of such number of Performance Units set forth in the Certificate by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate and the provisions of the Barnes & Noble Education, Inc. Equity Incentive Plan (the “Plan”).

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Valuation of Performance Units. Each Performance Unit shall represent the right to receive an amount in cash based upon the attainment of certain financial goals (“Performance Criteria”) during a specified period of time (the “Performance Period”) under a specified payment formula (the “Payment Formula”), each of which shall be specified in the Certificate. Following the end of the Performance Period, the Committee shall certify the level of attainment of the Performance Criteria and the amount payable under the Payment Formula as a result thereof; provided that the Committee shall have discretion to reduce (but not increase) the amount otherwise payable under the Performance Units (the amount so payable (after the application of such discretion, if any), the “Payment Value”).

2. Payment. As soon as administratively practicable following the end of the Performance Period, the Company shall pay to the Participant an amount in cash equal to the Payment Value (such payment date, the “Payment Date”); provided , however , if the Participant’s employment or service terminates before the Payment Date, all Performance Units granted hereunder shall be forfeited. In order to receive payment for the Performance Units, the Participant must be continuously employed by the Company or any of its Affiliates from the Grant Date through the Payment Date.

3. Nontransferability. The Performance Units granted hereunder may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated. No assignment or transfer of any Performance Units in violation of this Section 3, whether voluntary or involuntary, by operation of law or otherwise, except as required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

4. Withholding Taxes. The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant, or otherwise require the Participant to pay, any federal, state, local or foreign income taxes, withholding taxes or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant of Performance Units, the payment of the Payment Value, or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate. If, notwithstanding the foregoing, the Participant shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such Withholding Taxes. In satisfaction of the requirement to pay Withholding Taxes, the Company, in its discretion, may elect to satisfy the obligation for Withholding Taxes by retaining a portion of the Payment Value equal to the amount of any Withholding Taxes due on the Payment Date.

5. Recoupment. The Committee may, in its sole discretion, direct that the Performance Units be cancelled or that the Company recoup, and upon demand by the Company, the Participant agrees to return to the Company, any gain realized under a previously paid Performance Unit if (a) the Participant, without the consent of the Company, while employed by or providing services to the Company or any of its Affiliates, (i) violates a non-competition, non-solicitation or non-disclosure agreement, (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities or (iii) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to the Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the Performance Units or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time or (b) if a financial restatement reduces the amount that would have been earned under such Performance Unit. The amount to be recouped shall be determined by the Committee in its sole discretion but shall not exceed the Payment Value. If after a demand for recoupment under this Section 5, the Participant fails to return any amount paid by the Company, the Participant acknowledges that the Company has the right to effect the recovery of the amount paid and the amount of its court costs, attorneys’ fees and other costs and expenses incurred in connection with enforcing this Agreement.

6. Administration. (a) Generally . This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant.

(b) Conflicts . The order of precedence as between the Plan, this Agreement or the Certificate, and any written employment agreement between Participant and the Company shall be as follows: If there is any inconsistency between (i) the terms of this Agreement or the Certificate (on the one hand) and the terms of the Plan (on the other hand); or (ii) any such written employment agreement (on the one hand) and the terms of the Plan (on the other hand), the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement, the Certificate or the written employment agreement (as the case may be). If there is any inconsistency between the terms of this Agreement or the Certificate (on the one hand) and the terms of Participant’s written employment agreement, if any (on the other hand), the terms of this Agreement or the Certificate (as the case may be) shall completely supersede and replace the conflicting terms of the written employment agreement unless such written employment agreement was approved by the Committee, in which event such written employment agreement shall completely supersede and replace the conflicting terms of this Agreement or the Certificate (as the case may be).

7. Exclusion from Other Computations. By acceptance of the Performance Units granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt or disposition of the Performance Units is special incentive compensation and shall not be taken into

account, to the extent permissible under applicable law, as “wages”, “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

8. Change of Control. In the event of the occurrence of a Change of Control of the Company, the Committee, in its sole discretion, may cause any unvested Performance Units granted hereunder to vest.

9. Miscellaneous.

(a) Annual Bonus . With respect to Participants who are party to employment agreements that provide for annual bonus compensation, the Payment Value shall constitute annual bonus compensation.

(b) No Right to Employment. Neither this Agreement nor the Certificate shall confer upon the Participant any right to continuation of employment by the Company, nor shall this Agreement or the Certificate interfere in any way with the Company’s right to terminate the Participant’s employment at any time.

(c) Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to the Performance Units granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

(d) Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(e) Consent to Board or Committee Action. By accepting this grant of Performance Units, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(f) Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of Performance Units. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of Performance Units in accordance with the Plan.

(g) Governmental Approvals. This Agreement and the Certificate shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(h) Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(i) Compliance with Code Section 409A. The payment of the Payment Value under this Agreement is intended to comply with Code Section 409A, and this Agreement shall be interpreted, operated and administered consistent with this intent. Notwithstanding the preceding,

the Company makes no representations concerning the tax consequences of this Agreement under Code Section 409A or any other federal, state, local, foreign or other taxes. Tax consequences will depend, in part, upon the application of the relevant tax law to the relevant facts and circumstances. The Participant should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

(j) [Section 162(m). To the extent the Committee determines it is desirable with respect to the Performance Units, all payments under this Agreement shall be intended to constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code. This Award shall be construed and administered in a manner consistent with such intent.]

(k) Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with the Plan, this Agreement or the Certificate.

(l) Exculpation. The Performance Units granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers, or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of the Performance Units granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to the Performance Units granted hereunder.

(m) Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

(n) Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn: Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

Performance Unit Award Certificate


Granted To:		Name
		Address
		City, State Zip

You have been awarded Performance Units of Barnes & Noble Education, Inc. (the “Company”), as described below. Subject to the terms of the Performance Unit Award Agreement and the Company’s Equity Incentive Plan (the “Plan”), each Performance Unit constitutes an unfunded and unsecured promise of the Company to deliver to you $[●] per performance unit.


Employee ID:		XXXXXXXX

Grant Date:		XX/XX/XX

Target Number of Performance Units Granted: [●]

Performance Period: The Performance Period shall be [XX/XX/XX] to [XX/XX/XX].

Performance Metrics:

[“Adjusted EBIT” which shall mean the Company’s income from ongoing operations (excluding income on investments and foreign currency gains) on a consolidated basis, before deduction of interest payments and income taxes, as reported in the Company’s income statement for fiscal year [2015], and prior to accrual for amounts paid under the Performance Unit Awards and adjusted to exclude the effects of charges for (a) restructurings, discontinued operations, acquisitions, divestitures, debt restructuring or early repayment, inventory or asset write-downs, severance costs incurred in connection with any restructuring, divestiture or reorganization, extraordinary items and other unusual on non-recurring items, (b) any event either not directly related to the operations of the Company or not within reasonable control of the Company’s management, (c) the cumulative effect of tax or accounting changes or restatement and (d) non-routine litigation expenses such as shareholder derivative actions.

“Adjusted EBITDA” means adding Depreciation and Amortization to Operating Income/(Loss) as reported in the Company’s audited financial statements and adjusted to exclude the current year LIFO inventory accounting benefit.]

“Individual Performance Goals” means [●]

Threshold Performance Metric: [$[●] of Adjusted EBIT]. For the avoidance of doubt, if this Threshold Performance Metric is not achieved, then none of the Performance Units shall vest.

Adjusted EBITDA Target: $[●]

Performance Vesting: [●]% of the Performance Units will vest based on the Adjusted EBITDA level achieved during the Performance Period (the “EBITDA Performance Units”) and [●]% of the Performance Units will vest based on the Individual Performance Goals (the “Individual Performance Units”), as set forth below.


Level of Achievement of Adjusted EBITDA Target	% of EBITDA Performance Units Vested
[0% – less than 50%		[0	%
50% – less than 75%		25	%
75% – less than 100%		62.5	%
100% – less than 112.5%		100	%
112.5% – less than 125%		108.5	%
125% or more]		117	%]

Level of Achievement of Individual Performance Goals	% of Individual Performance Units Vested
below [●]		0	%
[●]		[●	]%
[●]		[●	]%
[●] and above		[●	]%

Time Vesting: Except as otherwise set forth in the Performance Unit Award Agreement, you must be continuously employed by the Company or any of its Affiliates during the entire Performance Period in order to vest in any portion of the Target Number of Performance Units Granted.

By your signature below, you agree that these Performance Units are awarded under and governed by the terms and conditions of the Plan and the Performance Unit Award Agreement, all of which are attached and made a part of this document. You further acknowledge and understand that the Committee shall have discretion to reduce or increase the amount otherwise payable under the Performance Units (including, based on the level of achievement of underlying Performance Metrics applicable to you).


Signature:						Date:

NOTE: If there are any discrepancies in the name or address shown above, please make the appropriate correction on this form.

PLEASE RETURN TO:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attn: Human Resources

[Phone]

Exhibit 10.6

PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT

Issued Pursuant to the

Barnes & Noble Education, Inc. Equity Incentive Plan

THIS PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT (“Agreement”), effective as of the grant date (“Grant Date”) set forth in the attached Performance-Based Stock Unit Award Certificate (the “Certificate”), represents the grant of such target number of performance-based stock units subject to performance-based vesting criteria (“PSUs”) set forth in the Certificate by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate, and the provisions of the Barnes & Noble Education, Inc. Equity Incentive Plan (the “Plan”).

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Grant of PSUs. The Company hereby grants to the Participant the target number of PSUs set forth in the Certificate. The portion of the PSUs that will vest based on the attainment of certain financial goals (the “Performance Metrics”) during a specific period of time (the “Performance Period”) under a specified vesting formula (including the maximum number of PSUs that are eligible to vest), each of which is set forth in the Certificate, shall be determined by the Committee. Following the end of the Performance Period, the Committee shall certify the level of attainment of the Performance Metrics and the PSUs vested as a result thereof.

2. Vesting Period and Settlement. (a) In General. Subject to the terms of this Agreement, the Certificate and the Plan, PSUs granted hereunder are eligible to vest as indicated in the Certificate at the end of the Performance Period. For such vesting to occur at the end of the Performance Period, the Participant must be continuously employed by the Company or any of its Affiliates from the Grant Date through the end of the Performance Period. Except as set forth in Section 6 or Section 13 below, if the Participant’s employment terminates before the Settlement Date (as defined below), all PSUs granted hereunder as of the date of termination of employment shall be forfeited.

(b) Vesting. Except as set forth in Section 6 or Section 13 below, in no event shall a Participant have any rights to the Shares underlying the PSUs granted hereunder prior to the date such PSUs vest pursuant to the vesting schedule set forth in the Certificate and the PSUs are settled.

(c) Settlement. Within 60 days after the end of the Performance Period, the Committee shall determine and certify in writing (1) whether and to what extent the Performance Metrics have been achieved and (2) based on the achievement of such Performance Metrics, the number of PSUs that have vested, in each case, in accordance with the Certificate. Not later than the 15th day of the third month following the end of the Performance Period (or such earlier date on which the PSUs vest in accordance with Section 6 or Section 13 below (such date, the “Settlement Date”)), the Company shall deliver to the Participant one Share, or the equivalent value in cash, other property or any combination thereof, as determined in the sole discretion of the Committee at the time of such payment, for each PSU that vested in accordance with the Certificate and the terms of this Agreement and the Plan, subject to Section 11 below relating to tax withholding.

3. No Voting Rights. No PSUs granted hereunder shall have any voting rights accorded to the underlying Shares. Each PSU constitutes an unfunded and unsecured promise of the Company to deliver to the Participant a Share (or the equivalent value thereof).

4. Dividend Equivalent Rights. (a) Cash Dividends. The Participant shall be entitled to receive an amount in cash equal to any cash dividends paid with respect to the number of Shares underlying these PSUs granted hereunder. Any such cash dividends shall not be distributed to the Participant unless, until and except to the extent that the Performance Metrics applicable to these PSUs are achieved or are otherwise deemed satisfied.

(b) Non-Cash Dividends. Any stock dividends or other distributions or dividends of property other than cash with respect to the Shares underlying these PSUs granted hereunder shall be subject to the same forfeiture restrictions and restrictions on transferability as apply to the PSUs with respect to which such property was paid.

5. Nontransferability. (a) In General. Except as may be provided in Section 5(b) below, these PSUs granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, except as provided in the Plan. No assignment or transfer of any PSUs in violation of this Section 5, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

(b) Transfers With The Consent of the Committee. With the consent of the Committee, a Participant may assign or transfer unvested PSUs to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner) (each transferee thereof, a “Permitted Assignee”); provided , however , that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan, the Certificate and this Agreement relating to the transferred PSUs and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan, the Certificate and this Agreement. Notwithstanding the foregoing, in no event shall the PSUs (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 5(b).

6. Termination. (a) Death. In the event a Participant dies while employed by the Company or any of its Affiliates, a number of PSUs equal to the target number of PSUs awarded (as set forth in the Certificate) shall immediately vest in the estate of such Participant or in any person who acquired such PSUs by bequest or inheritance, or by the Permitted Assignee. References in this Agreement to a Participant shall include any person who acquired PSUs from such Participant by bequest or inheritance.

(b) Disability. In the event a Participant ceases to perform services of any kind for the Company or any of its Affiliates due to permanent and total disability, a number of PSUs equal to the target number of PSUs awarded (as set forth in the Certificate) shall immediately vest in the Participant, or his guardian or legal representative, or a Permitted Assignee, as of the first date of permanent and total disability (as determined in the sole discretion of the Committee). For purposes of this Agreement, the term “permanent and total disability” means the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee. Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (1) whether a Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (2) the first date of such permanent and total disability.

7. Recoupment. The Committee may, in its sole discretion, direct that the PSUs be cancelled or that the Company recoup, and upon demand by the Company, the Participant agrees to return to the Company, any gain realized under a previously paid PSU if (a) the Participant, without the consent of the Company, while employed by or providing services to the Company or any of its Affiliates, (i) violates a non-competition, non-solicitation or non-disclosure agreement, (ii) otherwise engages in activity that is in conflict with or adverse to the interest of the Company or any Affiliate, including fraud or conduct contributing to any financial restatements or irregularities or (iii) to the extent applicable to the Participant, otherwise violates any policy adopted by the Company or any of its Affiliates relating to the recovery of compensation granted, paid, delivered, awarded or otherwise provided to the Participant by the Company or any of its Affiliates as such policy is in effect on the date of grant of the PSUs or, to the extent necessary to address the requirements of applicable law (including Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified in Section 10D of the Exchange Act, Section 304 of the Sarbanes-Oxley Act of 2002 or any other applicable law), as may be amended from time to time or (b) if a financial restatement reduces the amount that would have been earned under such PSU. The amount to be recouped shall be determined by the Committee in its sole discretion but shall not exceed the Fair Market Value of the PSUs that vested under this Agreement. If after a demand for recoupment under this Section 7, the Participant fails to return any amount paid by the Company, the Participant acknowledges that the Company has the right to effect the recovery of the amount paid and the amount of its court costs, attorneys’ fees and other costs and expenses incurred in connection with enforcing this Agreement.

8. Administration. (a) Generally. This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant and Permitted Assignees. Any inconsistency between this Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.

(b) Conflicts. The order of precedence as between the Plan, this Agreement or the Certificate, and any written employment agreement between the Participant and the Company shall be as follows: If there is any inconsistency between (i) the terms of this Agreement or the Certificate (on the one hand) and the terms of the Plan (on the other hand); or (ii) any such written employment agreement (on the one hand) and the terms of the Plan (on the other hand), the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement, the Certificate or the written employment agreement (as the case may be). If there is any inconsistency between the terms of this Agreement or the Certificate (on the one hand) and the terms of Participant’s written employment agreement, if any (on the other hand), the terms of this Agreement or the Certificate (as the case may be) shall completely supersede and replace the conflicting terms of the written employment agreement unless such written employment agreement was approved by the Committee, in which event such written employment agreement shall completely supersede and replace the conflicting terms of this Agreement or the Certificate (as the case may be).

9. Adjustments. The number of PSUs granted hereunder shall be subject to adjustment in accordance with Section 12.2 of the Plan.

10. Exclusion from Other Computations. By acceptance of these PSUs granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt or settlement of the PSUs, or upon disposition of any Shares received upon settlement, is special incentive compensation and shall not be taken into account, to the extent permissible under applicable law, as “wages,” “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

11. Withholding Taxes. The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee thereof), or otherwise require the Participant or Permitted Assignee to pay, any federal, state, local or foreign income taxes, withholding taxes, or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant or vesting of PSUs, the transfer of any PSUs or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate. If, notwithstanding the foregoing, the Participant (or Permitted Assignee) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant or Permitted Assignee or to take such other action as may be necessary to satisfy such Withholding Taxes. In satisfaction of the requirement to pay Withholding Taxes, the Company, in its sole discretion, may elect to satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares that it would otherwise deliver on a particular Settlement Date equal to the amount of any Withholding Taxes due on such Settlement Date. Notwithstanding the foregoing discretion, the Company shall satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares that it would otherwise deliver on a particular Settlement Date equal to the amount of any

Withholding Taxes due on such Settlement Date. For purposes of the preceding two sentences, where the Company is to retain Shares to satisfy the obligation for Withholding Taxes, the net amount of Shares to be delivered to the Participant on a Settlement Date shall equal the total number of Shares otherwise deliverable to the Participant on such Settlement Date (pursuant to Section 2(c) hereof and the Certificate), less such number of Shares having an aggregate Fair Market Value equal to the amount of such Withholding Taxes (as determined in the Committee’s sole discretion).

12. Registration; Legend. The Company may postpone the issuance and delivery of any Shares upon settlement of these PSUs granted hereunder until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the Company of the same class are then listed and (b) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation as the Company shall determine to be necessary or advisable. The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.

The Company may cause the following or a similar legend to be set forth on each certificate representing Shares issuable upon settlement of these PSUs granted hereunder unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO FORFEITURE AND OTHER LIMITATIONS AND RESTRICTIONS AS SET FORTH IN A PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT ON FILE WITH THE COMPANY. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

13. Change of Control. (a) In the event of a Change of Control of the Company, unless the Committee, in its sole discretion, determines otherwise, the Performance Metrics set forth in the Certificate applicable to these PSUs granted hereunder shall cease to apply to these PSUs and be deemed achieved at the greater of the target level performance or the actual level of performance, as determined by the Committee, in its sole discretion, and the number of PSUs based on such performance level shall vest and be settled on the last day of the Performance Period, subject to the Participant’s continuous employment by the Company or any of its Affiliates from the date of the Change of Control through the end of the Performance Period.

at the time of the Change of Control shall vest as of the day immediately preceding the date of termination unless the termination was made by the successor company for cause. For purposes of this Agreement, “cause” shall mean either (i) material failure by the Participant to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with the Company after written notice of such breach or failure and the Participant failed to cure such breach or failure to the Company’s reasonable satisfaction within five days after receiving such written notice; or (ii) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of the Company or its funds, properties, assets or other employees.

14. Miscellaneous.

(a) No Right to Employment. Neither this Agreement nor the Certificate shall confer upon the Participant any right to continuation of employment by the Company, nor shall this Agreement or the Certificate interfere in any way with the Company’s right to terminate the Participant’s employment at any time.

(b) Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to these PSUs granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

(c) Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

(d) Consent to Board or Committee Action. By accepting this grant of PSUs, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(e) Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of PSUs. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of PSUs in accordance with the Plan.

(f) Governmental Approvals. This Agreement and the Certificate shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(g) Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(h) Compliance with Code Section 409A. The settlement of these PSUs granted hereunder is intended to comply with Code Section 409A, and this Agreement shall be interpreted, operated and administered consistent with this intent. Notwithstanding the

preceding, the Company makes no representations concerning the tax consequences of this Agreement under Code Section 409A or any other federal, state, local, foreign or other taxes. Tax consequences will depend, in part, upon the application of the relevant tax law to the relevant facts and circumstances. The Participant should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

(i) [Section 162(m). To the extent the Committee determines it is desirable with respect to the PSUs, all payments under this Agreement shall be intended to constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code. This Award shall be construed and administered in a manner consistent with such intent.]

(j) Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with the Plan, this Agreement or the Certificate.

(k) Exculpation. These PSUs granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of these PSUs granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to these PSUs granted hereunder.

(l) Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

(m) Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn: Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

[Insert Barnes & Noble Education Logo]

Performance-Based Stock Unit Award Certificate


Granted To:		Name
		Address
		City, State Zip

You have been awarded Performance-Based Stock Units (“PSUs”) of Barnes & Noble Education, Inc. (the “Company”), as described below. Subject to the terms of the Performance-Based Stock Unit Award Agreement and the Company’s Equity Incentive Plan (the “Plan”), each PSU constitutes an unfunded and unsecured promise of the Company to deliver to you one share of common stock of Barnes & Noble Education, Inc., par value $0.01 per share (or the equivalent value thereof).


Employee ID:	XXXXXXXX

Award Date:	XX/XX/XX	Target Number of PSUs Awarded: X,XXX

Performance Period: The Performance Period shall be three fiscal years commencing on [●] and ending on [●].

Performance Metrics: (i) Earnings before interest, taxes, depreciation and amortization of the Company (“EBITDA”) and (ii) revenue of the Company (“Revenue”)[; insert adjustment language as necessary].

Performance Vesting: 50% of the Target Number of PSUs Awarded will vest based on the EBITDA level achieved during the Performance Period (the “EBITDA PSUs”) and 50% of the Target Number of PSUs Awarded will vest based on the Revenue level achieved during the Performance Period (the “Revenue PSUs”), as set forth below.


Performance Period EBITDA Level	% of EBITDA PSUs Vested
below [●]		0	%
[●]		50% (threshold	)
[●]		100% (target	)
[●] and above		150% (maximum	)

Performance Period Revenue Levels	% of Revenue PSUs Vested
below [●]		0	%
[●]		50% (threshold	)
[●]		100% (target	)
[●] and above		150% (maximum	)

Performance-Based Stock Unit Award Certificate

For any amounts calculated under this Certificate that fall between two percentages set forth in the right columns above that are between 50% and 150%, the percentage of the number of applicable PSUs that vest shall be interpolated in a straight line between the two relevant percentages, rounded to the nearest whole percentage.

Time Vesting: Except as otherwise set forth in the Performance-Based Stock Unit Award Agreement, you must be continuously employed by the Company or any of its Affiliates during the entire Performance Period in order to vest in any portion of the Target Number of PSUs Awarded.

By your signature below, you agree that these PSUs are awarded under and governed by the terms and conditions of the Plan, the Performance-Based Stock Unit Award Agreement and the Insider Trading Policy, all of which are attached and made a part of this document.


Signature:						Date:

NOTE: If there are any discrepancies in the name or address shown above, please make the appropriate correction on this form.

PLEASE RETURN TO:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attn: Human Resources

[Phone]

Exhibit 10.7

RESTRICTED STOCK UNIT AWARD AGREEMENT

Issued Pursuant to the

Barnes & Noble Education, Inc. Equity Incentive Plan

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (“Agreement”), effective as of the grant date (“Grant Date”) set forth in the attached Restricted Stock Unit Award Certificate (the “Certificate”), represents the grant of such number of restricted stock units (“RSUs”) set forth in the Certificate by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate and the provisions of the Barnes & Noble Education, Inc. Equity Incentive Plan (the “Plan”).

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Grant of RSUs. The Company hereby grants to the Participant the number of RSUs set forth in the Certificate, subject to the terms and conditions of the Plan and this Agreement.

2. Vesting Period and Settlement. (a) In General. Subject to the terms of this Agreement, the Certificate and the Plan, RSUs granted hereunder are eligible to vest as indicated in the Certificate. For such vesting to occur on any vesting date set forth therein, the Participant must be continuously employed by the Company or any of its Affiliates from the Grant Date through such vesting date. Except as set forth in Section 6 or Section 12 below, if the Participant’s employment terminates before the last vesting date set forth in the Certificate, all RSUs granted hereunder that are unvested as of the date of termination of employment shall be forfeited.

(b) Vesting. Except as set forth in Section 6 or Section 12 below, in no event shall a Participant have any rights to the Shares underlying the RSUs granted hereunder prior to the date such RSUs vest pursuant to the vesting schedule set forth in the Certificate and the RSUs are settled.

(c) Settlement. On each vesting date, the Company shall deliver to the Participant one Share, or the equivalent value in cash, other property or any combination thereof, as determined in the sole discretion of the Committee at the time of such payment, for each RSU that is scheduled to vest on such date in accordance with the Certificate and the terms of this Agreement and the Plan, subject to Section 10 below relating to tax withholding.

3. No Voting Rights. No RSUs granted hereunder shall have any voting rights accorded to the underlying Shares. Each RSU constitutes an unfunded and unsecured promise of the Company to deliver to the Participant a Share (or the equivalent value thereof).

4. Dividend Equivalent Rights. (a) Cash Dividends. The Participant shall be entitled to receive an amount in cash equal to any cash dividends paid with respect to the number of Shares underlying these RSUs granted hereunder. Any such cash dividends shall not be distributed to the Participant unless, until and except to the extent that these RSUs vest.

(b) Non-Cash Dividends. Any stock dividends or other distributions or dividends of property other than cash with respect to the Shares underlying these RSUs granted hereunder shall be subject to the same forfeiture restrictions and restrictions on transferability as apply to the RSUs with respect to which such property was paid.

5. Nontransferability. (a) In General. Except as may be provided in Section 5(b) below, these RSUs granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, except as provided in the Plan. No assignment or transfer of any RSUs in violation of this Section 5, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

(b) Transfers With The Consent of the Committee. With the consent of the Committee, a Participant may assign or transfer RSUs to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner) (each transferee thereof, a “Permitted Assignee”); provided , however , that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan, the Certificate and this Agreement relating to the transferred RSUs and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan, the Certificate and this Agreement. Notwithstanding the foregoing, in no event shall the RSUs (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 5(b).

6. Termination. (a) Death. In the event a Participant dies while employed by the Company or any of its Affiliates, all restrictions set forth herein shall lapse and any RSUs held by such Participant (or his or her Permitted Assignee) shall immediately vest in the estate of such Participant or in any person who acquired such RSUs by bequest or inheritance, or by the Permitted Assignee. References in this Agreement to a Participant shall include any person who acquired RSUs from such Participant by bequest or inheritance.

(b) Disability. In the event a Participant ceases to perform services of any kind for the Company or any of its Affiliates due to permanent and total disability, all restrictions set forth herein shall lapse and all RSUs shall immediately vest in the Participant, or his guardian or legal representative, or a Permitted Assignee, as of the first date of permanent and total disability (as determined in the sole discretion of the Committee). For purposes of this Agreement, the term “permanent and total disability” means the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee. Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (1) whether a Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (2) the first date of such permanent and total disability.

7. Administration. (a) Generally. This Agreement and the rights of the Participant hereunder and under the Certificate are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan, this Agreement and the Certificate, all of which shall be binding upon the Participant and Permitted Assignees. Any inconsistency between this Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.

8. Adjustments. The number of RSUs granted hereunder shall be subject to adjustment in accordance with Section 12.2 of the Plan.

9. Exclusion from Other Computations. By acceptance of these RSUs granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt or settlement of the RSUs, or upon disposition of any Shares received upon settlement, is special incentive compensation and shall not be taken into account, to the extent permissible under applicable law, as “wages”, “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

10. Withholding Taxes. The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee thereof), or otherwise require the Participant or Permitted Assignee to pay, any federal, state, local or foreign income taxes, withholding taxes, or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant or vesting of RSUs, the transfer of any RSUs or any other taxable event occurring pursuant to the Plan, this Agreement or the Certificate. If, notwithstanding the foregoing, the Participant (or Permitted Assignee) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant or Permitted Assignee or to take such other action as may be necessary to satisfy such Withholding Taxes. In satisfaction of the requirement to pay Withholding Taxes, the Company, in its sole discretion, may elect to satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares that it would otherwise deliver on a particular vesting date equal to the amount of any Withholding Taxes due on such vesting date. Notwithstanding the foregoing discretion, the Company shall satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares that it would otherwise deliver on a particular vesting date equal to the amount of any Withholding Taxes due on such vesting date. For purposes of the preceding two sentences, where the Company is to retain Shares to satisfy the obligation for Withholding Taxes, the net amount of Shares to be delivered to the Participant on a vesting date shall equal the total number of Shares otherwise deliverable to the Participant on such vesting date (pursuant to Section 2(c) hereof and the Certificate), less such number of Shares having an aggregate Fair Market Value equal to the amount of such Withholding Taxes (as determined in the Committee’s sole discretion).

11. Registration; Legend. The Company may postpone the issuance and delivery of any Shares upon settlement of these RSUs granted hereunder until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the Company of the same class are then listed and (b) the

completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation as the Company shall determine to be necessary or advisable. The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.

The Company may cause the following or a similar legend to be set forth on each certificate representing Shares issuable upon settlement of these RSUs granted hereunder unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO FORFEITURE AND OTHER LIMITATIONS AND RESTRICTIONS AS SET FORTH IN A RESTRICTED STOCK UNIT AWARD AGREEMENT ON FILE WITH THE COMPANY. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

12. Change of Control. (a) In the event of the occurrence of a Change of Control of the Company, the RSUs shall be treated in accordance with Article 11 of the Plan.

(b) Notwithstanding the foregoing, in the event of a termination of the Participant’s employment by the successor company within 24 months following such Change of Control, these RSUs granted hereunder or any award substituted therefor held by the Participant at the time of the Change of Control shall vest as of the day immediately preceding the date of termination unless the termination was made by the successor company for cause. For purposes of this Agreement, “cause” shall mean either (i) material failure by the Participant to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with the Company after written notice of such breach or failure and the Participant failed to cure such breach or failure to the Company’s reasonable satisfaction within five days after receiving such written notice; or (ii) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of the Company or its funds, properties, assets or other employees.

13. Miscellaneous.

(b) Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to these RSUs granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

(d) Consent to Board or Committee Action. By accepting this grant of RSUs, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(e) Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of RSUs. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of RSUs in accordance with the Plan.

(g) Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware.

(h) Compliance with Code Section 409A. The settlement of these RSUs granted hereunder is intended to comply with Code Section 409A, and this Agreement shall be interpreted, operated and administered consistent with this intent. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of this Agreement under Code Section 409A or any other federal, state, local, foreign or other taxes. Tax consequences will depend, in part, upon the application of the relevant tax law to the relevant facts and circumstances. The Participant should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

(i) Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with the Plan, this Agreement or the Certificate.

(j) Exculpation. These RSUs granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of these RSUs granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to these RSUs granted hereunder.

(k) Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

(l) Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn: Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

[Insert Barnes & Noble Education Logo]

Restricted Stock Unit Award Certificate


Granted To:		Name
		Street Address
		City, State Zip Code

You have been granted Restricted Stock Units (“RSUs”) of Barnes & Noble Education, Inc. (the “Company”), as described below. Subject to the terms of the Restricted Stock Unit Award Agreement, each RSU constitutes an unfunded and unsecured promise of the Company to deliver to you one share of common stock of Barnes & Noble Education, Inc., par value $0.01 per share (or the equivalent value thereof).


Employee ID:	XXXXXXXXX

Grant Date:	XX/XX/15	Number of RSUs Granted: X,XXX

Vesting Schedule:

By your signature below, you agree that these RSUs are granted under and governed by the terms and conditions of the Company’s Equity Incentive Plan, the Restricted Stock Unit Award Agreement and the Insider Trading Policy, all of which are attached and made a part of this document.


Signature:						Date:

NOTE: If there are any discrepancies in the name or address shown above, please make the appropriate correction on this form.

PLEASE RETURN TO:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attn: Human Resources

[Phone]

Exhibit 10.8

RESTRICTED STOCK AWARD AGREEMENT

Issued Pursuant to the

Barnes & Noble Education, Inc. Equity Incentive Plan

THIS RESTRICTED STOCK AWARD AGREEMENT (“Agreement”), effective as of the grant date (“Grant Date”) set forth in the attached Restricted Stock Award Certificate (the “Certificate”), represents the grant of such number of Shares of Restricted Stock set forth in the Certificate by Barnes & Noble Education, Inc. (the “Company”), to the person named in the Certificate (the “Participant”), subject to the terms and conditions set forth below, the Certificate and the provisions of the Barnes & Noble Education, Inc. Equity Incentive Plan (the “Plan”).

All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Grant of Restricted Stock. The Company hereby grants to the Participant the number of Shares of Restricted Stock set forth in the Certificate, subject to the terms and conditions of the Plan and this Agreement. As soon as practicable after the Grant Date, the Company shall cause to be transferred on the books of the Company, Shares registered in the name of the Company, as nominee for the Participant, evidencing the Restricted Stock covered by this Agreement, but subject to forfeiture to the Company retroactive to the Grant Date, if the Certificate is not duly executed by the Participant and timely returned to the Company. Until the lapse or release of all restrictions applicable to a grant of Restricted Stock, the share certificates representing such Restricted Stock shall be held in custody by the Company or its designee.

2. Vesting Period. (a) In General. Subject to the terms of this Agreement, the Certificate and the Plan, Shares of Restricted Stock granted hereunder are eligible to vest as indicated in the Certificate. For such vesting to occur on any vesting date set forth therein, the Participant must be continuously employed by or providing services to the Company or any of its Affiliates from the Grant Date through such vesting date. Except as set forth in Section 6 below, if the Participant’s employment or service terminates before the last vesting date set forth in the Certificate, all Shares of Restricted Stock granted hereunder that are unvested as of the date of termination of employment or service shall be forfeited.

(b) Vesting. Except as set forth in Section 6 or Section 12 below, in no event shall a Participant have any rights to these Shares of Restricted Stock granted hereunder prior to the date such Shares vest pursuant to the vesting schedule set forth in the Certificate.

3. Voting Rights. All Shares of Restricted Stock issued hereunder, whether vested or unvested, shall have full voting rights accorded to outstanding Shares.

4. Dividend Rights. (a) Cash Dividends. The Participant shall be entitled to receive any cash dividends paid with respect to Shares of Restricted Stock granted hereunder. Any such cash dividends shall be distributed to the Participant at the same time cash dividends are paid to holders of Shares.

(b) Non-Cash Dividends. Any stock dividends or other distributions or dividends of property other than cash with respect to Shares of Restricted Stock granted hereunder shall be subject to the same forfeiture restrictions and restrictions on transferability as apply to the Restricted Stock with respect to which such property was paid.

5. Nontransferability. (a) In General. Except as may be provided in Section 5(b) below, these Shares of Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, until such Shares have vested in accordance with Section 2 hereof and except as provided in the Plan. No assignment or transfer of any Shares of Restricted Stock in violation of this Section 5, whether voluntary or involuntary, by operation of law or otherwise, except by will or the laws of descent and distribution or as otherwise required by applicable law, shall vest in the assignee or transferee any interest whatsoever.

(b) Transfers With The Consent of the Committee. With the consent of the Committee, a Participant may assign or transfer unvested Shares of Restricted Stock to the Participant’s spouse, domestic partner and/or children (and/or trusts and/or partnerships established for the benefit of the Participant’s spouse, domestic partner and/or children or in which the Participant is a beneficiary or partner) (each transferee thereof, a “Permitted Assignee”); provided, however, that such Permitted Assignee(s) shall be bound by and subject to all of the terms and conditions of the Plan, the Certificate and this Agreement relating to the transferred Shares of Restricted Stock and shall execute an agreement satisfactory to the Company evidencing such obligations; and provided further that such Participant shall remain bound by the terms and conditions of the Plan, the Certificate and this Agreement. Notwithstanding the foregoing, in no event shall the Shares of Restricted Stock (or any rights and obligations thereunder) be transferred to a third party in exchange for value unless such transfer is specifically approved by the Company’s stockholders. The Company shall cooperate with any Permitted Assignee and the Company’s transfer agent in effectuating any transfer permitted under this Section 5(b).

6. Termination. (a) Death. In the event a Participant dies while employed by or providing services to the Company or any of its Affiliates, all restrictions set forth herein shall lapse and any unvested Shares of Restricted Stock held by such Participant (or his or her Permitted Assignee) shall immediately vest in the estate of such Participant or in any person who acquired such Shares of Restricted Stock by bequest or inheritance, or by the Permitted Assignee. References in this Agreement to a Participant shall include any person who acquired Shares of Restricted Stock from such Participant by bequest or inheritance.

(b) Disability. In the event a Participant ceases to perform services of any kind (whether as an employee or Director) for the Company or any of its Affiliates due to permanent and total disability, all restrictions set forth herein shall lapse and all unvested Shares of Restricted Stock shall immediately vest in the Participant, or his guardian or legal representative, or a Permitted Assignee, as of the first date of permanent and total disability (as determined in the sole discretion of the Committee). For purposes of this Agreement, the term “permanent and total disability” means the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Committee. Notwithstanding anything to the contrary set forth herein, the Committee shall determine, in its sole and absolute discretion, (1) whether a Participant has ceased to perform services of any kind due to a permanent and total disability and, if so, (2) the first date of such permanent and total disability.

Certificate, all of which shall be binding upon the Participant and Permitted Assignees. Any inconsistency between this Agreement or the Certificate (on the one hand) and the Plan (on the other hand) shall be resolved in favor of the Plan.

8. Adjustments. The number of Shares of Restricted Stock granted hereunder shall be subject to adjustment in accordance with Section 12.2 of the Plan.

9. Exclusion from Other Computations. By acceptance of these Shares of Restricted Stock granted hereunder, the Participant hereby agrees that any income or gain realized upon the receipt or disposition of the Shares is special incentive compensation and shall not be taken into account, to the extent permissible under applicable law, as “wages”, “salary” or “compensation” in determining the amount of any payment under any pension, retirement, incentive, profit sharing, bonus, severance or deferred compensation plan of the Company or any of its Affiliates.

10. Withholding Taxes. The Company shall have the right to withhold from wages or other amounts otherwise payable to the Participant (or a Permitted Assignee thereof), or otherwise require the Participant or Permitted Assignee to pay, any federal, state, local or foreign income taxes, withholding taxes, or employment taxes required to be withheld by law or regulations (“Withholding Taxes”) arising as a result of the grant or vesting of Shares of Restricted Stock, the transfer of any Shares of Restricted Stock, the making of an election under [Section 83(b)] (or any similar provision) of the Internal Revenue Code of 1986 (the “Code”), or any other taxable event occurring pursuant to the Plan (including, without limitation, the payment of dividends on unvested Shares of Restricted Stock), this Agreement or the Certificate. If, notwithstanding the foregoing, the Participant (or Permitted Assignee) shall fail to actually or constructively make such tax payments as are required, the Company (or its Affiliates) shall, to the extent permitted by law, have the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to such Participant or Permitted Assignee or to take such other action as may be necessary to satisfy such Withholding Taxes. In satisfaction of the requirement to pay Withholding Taxes (but only if the [Section 83(b)] Election defined below has not been made with respect to the Restricted Stock granted hereunder), the Company, in its sole discretion, may elect to satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares of Restricted Stock that it would otherwise deliver on a particular vesting date equal to the amount of any Withholding Taxes due on such vesting date. Notwithstanding the foregoing discretion, the Company shall satisfy the obligation for Withholding Taxes by retaining a sufficient number of Shares of Restricted Stock that it would otherwise deliver on a particular vesting date equal to the amount of any Withholding Taxes due on such vesting date, unless the Participant has either (a) made the [Section 83(b)] Election defined below or (b) provided the Company with written notice at least 30 days (or such lesser period as may be permitted by the Company in its sole

discretion) in advance of such vesting date that the Participant will pay the Withholding Taxes in cash. For purposes of the preceding two sentences, where the Company is to retain Shares to satisfy the obligation for Withholding Taxes, the net amount of Shares to be delivered to the Participant on a vesting date shall equal the total number of Shares otherwise deliverable to the Participant on such vesting date (pursuant to Section 1 hereof and the Certificate), less such number of Shares having an aggregate Fair Market Value equal to the amount of such Withholding Taxes (as determined in the Committee’s sole discretion).

11. Registration; Legend. The Company may postpone the issuance and delivery of these Shares of Restricted Stock granted hereunder until (a) the admission of such Shares to listing on any stock exchange or exchanges on which Shares of the Company of the same class are then listed and (b) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation as the Company shall determine to be necessary or advisable. The Participant shall make such representations and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company, in light of the then existence or non-existence with respect to such Shares of an effective Registration Statement under the Securities Act of 1933, as amended, to issue the Shares in compliance with the provisions of that or any comparable act.

The Company may cause the following or a similar legend to be set forth on each certificate representing Shares of Restricted Stock granted hereunder unless counsel for the Company is of the opinion as to any such certificate that such legend is unnecessary:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE SUBJECT TO FORFEITURE AND OTHER LIMITATIONS AND RESTRICTIONS AS SET FORTH IN A RESTRICTED STOCK AWARD AGREEMENT ON FILE WITH THE COMPANY. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS ESTABLISHED BY AN OPINION FROM COUNSEL TO THE COMPANY.

12. Change of Control. (a) In the event of the occurrence of a Change of Control of the Company, the Shares of Restricted Stock shall be treated in accordance with Article 11 of the Plan.

(b) Notwithstanding the foregoing, in the event of a termination of the Participant’s employment or services by the successor company following such Change of Control, these Shares of Restricted Stock granted hereunder or any award substituted therefor held by such Participant at the time of the Change of Control shall vest as of the day immediately preceding the date of termination unless the termination was made by the successor company for cause. For purposes of this Agreement, “cause” shall mean either (i) material failure by the Participant to perform his or her duties (other than as a result of incapacity due to physical or mental illness) during his or her employment with or service to the Company after written notice of such breach or failure and the Participant failed to cure such breach or failure to the Company’s reasonable satisfaction within five days after receiving such written notice; or (ii) any act of fraud, misappropriation, misuse, embezzlement or any other material act of dishonesty in respect of the Company or its funds, properties, assets or other employees

13. Miscellaneous.

(b) Successors. All obligations of the Company under the Plan, this Agreement and the Certificate, with respect to these Shares of Restricted Stock granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

(d) Consent to Board or Committee Action. By accepting this grant of Shares of Restricted Stock, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the Committee.

(e) Amendment. The Committee may, with the consent of the Participant, at any time or from time to time amend the terms and conditions of this grant of Shares of Restricted Stock. In addition, the Committee may at any time or from time to time amend the terms and conditions of this grant of Shares of Restricted Stock in accordance with the Plan.

(f) Governmental Approvals. This Agreement and the Certificate shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(g) Governing Law. To the extent not preempted by federal law, this Agreement and the Certificate shall be governed by, and construed in accordance with the laws of the State of Delaware.

[(h) Section 83(b) Election. If the Participant makes the election contemplated by Section 83(b) of the Code (a “Section 83(b) Election”) (or any similar provision of federal, state or local law) with respect to the Shares of Restricted Stock granted hereunder, the Participant shall provide the Company with a copy of such election within 30 days after the Grant Date (or such earlier date required by law) and otherwise comply with the provisions of this Section 13(h). The Participant hereby agrees, as a condition precedent to any issuance of Shares of Restricted Stock under this Agreement, that on or prior to the date of filing of any Section 83(b) Election with respect to such Shares of Restricted Stock, Participant shall satisfy the Company’s Withholding Tax obligations with respect to such Section 83(b) Election by tendering payment to the Company, in readily available funds, of an amount equal to such Withholding Tax obligation (or enter into such other arrangement as shall be acceptable to the Company to satisfy such Withholding Tax obligation).]

(i) No Tax Advice. Participant hereby acknowledges that the Company has not provided any specific tax advice to Participant in connection with his or her participation in the Plan. Participant understands and acknowledges that the Section 83(b) Election is valid only if made within 30 days after the Grant Date. Participant will consult with his or her own tax advisors with respect to any tax consequences relating to a grant of Restricted Stock, participation in the Plan, and the decision of whether or not to make a Section 83(b) Election.

(j) Waiver of Trial by Jury. The Participant, every person claiming under or through the Participant, and the Company hereby waives to the fullest extent permitted by applicable law any right to a trial by jury with respect to any litigation directly or indirectly arising out of, under, or in connection with the Plan, this Agreement or the Certificate.

(k) Exculpation. These Shares of Restricted Stock granted hereunder and all documents, agreements, understandings and arrangements relating hereto have been issued on behalf of the Company by officers acting on its behalf and not by any person individually. None of the Directors, officers or stockholders of the Company nor the Directors, officers or stockholders of any Affiliate of the Company shall have any personal liability hereunder or thereunder. The Participant shall look solely to the assets of the Company for satisfaction of any liability of the Company in respect of these Shares of Restricted Stock granted hereunder and all documents, agreements, understandings and arrangements relating hereto and will not seek recourse or commence any action against any of the Directors, officers or stockholders of the Company or any of the Directors, officers or stockholders of any Affiliate, or any of their personal assets, for the performance or payment of any obligation hereunder or thereunder. The foregoing shall also apply to any future documents, agreements, understandings, arrangements and transactions between the parties hereto with respect to these Shares of Restricted Stock granted hereunder.

(l) Captions. The captions in this Agreement are for convenience of reference only, and are not intended to narrow, limit or affect the substance or interpretation of the provisions contained herein.

(m) Notices. Any notice that either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed as follows: if to the Company, at its office at 120 Mountain View Blvd, Basking Ridge, NJ 07920, Attn: Human Resources, or at such other address as the Company by notice to the Participant may designate in writing from time to time; and if to the Participant, at the address shown below his or her signature on the Certificate, or at such other address as the Participant by notice to the Company may designate in writing from time to time. Notices shall be effective upon receipt.

[Insert Barnes & Noble Education Logo]

Restricted Stock Award Certificate


Granted To:		Name
		Street Address
		City, State Zip Code

You have been granted Restricted Stock of Barnes & Noble Education, Inc. (the “Company”), par value $0.01 per share.

By your signature below, you agree that these Shares of Restricted Stock are awarded under and governed by the terms and conditions of the Company’s Equity Incentive Plan, the Restricted Stock Award Agreement and the Insider Trading Policy, all of which are attached and made a part of this document.


Signature:						Date:

NOTE: If there are any discrepancies in the name or address shown above, please make the appropriate correction on this form.

PLEASE RETURN TO:

Barnes & Noble Education, Inc.

120 Mountain View Blvd

Basking Ridge, NJ 07920

Attn: Human Resources

[Phone]

Exhibit 10.9

LOGO

June 23, 2015

Mr. Max Roberts

c/o Barnes & Noble College Booksellers, LLC

120 Mountain View Boulevard

Basking Ridge, NJ 07920

Dear Mr. Roberts:

This letter agreement (the “Agreement”) is intended to set forth our mutual understanding regarding your employment as Chief Executive Officer of Barnes & Noble Education, Inc. (“Education”) and Barnes & Noble College Booksellers, LLC (the “Company”), a wholly-owned subsidiary of Barnes & Noble Education, Inc. This Agreement is intended to replace the letter agreement with you dated as of June 24, 2014 (the “Prior Agreement”) effective as of the distribution by Barnes & Noble, Inc. to its stockholders of all shares of common stock of Barnes & Noble Education, Inc., and the indirect ownership of all membership interests in the Company (the “Distribution”). For the avoidance of doubt, the Prior Agreement shall remain effective through the effectiveness of the Distribution and shall be replaced by this Agreement upon the effectiveness of the Distribution; provided, however, Barnes & Noble, Inc. may at any time prior to the proposed Distribution provide notice to you in accordance with Section 6.5 of this Agreement that the proposed Distribution will not occur, in which case, this Agreement shall be null and void ab initio.

Accordingly, we are pleased to agree as follows:

1. Duties. You agree to be Chief Executive Officer of Barnes & Noble Education, Inc. for the term of this Agreement. In this capacity, you shall perform such duties and have such responsibilities as are typically associated with such position, including such duties and responsibilities as are prescribed by the Board of Directors of Education (the “Board”) consistent with such position. During your employment, you agree to devote your full business time and attention to the performance of your duties and responsibilities hereunder. You shall report to the Executive Chairman or Chairman of the Board. Education shall (a) nominate you for election to the Board or, if earlier, shall appoint you to fill a vacancy on the Board and (b) re-nominate you at the expiration of each term of office as a member of the Board during the term of this Agreement. Subject to Section 2(b), you shall serve as a member of the Board for each period for which you are so elected or appointed without any additional compensation.

2. Term. (a) The initial term of this Agreement shall be for a period beginning on the date hereof (the “Effective Date”) and ending on the third anniversary of the Effective Date or, if earlier, the termination of your employment in accordance with the provisions set forth below (the “Initial Term”). At the expiration (but not earlier termination) of the Initial Term, and any subsequent “Renewal Term” (as defined below), the term of this Agreement shall automatically renew for additional periods of one year (each, a “Renewal Term”), unless your employment has earlier terminated or either party hereto has given the other party written notice of non-renewal at least 90 days prior to the expiration date of the Initial Term or the Renewal Term, as applicable. In the event that either party has given written notice of non-renewal, and your employment with the Company continues after the expiration of the Initial Term or any Renewal Term, such post-expiration employment shall be “at-will” and either party may terminate such employment with or without notice and for any reason or no reason.

(b) Your employment hereunder shall terminate upon your death and may be terminated by the Company upon written notice to you following your Disability (as defined below). Your employment hereunder may also be terminated by the Company immediately for Cause (as defined below) or following two weeks written notice to you for any other reason. Your employment hereunder may also be terminated by you following written notice to the Company of your intention to resign with or without Good Reason (as defined below); provided that a resignation for Good Reason shall comply with Section 2(c)(iv). If as of the date of your employment for any reason, you are a member of the Board or the board of directors of any of Education’s affiliates, or hold any other position with Education or its affiliates, you shall automatically be deemed to have resigned from all such positions as of such date. You agree to execute such documents and take such other actions as Education may request to reflect such resignation.

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(i) “Cause” means (A) your engaging in intentional misconduct or gross negligence that, in either case, is injurious to Company; (B) your indictment, entry of a plea of nolo contendere or conviction by a court of competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence, intentional acts or intentional omissions by you (as determined by a majority vote of the Board in its reasonable discretion and judgment) that constitute fraud, dishonesty, embezzlement or misappropriation in connection with the performance of your employment duties and responsibilities; (D) your engaging in any act of intentional misconduct or moral turpitude (as determined by a majority vote of the Board in its reasonable discretion and judgment) reasonably likely to adversely affect the Company or its business; (E) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (F) your willful failure or refusal to properly perform (as determined by a majority vote of the Board in its reasonable discretion and judgment) the duties, responsibilities or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow (as determined by a majority vote of the Board in its reasonable discretion and judgment) any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (G) your material breach of this Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants).

(ii) “Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties as Chief Executive Officer of Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

(iii) “Good Reason” shall mean the occurrence of one or more of the following events without your written consent: (A) there shall have been a material diminution of your authority, duties or responsibilities; (B) there shall have been a greater than 10% reduction in your Annual Base Salary (as defined below) in effect as of the Effective Date pursuant to Section 3.1; (C) the principal executive offices of the Company shall be relocated to a location more than 50 miles from both New York City, NY and Basking Ridge, NJ; or (D) the Company fails to make material payments to you as required by this Agreement.

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

3. Compensation.

3.1 Annual Base Salary. During the Initial Term and any Renewal Term, the Company shall pay you, for all services you perform hereunder, an annual base salary of U.S. $900,000.00, or such higher amount as the Compensation Committee of the Board (the “Compensation Committee”) may determine, payable in accordance with the Company’s payroll schedule applicable to executive officers of the Company (“Annual Base Salary”).

3.2 Bonus Compensation. During the Initial Term and any Renewal Term, the Company shall pay you annual bonus compensation, as determined by the Compensation Committee, with an annual target amount of not less than 150% of your Annual Base Salary, which shall be paid by the Company in accordance with and subject to the terms and conditions of the incentive or compensation plan or arrangement specified by the Compensation Committee.

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3.3 Employee Benefits. During the Initial Term and any Renewal Term, you shall be eligible to participate in and receive any benefits to which you are entitled under the employee benefit plans that the Company provides for its employees generally, as well as any employee benefit plans that Barnes & Noble Education, Inc. provides for its executive officers generally.

3.4 Expenses. During the Initial Term and any Renewal Term, the Company shall reimburse you for all reasonable expenses incurred by you in the performance of your duties and responsibilities under this Agreement, including entertainment and travel expenses, in accordance with the policies and procedures established by the Compensation Committee.

3.5 Equity Awards. During the Initial Term and any Renewal Term, you shall be eligible to receive equity awards of Barnes & Noble Education, Inc. under the terms of the Barnes & Noble Education, Inc. Equity Incentive Plan, as determined by the Compensation Committee.

3.6 Car Allowance. During the Initial Term and any Renewal Term, the Company shall pay you in cash a monthly car allowance of U.S. $1,500.00, or such higher amount as may be determined by the Compensation Committee.

3.7 Life and Disability Insurance. During the Initial Term and any Renewal Term, the Company shall obtain in your name (a) a life insurance policy providing for a death benefit of U.S. $1,000,000.00 payable to any beneficiary or beneficiaries named by you and (b) a disability insurance policy providing for monthly payments to you of at least U.S. $12,800.00 during the period of any disability until the earlier of your attaining age 65 or death; provided that the term “disability” in any such disability insurance policy shall be defined in a manner consistent with the definition in Section 2(c)(ii). During the Initial Term and the Renewal Term, the Company shall pay all premiums due on such policies.

3.8 Severance. In the event that, during the Initial Term or any Renewal Term, (a) your employment is terminated by the Company without Cause or (b) you voluntarily terminate your employment for Good Reason, the Company shall pay you an amount equal to two times the sum of (i) your then Annual Base Salary, (ii) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (iii) the aggregate annual dollar amount of the payments made or to be made to you or on your behalf for purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this Agreement and do not materially breach such provisions at any time during the Relevant Period (as defined below). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid. Upon the expiration of this Agreement due to non-renewal, or upon the termination of your employment hereunder for Cause or by your death or Disability, or by your voluntary termination of your employment hereunder without Good Reason, you shall be entitled only to the payment of such installments of your Annual Base Salary that have been earned through the date of such expiration and/or termination.

3.9 Change of Control Payments. (a) If at any time during the Initial Term and any Renewal Term (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within the greater of two years following the Change of Control or the remainder of the Initial Term or any Renewal Term, as applicable, then the Company shall pay you an amount equal to three times the sum of (a) your then Annual Base Salary, (b) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (c) the aggregate annual dollar amount of the payments made or to be made by the Company for

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purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Change of Control Amount”). The Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this Section 3.9 would be payable to you under this Agreement or any other plan, policy or arrangement of the Company or Barnes & Noble Education, Inc., exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation, in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. Subject to the Section 280G limitation referred to above, to the extent that you are not fully vested in any retirement benefits from any pension, profit-sharing or other retirement plan or program maintained by the Company or Barnes & Noble Education, Inc. and your employment terminates in the circumstances contemplated by this Section 3.9(a), the Company shall pay directly to you within 30 days after the date on which your employment terminates the difference between the amounts that would have been paid to you had you been fully vested on the date that your employment terminates and the amounts actually paid or payable to you pursuant to such plans or programs. The amounts payable to you under this Section 3.9(a) shall be in lieu of any amounts payable to you under Section 3.8 above.

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

(i) after the Effective Date hereof, any person, entity or “group” as identified in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “1934 Act”), other than you or any of your affiliates becomes a beneficial owner (as such term is defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of Barnes & Noble Education, Inc. representing 40% or more of the total number of votes that may be cast for the election of directors of Barnes & Noble Education, Inc.; or

(ii) within two years after a merger, consolidation, liquidation or sale of assets involving Barnes & Noble Education, Inc., or a contested election of a Barnes & Noble Education, Inc. director, or any combination of the foregoing, the individuals who were directors of Barnes & Noble Education, Inc. immediately prior thereto shall cease to constitute a majority of the board of Barnes & Noble Education, Inc.; or

(iii) within two years after a tender offer or exchange offer for voting securities of Barnes & Noble Education, Inc., the individuals who were directors of Barnes & Noble Education, Inc. immediately prior thereto shall cease to constitute a majority of the board of Barnes & Noble Education, Inc.

4. Non-Competition and Confidential Information.

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or (ii) any person, corporation or other entity engaged in the Business Area. For purposes of this Agreement, the term “Business Area” shall mean the sale, distribution or attempted sale or distribution of books, textbooks, periodicals, newspapers, digital or audio versions of any of the foregoing or e-reading devices and related software. Notwithstanding the foregoing, the restrictions of this Section 4.1 shall not apply to the placement of general advertisements or the use of general search firm services with respect to a particular geographic area, but which are not targeted, directly or indirectly, towards employees of the Company or any of its subsidiaries.

4.2 Ownership of Other Securities. Nothing in Section 4.1 shall be construed as denying you the right to own securities of any corporation listed on a national securities exchange or quoted in the NASDAQ System in an amount up to 5% of the outstanding number of such securities.

4.3 Confidential Information. (a) You shall use best efforts and diligence both during and after any employment with the Company, regardless of how, when or why such employment ends, to protect the confidential, trade secret and/or proprietary character of all Confidential Information and Trade Secret Information (as defined below). You shall not, directly or indirectly, use (for your benefit or for the benefit of any other person) or disclose any Confidential Information or Trade Secret Information, for so long as it shall remain proprietary or protectable, except as may be necessary for the performance of your duties for the Company. For purposes of this Agreement, “Confidential Information” shall mean all confidential information of the Company, regardless of the form or medium in which it is or was created, stored, reflected or preserved, information that is either developed by you (alone or with others) or to which you shall have had access during any employment with the Company. Confidential Information includes, but is not limited to, Trade Secret Information, and also includes information that is learned or acquired by the Company from others with whom the Company has a business relationship in which, and as a result of which, such information is revealed to the Company. For purposes of this Agreement, “Trade Secret Information” shall mean all information, regardless of the form or medium in which it is or was created, stored, reflected or preserved, that is not commonly known by or generally available to the public and that: (i) derives or creates economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The Company’s Trade Secret Information may include, but is not limited to, all confidential information relating to or reflecting the Company’s research and development plans and activities; compilations of data; product plans; sales, marketing and business plans and strategies; pricing, price lists, pricing methodologies and profit margins; current and planned incentive, recognition and rewards programs and services; personnel; inventions, concepts, ideas, designs and formulae; current, past and prospective customer lists; current, past and anticipated customer needs, preferences and requirements; market studies; computer software and programs (including object code and source code); and computer and database technologies, systems, structures and architectures. You understand that Confidential Information and/or Trade Secret Information may or may not be labeled as such, and you shall treat all information that appears to be Confidential Information and/or Trade Secret Information as confidential unless otherwise informed or authorized by the Company. Nothing in this Agreement shall be construed to mean that Company owns any intellectual property or ideas that were conceived by you before you commenced employment with Company and which you have previously disclosed to the Company. Subject to Section 4.3(b), nothing in this Section 4.3(a) shall prevent you from complying with a valid legal requirement (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or Trade Secret Information.

(b) You agree that both during and after any employment with the Company, regardless of how, when or why such employment ends, if you are legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or Trade Secret Information, you shall promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company to waive compliance with the provisions of this Section 4.3. Thereafter, you shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, you are compelled to disclose the Confidential Information or Trade Secret Information or else stand liable for contempt or suffer other sanction, censure or penalty, you shall disclose only so much of the Confidential Information or Trade Secret Information to the party compelling

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disclosure as you believe in good faith on the basis of advice of counsel is required by law, and you shall give the Company prior notice of the Confidential Information or Trade Secret Information you believe you are required to disclose. The Company shall reimburse any reasonable legal fees and related expenses you incur in order to comply with this Section 4.3(b).

4.4 Inventions. You shall promptly disclose and provide to the Company, any original works of authorship, designs, formulas, processes, improvements, compositions of matter, computer software programs, data, information or databases, methods, procedures or other inventions, developments or improvements of any kind that you conceive, originate, develop, improve, modify and/or create, solely or jointly with others, during the period of your employment, or as a result of such employment (collectively, “Inventions”), and whether or not any such Inventions also may be included within “Confidential Information” or “Trade Secret Information” (as defined under this Agreement), or are patentable, copyrightable or protectable as trade secrets. You acknowledge and agree that the Company is and shall be the exclusive owner of all rights, title and interest in and to the Inventions and, specifically, that any copyrightable works prepared by you within the scope of your employment are “works for hire” under the Copyright Act, that such “works for hire” are Inventions and that the Company shall be considered the author and owner of such copyrightable works. In the event that any Invention is deemed not to be a “work for hire”, or in the event that you should, by operation of law, be deemed to be entitled to retain any rights, title or interest in and to any Invention, you hereby irrevocably waive all rights, title and interest and assign to the Company, without any further consideration and regardless of any use by the Company of any such Inventions, all rights, title and interest, if any, in and to such Invention. You agree that the Company, as the owner of all Inventions, has the full and complete right to prepare and create derivative works based upon the Inventions and to use, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, publicly perform and publicly display and otherwise exploit by all means now known or later developed, such Inventions and derivative works anywhere throughout the world and at any time during or after your employment hereunder or otherwise.

4.5 Return of Information. You shall promptly deliver to the Company, upon the termination for any reason of your employment, or at any other time at the Company’s request, without retaining any copies, all documents, information and other material in your possession or control containing, reflecting and/or relating, directly or indirectly, to any Confidential Information and/or Trade Secret Information.

4.6 Cooperation. You agree that both during and after any employment with the Company, regardless of how, when or why such employment ends, you shall provide reasonable cooperation to the Company and its affiliates in connection with any pending or future lawsuit, arbitration, or proceeding between the Company and/or any affiliate and any third party, any pending or future regulatory or governmental inquiry or investigation concerning the Company and/or any affiliate and any other legal, internal or business matters of or concerning the Company and/or any affiliate. Such cooperation shall include meeting with and providing information the Company, any affiliate and/or their respective attorneys, auditors or other representatives as reasonably requested by the Company. The Company shall reimburse any reasonable legal fees and related expenses you incur in order to comply with this Section 4.6.

4.7 Non-Disparagement. During and after any employment with the Company, regardless of how, when or why such employment ends, (a) you shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning the Company or its subsidiaries or affiliates, any of their clients or businesses or any of their current or former officers, directors, employees or shareholders and (b) Company Parties (as defined below) shall not make any oral or written negative, disparaging or adverse statements or representations of or concerning you; provided, however, that nothing herein shall prohibit (i) critical communications between you and the Company or Company Parties during the Initial Term and any Renewal Term and in connection with your employment or (ii) you or any Company Party from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process). For purposes of this Agreement, the term “Company Parties” shall mean the executive officers and designated spokespersons of the Company.

4.8 Severability. If any of the restrictions in this Section 4 should for any reason whatsoever be declared invalid, the validity or enforceability of the remainder of this Agreement shall not be adversely affected thereby.

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

(b) In addition, the Company recognizes that any violation of the restrictions in Section 4.7(b) may give rise to losses or damages for which you cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to you. Accordingly, the Company agrees that, in addition to any other remedy that you may have at law or in equity, you shall be entitled to injunctive relief to restrain any violation by the Company of the restrictions in Section 4.7(b).

4.10 Reasonableness. You acknowledge that the limitations and obligations contained in this Section 4 are, individually and in the aggregate, reasonable and properly required by the Company and that in the event that any such limitations are found to be unreasonable and unenforceable, you shall submit to such limitations and/or obligations in such form as the arbitrator shall determine. You agree that you shall not challenge or contest the reasonableness, validity or enforceability of any such limitations and obligations.

4.11 Governmental Agencies . Notwithstanding any provision of this Agreement to the contrary, this Agreement is not intended to, and shall not, limit or restrict you from: (a) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (b) providing Confidential Information (as defined in Section 4.3(a)) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating, participating or assisting in any government or regulatory entity investigation or proceeding.

5. Indemnification. You shall be indemnified by the Company, as an officer of the Company and its affiliates, against all actions, suits, claims, legal proceedings and the like to the fullest extent permitted by law, including advancement of expenses, partial indemnification, indemnification following the termination of this Agreement, indemnification of your estate and similar matters. For purposes of this Agreement, such indemnification shall extend to, to the fullest extent permitted by law, legal fees, costs, expenses, judgments, settlements, claim resolution payments, arbitration fees, arbitrator fees, mediation fees, negotiation fees and hold harmless obligations.

6. Miscellaneous.

6.2 Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors and assigns.

6.3 Amendments and Waivers. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by both parties to this Agreement. Electronic communications, even if receipt is acknowledged, shall not constitute an amendment or modification of this Agreement.

6.4 Assignment. Neither this Agreement nor any rights or obligations that either party may have by reason of this Agreement shall be assignable by either party without the prior written consent of the other party.

6.5 Notices. Any notice that may or must be given under this Agreement shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepaid, or reputable overnight courier, addressed to you at the address set forth on the first page hereof, or to the Company at 120 Mountain View Boulevard, Basking Ridge, NJ 07920 to the attention of the Vice President for Human Resources for the Company (with a copy to the General Counsel for the Company), or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this section.

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6.6 Section and Other Headings; Other. The section and other headings contained in this Agreement are for reference purposes only and are not deemed to be a part of this Agreement or to affect the meaning and interpretation of this Agreement. For purposes of this Agreement, the term “including” shall mean “including, without limitation.”

6.7 Governing Law. This Agreement shall be construed (both as to validity and performance) and enforced in accordance with and governed by the laws of the State of New Jersey applicable to agreements made and to be performed wholly within the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New Jersey. Except as provided in Section 6.9, exclusive jurisdiction for all disputes or claims arising under or in connection with this Agreement, and any and all claims by or against you relating to your employment with the Company, shall lie in any Federal or state court located within Somerset County of New Jersey.

6.8 Survival of Rights and Obligations. All rights and obligations arising hereunder shall continue to have full force and effect after the termination of this Agreement unless otherwise provided herein to the extent necessary to preserve the intended benefits of such provisions. If any section of this Agreement is determined to be void, voidable or unenforceable, it shall have no effect on the remainder of this Agreement, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law.

6.9 Arbitration. The parties agree that all disputes arising under or in connection with this Agreement, and any and all claims by you relating to your employment with the Company, including any claims of discrimination or other employment-related claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the Americans with Disabilities Act or any other employment-related Federal, state or local law, shall be submitted to arbitration before the American Arbitration Association (“AAA”) under its rules then prevailing for the type of claim in issue before one arbitrator and to be held at the AAA’s office located in Somerset County of New Jersey. In any arbitration hereunder, the arbitrator shall have the power to issue appropriate injunctive or other non-monetary relief, and award appropriate compensatory damages. The parties agree that no damages other than compensatory damages shall be sought or claimed by either party and each party waives any claim, right or entitlement to punitive, exemplary or consequential damages, or any other damages, and each relevant arbitrator is specifically divested of any power to award any damages in the nature of punitive, exemplary or consequential damages, or any other damages of any kind or nature in excess of compensatory damages. Nothing in this arbitration provision shall preclude, and the parties expressly acknowledge that either party may seek, temporary injunctive relief from any Federal or state court located within Somerset County of New Jersey in connection with or as supplement to an arbitration hereunder, including regarding any claim under Section 4 of this Agreement. For purposes of any such action or proceeding, the parties each hereby specifically submit to the personal jurisdiction of any Federal or state court located within Somerset County of New Jersey and further agree that service of process may be made within or without the State of New Jersey by giving notice in the manner provided in Section 6.5 of this Agreement.

6.10 Section 409A of the Code. It is intended that the provisions of this Agreement comply with Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. If, at the time of your separation from service (within the meaning of Section 409A of the Code), (a) you shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (b) the Company shall make a good faith determination that an amount payable under this Agreement or any other plan, policy, arrangement or agreement of or with the Company or Barnes & Noble Education, Inc. (this Agreement and such other plans, policies, arrangements and agreements, the “Company Plans”) constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay any such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the first day of the seventh month following

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such separation from service. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to the Company. Except as specifically permitted by Section 409A of the Code, the benefits and reimbursements provided to you under this Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement or Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to you on or before the last day of the calendar year following the calendar year in which the underlying fee, cost or expense is incurred. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Your tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A of the Code, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

6.11 Representations and Warranties. You hereby represent and warrant to the Company that (a) your execution, delivery and performance of this Agreement do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which you are a party or by which you are bound; (b) you are not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity that has not been disclosed to the Company prior to the execution of this Agreement; (c) in the performance of any duties and responsibilities on behalf of the Company, you shall not divulge or use in any way any trade secrets or confidential or proprietary information that are within your possession or knowledge (if any), are owned by any other person or entity and regardless of whether or not such trade secrets or confidential or proprietary information are subject to any written agreement; and (d) upon the execution and delivery of this Agreement, it shall be a valid and binding obligation, enforceable in accordance with its terms. You hereby acknowledge and represent that you fully understand the terms and conditions contained herein.

6.12 Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

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If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this Agreement.


Very truly yours,

	BARNES & NOBLE EDUCATION, INC.

	By:
	Name:	Michael P. Huseby

	Date:	June , 2015


Accepted and Agreed to:

MAX ROBERTS

By:

Date:

[ Signature Page to Employment Agreement ]

EXHIBIT A

GENERAL RELEASE AND WAIVER

1. [Name] (“Employee”) hereby acknowledges and agrees that Employee’s employment with Barnes & Noble College Booksellers, LLC and Barnes & Noble Education, Inc. (together, the “Company”) terminated on , 20 (the “Termination Date”).

2. Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the payments and benefits set forth in Section 3.8 of the employment letter agreement, dated as of June [•], 2015, between Employee and the Company (such agreement referred to herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release.

3. (a) THIS SECTION PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS EMPLOYEE MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE EMPLOYEE SIGNS THIS RELEASE, EMPLOYEE MUST READ THIS SECTION CAREFULLY, AND MAKE SURE THAT EMPLOYEE UNDERSTANDS IT FULLY.

(b) In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company, and on behalf of the Company and each Releasee (as defined below), Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the Company, its current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, benefit plans, agents, attorneys, advisors, counselors and employees, and the current and former officers, directors, shareholders, agents, attorneys, advisors, counselors and employees of any such parent, affiliate, subsidiary, branch or division of the Company and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (each, a “Releasee”), from or in connection with, and hereby waives and/or settles, except as provided in Section 3(c), any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever, whether or not related to employment, and which Releasor ever had, now has or hereafter can, shall or may have as of the date of this Release, including, without limitation, (i) any rights and/or claims arising under any contract, express or implied, written or oral, including, without limitation, the Employment Agreement; (ii) any rights and/or claims arising under any applicable foreign, Federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices, including, without limitation, family and medical, and/or, specifically, that prohibit discrimination based upon age, race, religion, sex, color, creed, national origin, sexual orientation, marital status, disability, medical condition, pregnancy, veteran status or any other unlawful bases, including, without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar applicable statutes, orders, laws, ordinances, regulations or the like, or case law, of the State of New Jersey and any State in which any Releasee is subject to jurisdiction, or any political subdivision thereof, including, without limitation, the New York State Human Rights Law, the New York State Labor Law, the New York City Human Rights Law, the New Jersey Law Against Discrimination and the New Jersey Wage and Hour Law, and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes, orders, laws, ordinances, regulations or the like; (iii) any waivable rights and/or claims relating to wages and hours, including under state or local labor or wage payment laws; (iv) any rights and/or claims to benefits that Employee may have or become entitled to receive under any severance, termination, change of control, bonus or similar policy, plan, program, agreement or similar or related arrangements, including, without limitation, any offer letter, letter agreement or employment

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agreement between Employee and the Company; (v) any rights and/or claims that Employee may have to receive any equity in the Company (whether restricted or unrestricted) in the future; and (vi) and any rights and/or claims for attorneys’ fees. Employee agrees not to challenge or contest the reasonableness, validity or enforceability of this Release.

(c) Notwithstanding the foregoing, Employee does not release any Releasee from any of the following rights and/or claims: (i) any rights and/or claims Employee may have that arise after the date Employee signs this Release; (ii) any rights and/or claims that by law cannot be waived by private agreement; (iii) Employee’s right to file a charge with or participate in any investigation or proceeding conducted by the U.S. Equal Employment Opportunity Commission (“EEOC”) or similar government agency; provided that even though Employee can file a charge or participate in an investigation or proceeding conducted by the EEOC or similar government agency, by executing this Release, Employee is waiving his ability to obtain relief of any kind from any Releasee to the extent permitted by law; (iv) Employee’s non-forfeitable rights to accrued benefits (within the meaning of Sections 203 and 204 of ERISA); (v) any rights and/or claims to insurance coverage under any directors’ and officers’ personal liability insurance or fiduciary insurance policy; and (vi) any rights and/or claims to enforce the Employment Agreement in accordance with its terms.

4. Nothing in or about this Release prohibits Employee from: (i) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for enforcing a law; (ii) providing Confidential Information (as defined in Section 4.3(a) of the Employment Agreement) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating, participating or assisting in any government or regulatory entity investigation or proceeding.

5. Employee represents and warrants that Employee has not filed or commenced any complaints, claims, actions or proceedings of any kind against any Releasee with any Federal, state or local court or any administrative, regulatory or arbitration agency or body. Employee hereby waives any right to, and agrees not to, seek reinstatement or employment of any kind with any Releasee and, without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, nondiscriminatory basis for rejecting any such application or, in the event Employee obtains such employment, for terminating such employment. This Release and the Separation Benefit are not intended to be, shall not be construed as and are not, an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions.

6. (a) Employee hereby represents and agrees that Employee shall keep confidential and not disclose orally or in writing, to any person, except as may be required by law, any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder. Employee further agrees that, except as shall be required by law, Employee shall keep confidential and not disclose orally or in writing, directly or indirectly, to any person (except Employee’s immediate family, attorneys and accountant), any and all information concerning any facts, claims or assertions relating or referring to any experiences of Employee or treatment Employee received by or on behalf of any Releasee through the date of this Release.

(b) If Employee is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any information covered by Section 6(a), Employee shall promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company, to waive compliance with the provisions of this Release. Employee shall use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Employee is compelled to disclose such information or else stand liable for contempt or suffer other sanction, censure or penalty, Employee shall disclose only so much of such information to the party compelling disclosure as he believes in good faith on the basis of advice of counsel is required by law, and Employee shall give the Company prior notice of such information he believes he is required to disclose.

7. (a) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

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(b) Without limitation to the survival of any other terms of the Employment Agreement subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release, Employee and the Company expressly acknowledge that the terms of Sections 4 and 5 of the Employment Agreement survive and shall be in full force and effect as provided in the Employment Agreement.

8. The covenants, representations and acknowledgments made by Employee in this Release shall continue to have full force and effect after the execution and effectiveness of this Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them, to the extent necessary to preserve the intended benefits of such provisions. If any section of this Release is determined to be void, voidable or unenforceable, it shall have no effect on the remainder of this Release, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law. Without limitation to Section 3.8 of the Employment Agreement, the Company shall be excused and released from any obligation to make payment of the Separation Benefit, and Employee shall be obligated to return to the Company the Separation Benefit, in the event that Employee is found to have (a) made a material misstatement in any term, condition, covenant, representation or acknowledgment in this Release, or (b) Employee is found to have committed or commits a material breach of any term, condition or covenant in this Release.

9. This Release and the Employment Agreement constitute the sole and complete agreement between the parties with respect to the matters set forth therein and supersedes all prior agreements, understandings and arrangements, oral or written, between Employee and the Company with respect to the subject matter thereof. This Release may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an instrument in writing, waive compliance by the other party with any term or provision of this Release to be performed or complied with by such other party.

10. With respect to any claims or disputes under or in connection with this Release or any claims released under Section 3 of this Release, Employee and the Company hereby acknowledge and agree that Sections 6.7 and 6.9 of the Employment Agreement shall govern. Employee acknowledges that a breach or threatened breach of the provisions of this Release may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law, and that such violation may result in irreparable and continuing harm to the Company. Accordingly, Employee agrees that, in addition to any other remedy that the Company may have at law or in equity, the Company shall be entitled to seek equitable relief, including, without limitation, injunction and specific performance and Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies (including claims for damages) in the event of a breach or threatened breach of this Release.

11. Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all of its terms, (b) Employee understands all of the terms of this Release, which are fair, reasonable and are not the result of any fraud, duress, coercion, pressure or undue influence exercised by or on behalf of any Releasee and (c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely and voluntarily.

12. By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided adequate time (i.e., at least 21 days) to review this Release and to consider whether to sign this Release and (c) Employee has been advised that Employee has 7 days following execution to revoke this Release (“Revocation Period”). Notwithstanding anything to the contrary contained herein or in the Employment Agreement, this Release shall not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired and provided that Employee has not revoked this Release. Employee agrees that any revocation shall be made in writing and delivered to , [Vice President, Human Resources, Barnes & Noble Education, Inc.], 120 Mountain View Boulevard, Basking Ridge, NJ 07920. Employee acknowledges that revocation of this Release shall result in the Company’s not having an obligation to pay the Separation Benefit.


Signature:		Date:
	[Name]

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Exhibit 10.10

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June 23, 2015

Mr. Barry Brover

c/o Barnes & Noble College Booksellers, LLC

120 Mountain View Boulevard

Basking Ridge, NJ 07920

Dear Mr. Brover:

This letter agreement (the “Agreement”) is intended to set forth our mutual understanding regarding your employment as Vice President, Chief Financial Officer of Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC (the “Company”), a wholly-owned subsidiary of Barnes & Noble Education, Inc. This Agreement is intended to replace the letter agreement with you dated as of June 30, 2014 (the “Prior Agreement”) effective as of the distribution by Barnes & Noble, Inc. to its stockholders of all shares of common stock of Barnes & Noble Education, Inc., and the indirect ownership of all membership interests in the Company (the “Distribution”). For the avoidance of doubt, the Prior Agreement shall remain effective through the effectiveness of the Distribution and shall be replaced by this Agreement upon the effectiveness of the Distribution; provided, however, Barnes & Noble, Inc. may at any time prior to the proposed Distribution provide notice to you in accordance with Section 6.5 of this Agreement that the proposed Distribution will not occur, in which case, this Agreement shall be null and void ab initio.

Accordingly, we are pleased to agree as follows:

1. Duties. You agree to be Vice President, Chief Financial Officer of Barnes & Noble Education, Inc. for the term of this Agreement. In this capacity, you shall perform such duties and have such responsibilities as are typically associated with such position, including such duties and responsibilities as are prescribed by the Chief Executive Officer of Barnes & Noble Education, Inc. consistent with such position. While you are the Company’s employee, you agree to devote your full business time and attention to the performance of your duties and responsibilities hereunder. You shall report to the Chief Executive Officer of Barnes & Noble Education, Inc.

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competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence, intentional acts or intentional omissions by you (as determined by a majority vote of the Board of Directors of Barnes & Noble Education, Inc. (the “Board”) in its reasonable discretion and judgment) that constitute fraud, dishonesty, embezzlement or misappropriation in connection with the performance of your employment duties and responsibilities; (D) your engaging in any act of intentional misconduct or moral turpitude (as determined by a majority vote of the Board in its reasonable discretion and judgment) reasonably likely to adversely affect the Company or its business; (E) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (F) your willful failure or refusal to properly perform (as determined by a majority vote of the Board in its reasonable discretion and judgment) the duties, responsibilities or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow (as determined by a majority vote of the Board in its reasonable discretion and judgment) any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (G) your material breach of this Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants).

(ii) “Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties as Vice President, Chief Financial Officer of Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

3. Compensation.

3.1 Annual Base Salary. During the Initial Term and any Renewal Term, the Company shall pay you, for all services you perform hereunder, an annual base salary of U.S. $505,000.00, or such higher amount as the Compensation Committee of the Board (the “Compensation Committee”) may determine, payable in accordance with the Company’s payroll schedule applicable to executive officers of the Company (“Annual Base Salary”).

3.2 Bonus Compensation. During the Initial Term and any Renewal Term, the Company shall pay you annual bonus compensation, as determined by the Compensation Committee, with an annual target amount of not less than 75% of your Annual Base Salary, which shall be paid by the Company in accordance with and subject to the terms and conditions of the incentive or compensation plan or arrangement specified by the Compensation Committee.

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3.8 Severance. In the event that, during the Initial Term or any Renewal Term, (a) your employment is terminated by the Company without Cause or (b) you voluntarily terminate your employment for Good Reason, the Company shall pay you an amount equal to one times the sum of (i) your then Annual Base Salary, (ii) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (iii) the aggregate annual dollar amount of the payments made or to be made to you or on your behalf for purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this Agreement and do not materially breach such provisions at any time during the Relevant Period (as defined below). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid. Upon the expiration of this Agreement due to non-renewal, or upon the termination of your employment hereunder for Cause or by your death or Disability, or by your voluntary termination of your employment hereunder without Good Reason, you shall be entitled only to the payment of such installments of your Annual Base Salary that have been earned through the date of such expiration and/or termination.

3.9 Change of Control Payments. (a) If at any time during the Initial Term and any Renewal Term (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within the greater of two years following the Change of Control or the remainder of the Initial Term or any Renewal Term, as applicable, then the Company shall pay you an amount equal to two times the sum of (a) your then Annual Base Salary, (b) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (c) the aggregate annual dollar amount of the payments made or to be made by the Company for

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purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Change of Control Amount”). The Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this Section 3.9 would be payable to you under this Agreement or any other plan, policy or arrangement of the Company or Barnes & Noble Education, Inc., exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation, in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. The amounts payable to you under this Section 3.9(a) shall be in lieu of any amounts payable to you under Section 3.8 above.

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

4. Non-Competition and Confidential Information.

4.1 Non-Competition. You agree that during the Initial Term and any Renewal Term and for a period of two years (the “Relevant Period”) after the termination for any reason of your employment, you shall not, directly or indirectly, (a) employ or retain, or induce or cause any other person or entity to employ or retain, any person who is, or who at any time in the twelve-month period prior to such time had been, employed or retained by the Company or any of its subsidiaries or affiliates; or (b) provide services, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, to any Competing Business (as defined below) provided, however, that you may provide services to a Competing Business (other than Amazon.com, Inc. and its subsidiaries and affiliates and their respective successors (collectively, “Amazon”)) that is engaged in one or more businesses other than the Business Area (as defined below) but only to the extent that you do not provide services, directly or indirectly, to the segment of such Competing Business that is engaged in the Business Area. For purposes of this Agreement, the term “Competing Business” shall mean (i) Amazon or (ii) any person, corporation or other entity engaged in the Business Area. For purposes of this Agreement, the term “Business Area” shall mean the sale, distribution or attempted sale or distribution of books, textbooks, periodicals, newspapers, digital or audio versions of any of the foregoing or e-reading devices and related software. Notwithstanding the foregoing, the restrictions of this Section 4.1 shall not apply to the placement of general advertisements or the use of general search firm services with respect to a particular geographic area, but which are not targeted, directly or indirectly, towards employees of the Company or any of its subsidiaries.

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6. Miscellaneous.

6.1 Entire Agreement. This Agreement constitutes the entire agreement between you and the Company with respect to the terms and conditions of your employment by the Company and supersedes all prior agreements, understandings and arrangements, oral or written, between you and the Company with respect to the subject matter hereof, including the Prior Agreement. Notwithstanding the foregoing sentence, the Retention Bonus Agreement dated February 7, 2014 between the Company and Employee shall be in full force and effect.

6.2 Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors and assigns.

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Section 409A of the Code, then the Company shall not pay any such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the first day of the seventh month following such separation from service. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to the Company. Except as specifically permitted by Section 409A of the Code, the benefits and reimbursements provided to you under this Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement or Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to you on or before the last day of the calendar year following the calendar year in which the underlying fee, cost or expense is incurred. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Your tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A of the Code, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

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If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this Agreement.


Very truly yours,

	BARNES & NOBLE EDUCATION, INC.

	By:
	Name:	Max Roberts
	Title:	Chief Executive Officer

	Date:	June , 2015


Accepted and Agreed to:

BARRY BROVER

By:

Date:

[ Signature Page to Employment Agreement ]

EXHIBIT A

GENERAL RELEASE AND WAIVER

2. Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the payments and benefits set forth in Section 3.8 of the employment letter agreement, dated as of June [●], 2015, between Employee and the Company (such agreement referred to herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release.

A-1

control, bonus or similar policy, plan, program, agreement or similar or related arrangements, including, without limitation, any offer letter, letter agreement or employment agreement between Employee and the Company; (v) any rights and/or claims that Employee may have to receive any equity in the Company (whether restricted or unrestricted) in the future; and (vi) and any rights and/or claims for attorneys’ fees. Employee agrees not to challenge or contest the reasonableness, validity or enforceability of this Release.

7. (a) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

A-2

12. By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided adequate time (i.e., at least 21 days) to review this Release and to consider whether to sign this Release and (c) Employee has been advised that Employee has 7 days following execution to revoke this Release (“Revocation Period”). Notwithstanding anything to the contrary contained herein or in the Employment Agreement, this Release shall not be effective or enforceable, and the Separation Benefit is not payable and shall not be delivered or paid by the Company, until the Revocation Period has expired and provided that Employee has not revoked this Release. Employee agrees that any revocation shall be made in writing and delivered to , [Vice President, Human Resources, Barnes & Noble Education, Inc.], 120 Mountain View Boulevard, Basking Ridge, NJ 07920. Employee acknowledges that revocation of this Release shall result in the Company’s not having an obligation to pay the Separation Benefit.


Signature:		Date:
	[Name]

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Exhibit 10.11

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June 23, 2015

Mr. Patrick Maloney

c/o Barnes & Noble College Booksellers, LLC

120 Mountain View Boulevard

Basking Ridge, NJ 07920

Dear Mr. Maloney:

This letter agreement (the “Agreement”) is intended to set forth our mutual understanding regarding your employment as Executive Vice President, Chief Operating Officer of Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC (the “Company”), a wholly-owned subsidiary of Barnes & Noble Education, Inc. This Agreement is intended to replace the letter agreement with you dated as of June 30, 2014 (the “Prior Agreement”) effective as of the distribution by Barnes & Noble, Inc. to its stockholders of all shares of common stock of Barnes & Noble Education, Inc., and the indirect ownership of all membership interests in the Company (the “Distribution”). For the avoidance of doubt, the Prior Agreement shall remain effective through the effectiveness of the Distribution and shall be replaced by this Agreement upon the effectiveness of the Distribution; provided, however, Barnes & Noble, Inc. may at any time prior to the proposed Distribution provide notice to you in accordance with Section 6.5 of this Agreement that the proposed Distribution will not occur, in which case, this Agreement shall be null and void ab initio.

Accordingly, we are pleased to agree as follows:

1. Duties. You agree to be Executive Vice President, Chief Operating Officer of Barnes & Noble Education, Inc. for the term of this Agreement. In this capacity, you shall perform such duties and have such responsibilities as are typically associated with such position, including such duties and responsibilities as are prescribed by the Chief Executive Officer of Barnes & Noble Education, Inc. consistent with such position. During your employment, you agree to devote your full business time and attention to the performance of your duties and responsibilities hereunder. You shall report to the Chief Executive Officer of Barnes & Noble Education, Inc.

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(ii) “Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties as Executive Vice President, Chief Operating Officer of Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

3. Compensation.

3.1 Annual Base Salary. During the Initial Term and any Renewal Term, the Company shall pay you, for all services you perform hereunder, an annual base salary of U.S. $767,000.00, or such higher amount as the Compensation Committee of the Board (the “Compensation Committee”) may determine, payable in accordance with the Company’s payroll schedule applicable to executive officers of the Company (“Annual Base Salary”).

3.2 Bonus Compensation. During the Initial Term and any Renewal Term, the Company shall pay you annual bonus compensation, as determined by the Compensation Committee, with an annual target amount of not less than 125% of your Annual Base Salary, which shall be paid by the Company in accordance with and subject to the terms and conditions of the incentive or compensation plan or arrangement specified by the Compensation Committee.

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3.8 Severance. In the event that, during the Initial Term or any Renewal Term, (a) your employment is terminated by the Company without Cause or (b) you voluntarily terminate your employment for Good Reason, the Company shall pay you an amount equal to one times the sum of (i) your then Annual Base Salary, (ii) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (iii) the aggregate annual dollar amount of the payments made or to be made to you or on your behalf for purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this Agreement and do not materially breach such provisions at any time during the Relevant Period (as defined below). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefor; provided, however, such repayment shall not be required if the Company shall have materially breached this Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid. Upon the expiration of this Agreement due to non-renewal, or upon the termination of your employment hereunder for Cause or by your death or Disability, or by your voluntary termination of your employment hereunder without Good Reason, you shall be entitled only to the payment of such installments of your Annual Base Salary that have been earned through the date of such expiration and/or termination.

3.9 Change of Control Payments. (a) If at any time during the Initial Term and any Renewal Term (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within the greater of two years following the Change of Control or the remainder of the Initial Term or any Renewal Term, as applicable, then the Company shall pay you an amount equal to two times the sum of (a) your then Annual Base Salary, (b) the average of the annual bonuses actually paid to you with respect to the three completed years preceding the date of your termination of employment and (c) the aggregate annual dollar amount of the payments made or to be made by the Company for

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purposes of providing you with the benefits set forth in Sections 3.3, 3.6 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Change of Control Amount”). The Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this Section 3.9 would be payable to you under this Agreement or any other plan, policy or arrangement of the Company or Barnes & Noble Education, Inc., exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation, in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. The amounts payable to you under this Section 3.9(a) shall be in lieu of any amounts payable to you under Section 3.8 above.

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

4. Non-Competition and Confidential Information.

4.1 Non-Competition. You agree that during the Initial Term and any Renewal Term and for a period of two years (the “Relevant Period”) after the termination for any reason of your employment, you shall not, directly or indirectly, (a) employ or retain, or induce or cause any other person or entity to employ or retain, any person who is, or who at any time in the twelve-month period prior to such time had been, employed or retained by the Company or any of its subsidiaries or affiliates; or (b) provide services, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, to any Competing Business (as defined below); provided, however, that you may provide services to a Competing Business (other than Amazon.com, Inc. and its subsidiaries and affiliates and their respective successors (collectively, “Amazon”)) that is engaged in one or more businesses other than the Business Area (as defined below) but only to the extent that you do not provide services, directly or indirectly, to the segment of such Competing Business that is engaged in the Business Area. For purposes of this Agreement, the term “Competing Business” shall mean (i) Amazon or (ii) any person, corporation or other entity engaged in the Business Area. For purposes of this Agreement, the term “Business Area” shall mean the sale, distribution or attempted sale or distribution of books, textbooks, periodicals, newspapers, digital or audio versions of any of the foregoing or e-reading devices and related software. Notwithstanding the foregoing, the restrictions of this Section 4.1 shall not apply to the placement of general advertisements or the use of general search firm services with respect to a particular geographic area, but which are not targeted, directly or indirectly, towards employees of the Company or any of its subsidiaries.

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6. Miscellaneous.

6.2 Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors and assigns.

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the address set forth on the first page hereof, or to the Company at 120 Mountain View Boulevard, Basking Ridge, NJ 07920 to the attention of the Vice President for Human Resources for the Company (with a copy to the General Counsel for the Company), or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this section.

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compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay any such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the first day of the seventh month following such separation from service. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to the Company. Except as specifically permitted by Section 409A of the Code, the benefits and reimbursements provided to you under this Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement or Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to you on or before the last day of the calendar year following the calendar year in which the underlying fee, cost or expense is incurred. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Your tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A of the Code, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

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If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this Agreement.


Very truly yours,

	BARNES & NOBLE EDUCATION, INC.

	By:
	Name:	Max Roberts
	Title:	Chief Executive Officer

	Date:	June , 2015

Accepted and Agreed to:

PATRICK MALONEY


By:

Date:

[ Signature Page to Employment Agreement ]

EXHIBIT A

GENERAL RELEASE AND WAIVER

2. Employee acknowledges and agrees that Employee’s executing this General Release and Waiver (“Release”) is a condition precedent to the Company’s obligation to pay (and the Employee’s right to retain) the payments and benefits set forth in Section 3.8 of the employment letter agreement, dated as of June [●], 2015, between Employee and the Company (such agreement referred to herein as the “Employment Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”), that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits that, prior to the execution of this Release, Employee may have earned or accrued, or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Releasor (as defined below) except as expressly provided in this Release.

A-1

7. (a) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

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Signature:		Date:
	[Name]

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Exhibit 10.12

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June 23, 2015

William Maloney

c/o Barnes & Noble College Booksellers, LLC

120 Mountain View Boulevard

Basking Ridge, NJ 07920

Dear Mr. Maloney:

This letter agreement (the “Agreement”) is intended to set forth our mutual understanding regarding your employment as Executive Vice President of Barnes & Noble Education, Inc. (“Education”) and Barnes & Noble College Booksellers, LLC (the “Company”), a wholly-owned subsidiary of Barnes & Noble Education, Inc. This Agreement is intended to replace the letter agreement with you dated as of September 30, 2009 (the “Prior Agreement”) effective as of the distribution by Barnes & Noble, Inc. to its stockholders of all shares of common stock of Barnes & Noble Education, Inc., and the indirect ownership of all membership interests in the Company (the “Distribution”). For the avoidance of doubt, the Prior Agreement shall remain effective through the effectiveness of the Distribution and shall be replaced by this Agreement upon the effectiveness of the Distribution; provided, however, Barnes & Noble, Inc. may at any time prior to the proposed Distribution provide notice to you in accordance with Section 5.5 of this Agreement that the proposed Distribution will not occur, in which case, this Agreement shall be null and void ab initio. The execution of this Agreement shall be deemed to be the written notice of non-renewal of the term of the Prior Agreement that is scheduled to end on September 30, 2015 (the “Prior Agreement End Date”).

Accordingly, we are pleased to agree as follows:

1. Employment; Duties. You agree to be Executive Vice President of Barnes & Noble Education, Inc or successor thereto, for the term of this Agreement. In this capacity, you shall perform such duties and have such responsibilities as are typically associated with the office of Executive Vice President, including such duties and responsibilities as are prescribed by the Chief Executive Officer of Education. During your employment, you agree to devote your full business time and attention to the performance of your duties and responsibilities hereunder.

2. Term. (a) Unless terminated earlier in accordance with the provisions set forth below, the initial term of this Agreement will be for a period beginning on the date hereof (the “Effective Date”) and ending on the third anniversary of the Effective Date (“Initial Term”). At the expiration (but not earlier termination) of the Initial Term, and any subsequent “Renewal Term” (as defined below), the term of this Agreement shall automatically renew for additional periods of one year (each a “Renewal Term”), unless either party has given the other party written notice of non-renewal at least three (3) months prior to the expiration date of the Initial or Renewal Term, as applicable. In the event that either party has given written notice of non-renewal, and your employment with the Company continues after the expiration of the Initial Term or any Renewal Term, such post-expiration employment shall be “at-will” and either party may terminate such employment with or without notice and for any reason or no reason.

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(b) This Agreement shall terminate upon your death and may be terminated by the Company by written notice to you following your Disability (as defined below). This Agreement may also be terminated by the Company immediately for Cause (as defined below) or upon two weeks written notice to you for any other reason. This Agreement may also be terminated by you upon written notice to the Company, for Good Reason (as defined below).

(i) “Cause” means (A) Executive’s engaging in intentional misconduct or gross negligence which is injurious to Company; (B) your indictment or conviction with respect to any felony or other crime or violation of law involving fraud or dishonesty, or your entry of a plea of nolo contendere with respect to any felony involving fraud or dishonesty; (C) any gross negligence, intentional acts or intentional omissions by you, as determined by a majority vote of the Education Board of Directors (the “Board”) in its reasonable discretion and judgment, that constitute fraud, dishonesty, embezzlement or misappropriation in connection with the performance of the duties and responsibilities of your employment hereunder; (D) engaging in any act of intentional misconduct or moral turpitude, as determined by a majority vote of the Board, reasonably likely to adversely affect the Company or its business or reputation; (E) abuse of or dependency on alcohol or drugs (illicit or otherwise) which adversely affects job performance; (F) willful failure or refusal by you to properly perform (as determined by the Company in its reasonable discretion and judgment) the duties, responsibilities or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow (as determined by the Company in its reasonable discretion and judgment) any lawful direction by the Company; or (G) material breach of this Agreement or of any other duty to, written policy of, or agreement with the Company.

(ii) “Disability” shall mean a written determination by a majority of three physicians mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties of Executive Vice President of Barnes & Noble Education, Inc and Barnes & Noble College Booksellers, LLC, or successor thereto, under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

(iii) “Good Reason” shall mean the occurrence of one or more of the following events: (A) there shall have been a material diminution of your duties; (B) there shall have been a material diminution in the authority, duties, or responsibilities of the supervisor to whom you are required to report; (C) there shall have been a material reduction in the Annual Base Salary (as defined below) you receive from the Company; or (D) the principal executive offices of the Company shall be relocated to a location more than 50 miles from both New York City and Basking Ridge, New Jersey. The parties acknowledge that the foregoing definitions and any early termination by you for Good Reason shall be effective only to the extent that such definitions and such early

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termination satisfy the requirements of Section 409A of the Internal Revenue Code of 1986 as amended, and the regulations and other guidance promulgated thereunder (“Code”).

(iv) You will only be deemed to terminate employment for Good Reason if (A) you provide the Company with written notice of Good Reason within a period not to exceed 90 days after the initial existence of the condition alleged to give rise to Good Reason, (B) the Company fails to remedy the condition within 30 days of such notice, and (C) your termination is within six (6) months following the initial existence of the condition alleged to give rise to Good Reason.

3. Compensation.

3.1. Annual Base Salary. The Company will pay you, for all services you perform hereunder, an annual base salary of six hundred and eighty thousand ($680,000), or such higher amount as the Compensation Committee of the Board (the “Compensation Committee”) may determine, payable in accordance with the Company’s payroll schedule applicable to executive officers of the Company (“Annual Base Salary”).

3.2. Bonus Compensation. In addition to your above-mentioned Annual Base Salary, you shall be eligible to participate in the Company’s bonus program as determined by the Compensation Committee in its sole discretion. The target level annual bonus payment shall be at least 100% of your Annual Base Salary and shall be based upon achievement of measurable objectives as defined by the Company each year.

3.3. Expenses; Car Allowance. During the term of your employment, we will: (a) pay you a car allowance per month of $1,500, or such higher amount as may be determined by the Compensation Committee; and (b) reimburse you for all reasonable expenses incurred by you in the performance of your duties and responsibilities under this Agreement, including, without limitation, entertainment and travel expenses, in accordance with the policies and procedures established by the Compensation Committee (“Eligible Expenses”). All such reimbursements not already paid in accordance with Company policy shall be paid not later than the last day of the calendar year following the calendar year in which the Eligible Expenses were incurred.

3.4. Employee Benefits. During the Initial Term and any Renewal Term, you will be eligible to participate in and receive any benefits to which you are entitled under employee benefit plans which the Company provides for all employees.

3.5. Severance. In the event of the early termination of the Initial Term or any Renewal Term of this Agreement by the Company without Cause or by you with Good Reason, the Company will pay you an amount equal to your then Annual Base Salary, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”), provided that (a) you execute and deliver to the Company a release of all claims against the Company substantially in the form annexed hereto as Exhibit A (“Release”) and (b) you have not materially breached as of the date of such early termination any provisions of this Agreement and do not materially breach such provisions at any time during the 12-month period following

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the date of termination. The Company’s obligation to make the severance payment will be cancelled upon the occurrence of any such material breach during such period and, in the event such payment has already been made, you shall repay to the Company such payment under this paragraph within 30 days after demand therefor. The Severance Amount shall be paid in cash in a single lump sum, on the later of the first day of the month following the month in which early termination referred to in this paragraph occurs or the date the Release is returned and the Revocation Period (as defined in the Release) has expired; provided, however, that if such termination occurs on or prior to the Prior Agreement End Date, the Severance Amount shall be paid in 12 approximately equal monthly installments as provided in Section 3.5 of the Prior Agreement commencing on the date on which such installments would have commenced under Section 3.5 of the Prior Agreement. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered within 60 days of such early termination of employment (or if such Release is revoked in accordance with its terms), no severance payment under this Section 3.5 shall be paid. Notwithstanding the foregoing, in the event you are determined to be a “Specified Employee” as defined in Section 409A of the Code, such severance pay otherwise payable before the day that is six months following your termination of employment shall be delayed and paid on the first day of the seventh month following your termination of employment, but only to the extent necessary to prevent adverse tax consequences to you under Code Section 409A. Upon the expiration of the Initial Term or any Renewal Term of this Agreement, or upon the early termination of either such Term of this Agreement for Cause or by your death or Disability, or by your voluntary termination of your employment without Good Reason, you shall be entitled only to the payment of your Annual Base Salary that have been earned through the date of such expiration and/or early termination.

3.6. Equity Awards. During the Initial Term and any Renewal Term, you shall be eligible to receive equity awards of Barnes & Noble Education, Inc. under the terms of the Barnes & Noble Education, Inc. Equity Incentive Plan, as determined by the Compensation Committee.

3.7. Change of Control Payments. (a) If at any time during the Initial Term and any Renewal Term of this Agreement there is a Change of Control and (i) your employment is terminated by the Company without Cause or (ii) you voluntarily terminate your employment for Good Reason, in either case within the greater of two years following the Change of Control or the remainder of the Initial Term or any Renewal Term of this Agreement, as applicable, the Company shall pay you two times your then Annual Base Salary (the “Change of Control Amount”); provided that the maximum amount payable pursuant to this Section 3.7 plus any other change of control payments shall be the maximum amount payable to the Executive without triggering an excise tax under Section 280G of the Code, or any successor provision thereto. Any reduction hereunder in the amount payable upon a Change of Control shall be made to amounts which do not constitute deferred compensation within the meaning of Code Section 409A. The amount due under this Section 3.7 shall be paid to you in one lump sum within 30 days after the date your employment terminates; provided, however, that if such termination occurs on or prior to the Prior Agreement End Date, the Change of Control Amount shall be reduced by the Severance Amount but otherwise paid in accordance with this Agreement, and the Severance Amount shall be paid in 12 approximately equal monthly

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installments as provided in Section 3.5 of the Prior Agreement commencing on the date on which such installments would have commenced under Section 3.5 of the Prior Agreement. The amounts payable to you under this Section 3.7 shall be in lieu of any amounts payable to you under Section 3.5 above.

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

(i)

after the Effective Date hereof, any person, entity or “group” as identified in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “1934 Act”), other than you or any of your affiliates becomes a beneficial owner (as such term is defined in Rule 13d-3 under the 1934 Act) directly or indirectly of securities representing 40% or more of the total number of votes that may be cast for the election of directors of Barnes & Noble Education, Inc.; or

(ii)

within two years after a merger, consolidation, liquidation or sale of assets involving Barnes & Noble Education, Inc., or a contested election of a Barnes & Noble Education, Inc. director, or any combination of the foregoing, the individuals who were directors of Barnes & Noble Education, Inc. immediately prior thereto shall cease to constitute a majority of the Board; or

(iii)

within two years after a tender offer or exchange offer for voting securities of Barnes & Noble Education, Inc., the individuals who were directors of Barnes & Noble Education, Inc. immediately prior thereto shall cease to constitute a majority of the Board.

4. Non-Competition and Confidential Information.

4.1. Non-Competition. You agree that so long as you are employed by the Company and for period of two (2) years (the “Relevant Period”) after the expiration or termination for any reason of your employment under this Agreement or otherwise, you will not (a) employ or retain, or induce or cause any other person or entity to employ or retain, any person who is employed or retained by the Company or any of its subsidiaries or affiliates; and (b) engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business, as defined below. For purposes of this Agreement, the term “Competing Business” shall mean any person, corporation or other entity which principally sells or attempts to sell any products or services which are the same as or substantially similar to the products and services (i) sold by the Company or any of its subsidiaries at any time and from time to time during the last two (2) years prior to the expiration or termination for any reason of your employment under this Agreement or otherwise, or (ii) being developed by the Company or any of its subsidiaries at any time during the initial Term or any Renewal Term of this Agreement or your employment with the Company otherwise, no matter what stage of development was achieved during such period and even if the idea was abandoned during such period.

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4.2. Ownership of Other Securities. Nothing in paragraph 4.1 shall be construed as denying you the right to own securities of any corporation listed on a national securities exchange or quoted in the NASDAQ System to the extent of an aggregate of 5% of the outstanding shares of such securities.

4.3. Confidential Information. You shall use best efforts and diligence both during and after any employment with the Company, regardless of how, when or why such employment ends, to protect the confidential, trade secret and/or proprietary character of all Confidential Information and Trade Secret Information, as defined below. You shall not, directly or indirectly, use (for your benefit or for the benefit of any other person) or disclose any Confidential Information or Trade Secret Information, for so long as it shall remain proprietary or protectable, except as may be necessary for the performance of your duties for the Company. For purposes of this Agreement, “Confidential Information” shall mean all confidential information of the Company, regardless of the form or medium in which it is or was created, stored, reflected or preserved, information which is either developed by you (alone or with others) or to which you shall have had access during any employment with the Company. Confidential Information includes, but is not limited to, Trade Secret Information, and also includes information which is learned or acquired by the Company from others with whom the Company has a business relationship in which, and as a result of which, such information is revealed to the Company. For purposes of this Agreement, “Trade Secret Information” shall mean all information, regardless of the form or medium in which it is or was created, stored, reflected or preserved, that is not commonly known by or generally available to the public and that (a) derives or creates economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The Company’s Trade Secret Information may include, but is not limited to, all confidential information relating to or reflecting the Company’s research and development plans and activities; compilations of data; product plans; sales, marketing and business plans and strategies; pricing, price lists, pricing methodologies and profit margins; current and planned incentive, recognition and rewards programs and services; personnel, inventions, concepts, ideas, designs and formulae; current, past and prospective customer lists; current, past and anticipated customer needs, preferences and requirements; market studies; computer software and programs (including object code and source code); and computer and database technologies, systems, structures and architectures. You understand that Confidential and/or Trade Secret Information may or may not be labeled as such, and you will treat all information which appears to be Confidential and/or Trade Secret Information as confidential unless otherwise informed or authorized by the Company.

4.4. Inventions. Executive shall promptly disclose and provide to the Company, any original works of authorship, designs, formulas, processes, improvements, compositions of matter, computer software programs, data, information or databases, methods, procedures or other inventions, developments or improvements of any kind that Executive conceives, originates, develops, improves, modifies and/or creates, solely or jointly with others, during the period, of Executive’s employment, or as a result of such employment (collectively, “Inventions”), and whether or not any such Inventions also may be included within “Confidential

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Information” or “Trade Secret Information” as defined under this Agreement, or are patentable, copyrightable or protectable as trade secrets. Executive acknowledges and agrees that the Company is and shall be the exclusive owner of all rights, title and interest in and to the Inventions and, specifically without limitation, that any copyrightable works prepared by Executive within the scope of your employment are “works for hire” under the Copyright Act, that such “works for hire” are Inventions and that the Company will be considered the author and owner of such copyrightable works. In the event that any Invention is deemed not to be a “work for hire”, or in the event that Executive should, by operation of law, be deemed to be entitled to retain any rights, title or interest in and to any Invention, Executive hereby irrevocably waives all rights, title and interest and assigns to the Company, without any further consideration and regardless of any use by the Company of any such Inventions, all rights, title and interest, if any, in and to such Invention. Executive agrees that the Company, as the owner of all Inventions, has the full and complete right to prepare and create derivative works based upon the Inventions and to use, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, publicly perform and publicly display, and otherwise exploit by all means now known or later developed, such Inventions and derivative works anywhere throughout the world and at any time during or after Executive’s employment hereunder or otherwise.

4.5. Reasonableness. You acknowledge that the foregoing limitations and obligations are reasonable and properly required by the Company and that in the event that any such limitations are found by a court to be unreasonable and unenforceable, you will submit to such limitations and/or obligations in such form as such court shall determine.

4.6. Return of Information. You shall promptly deliver to the Company, upon the expiration or termination for any reason of your employment under this Agreement or otherwise, or at any other time at the Company’s request, without retaining any copies, all documents, information and other material in your possession or control containing, reflecting and/or relating, directly or indirectly, to any Confidential Information and/or Trade Secret Information.

4.7. Severability. If any of the restrictions in paragraph 4 should for any reason whatsoever be declared invalid, the validity or enforceability of the remainder of this Agreement will not be adversely affected thereby.

4.8. Equitable Relief. You acknowledge that your services to the Company are of a unique character which give them a special value to the Company. You further recognize that any violation of the restrictions in paragraph 4 may give rise to losses or damages for which the Company cannot be reasonably or adequately compensated in an action at law and that such violation may result in irreparable and continuing harm to the Company. Accordingly, you agree that, in addition to any other remedy which the Company may have at law or in equity, the Company shall be entitled to injunctive relief to restrain any violation by you of the restrictions in paragraph 4.

4.9 Governmental Agencies . Notwithstanding any provision of this Agreement to the contrary, this Agreement is not intended to, and shall not, limit or restrict you from: (a) filing and, as provided for under Section 21F of the Securities Exchange Act of 1934, maintaining the confidentiality of a claim with a government agency that is responsible for

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enforcing a law; (b) providing Confidential Information (as defined in Section 4.3(a)) to the extent required by law or legal process or permitted by Section 21F of the Securities Exchange Act of 1934; or (iii) cooperating, participating or assisting in any government or regulatory entity investigation or proceeding.

5. Miscellaneous.

5.1. Entire Agreement. This Agreement constitutes the entire agreement between you and the Company with respect to the terms and conditions of your employment by the Company and supersedes all prior agreements, understandings and arrangements, oral or written, between you and the Company with respect to the subject matter hereof, including the Prior Agreement.

5.2. Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors and assigns.

5.3. Amendments and Waivers. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by the party against whom enforcement of any such modification or amendment is sought. Either party may, by an instrument in writing, waive compliance by the other party with any term or provision of this Agreement to be performed or complied with by such other party.

5.4. Assignment. Neither this Agreement nor any rights or obligations which either party may have by reason of this Agreement shall be assignable by either party without the prior written consent of the other party.

5.5. Notices. Any notice which may or must be given under this Agreement shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepaid, or reputable overnight courier, addressed to you at the address set forth on the first page hereof, or to the Company at 120 Mountain View Boulevard, Basking Ridge, NJ 07920 to the attention of the Vice President for Human Resources for the Company (with a copy to the General Counsel for the Company), or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this paragraph.

5.6. Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and are not deemed to be a part of this Agreement or to affect the meaning and interpretation of this Agreement.

5.7. Governing Law. This Agreement shall be construed (both as to validity and performance) and enforced in accordance with and governed by the laws of the State of New Jersey applicable to agreements made and to be performed wholly within the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New Jersey. Each party submits to jurisdiction in the State of New Jersey and further agrees that any cause of action arising under this Agreement shall be brought exclusively in a court in Somerset County of New Jersey.

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5.8. Survival of Rights and Obligations. All rights and obligations of you and the Company arising during the Initial Term and any Renewal Term of this Agreement shall continue to have full force and effect after the termination of this Agreement unless otherwise provided herein.

5.9. Code Section 409A. Notwithstanding any provision herein to the contrary, in the event that you are determined to be a Specified Employee, for purposes of any payment on termination of employment under this Agreement, payment(s) shall be made or begin, as applicable, on the first payroll date which is more than six months following the date of separation from service (or, if earlier, upon your death), to the extent required to avoid any tax consequences under Code Section 409A. All provisions of this Agreement shall be interpreted in a manner consistent with Section 409A of the Code, as amended, and the regulations and other guidance promulgated thereunder. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Code Section 409A or any other federal, state, or local tax law. Your tax consequences will depend, in part, upon the application of relevant tax law, including Code Section 409A, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

5.10. Executive’s Representations and Warranties. You hereby represent and warrant to the Company that (a) your execution, delivery and performance of this Agreement do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which you are a party or by which you are bound; (b) you are not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity, which has not been disclosed to the Company prior to the execution of this Agreement; (c) in the performance of any duties and responsibilities on behalf of the Company, you shall not divulge or use in any way any trade secrets or confidential or proprietary information which are within your possession or knowledge (if any), are owned by any other person or entity and regardless of whether or not such trade secrets or confidential or proprietary information are subject to any written agreement; and (d) upon the execution and delivery of this Agreement, it shall be a valid and binding obligation, enforceable in accordance with its terms. You hereby acknowledge and represent that you fully understand the terms and conditions contained herein.

5.11. Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

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If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this letter.


Very truly yours,

Barnes & Noble Education, Inc.

By:
		Max Roberts
		Chief Executive Officer

Date: June , 2015

Accepted and Agreed to:

William Maloney

Date:

[Signature Page to Employment Agreement]

EXHIBIT A

GENERAL RELEASE AND WAIVER

1. William Maloney (“Employee”) hereby acknowledges and agrees that Employee’s employment with Barnes & Noble Education, Inc. and Barnes & Noble College Booksellers, LLC, or successor thereto, (together, the “Company”) terminated on, , 20 (the “Termination Date”).

2. Employee hereby agrees that after the delivery to the Company of a signed original of this General Release and Waiver (“Release”), Employee will accept from the Company and on behalf of the Company and each Releasee (as defined herein), the payments set forth in Section 3.5 of the employment agreement dated as of , 2015 between Employee and the Company (such agreement referred to herein as the “Agreement” and such payments and benefits collectively referred to herein as the “Separation Benefit”). Employee acknowledges and agrees that Employee’s executing the Agreement is a condition precedent to the Company’s obligation to pay the Separation Benefit, that the Separation Benefit is adequate consideration for this Release, and that any monetary or other benefits which, prior to the execution of this Release, Employee may have earned or accrued or to which Employee may have been entitled, have been paid or such payments or benefits have been released, waived or settled by Release or pursuant to this Release.

3. THIS PARAGRAPH PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING AND POTENTIAL CLAIMS YOU MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED WITHIN THE DESCRIPTION BELOW OF “RELEASEE.” BEFORE YOU SIGN THIS RELEASE, YOU MUST READ THIS PARAGRAPH CAREFULLY, AND MAKE SURE THAT YOU UNDERSTAND IT FULLY.

In consideration of Employee’s receipt and acceptance of the Separation Benefit from the Company and on behalf of the Company and each Releasee (as defined below), Employee, on Employee’s behalf and on behalf of Employee’s heirs, executors, administrators, successors and assigns (collectively, “Releasor”), hereby irrevocably, unconditionally and generally releases the Company, Barnes & Noble Education, Inc., their respective current and former officers, directors, shareholders, trustees, parents, members, managers, affiliates, subsidiaries, branches, divisions, agents, attorneys and employees, and the current and former officers, directors, shareholders, agents, attorneys and employees of any such parent, affiliate, subsidiary, branch or division of the Company and Barnes & Noble Education, Inc. and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (collectively, “Releasee”), from or in connection with, and hereby waives and/or settles, except as may otherwise be stated herein, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever and which Releasor ever had, now has or hereafter can, shall or may have as of the date of this Release, including, without limitation, any rights and/or claims arising under any

contract, express or implied, written or oral, including without limitation the employment agreement between Employee and the Company, dated , 2015 (“Employment Agreement”); for wrongful dismissal or termination of employment; and arising under any applicable foreign, federal, state, local or other statutes, orders, laws, ordinances, regulations or the like, or case law, that relate to employment or employment practices and/or, specifically, that prohibit discrimination based upon age, race, religion, sex, national origin, disability or any other unlawful bases, including without limitation, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990, as amended, the Family Medical Leave Act of 1993, as amended, the Employee Retirement Income Security Act of 1990, as amended, the Vietnam Era Veterans’ Readjustment Assistance Act, as amended, the Worker Adjustment and Retraining Notification Act, as amended, and any similar applicable statutes, orders, laws, ordinances, regulations or the like, or case law, of the State of New Jersey and any State in which any Releasee is subject to jurisdiction, or any political subdivision thereof, including without limitation, the New York State Human Rights Law, the New York State Labor Law, , New York City Human Rights Law, New Jersey Law Against Discrimination and New Jersey Wage and Hour Law, and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes, orders, laws, ordinances, regulations or the like.

5. Employee represents and warrants that Employee has not filed or commenced any complaints, claims, actions or proceedings of any kind against any Releasee with any federal, state or local court or any administrative, regulatory or arbitration agency or body. Employee hereby waives any right to, and agrees not to, seek reinstatement or employment of any kind with any Releasee and, without waiver by any Releasee of the foregoing, the existence of this Release shall be a valid, nondiscriminatory basis for rejecting any such application or, in the event Employee obtains such employment, to terminate such employment.

6. By executing this Release, Releasor acknowledges that (a) Employee has been advised by the Company to consult with an attorney before executing this Release; (b) Employee was provided adequate time (i.e., at least twenty-one (21) days) to review this Release and to consider whether to sign the Release and (c) Employee has been advised that Employee has seven (7) days following execution to revoke the Release (“Revocation Period”). Notwithstanding anything to the contrary contained herein or in your Employment Agreement, this Release will not be effective or enforceable, and the Separation Benefit is not payable and shall not

be delivered or paid by the Company, until the Revocation Period has expired and provided that Employee has not revoked the Release. Employee agrees that any revocation shall be made in writing and delivered to , Vice President, Human Resources, Barnes & Noble Education, Inc., 120 Mountain View Boulevard, Basking Ridge, NJ 07920. Employee acknowledges that revocation of the Release will result in the Company’s not having an obligation to pay the Separation Benefit.

7. This Release and Separation Benefit are not intended to be, shall not be construed as and are not an admission or concession by any Releasee of any wrongdoing or illegal or actionable acts or omissions. Employee, as and on behalf of Releasor, hereby represents and agrees that Employee shall keep confidential and not disclose orally or in writing, to any person, except as may be required by law, any and all information concerning the existence or terms of this Release and the amount of any payments made hereunder. Employee further agrees that in consideration of the Separation Benefit, and except as shall be required by law, (a) Employee shall keep confidential and not disclose orally or in writing directly or indirectly to any person (except Employee’s immediate family, attorneys and accountant), any and all information concerning any facts, claims or assertions relating or referring to any experiences of Employee or treatment Employee received by or on behalf of any Releasee through the date of this Release, and (b) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

8. (a) Without limitation on the survival of any and all other terms of the Employment Agreement subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release, Employee and the Company expressly acknowledge that the terms of Sections 4 and 5 of the Employment Agreement survive and shall be in full force and effect subsequent to the end of Employee’s employment, the expiration or termination of the Employment Agreement, and/or the execution and effectiveness of this Release.

(b) If Employee is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information (as defined in Section 4.3 of the Employment Agreement), Employee will promptly notify the Company of such request or requirement so that the Company may seek to avoid or minimize the required disclosure and/or to obtain an appropriate protective order or other appropriate relief to ensure that any information so disclosed is maintained in confidence to the maximum extent possible by the agency or other person receiving the disclosure, or, in the discretion of the Company to waive compliance with the provisions of this Release. Employee will use reasonable efforts, in cooperation with the Company or otherwise, to avoid or minimize the required disclosure and/or to obtain such protective order or other relief. If, in the absence of a protective order or the receipt of a waiver hereunder, Employee is compelled to disclose the Confidential Information or else stand liable for contempt or suffer other sanction, censure or penalty, Employee will disclose only so much of the Confidential Information to the party compelling disclosure as he believes in

good faith on the basis of advice of counsel is required by law and Employee shall give the Company prior notice of the Confidential Information he believes he is required to disclose.

9. Employee represents that Employee has returned to the Company, or that Employee shall do so prior to delivery of the Separation Benefit, all property of the Company which is or has been in Employee’s possession, custody, or control, including but not limited to computers and other equipment, company credit cards, identification cards, and access cards and keys.

10. Employee shall provide such reasonable cooperation the Company on behalf of itself or any Releasee, may request in connection with any pending or future lawsuit, arbitration, or proceeding between the Company and/or any Releasee and any third party; any pending or future regulatory or governmental inquiry or investigation concerning the Company and/or any Releasee; and any other legal, internal, or business matters of or concerning the Company and/or any Releasee. Such cooperation shall include, without limitation, meeting with and providing information the Company, any Releasee and/or its, their respective attorneys, auditors, or other representatives as reasonably requested by the Company.

11. The covenants, representations and acknowledgments made by Employee in this Release shall survive the execution and effectiveness of this Release and the delivery of the Separation Benefit, and this Release shall inure to the benefit of each Releasee, and the successors and assigns of each of them. Releasees shall be excused and released from any obligation to make payment of the Separation Benefit, and Employee shall be obligated to return to the Company the Separation Benefit, in the event that the Employee is found to have made a material misstatement in any term, condition, covenant, representation or acknowledgment in this Release, or Employee is found to have committed or commits a material breach of any term, condition or covenant in this Release.

12. This Release and the Employment Agreement constitute the sole and complete understanding and agreement between the parties with respect to the matters set forth herein and there are no other agreements or understandings, whether written or oral and whether made contemporaneously or otherwise. No term, condition, covenant, representation or acknowledgment contained in this Release may be amended unless in a writing signed by both parties. If any section of this Release is determined to be void, voidable or unenforceable, it shall have no effect on the remainder of the Release which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions maximum effect permitted by applicable law.

13. With respect to any claims or disputes under or in connection with this Release or any claims releases under paragraph 3 of this Release, Employee and the Company hereby acknowledge and agree that Section 5.7 of the Employment Agreement shall govern . Employee acknowledges if there is a breach or threatened breach of the provisions of this Release, the Company will have no adequate remedy in money or

damages and accordingly shall be entitled to seek equitable relief, including without limitation, injunction and specific performance; Employee hereby waives any requirements for security or posting of any bond in connection with such relief. No specification in this Release of any particular remedy shall be construed as a waiver or prohibition of any other remedies (including claims for damages) in the event of a breach or threatened breach of this Release.

14. This Release shall in all respects be subject to, governed by and enforced and construed pursuant to and in accordance with the laws of the State of New Jersey without regard to and excluding its choice of law rules.

15. Employee agrees and acknowledges that (a) Employee has had an adequate opportunity to review this Release and all of its terms; (b) Employee understands all of the terms of this Release, which are fair, reasonable and are not the result of any fraud, duress, coercion, pressure or undue influence exercised by or on behalf of any Releasee; and (c) Employee has agreed to and/or entered into this Release and all of the terms hereof, knowingly, freely and voluntarily.


Signature:		Date:
	William Maloney

Exhibit 10.13

[EDUCATION LETTERHEAD]

June [●], 2015

Mr. Michael P. Huseby

122 Fifth Avenue

New York, NY 10011

Dear Mr. Huseby:

This letter agreement (the “Agreement”) is intended to set forth our mutual understanding regarding your employment as Executive Chairman (“Executive Chairman”) of the Board of Directors of Barnes & Noble Education, Inc. (the “Company”) effective as of the distribution by Barnes & Noble, Inc. to its stockholders of all shares of common stock of the Company, and the indirect ownership of all membership interests in the Company (the “Distribution”). Barnes & Noble, Inc. may at any time prior to the proposed Distribution provide notice to you in accordance with Section 6.5 of this Agreement that the proposed Distribution will not occur, in which case, this Agreement shall be null and void ab initio.

Accordingly, we are pleased to agree as follows:

1. Duties. (a) You will serve as the Executive Chairman of the Board of Directors of the Company (the “Board”). The Company shall (i) nominate you for election to the Board or, if earlier, shall appoint you to fill a vacancy on the Board, and (ii) re-nominate you at the expiration of each term of office as a member of the Board during the term of this Agreement. Subject to Section 2(b), you shall serve as a member of the Board for each period for which you are so elected or appointed without any additional compensation.

(b) During the Initial Term and any Renewal Term (each, as defined below), you shall also serve as an employee of the Company reporting directly to the Board, and shall be subject to the Company’s policies on the same basis as senior executives of the Company. In such capacity, you shall assist and advise the Board and the Company’s senior executives and shall have such other duties and responsibilities as the Board may specify from time to time.

(c) During the Initial Term and any Renewal Term, you shall devote the time and effort reasonably required to fulfill your duties and responsibilities under this Agreement; provided, however, that you may continue to serve on the boards of those entities on which you serve as of the date of this Agreement and may serve on the boards of such other entities following the date of this Agreement for which you have provided the Board advance notice; and provided further that, with respect to any such board service, you shall recuse yourself and not otherwise participate as to any matter that relates to the “Business Area” (as defined in Section 4.1).

2. Term. (a) The initial term of this Agreement shall be for a period beginning on the date hereof (the “Effective Date”) and ending on the second anniversary of the Effective Date or, if earlier, the termination of your employment in accordance with the provisions set forth below (the “Initial Term”). At the expiration (but not earlier termination) of the Initial Term, and any subsequent “Renewal Term” (as defined below), the term of this Agreement shall automatically renew for additional periods of one year (each, a “Renewal Term”), unless your employment has earlier terminated or either party hereto has given the other party written notice of non-renewal at least 90 days prior to the expiration date of the Initial Term or the Renewal Term, as applicable. In the event that either party has given written notice of non-renewal, and your employment with the Company continues after the expiration of the Initial Term or any Renewal Term, such post-expiration employment shall be “at-will” and either party may terminate such employment with or without notice and for any reason or no reason.

employment for any reason, you are a member of the Board or the board of directors of any of the Company’s affiliates, or hold any other position with the Company or its affiliates, you shall automatically be deemed to have resigned from all such positions as of such date. You agree to execute such documents and take such other actions as the Company may request to reflect such resignation.

(i) “Cause” means (A) your engaging in intentional misconduct or gross negligence that, in either case, is injurious to the Company; (B) your indictment, entry of a plea of nolo contendere or conviction by a court of competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence, intentional acts or intentional omissions by you (as determined by a majority vote of the Board in its reasonable discretion and judgment) that constitute fraud, dishonesty, embezzlement or misappropriation in connection with the performance of your employment duties and responsibilities; (D) your engaging in any act of intentional misconduct or moral turpitude (as determined by a majority vote of the Board in its reasonable discretion and judgment) reasonably likely to adversely affect the Company or its business; (E) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (F) your willful failure or refusal to properly perform (as determined by a majority vote of the Board in its reasonable discretion and judgment) the duties, responsibilities or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow (as determined by a majority vote of the Board in its reasonable discretion and judgment) any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (G) your material breach of this Agreement or of any other contractual duty to, written policy of, or written agreement with the Company (with the exception of a material breach based in good faith on the advice of professional consultants, such as attorneys and accountants).

(ii) “Disability” shall mean a written determination by a majority of three physicians (one of which shall be your most recent primary care provider) mutually agreeable to the Company and you (or, in the event of your total physical or mental disability, your legal representative) that you are physically or mentally unable to perform your duties as Executive Chairman under this Agreement and that such disability can reasonably be expected to continue for a period of six consecutive months or for shorter periods aggregating 180 days in any 12-month period.

(iii) “Good Reason” shall mean the occurrence of one or more of the following events without your written consent: (A) there shall have been a material diminution of your authority, duties or responsibilities as described in Section 1; (B) there shall have been a greater than 10% involuntary reduction in your Annual Base Salary (as defined below) in effect pursuant to Section 3.1; (C) the principal executive offices of the Company shall be relocated to a location more than 50 miles from Basking Ridge, NJ or New York City, NY; or (D) the Company fails to make material payments to you (or provide to you restricted stock units) as required by this Agreement.

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

3. Compensation.

3.1. Annual Base Salary. During the Initial Term and any Renewal Term, the Company shall pay you, for all services you perform hereunder, an annual base salary of U.S. $500,000.00, or such higher amount as the Compensation Committee of the Board (the “Compensation Committee”) may determine, payable in accordance with the Company’s payroll schedule applicable to executive officers of the Company (“Annual Base Salary”).

3.2. Bonus Compensation. During the Initial Term and any Renewal Term, you will be eligible to receive annual bonus compensation, as determined by the Compensation Committee, which bonus, if any, shall be paid in accordance with the incentive or compensation plan or arrangement specified by the Compensation Committee.

3.3. Employee Benefits. During the Initial Term and any Renewal Term, you shall be eligible to participate in and receive any benefits to which you are entitled under the employee benefit plans that the Company provides for its employees generally, as well as any employee benefit plans that the Company provides for its executive officers generally.

3.4. Expenses. During the Initial Term and any Renewal Term, the Company shall reimburse you for all expenses incurred by you in the performance of your duties and responsibilities under this Agreement, including entertainment and travel expenses, in accordance with the policies and procedures established by the Compensation Committee.

3.5. Equity Awards. During each fiscal year of the Company following the fiscal year in which the Effective Date occurs and at the same time as other executive officers of the Company, you shall be granted a number of equity or equity-based awards of the Company with an aggregate target value of 300% of your annual base salary, and such equity or equity-based awards shall be comprised of the same types of awards granted to other executive officers of the Company, with the same terms and conditions as such awards.

3.6. Office Space and Administrative Support. The Company shall provide you with office space and administrative support as reasonably necessary to perform your duties as set forth in Section 1.

3.7. Life and Disability Insurance. During the Initial Term and any Renewal Term, the Company shall obtain in your name (a) a life insurance policy providing for a death benefit of U.S. $1,000,000.00 payable to any beneficiary or beneficiaries named by you and (b) a disability insurance policy providing for monthly payments to you of U.S. $12,800.00, which monthly amount will be increased to the extent the available maximum monthly benefit under the group disability insurance policy under which such insurance is provided is increased, during the period of any disability until the earlier of your attaining age 65 or death; provided that the term “disability” in any such disability insurance policy shall be defined in a manner consistent with the definition in Section 2(c)(ii). During the Initial Term and the Renewal Term, the Company shall pay all premiums due on such policies.

3.8. Severance. (a) In the event that, during the Initial Term or any Renewal Term, (1) your employment is terminated by the Company without Cause or (2) you voluntarily terminate your employment for Good Reason, in addition to the Accrued Obligations (as described in Section 3.8(b)), the Company shall pay you an amount equal to two times the sum of (i) your then Annual Base Salary, (ii) the average of the annual bonuses actually paid or payable to you with respect to the three completed fiscal years preceding the date of your termination of employment (or such lesser number of completed fiscal years) and (iii) the aggregate annual dollar amount of the payments made or to be made to you or on your behalf for purposes of providing you with the benefits set forth in Sections 3.3 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Severance Amount”); provided that (x) you execute and deliver to the Company, and do not revoke, a release of all claims against the Company substantially in the form attached hereto as Exhibit A (“Release”) and (y) you have not materially breached as of the date of such termination any provisions of this Agreement and do not materially breach such provisions at any time during the Relevant Period (as defined below). The Company’s obligation to make such payment shall be cancelled upon the occurrence of any such material breach and, in the event such payment has already been made, you shall repay to the Company such payment within 30 days after demand therefore; provided, however, such repayment shall not be required if the Company shall have materially breached this Agreement prior to the time of your breach. The Severance Amount shall be paid in cash in a single lump sum on the later of (1) the first day of the month following the month in which such termination occurs and (2) the date the Revocation Period (as defined in the Release) has expired. Notwithstanding anything in this paragraph to the contrary, if a Release is not executed and delivered to the Company within 60 days of such termination of employment (or if such Release is revoked in accordance with its terms), the Severance Amount shall not be paid, but the Accrued Obligations nevertheless shall be paid.

(b) Upon the termination of your employment hereunder for any reason other than as set forth in Section 3.8(a) above, during the Initial Term or any Renewal Term, the Company shall have no further obligation to you other than: (1) to pay Annual Base Salary through the effective date of termination (the “Effective Termination Date”); (2) to pay any bonus (as described in Section 3.2) for any fiscal year which has ended prior to the fiscal year in which the Effective Termination Date occurs that has been earned but not yet paid as of the Effective Termination Date; and (3) with respect to any benefits to which you may be entitled pursuant to any insurance or other benefit plans or arrangements of the Company, such benefits shall be payable in accordance with the terms of such plans or arrangements (the items described in clauses (1), (2) and (3) collectively, the “Accrued Obligations”). For purposes of this Section 3.8, except as may be required under Section 6.10, payment under clause (1) shall be made in cash in a single lump sum not later than 60 days following the Effective Termination Date and payment under clause (2) shall be made in cash in a single lump sum not later than the fifteenth day of the third month following the end of the fiscal year of the Company with respect to which the applicable bonus was earned.

3.9. Change of Control Payments. (a) If at any time during the Initial Term and any Renewal Term (i) there is a Change of Control (as defined below) and (ii) your employment is terminated by the Company without Cause or you voluntarily terminate your employment for Good Reason, in either case, within the greater of two years following the Change of Control or the remainder of the Initial Term or any Renewal Term, as applicable, then the Company shall pay you an amount equal to three times the sum of (x) your then Annual Base Salary, (y) the average of the annual bonuses actually paid or payable to you with respect to the three completed fiscal years preceding the date of your termination of employment (or such lesser number of completed fiscal years) and (z) the aggregate annual dollar amount of the payments made or to be made by the Company for purposes of providing you with the benefits set forth in Sections 3.3 and 3.7 above, less all applicable withholding and other applicable taxes and deductions (“Change of Control Amount”). The Change of Control Amount shall be paid to you in cash in a single lump sum within 30 days after the date your employment terminates. In the event that it is determined that the aggregate amount of the payments and benefits that could be considered “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (collectively, with the regulations and other guidance promulgated thereunder, the “Code”; and such payments and benefits, the “Parachute Payments”) that, but for this Section 3.9 would be payable to you under this Agreement or any other plan, policy or arrangement of the Company, exceeds the greatest amount of Parachute Payments that could be paid to you without giving rise to any liability for any excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the aggregate amount of Parachute Payments payable to you shall not exceed the amount that produces the greatest after-tax benefit to you after taking into account any Excise Tax to be payable by you. Any reduction in Parachute Payments pursuant to the immediately preceding sentence shall be made in the following order: (1) cash payments that do not constitute deferred compensation within the meaning of Section 409A of the Code, (2) welfare or in-kind benefits, (3) equity compensation awards and (4) cash payments that do constitute deferred compensation within the meaning of Section 409A of the Code, in each case, such reductions shall be made in the manner that maximizes the present value to you of all such payments. Subject to the Section 280G limitation referred to above, to the extent that you are not fully vested in any retirement benefits from any tax-qualified or non tax-qualified pension, profit-sharing or other retirement plan or program maintained by the Company and your employment terminates in the circumstances contemplated by this Section 3.9(a), the Company shall pay directly to you within 30 days after the date on which your employment terminates the difference between the amounts that would have been paid to you had you been fully vested on the date that your employment terminates and the amounts actually paid or payable to you pursuant to such plans or programs. The amounts payable to you under this Section 3.9(a) shall be in lieu of any amounts payable to you under Section 3.8 above.

(b) As used herein, “Change of Control” shall mean the occurrence of one or more of the following events:

(i) after the Effective Date hereof, any person, entity or “group” as identified in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “1934 Act”), other than you or any of your affiliates becomes a beneficial owner (as such term is defined in Rule 13(d)(3) under the 1934 Act), directly or indirectly, of securities of the Company representing 40% or more of the total number of votes that may be cast for the election of directors of the Company; or

(ii) within two years after a merger, consolidation, liquidation or sale of assets involving the Company, or a contested election of a Company director, or any combination of the foregoing, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board; or

(iii) within two years after a tender offer or exchange offer for voting securities of the Company, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board.

4. Non-Competition and Confidential Information.

4.1. Non-Competition. You agree that during the Initial Term and any Renewal Term and for a period of two years (the “Relevant Period”) after the termination for any reason of your employment, you shall not, directly or indirectly, (a) employ or retain, or induce or cause any other person or entity to employ or retain, any person who is, or who at any time in the twelve-month period prior to such time had been, employed or retained by the Company or any of its subsidiaries or affiliates; or (b) provide services, whether as principal or as agent, officer, director, employee, consultant, shareholder, or otherwise, alone or in association with any other person, corporation or other entity, to any Competing Business (as defined below); provided, however, that you may provide services to a Competing Business (other than Amazon.com, Inc. and its subsidiaries and affiliates and their respective successors (collectively, “Amazon”)) that is engaged in one or more businesses other than the Business Area (as defined below) but only to the extent that you do not provide services, directly or indirectly, to the segment of such Competing Business that is engaged in the Business Area. For purposes of this Agreement, the term “Competing Business” shall mean (i) Amazon or (ii) any person, corporation or other entity engaged in the Business Area. For purposes of this Agreement, the term “Business Area” shall mean the sale, distribution or attempted sale or distribution of books, textbooks, periodicals, newspapers, digital or audio versions of any of the foregoing or e-reading devices and related software, and which, for the avoidance of doubt, does not include multi-channel distribution of video content via cable, satellite or internet. Notwithstanding the foregoing, (i) the restrictions of this Section 4.1 shall not apply to the placement of general advertisements or the use of general search firm services with respect to a particular geographic area, but which are not targeted, directly or indirectly, towards employees of the Company or any of its subsidiaries, and (ii) your continuing to serve as a director of those entities for which you are permitted to serve as a director pursuant to Section 1 shall not be deemed, in and of itself, a violation of this Section 4.1.

4.2. Ownership of Other Securities. Nothing in Section 4.1 shall be construed as denying you the right to own securities of any corporation listed on a national securities exchange or quoted in the NASDAQ System in an amount up to 5% of the outstanding number of such securities.

4.3. Confidential Information. (a) You shall use best efforts and diligence both during and after any employment with the Company, regardless of how, when or why such employment ends, to protect the confidential, trade secret and/or proprietary character of all Confidential Information and Trade Secret Information (as defined below). You shall not, directly or indirectly, use (for your benefit or for the benefit of any other person) or disclose any Confidential Information or Trade Secret Information, for so long as it shall remain proprietary or protectable, except as may be necessary for the performance of your duties for the Company. For purposes of this Agreement, “Confidential Information” shall mean all confidential information of the Company, regardless of the form or medium in which it is or was created, stored, reflected or preserved, information that is either developed by you (alone or with others) or to which you shall have had access during any employment with the Company. Confidential Information includes, but is not limited to, Trade Secret Information, and also includes information that is learned or acquired by the Company from others with whom the Company has a business relationship in which, and as a result of which, such information is revealed to the Company. For purposes of this Agreement, “Trade Secret Information” shall mean all information, regardless of the form or medium in which it is or was created, stored, reflected or preserved, that is not commonly known by or generally available to the public and that: (i) derives or creates economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The Company’s Trade Secret Information may include, but is not limited to, all confidential information relating to or reflecting the Company’s research and development plans and activities; compilations of data; product plans; sales, marketing and business plans and strategies; pricing, price lists, pricing methodologies and profit margins; current and planned incentive, recognition and rewards programs and services; personnel; inventions, concepts, ideas, designs and formulae; current, past and prospective customer lists; current, past and anticipated customer needs, preferences and

requirements; market studies; computer software and programs (including object code and source code); and computer and database technologies, systems, structures and architectures. You understand that Confidential Information and/or Trade Secret Information may or may not be labeled as such, and you shall treat all information that appears to be Confidential Information and/or Trade Secret Information as confidential unless otherwise informed or authorized by the Company. Nothing in this Agreement shall be construed to mean that Company owns any intellectual property or ideas that were conceived by you before you commenced employment with Company and which you have previously disclosed to the Company. Subject to Section 4.3(b), nothing in this Section 4.3(a) shall prevent you from complying with a valid legal requirement (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Information or Trade Secret Information.

4.4. Inventions. You shall promptly disclose and provide to the Company, any original works of authorship, designs, formulas, processes, improvements, compositions of matter, computer software programs, data, information or databases, methods, procedures or other inventions, developments or improvements of any kind that you conceive, originate, develop, improve, modify and/or create, solely or jointly with others, during the period of your employment, or as a result of such employment (collectively, “Inventions”), and whether or not any such Inventions also may be included within “Confidential Information” or “Trade Secret Information” (as defined under this Agreement), or are patentable, copyrightable or protectable as trade secrets. You acknowledge and agree that the Company is and shall be the exclusive owner of all rights, title and interest in and to the Inventions and, specifically, that any copyrightable works prepared by you within the scope of your employment are “works for hire” under the Copyright Act, that such “works for hire” are Inventions and that the Company shall be considered the author and owner of such copyrightable works. In the event that any Invention is deemed not to be a “work for hire”, or in the event that you should, by operation of law, be deemed to be entitled to retain any rights, title or interest in and to any Invention, you hereby irrevocably waive all rights, title and interest and assign to the Company, without any further consideration and regardless of any use by the Company of any such Inventions, all rights, title and interest, if any, in and to such Invention. You agree that the Company, as the owner of all Inventions, has the full and complete right to prepare and create derivative works based upon the Inventions and to use, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, publicly perform and publicly display and otherwise exploit by all means now known or later developed, such Inventions and derivative works anywhere throughout the world and at any time during or after your employment hereunder or otherwise.

4.5. Return of Information. You shall promptly deliver to the Company, upon the termination for any reason of your employment, or at any other time at the Company’s request, without retaining any copies, all documents, information and other material in your possession or control containing, reflecting and/or relating, directly or indirectly, to any Confidential Information and/or Trade Secret Information.

4.6. Cooperation. You agree that both during and after any employment with the Company, regardless of how, when or why such employment ends, you shall provide reasonable cooperation to the Company and its affiliates in connection with any pending or future lawsuit, arbitration, or proceeding between the Company

and/or any affiliate and any third party, any pending or future regulatory or governmental inquiry or investigation concerning the Company and/or any affiliate and any other legal, internal or business matters of or concerning the Company and/or any affiliate. Such cooperation shall include meeting with and providing information the Company, any affiliate and/or their respective attorneys, auditors or other representatives as reasonably requested by the Company. The Company shall reimburse any reasonable legal fees and related expenses you incur in order to comply with this Section 4.6.

4.7. Non-Disparagement. During and after any employment with the Company, regardless of how, when or why such employment ends, (a) you shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning the Company or its subsidiaries or affiliates, any of their clients or businesses or any of their current or former officers, directors, employees or shareholders and (b) Company Parties (as defined below) shall not make any oral or written negative, disparaging or adverse statements or representations of or concerning you; provided, however, that nothing herein shall prohibit (i) critical communications between you and the Company or Company Parties during the Initial Term and any Renewal Term and in connection with your employment or (ii) you or any Company Party from disclosing truthful information if legally required (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process). For purposes of this Agreement, the term “Company Parties” shall mean the executive officers and designated spokespersons of the Company.

4.8. Severability. If any of the restrictions in this Section 4 should for any reason whatsoever be declared invalid, the validity or enforceability of the remainder of this Agreement shall not be adversely affected thereby.

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

4.10. Reasonableness. You acknowledge that the limitations and obligations contained in this Section 4 are, individually and in the aggregate, reasonable and properly required by the Company and that in the event that any such limitations are found to be unreasonable and unenforceable, you shall submit to such limitations and/or obligations in such form as the arbitrator shall determine. You agree that you shall not challenge or contest the reasonableness, validity or enforceability of any such limitations and obligations.

6. Miscellaneous.

6.1. Entire Agreement. This Agreement constitutes the entire agreement between you and the Company with respect to the terms and conditions of your employment by the Company and supersedes all prior agreements, understandings and arrangements, oral or written, between you and the Company with respect to the subject matter hereof.

6.2. Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall be binding upon you and the Company and our respective heirs, legal representatives, successors and assigns.

6.3. Amendments and Waivers. This Agreement may not be amended or modified except by an instrument or instruments in writing signed by both parties to this Agreement. Electronic communications, even if receipt is acknowledged, shall not constitute an amendment or modification of this Agreement.

6.4. Assignment. Neither this Agreement nor any rights or obligations that either party may have by reason of this Agreement shall be assignable by either party without the prior written consent of the other party.

6.5. Notices. Any notice that may or must be given under this Agreement shall be in writing and shall be personally delivered or sent by certified or registered mail, postage prepaid, or reputable overnight courier, addressed to you at the address set forth on the first page hereof, or to the Company at 120 Mountain View Boulevard, Basking Ridge, NJ 07920 to the attention of the Vice President for Human Resources for the Company (with a copy to the General Counsel for the Company), or to such other address as you or the Company, as the case may be, may designate in writing in accordance with the provisions of this section.

6.6. Section and Other Headings; Other. The section and other headings contained in this Agreement are for reference purposes only and are not deemed to be a part of this Agreement or to affect the meaning and interpretation of this Agreement. For purposes of this Agreement, the term “including” shall mean “including, without limitation.”

6.7. Governing Law. This Agreement shall be construed (both as to validity and performance) and enforced in accordance with and governed by the laws of the State of New Jersey applicable to agreements made and to be performed wholly within the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New Jersey. Except as provided in Section 6.9, exclusive jurisdiction for all disputes or claims arising under or in connection with this Agreement, and any and all claims by or against you relating to your employment with the Company, shall lie in any Federal or state court located within Somerset County of New Jersey.

6.8. Survival of Rights and Obligations. All rights and obligations arising hereunder shall continue to have full force and effect after the termination of this Agreement unless otherwise provided herein to the extent necessary to preserve the intended benefits of such provisions. If any section of this Agreement is determined to be void, voidable or unenforceable, it shall have no effect on the remainder of this Agreement, which shall remain in full force and effect, and the provisions so held invalid or unenforceable shall be deemed modified as to give such provisions the maximum effect permitted by applicable law.

6.9. Arbitration. The parties agree that all disputes arising under or in connection with this Agreement, and any and all claims by you relating to your employment with the Company, including any claims of discrimination or other employment-related claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the Americans with Disabilities Act or any other employment-related Federal, state or local law, shall be submitted to arbitration before the American Arbitration Association (“AAA”) under its rules then prevailing for the type of claim in issue before one arbitrator and to be held at the AAA’s office located in Somerset County of New Jersey. In any arbitration hereunder, the arbitrator shall have the power to issue appropriate injunctive or other non-monetary relief, and award appropriate compensatory

damages. The parties agree that no damages other than compensatory damages shall be sought or claimed by either party and each party waives any claim, right or entitlement to punitive, exemplary or consequential damages, or any other damages, and each relevant arbitrator is specifically divested of any power to award any damages in the nature of punitive, exemplary or consequential damages, or any other damages of any kind or nature in excess of compensatory damages. Nothing in this arbitration provision shall preclude, and the parties expressly acknowledge that either party may seek, temporary injunctive relief from any Federal or state court located within Somerset County of New Jersey in connection with or as supplement to an arbitration hereunder, including regarding any claim under Section 4 of this Agreement. For purposes of any such action or proceeding, the parties each hereby specifically submit to the personal jurisdiction of any Federal or state court located within Somerset County of New Jersey and further agree that service of process may be made within or without the State of New Jersey by giving notice in the manner provided in Section 6.5 of this Agreement.

6.10. Section 409A of the Code. It is intended that the provisions of this Agreement comply with Section 409A of the Code, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. If, at the time of your separation from service (within the meaning of Section 409A of the Code), (a) you shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (b) the Company shall make a good faith determination that an amount payable under this Agreement or any other plan, policy, arrangement or agreement of or with the Company (this Agreement and such other plans, policies, arrangements and agreements, the “Company Plans”) constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay any such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the earlier of the first day of the seventh month following such separation from service or your death. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to the Company. Except as specifically permitted by Section 409A of the Code, the benefits and reimbursements provided to you under this Agreement and any Company Plan during any calendar year shall not affect the benefits and reimbursements to be provided to you under the relevant section of this Agreement or Company Plan in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit and shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or any successor thereto. Further, in the case of reimbursement payments, such payments shall be made to you on or before the last day of the calendar year following the calendar year in which the underlying fee, cost or expense is incurred. Notwithstanding the preceding, the Company makes no representations concerning the tax consequences of your participation in this Agreement under Section 409A of the Code or any other Federal, state or local tax law. Your tax consequences shall depend, in part, upon the application of relevant tax law, including Section 409A of the Code, to the relevant facts and circumstances. You should consult a competent and independent tax advisor regarding the tax consequences of this Agreement.

6.11. Representations and Warranties. You hereby represent and warrant to the Company that (a) your execution, delivery and performance of this Agreement do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which you are a party or by which you are bound; (b) you are not a party to or bound by any employment agreement, noncompete agreement or confidentiality agreement with any other person or entity that has not been disclosed to the Company prior to the execution of this Agreement; (c) in the performance of any duties and responsibilities on behalf of the Company, you shall not divulge or use in any way any trade secrets or confidential or proprietary information that are within your possession or knowledge (if any), are owned by any other person or entity and regardless of whether or not such trade secrets or confidential or proprietary information are subject to any written agreement; and (d) upon the execution and delivery of this Agreement, it shall be a valid and binding obligation, enforceable in accordance with its terms. You hereby acknowledge and represent that you fully understand the terms and conditions contained herein.

6.12. Counterparts. This Agreement may be executed in one or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

If the foregoing accurately reflects our agreement, kindly sign and return to us the enclosed duplicate copy of this letter.

Very truly yours,


BARNES & NOBLE EDUCATION, INC.

By:
Name:		Bradley A. Feuer
Title:		Vice President, General Counsel and Corporate Secretary

Accepted and Agreed to:


MICHAEL P. HUSEBY

By:
Name:		Michael P. Huseby

Date:

[ Signature Page to Employment Agreement ]

EXHIBIT A

GENERAL RELEASE AND WAIVER

1. Michael P. Huseby (“Employee”) hereby acknowledges and agrees that Employee’s employment with Barnes & Noble College Education, Inc. (the “Company”) terminated on , 20 (the “Termination Date”).

A-1

7. (a) Employee shall not make, either directly or by or through another person, any oral or written negative, disparaging or adverse statements or representations of or concerning any Releasee.

A-2


Signature:								Date:
[Name]

A-3

Exhibit 10.14

INDEMNIFICATION AGREEMENT dated as of [●] (this “Agreement”), between Barnes & Noble Education, Inc., a Delaware corporation (the “Company”), and [●] (“Indemnitee”).

RECITALS

A. It is important to the Company that it attract and retain as directors and officers the most capable persons available.

B. Indemnitee is a director and/or officer of the Company.

C. The Company’s Amended and Restated By-laws (the “By-laws”) provide that the Company shall indemnify its directors and officers to the fullest extent permitted by law and shall advance expenses in connection therewith, and Indemnitee has been serving and continues to serve as a director and/or officer of the Company in part in reliance on such provisions.

D. In recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s continued service to the Company in an effective manner, in recognition of Indemnitee’s reliance on the aforesaid provisions of the By-laws, and to provide Indemnitee with express contractual indemnification (regardless of, among other things, any amendment to or revocation of such provisions, any change in the composition of the Company’s Board of Directors (the “Board”), any acquisition or business combination transaction relating to the Company or any change in the Company’s stockholders), the Company wishes to provide on the terms and subject to the conditions set forth in this Agreement for the indemnification of and the advancing of Expenses (as defined in Section 1(c)) to Indemnitee and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

E. The By-laws and the General Corporation Law of the State of Delaware expressly provide that the indemnification provisions set forth therein are not exclusive and contemplate that contractual agreements may be entered into between the Company and its directors and officers with respect to indemnification.

NOW, THEREFORE, the parties hereby agree as follows:

1. Certain Definitions. In addition to terms defined elsewhere herein, the following terms shall have the meanings ascribed to them below when used in this Agreement:

(a) A “ Change in Control ” shall have occurred with respect to the Company if (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 and the rules and regulations thereunder, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator

of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 40% or more of the equity interests of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (including taking into account all such equity interests that such “person” or “group” has the right to acquire pursuant to any option right); or (ii) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company cease to be composed of individuals (A) who were members of that board or equivalent governing body on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was approved (which need not include having been recommended) by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (C) whose election or nomination to that board or other equivalent governing body was approved (which need not include having been recommended) by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

(b) “ Claim ” means any Proceeding, whether instituted, made or conducted by the Company or any other Person, to which Indemnitee is a party or is otherwise involved (including as a witness) by reason of the fact that (i) Indemnitee is or was a director and/or officer of the Company or (ii) Indemnitee is or was serving at the request of the Company as a director, officer, employee and/or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise.

(c) “ Expenses ” means any and all attorneys’ and experts’ fees and all other costs, expenses and obligations (including travel expenses, court costs, retainers, transcript costs, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) actually and reasonably incurred or suffered by or on behalf of Indemnitee in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim.

(d) “ Indemnifiable Losses ” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties, ERISA excise taxes and amounts paid or payable in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing) relating to, resulting from or arising out of any Claim.

(e) “ Independent Legal Counsel ” means an attorney or law firm that is experienced in matters of corporate law and that shall not have otherwise performed services for the Company or Indemnitee within the last five years other than serving as independent legal counsel for purposes of determining the rights, including the

indemnification rights, of Indemnitee hereunder or under the By-laws, or for purposes of determining similar rights of other indemnitees under similar indemnification agreements or the By-laws.

(f) “ Person ” means any individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association, governmental entity or other entity.

(g) “ Proceeding ” means any threatened, asserted, pending or completed action, suit or proceeding (whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism), or any inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding.

(h) “ Reviewing Party ” means (i) if Indemnitee is a current director or officer of the Company, (A) such member or members of the Board who are not and were not party to or otherwise involved in (including as witnesses) the Claim in respect of which indemnification is being sought, (B) a committee of such members of the Board, designated by a majority vote of such members of the Board or (C) Independent Legal Counsel; or (ii) if Indemnitee is not a current director or officer of the Company, any person specified in clause (i) or such other person or body as may be selected by the member or members of the Board who are not and were not party to or otherwise involved in (including as witnesses) the Claim in respect of which indemnification is being sought.

2. Service by Indemnitee. Indemnitee shall serve and continue to serve as a director and/or officer of the Company and in such other capacity with respect to the Company as the Company may request, as the case may be, faithfully and to the best of Indemnitee’s ability so long as Indemnitee is duly elected or appointed to the Board or duly appointed as an officer of the Company, and until such time as Indemnitee is removed from the Board or removed from his or her office, as the case may be, as permitted by law or the Company’s certificate of incorporation or By-laws now or hereafter in effect, or until such time as Indemnitee tenders a resignation in writing.

3. Basic Indemnification Arrangement; Advancement of Expenses.

(a) The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by the laws of the State of Delaware in effect on the date hereof or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against all Indemnifiable Losses actually and reasonably incurred in connection with a Claim. The Company shall provide such indemnification in full as soon as practicable after request is made by Indemnitee in accordance with Section 4 hereof, but in any event no later than 60 days after receiving a written request from Indemnitee.

(b) If so requested by Indemnitee, the Company shall advance to Indemnitee within 20 days of such request any and all Expenses which Indemnitee

determines reasonably likely to be payable in connection with a Claim (an “Advancement of Expenses”). In accordance with such request, the Company shall either (i) pay such Expenses on Indemnitee’s behalf, or (ii) reimburse Indemnitee for such Expenses. Subject to Sections 3(c) and 3(d)(ii), Indemnitee’s right to an Advancement of Expenses is absolute, payable in advance of any disposition of a Claim, and shall not be subject to any prior determination by the Reviewing Party that Indemnitee has satisfied any applicable standard of conduct for indemnification.

(c) Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or Advancement of Expenses hereunder with respect to any Claim (or portion thereof) brought or made by Indemnitee against: (i) the Company, except for (A) any Claim (or portion thereof) in respect of this Agreement and/or Indemnitee’s rights hereunder, (B) any Claim (or portion thereof) to establish or enforce a right to indemnification under (1) any statute or law, (2) any other agreement with the Company or (3) the Company’s certificate of incorporation or By-laws now or hereafter in effect and (C) any counter-claim or cross-claim brought or made by Indemnitee against the Company in any Claim (or portion thereof) brought by or in the right of the Company against him; or (ii) any other Person, unless approved by the Board.

(d) Notwithstanding the foregoing, (i) the indemnification obligations of the Company under this Section 3 shall be subject to the condition that the Reviewing Party shall have determined, in accordance with Section 4 hereof, that Indemnitee is entitled to indemnification under applicable law and this Agreement, and (ii) to the extent required by the laws of the State of Delaware, the obligation of the Company to make an Advancement of Expenses under this Section 3 shall be subject to the condition that if, when, and to the extent that it is determined in a final decision from which there is no further right to appeal (a “Final Adjudication”) that Indemnitee is not entitled to be indemnified hereunder in accordance with applicable law, the Company shall be reimbursed by Indemnitee (who hereby agrees to reimburse the Company in accordance with this Section 3(d)) within 20 days of such Final Adjudication for all such Expenses theretofore advanced (it being understood that Indemnitee’s foregoing agreement to reimburse shall be deemed to satisfy any requirement that Indemnitee provide the Company with an undertaking to repay any Advancement of Expenses if it is determined by a Final Adjudication that Indemnitee is not entitled to indemnification hereunder in accordance with applicable law); provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that indemnification of Indemnitee would not be prohibited under applicable law, any determination made by the Reviewing Party that Indemnitee would be prohibited from being indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Advancement of Expenses unless and until a Final Adjudication is made with respect thereto. Any required repayment of Advancement of Expenses on the part of Indemnitee shall be unsecured and interest-free. If there has been no determination by the Reviewing Party within 60 days after written request is presented to the Company or if the Reviewing Party determines that the Company would be prohibited from indemnifying Indemnitee under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor.

4. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification hereunder, following a Final Adjudication of the applicable Claim, Indemnitee shall submit to the Company a written request therefor, along with such documentation and information as is reasonably available to Indemnitee and reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification hereunder; provided, however , that no deficiency in any such request, documentation or information shall adversely affect Indemnitee’s rights to indemnification or Advancement of Expenses hereunder. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board and the Reviewing Party in writing that Indemnitee has requested indemnification.

(b) Upon a written request by Indemnitee pursuant to the first sentence of Section 4(a) hereof, a determination, if required by the laws of the State of Delaware, with respect to Indemnitee’s entitlement thereto shall be made by the Reviewing Party. If the Reviewing Party is Independent Legal Counsel, such determination shall be made in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. If it is determined that Indemnitee is entitled to indemnification hereunder, the Company shall make payment to Indemnitee as soon as practicable but in any event no later than 60 days after receiving Indemnitee’s written request for indemnification. Indemnitee shall cooperate with the Reviewing Party with respect to Indemnitee’s entitlement to indemnification, including providing to the Reviewing Party upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure by court order or other similar legal requirement and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs and expenses (including attorneys’ fees and disbursements) reasonably incurred by Indemnitee in so cooperating with the Reviewing Party making such determination shall be borne by the Company, and the Company hereby agrees to indemnify and hold Indemnitee harmless therefrom.

5. Change in Control. The Company agrees that if a Change in Control shall have occurred with respect to the Company, then, upon written request of Indemnitee, the Reviewing Party with respect to all matters thereafter arising concerning rights of Indemnitee to indemnification hereunder or under any provision of the Company’s certificate of incorporation or By-laws now or hereafter in effect shall be Independent Legal Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably delayed, conditioned or withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

6. Indemnification for Additional Expenses. Without limiting the generality or effect of the foregoing, the Company shall indemnify Indemnitee against and, if requested by Indemnitee, shall within 20 days of such request advance to Indemnitee in accordance with Section 3(b), any and all additional Expenses paid or incurred by Indemnitee in connection with any Claim asserted or brought by Indemnitee for (a) indemnification or Advancement of Expenses by the Company hereunder or under any other agreement or any provision of the Company’s certificate of incorporation or By-laws now or hereafter in effect and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, provided that it is determined by a Final Adjudication that Indemnitee is entitled to indemnification, Advancement of Expenses or insurance recovery, as the case may be, under applicable law.

7. Partial Indemnity, Success on the Merits, Etc. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Indemnifiable Loss but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Loss or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

8. Burden of Proof. In connection with any determination by the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the Reviewing Party or court shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

9. Other Presumptions. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified under applicable law shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. For purposes of any determination of Indemnitee’s entitlement to indemnification or Advancement of Expenses hereunder, Indemnitee shall be presumed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to a criminal Claim, to have also had no reasonable cause to believe his or her conduct was unlawful, if it is determined by the Reviewing Party that Indemnitee’s actions were based on reliance in good faith (A) on the records or books of

account of the Company or another enterprise, including financial statements, (B) on information supplied to Indemnitee by the officers of the Company or another enterprise in the course of their duties, (C) on the advice of legal counsel for the Company or the Board (or any committee thereof) or for another enterprise or its board of directors (or any committee thereof), (D) on information or records given or reports made by an independent certified public accountant selected with reasonable care by the Company or the Board (or any committee thereof) or by another enterprise or its board of directors (or any committee thereof), or (E) on information, opinions or statements given or reports made by any other person selected with reasonable care by the Company or the Board (or any committee thereof) or by another enterprise or its board of directors (or any committee thereof) as to matters Indemnitee reasonably believes are within such person’s professional or expert competence. For purposes of this Section 9, the term “another enterprise” means any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent. The provisions of this Section 9 shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification hereunder.

10. Non-Exclusivity, Etc. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s certificate of incorporation and By-laws now or hereafter in effect, the substantive laws of the State of Delaware, any other contract or otherwise (collectively, “Other Indemnity Provisions”) ; provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee shall be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided hereunder as of the date hereof, Indemnitee shall be deemed to have such greater right hereunder. No amendment to the Company’s certificate of incorporation or By-laws now or hereafter in effect shall be effective vis-à-vis Indemnitee to the extent the effect of such amendment would be to deny, diminish or encumber Indemnitee’s right to indemnification hereunder or under any Other Indemnity Provision.

11. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer of the Company. If, at the time of receipt of notice of a Claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the Claim to the insurers in accordance with the procedures set forth in the respective policies.

12. Subrogation. In the event of payment hereunder, the Company shall be subrogated to the extent of such payment to all of the related rights of recovery of Indemnitee against other Persons (other than Indemnitee’s successors). Indemnitee shall execute all papers reasonably required and shall do everything that may be reasonably necessary to secure such rights, including execution of such documents necessary to enable the Company to effectively bring suit to enforce such rights.

13. No Duplication of Payments. The Company shall not be liable hereunder to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Other Indemnity Provisions or otherwise) of the amounts otherwise indemnifiable hereunder.

14. Defense of Claims. The Company shall be entitled to participate in the defense of any Claim or to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; provided, however, that if Indemnitee believes, after consultation with counsel selected by Indemnitee, that (a) the use of counsel chosen by the Company to represent Indemnitee would present such counsel with an actual or potential conflict of interest, (b) the named parties in any such Claim (including any impleaded parties) include both the Company and Indemnitee and Indemnitee concludes that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company, or (c) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Claim) at the Company’s expense. The Company shall not be liable to Indemnitee hereunder for any amounts paid in settlement of any Claim effected by Indemnitee without the Company’s prior written consent. The Company shall not, without the prior written consent of Indemnitee, effect any settlement of any threatened or pending Claim to which Indemnitee is or could have been a party unless such settlement solely involves the payment of money and includes a complete and unconditional release of Indemnitee from all liability on all claims that are the subject matter of such Claim. Neither the Company nor Indemnitee shall unreasonably delay, condition or withhold its or his or her consent to any proposed settlement; provided, however , that Indemnitee may withhold consent to any settlement that does not provide a complete and unconditional release.

15. Successors and Binding Agreement.

(a) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance reasonably satisfactory to Indemnitee and his or her counsel, to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform if no such succession had taken place. This Agreement shall be binding upon and inure to the benefit of the Company and any successor to the Company, including any Person acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation,

reorganization or otherwise (and such successor shall thereafter be deemed the “Company” for purposes of this Agreement), but shall not otherwise be assignable or delegable by the Company.

(b) This Agreement shall inure to the benefit of and be enforceable by Indemnitee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, legatees and other successors.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 15(a) and 15(b). Without limiting the generality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by Indemnitee’s will or by the laws of descent and distribution, and, in the event of any attempted assignment or transfer contrary to this Section 15(c), the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

16. Continuation of Indemnity. This Agreement shall be unaffected by Indemnitee ceasing to serve as a director or officer of the Company or ceasing to serve at the request of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and shall continue for so long as Indemnitee may have any liability or potential liability by virtue of his or her service in such capacity, including the final termination of all pending Claims in respect of which Indemnitee is granted rights of indemnification or Advancement of Expenses hereunder and of any Claims commenced by Indemnitee pursuant to this Agreement relating thereto, whether or not he or she is acting or serving in such capacity at the time any liability or Expense is incurred for which indemnification or Advancement of Expenses can be provided hereunder.

17. Notices. For all purposes of this Agreement, all communications, including notices, consents, requests or approvals, required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or one business day after having been sent for next-day delivery by a nationally recognized overnight courier service, addressed to the Company (to the attention of the Secretary of the Company) and to Indemnitee at the addresses shown on the signature page hereto, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

18. Governing Law; Submission to Jurisdiction. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS OF SUCH

STATE. ANY “ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR BROUGHT TO ENFORCE RIGHTS HEREUNDER SHALL BE FILED IN AND LITIGATED SOLELY BEFORE THE COURT OF CHANCERY OF THE STATE OF DELAWARE (OR, SOLELY TO THE EXTENT THE COURT OF CHANCERY DOES NOT HAVE SUBJECT MATTER JURISDICTION, THE EXCLUSIVE JURISDICTION OF ANY OTHER STATE OR FEDERAL COURT LOCATED IN THE STATE OF DELAWARE), AND EACH PARTY TO THIS AGREEMENT: (A) GENERALLY AND UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURT AND VENUE THEREIN, AND WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND VENUE BASED UPON THE DOCTRINE OF “FORUM NON CONVENIENS”; AND (B) GENERALLY AND UNCONDITIONALLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF CERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THIS AGREEMENT. FOR PURPOSES OF THIS SECTION, THE TERM “ACTION OR PROCEEDING” IS DEFINED AS ANY AND ALL CLAIMS, SUITS, ACTIONS, HEARINGS OR OTHER SIMILAR PROCEEDINGS, INCLUDING APPEALS AND PETITIONS THEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR CIVIL OR CRIMINAL. THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE GENERAL CONSENT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE, AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT.

19. Validity. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions will be deemed reformed to the extent necessary to conform to applicable law and to give maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision or provisions held invalid, illegal or unenforceable.

20. Amendments, Etc. No provision of this Agreement may be waived, amended or discharged unless such waiver, amendment or discharge is executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other similar or dissimilar provisions hereof, nor shall such waiver constitute a continuing waiver.

21. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

22. Interpretation . When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Headings of sections and paragraphs in this Agreement are for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof. Wherever the words “include”, “includes”, or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. Wherever the word “hereunder” is used in this Agreement, it shall mean “under this Agreement”. Words denoting gender shall include all genders.

23. Miscellaneous. No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

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IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly authorized representative to execute this Agreement as of the date first above written.

BARNES & NOBLE EDUCATION, INC.

Name:

Title:

[INDEMNITEE]

Exhibit 10.15

TRADEMARK LICENSE AGREEMENT

This Trademark License Agreement (this “ Agreement ”) is entered into as of [●] (“ Effective Date ”), by and between Barnes & Noble, Inc. (“ B&N ”) and Barnes & Noble Education, Inc. (“ BNED ”), each a “ Party ” and, collectively, the “ Parties ”. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Separation Agreement (as defined below).

WHEREAS, B&N and BNED are parties to a Separation and Distribution Agreement, dated as of , 2015 (the “ Separation Agreement ”), providing for, among other things, the transfer of assets and liabilities among B&N and BNED, the termination of intercompany agreements, BNED’s access to various B&N systems and distribution facilities and the use of B&N gift cards by BNED.

WHEREAS, in connection with the consummation of the Separation Agreement, B&N has agreed to grant to BNED a license to use the Licensed Marks (as defined below) on the following terms and conditions.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which each Party hereby acknowledges and in consideration of the premises, and the representations, warranties, covenants and agreements contained in this Agreement and the Separation Agreement, the Parties agree as follows:

I. DEFINITIONS

1.1. “ B&N Competitor ” means Amazon.com, Inc. and its affiliates or any of its successors and assigns.

1.2. “ B&N Format ” means bookstore and café operations that adhere to the look and feel of B&N retail stores owned and operated by B&N and cafés located within such stores, respectively, in each case as exemplified by B&N retail stores in existence as of the date of this Agreement. B&N shall be permitted to reasonably update the B&N Format from time to time, however, BNED shall not be obligated to modify any particular store significantly so long as such store generally adheres to the B&N Format in effect as of the date hereof, it being understood that all B&N Format stores shall undergo general maintenance and normal upkeep.

1.3. “ BNED Competitor ” means Amazon.com, Inc. and its affiliates or any of its successors and assigns.

1.4. “ Exclusively Licensed Marks ” means “Barnes & Noble College”, “B&N College”, “Barnes & Noble Education” and “B&N Education”.

1.5. “ Field of Use ” means (a) the contract management of college and university bookstores and other bookstores associated with academic institutions and related websites and (b) education products and services (including digital education products and services) and related websites.

B-1

1.6. The words “ include ”, “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation”.

1.7. “ Licensed Marks ” means the Exclusively Licensed Marks together with the Non-Exclusively Licensed Marks.

1.8. “ Non-Exclusively Licensed Marks ” means “Barnes & Noble”, “B&N” and “BN”.

1.9. “ Ownership Affiliate ” means a person or group (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) that becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “ option right ”), directly or indirectly, of more than 20.0% of the voting stock of a Party).

1.10. “ U.S. ” means the United States of America.

II. LICENSE

2.1. Subject to the terms and conditions of this Agreement, B&N hereby grants BNED:

(a) an exclusive (even as to B&N), perpetual, fully paid-up, non-transferable, non-assignable (except as provided in Section 9.10), non-sublicensable (except as provided in Section 2.4), license to use and display the Exclusively Licensed Marks in the U.S. in connection with BNED’s products and services solely within the Field of Use; and

(b) a non-exclusive, perpetual, fully paid-up, non-transferable, non-assignable (except as provided in Section 9.10), non-sublicensable, license to use and display the Non-Exclusively Licensed Marks in the U.S. in connection with BNED’s products and services solely within the Field of Use, and, further, solely as follows:

(i) used with “at [college / university name]” or with another name at the request of any other facility that is either controlled by a university or affiliated with a university (e.g., “Barnes & Noble at Campustown”);

(ii) in connection with BNED’s stores as set forth on Exhibit A (which Exhibit shall be updated from time to time in accordance with Section 2.2);

(iii) in connection with Barnes & Noble Cafés operated at BNED’s stores (which shall not include convenience stores);

(iv) on consumables ( e.g. , shopping bags) existing as of the Distribution Date on which the Non-Exclusively Licensed Mark “Barnes & Noble” is printed or otherwise appears until such consumables are used through, except as otherwise agreed by B&N; and

(v) if a particular store is identified solely by a Non-Exclusively Licensed Mark because it existed as such prior to the Distribution Date and was identified on Exhibit A, then the signage, labels or other identifiers inside the store shall either use solely the Exclusive Licensed Marks or otherwise comply with clause (i) above.

2.2. BNED will have the right to reasonably request that additional use cases be added to Section 2.1(b) for the use of the Non-Exclusively Licensed Marks within the Field of Use. Upon B&N’s reasonable approval, this Agreement shall be amended to reflect such additional use cases.

2.3. Except as expressly set forth in subsections 2.1(b)(i)-(iv) above or as otherwise agreed by B&N, BNED must modify the Non-Exclusively Licensed Marks it uses to conform them to the Exclusively Licensed Marks.

2.4. BNED may sub-license its rights to use the Exclusively Licensed Marks in the U.S. to third parties solely in connection with marketing and promotional activities for BNED’s products and services in the Field of Use, and provided that:

(a) all such sub-licensed use must comply with the terms and conditions of this Agreement, and

(b) BNED includes terms in its agreements with all sub-licensees, expressly and immediately terminating all rights of its sub-licensees to use the Exclusive Licensed Marks in the event that BNED’s rights to use the Exclusively Licensed Marks are terminated pursuant to this Agreement or if B&N reasonably objects to the use by any such sub-licensees.

2.5. In the event that BNED wishes after the date hereof to expand the scope of the license granted hereby to cover one or more jurisdictions outside the U.S., BNED may make a request to do so by delivering a written addendum to this Agreement (a) specifying the Licensed Marks it wishes to license and the jurisdiction in which it wishes to use such Licensed Marks and (b) agreeing to comply with all of the provisions of this Agreement with respect to the usage of such Licensed Marks in such jurisdiction. Upon receipt by B&N of an addendum in compliance with this Section 2.5, the license shall be extended to cover such Licensed Marks in such jurisdiction to the extent that on the date of such addendum B&N has the right to license such Licensed Marks to BNED in such jurisdiction. If the jurisdiction is one in which B&N does not as of such time have a validly existing trademark, B&N will have the opportunity to either register the relevant trademarks in that jurisdiction or allow BNED to register those trademarks in that jurisdiction and use them within the Field of Use. The filing costs and attorney’s fees of such registration shall be paid by B&N if it chooses to register the trademarks and by BNED if it registers the trademarks upon B&N’s authorization to do so. If BNED registers the trademarks, it shall grant B&N a license for use outside the Field of Use. Nothing in this Agreement or any addendum delivered under this Section 2.5 shall require B&N to obtain or maintain rights to any Licensed Marks outside the U.S.

2.6. BNED agrees that it:

(a) shall use the Licensed Marks in a manner that is consistent in all respects with the high standards, value, reputation and prestige associated with the use of the Licensed Marks on and prior to the Distribution Date by B&N;

(b) shall not use the Licensed Marks in any manner that (i) is deceptive or misleading, (ii) would diminish the value of or goodwill symbolized by the Licensed Marks, (iii) tarnishes, blurs or dilutes the Licensed Marks, (iv) compromises or reflects unfavorably upon the goodwill, good name, reputation or image of B&N or the Licensed Marks, or (v) might jeopardize or limit B&N’s proprietary interest therein;

(c) shall not (i) misrepresent to any person the scope of the license granted under this Agreement, (ii) incur or authorize any expenses or liabilities chargeable to B&N, or (iii) take any actions that would impose upon B&N any obligation or liability to a third party other than (x) obligations under this Agreement, or (y) other obligations which B&N expressly approves in writing for BNED to incur on its behalf;

(d) shall be responsible for non-conformance with the terms of this Agreement by any third party to which BNED sub-licenses its rights to use the Exclusively Licensed Marks; and

(e) shall not use Non-Exclusively Licensed Marks in any manner which is inconsistent with Section 2.1(b) above without the prior written consent of B&N; provided that no such consent shall be required for the use of the marks “bncollege”, “barnesandnoblecampus”, “barnesandnoblecollege”, “barnesandnobletextbook”, “barnesandnoblerental”, “bndigitallist”, “bncampus”, “bnknowledge”, “bnlearning”, “bnoncampus”, “bnschooling” “bnstudentvoice”, “bnteaching”, “bntextbook”, “bntextbookrental”, “bntextrent”, “bntheknow” or “bntraining” as part or of all of a domain name or URL actually used by BNED as of the date hereof.

2.7. Except for materials that are co-branded or jointly marketed with BNED, or as otherwise pre-approved in writing by BNED, B&N and its affiliates shall not use the Exclusively Licensed Marks and shall not license the Exclusively Licensed Marks to any other third party.

2.8. BNED shall have the right to use and enjoy the goodwill associated with the license to the Exclusively Licensed Marks and to the Licensed Marks as a whole, in the format and as provided in Section 2.1(b)(i)-(iii), for the duration of the license. For clarity, BNED shall not be entitled to any goodwill associated with the name “Barnes & Noble” itself. Subject to the foregoing, all goodwill associated with Licensed Marks is and shall remain the property of B&N and any goodwill attached to, that becomes attached to, or is created through BNED’s use of the Licensed Marks shall inure to the benefit of B&N.

2.9. All rights in and to the Licensed Marks not expressly granted to BNED under this Agreement are hereby reserved to B&N. BNED agrees that nothing in this Agreement shall give BNED any right, title or interest in the Licensed Marks, subject to BNED’s right to use the Licensed Marks in accordance with the licenses granted in this Agreement.

2.10. No other right or license is granted by B&N to BNED or by BNED to B&N, either express or implied, with respect to any other trademark, trade name, service mark or other intellectual property right owned or licensed by or to B&N or BNED. BNED shall not use the Licensed Marks in any manner not specifically authorized by this Agreement.

2.11. If BNED sub-licenses, or B&N licenses, any Licensed Marks to a third party, BNED shall include in the sub-license agreement an obligation by the sub-licensee to use the sub-license, and B&N shall include in the license agreement an obligation by the licensee to use the license, in a manner consistent with the terms of this Agreement.

III. TRADEMARK USAGE GUIDELINES AND QUALITY CONTROL

3.1. BNED shall:

(a) use the Licensed Marks in a manner consistent with B&N’s use prior to the Distribution Date, including the look and feel of B&N’s use of the Licensed Marks as may be updated from time to time;

(b) use the Licensed Marks in a manner that protects B&N’s ownership interest therein and is designed to maintain the high quality of the Licensed Marks;

(c) maintain at least substantially the same overall standards with respect to the quality of products and services (including any advertising and promotional materials) rendered in connection with the Licensed Marks as B&N has historically maintained;

(d) comply in all material respects with all applicable laws, rules, and regulations in connection with the use of the Licensed Marks and the offering of products or services in connection with the Licensed Marks; and

(e) use commercially reasonable efforts to promptly comply with reasonable more specific or additional brand usage guidelines and quality control measures as B&N may specify in writing from time to time (the “ Guidelines and Standards ”).

3.2. B&N shall:

(a) use the Licensed Marks in a manner that protects B&N’s ownership interest therein and is designed to maintain the high quality, high standards, value, reputation and prestige associated with the use of the Licensed Marks on and prior to the Distribution Date by B&N;

(b) maintain at least substantially the same overall standards with respect to the quality of products and services (including any advertising and promotional materials) rendered in connection with the Licensed Marks as B&N has historically maintained;

(c) comply in all material respects with all applicable laws, rules, and regulations in connection with the use of the Licensed Marks and the offering of products or services in connection with the Licensed Marks; and

(d) not use the Licensed Marks in any manner that (i) is deceptive or misleading, (ii) would diminish the value of or goodwill symbolized by the Licensed Marks, (iii) tarnishes, blurs or dilutes the Licensed Marks, (iv) compromises or reflects unfavorably upon the goodwill, good name, reputation or image of B&N or the Licensed Marks, or (v) might jeopardize or limit B&N’s proprietary interest therein.

3.3. If at any time B&N determines, in its sole discretion, that BNED is not complying with any Guidelines and Standards, B&N shall notify BNED in writing, setting forth in reasonable detail a description of the noncompliance and any reasonably requested action for curing such noncompliance. Upon receipt of such notice, BNED shall use commercially reasonable efforts to cure such noncompliance.

3.4. Upon B&N’s written request, BNED shall provide B&N with a reasonable number of samples of the products or other materials bearing the Licensed Marks in order for B&N to verify compliance with the Guidelines and Standards.

IV. PROTECTION OF LICENSED MARKS

4.1. BNED acknowledges that B&N is the exclusive owner of all right, title and interest in the Licensed Marks and will not at any time take or cause to be taken any act contesting or in any way impairing or tending to impair any part of such right, title and interest. BNED expressly acknowledges that its use of the Licensed Marks hereunder shall not confer on BNED any proprietary rights to the Licensed Marks, which shall at all times remain with B&N. BNED shall claim no interest in the Licensed Marks except the right to use them on the terms and conditions set forth herein, and shall not attempt to register the Licensed Marks on its own behalf.

4.2. BNED shall not challenge the ownership or validity of the Licensed Marks in the U.S. during the Term (as defined below) of this Agreement.

4.3. BNED shall not use or register in any jurisdiction any trademark, service mark or Internet domain name that would result in a likelihood of confusion with any of the Licensed Marks.

4.4. BNED shall cooperate with B&N, at B&N’s expense, in the execution, filing and prosecution of any trademark applications in the U.S. with respect to the Licensed Marks that B&N may desire to file, and for that purpose BNED will supply to B&N, upon B&N’s written request and at B&N’s expense, such graphics, renderings, screen shots, high resolution files, packaging, labels and similar materials as may be reasonably required.

4.5. B&N shall use commercially reasonable efforts to protect and maintain the Licensed Marks. At B&N’s request and expense (except as provided in Section 4.6 below), BNED shall assist B&N in taking any action reasonably necessary to procure, protect, vest, or maintain B&N’s rights in and to the Licensed Marks. BNED shall execute all documents reasonably requested by B&N to effectuate or confirm B&N’s rights in the Licensed Marks, including registration, maintenance or renewal of the Licensed Marks, recordation of the license relationship between B&N and BNED, and recordation of BNED as a registered user in the U.S. If BNED fails to execute any such document that is necessary, BNED appoints B&N as its attorney-in-fact to do so in BNED’s name and on BNED’s behalf.

4.6. B&N shall be initially responsible for payment but shall have the right to charge back to BNED all costs to apply for and maintain any registrations of the Exclusively Licensed Marks in the U.S.

4.7. BNED shall cause to appear on all products and Materials marked with the Licensed Marks, such legends, markings and notices as may be required by applicable law or reasonably requested by B&N. BNED is not required to use ^® or ^TM in connection with the Licensed Marks unless specifically requested by B&N or as provided in the Guidelines and Standards.

4.8. In connection with each use of the Licensed Marks, BNED shall include the following notice, as B&N may amend from time to time, in a commercially reasonable manner that is at least as prominent as BNED’s trademark notices with respect to its own trademarks:

“Barnes & Noble, Barnes & Noble College, and Barnes & Noble Education are trademarks of Barnes & Noble, Inc. or its affiliates in the U.S. and other countries.”

V. INFRINGEMENT

5.1. In the event that, during the Term of this Agreement, BNED learns of any infringement or threatened infringement of the Licensed Marks, or dilution by a third party in the U.S. with respect to the Licensed Marks, BNED shall promptly notify B&N or its authorized representative giving particulars thereof. Notwithstanding the foregoing, BNED is not obligated to monitor or police unauthorized use of the Licensed Marks by third parties to which it has not granted a sub-license with respect to the Exclusively Licensed Marks.

5.2. With respect to any infringement or threatened infringement, or dilution by a third party with respect to the Exclusively Licensed Marks, BNED may request that B&N bring litigation, opposition, cancellation or related legal proceedings (collectively, “ Enforcement Proceedings ”) or provide prior written consent to the initiation of Enforcement Proceedings by BNED (which consent shall not be unreasonably withheld, conditioned or delayed if B&N elects not to initiate Enforcement Proceedings). Any such Enforcement Proceedings brought by B&N at BNED’s request shall be at the expense of BNED, and the Parties shall equally share in the recovery of damages or compensation resulting from such Enforcement Proceedings. If B&N initiates Enforcement Proceedings and BNED declines to bear the expense, any resulting damages or compensation shall belong solely to B&N. In any such Enforcement Proceedings, BNED shall nevertheless provide necessary information and assistance to B&N or its authorized representatives at B&N’s expense, including to join or be joined as a party if such joinder is required in order to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought. If B&N brings any such Enforcement Proceedings that are not at BNED’s request, and BNED does not consent to participate and bear the expense and is joined to such Enforcement Proceedings solely to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought, B&N agrees to defend, indemnify and hold harmless BNED for all losses, costs, liabilities and expenses arising out of or related to the bringing of such Enforcement Proceedings. In addition, if B&N elects to bring Enforcement Proceedings,

whether at BNED’s request or otherwise, B&N shall have exclusive control of the Enforcement Proceedings, including any decision to maintain or settle such proceedings. If B&N does not elect to initiate Enforcement Proceedings after receiving BNED’s written request but consents to the initiation of Enforcement Proceedings by BNED, then (i) BNED may initiate such proceedings, (ii) shall have exclusive control of the Enforcement Proceedings, (iii) any decision to maintain or settle any such Enforcement Proceedings shall be at the exclusive option and expense of BNED, and (iv) all recoveries shall belong exclusively to BNED, subject to the following : (x) B&N shall not have any obligation to be joined as a party plaintiff in any Enforcement Proceedings without its prior written consent, which may be granted or withheld in its sole discretion, unless such joinder is required in order to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought, (y) if BNED brings any such Enforcement Proceedings and B&N is joined to such Enforcement Proceedings without its consent solely to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought, BNED agrees to defend, indemnify and hold harmless B&N for all losses, costs, liabilities and expenses arising out of or related to the bringing of such Enforcement Proceedings, and (z) BNED shall not take any action, or make any admissions, that may affect the validity of any registration of the Exclusively Licensed Marks, without the prior written consent of B&N.

5.3. With respect to any infringement or threatened infringement, or dilution by a third party with respect to the Non-Exclusively Licensed Mark, B&N shall have exclusive control of any Enforcement Proceedings relating to the Non-Exclusively Licensed Mark. The decision whether to bring, maintain or settle any such Enforcement Proceedings shall be at the exclusive option and expense of B&N, and all recoveries shall belong exclusively to B&N. BNED shall not and shall have no right to initiate any such Enforcement Proceedings in its own name, and BNED shall provide necessary information and assistance to B&N or its authorized representatives at B&N’s expense in the event that B&N decides that such Enforcement Proceedings should be commenced, including to join or be joined as a party in any action taken by B&N to enforce its rights in the Non-Exclusively Licensed Mark against a third party if such joinder is required in order to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought. If B&N brings any such Enforcement Proceedings, and BNED is joined to such Enforcement Proceedings solely to confer jurisdiction in the jurisdiction in which the Enforcement Proceedings are to be brought, B&N agrees to defend, indemnify and hold harmless BNED for all losses, costs, liabilities and expenses arising out of or related to the bringing of such Enforcement Proceedings.

5.4. B&N shall incur no liability to BNED under any legal theory by reason of B&N’s failure or refusal to prosecute or otherwise commence Enforcement Proceedings with respect to, any alleged infringement or dilution of the Licensed Marks by third parties, nor by reason of any settlement to which B&N may agree, provided such settlement does not require a payment of money by BNED.

VI. TERM AND TERMINATION; FUNDAMENTAL CHANGE

6.1. The term of this Agreement shall be in perpetuity subject to the termination provisions set forth below (the “ Term ”).

6.2. BNED may terminate this Agreement and the license and rights granted to it hereunder by B&N upon written notice to B&N. Such notice shall specify the effective date of such termination.

6.3. B&N may terminate this Agreement upon written notice to BNED if BNED has materially breached any provision of this Agreement and has not cured such breach within thirty (30) days after written notice of such breach has been given by B&N to BNED. Additionally, B&N may terminate this Agreement immediately in the event BNED (a) no longer continues to operate as a going concern, (b) no longer continues to operate in the Field of Use or (c) changes its name such that it no longer includes “Barnes & Noble” or the abbreviation “B&N”, or otherwise ceases to use the Licensed Marks in identifying its business.

6.4. B&N may terminate this Agreement if BNED transfers all or substantially all of its assets to a B&N Competitor or if a B&N Competitor becomes an Ownership Affiliate of BNED (either occurrence, a “ BNED Fundamental Change ”).

6.5. Upon termination or expiration of this Agreement, all of the rights of BNED under this Agreement shall terminate and shall revert automatically to B&N and BNED and any of its sub-licensees shall cease all use of the Licensed Marks. BNED shall use commercially reasonable efforts to wind down and to cease its and its sub-licensees’ use of the Licensed Marks on all materials existing as of the date of termination or expiration as soon as commercially practicable but in no event later than one hundred and eighty (180) days from the date of such termination or expiration, which shall be thirty (30) days in the event of a Sale to a B&N Competitor.

6.6. If B&N transfers all or substantially all of its assets to a BNED Competitor or if a BNED Competitor becomes an Ownership Affiliate of B&N, then B&N will not be permitted to use the Licensed Marks (a) in the contract management of college and university bookstores and other bookstores associated with academic institutions and related websites or (b) otherwise in stores and on websites a majority of the revenues of which are derived from the sale of education products and services (including digital education products and services).

6.7. BNED shall promptly correct any deviations from the B&N “look and feel” upon written notice by B&N of any such deviations; provided , however , in the event that B&N substantially changes the “look and feel” of Retail Stores as of the date of this Agreement, BNED may choose at its sole discretion to either adhere to the “look and feel” of B&N Retail Stores existing as of the date of this Agreement or the “look and feel” of B&N Retail Stores existing as of the date such changes take effect. If at any time B&N ceases to operate substantially as a bookstore business, BNED shall no longer be required to adhere to the B&N Format, provided that it continues to comply with Articles II, III, IV, V, VIII and XI and any alternative “look and feel” of BNED’s shall remain subject to the reasonable review and approval of B&N.

VII. REPRESENTATIONS AND WARRANTIES

7.1. Each party represents and warrants that it has the authority and right to enter into this Agreement and to agree to the terms and conditions herein.

7.2. B&N represents and warrants that it has the right and authority to grant the licenses granted hereunder, and B&N has not assigned any exclusive rights or granted any exclusive licenses in the Exclusively Licensed Marks to any third party.

7.3. B&N represents and warrants that as of the date hereof, it has no knowledge of any notice or claim asserted or threatened by a third party alleging that the Licensed Marks infringe any trademark, trade name or service mark of such third party.

VIII. INDEMNIFICATION

8.1. BNED agrees that it will defend, hold harmless, and indemnify B&N from and against any charges, suits, damages, costs, expenses, judgments, penalties, claims, liabilities, or losses of any kind or nature whatsoever, including reasonable attorney fees and expenses, that may be sustained or suffered by or secured against B&N: (a) based on or arising out of any manufacture, sale, or use of BNED’s products or services produced or marketed by BNED, except to the extent the claim relates to a matter for which B&N is obligated to indemnify BNED under Section 8.2 of this Agreement, (b) based on or arising out of any violation of this Agreement by BNED or any of its employees, affiliates and sub-licensees or (c) based on or arising out of any breach of any of the representations and warranties made by BNED under this Agreement.

8.2. B&N agrees that it will defend, hold harmless, and indemnify BNED from and against any charges, suits, damages, costs, expenses (including attorneys’ fees), judgments, penalties, claims, liabilities, or losses of any kind or nature whatsoever which may be sustained or suffered by or secured against BNED: (a) based on or arising out of any third-party claim that BNED’s use of the Licensed Marks (excluding any Licensed Marks BNED obtains under Section 2.5) in accordance with this Agreement but outside the Field of Use constitutes trademark infringement, or (b) based on or arising out of any breach of any of the representations and warranties made by B&N under this Agreement.

8.3. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING BUSINESS INTERRUPTION, LOSS OF FUTURE REVENUE, PROFITS OR INCOME OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS ARTICLE VIII, WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

IX. MISCELLANEOUS PROVISIONS

9.1. Nothing contained in this Agreement shall be construed as conferring any rights by implication, estoppel or otherwise, under any intellectual property right, other than the rights expressly granted in this Agreement with respect to the Licensed Marks.

9.2. This Article IX and the agreements and obligations of BNED and B&N contained in Sections 4.1, 4.2, 4.3, 4.7 and 4.8 and Articles V, VI, VII and VIII shall survive the termination of this Agreement. All other representations, warranties, covenants and agreements in this Agreement shall not survive the termination of this Agreement.

9.3. This Agreement may not be amended except by an instrument in writing signed on behalf of both of the Parties or waived except by an instrument in writing signed by the Party against whom enforcement is sought. Any agreement on the part of a Party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party referring expressly to the provisions hereof being waived.

9.4. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement.

9.5. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby will be governed by, and construed in accordance with, the laws of the State of New York (excluding its choice of law rules). Each party submits to jurisdiction in the State of New York and further agrees that any cause of action arising under this Agreement shall be brought exclusively in a court in New York, New York.

9.6. All notices and other communications hereunder shall be in writing and shall be in accordance with Section 12.05 of the Separation Agreement.

9.7. This Agreement, which includes all Exhibits hereto, and the Separation Agreement constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter of this Agreement.

9.8. This Agreement shall be binding upon and inure solely to the benefit of each of the Parties and their respective successors and assigns, and nothing in this Agreement, express or implied, is intended to or confers upon any Person other than the Parties and their respective successors and permitted assigns any legal or equitable right, benefit, or remedy of any nature under or by reason of this Agreement. Nothing contained in this Agreement shall be deemed or construed to create a partnership or joint venture, to create the relationships of employee/employer or principal/agent, or otherwise create any liability whatsoever of either Party with respect to the indebtedness, liabilities, obligations or actions of the other or any of their respective officers, directors, employees, stockholders, agents or representatives, or any other person or entity.

9.9. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein, so long as the economic and legal substance of the transactions contemplated hereby are not affected in a manner materially adverse to either Party hereto.

9.10. BNED may not assign this Agreement or any of its rights and obligations hereunder by operation of law or otherwise without the prior written consent of B&N. Any attempted assignment in violation of this Section 9.10 shall be void.

9.11. B&N may assign this Agreement, any rights or obligations hereunder, or any of the Licensed Marks to any third party; provided , however , that such third party agrees in writing prior to any such assignment to comply with the terms and conditions of this Agreement. Any attempted assignment in violation of this Section 9.11 shall be void.

9.12. The Parties agree that irreparable damage may occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof, and that each Party may be entitled to specific performance of the terms hereof in addition to any other remedy at law or equity. Each Party agrees that, prior to seeking any remedy at law or equity (other than specific performance), it will submit its claim against the other Party to a private and confidential mediation process to be conducted by a single mediator (the “ Mediator ”) in New York City, New York, agreed upon in good faith by the Parties. Each Party will only seek other remedies if the Parties are unable to resolve the claim in the mediation process within sixty (60) days after the initial mediation meeting with the Mediator, or longer if deemed necessary by the Mediator.

9.13. In the event of a dispute arising out of or relating to this Agreement or the transactions contemplated hereby, each Party agrees to designate a senior employee at the vice president level or higher to meet in person with the other Party’s designee in an attempt to resolve the dispute. The discussion at such meeting shall be a confidential settlement communication protected by Federal Rule of Evidence 408 and its equivalents. This clause shall not prevent either Party from initiating litigation or commencing other formal proceedings, subject to Section 9.12 above, in parallel, but the initiation of litigation or such other proceedings shall not be used as a basis to decline to hold the in-person meeting required by this paragraph.

9.14. Headings/Construction.

Section headings contained in this Agreement are for convenient reference only, and shall not in any way affect the meaning or interpretation of this Agreement. The language used in this Agreement will be deemed the language chosen by the Parties to express their mutual intent, and no rule of strict construction will apply against any Person. The term “or” is not exclusive.

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the Parties hereto as of the date of this Agreement.


LICENSOR:						LICENSEE:

BARNES & NOBLE, INC.						BARNES & NOBLE EDUCATION, INC.

By:						By:
Name:						Name:
Title:						Title:

Exhibit A

Existing Stores operated by BNED solely under name “Barnes & Noble”

1. [list]

Exhibit 21.1

Subsidiaries of Barnes & Noble Education, Inc.


Legal Name		Jurisdiction of Organization
Barnes & Noble College Booksellers, LLC		Delaware

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated June 26, 2015 with respect to the consolidated financial statements and financial statement schedule of Barnes & Noble Education, Inc. in Amendment No. 3 to the Registration Statement (Form S-1 No. 333-202298) and related Prospectus of Barnes & Noble Education, Inc. for the registration of shares of its common stock.

/s/ Ernst & Young LLP

New York, NY

June 26, 2015