As it prepares for what could be a showdown with Ron Burkle at its September annual meeting, Barnes & Noble has signed new employment contracts with Len Riggio and Steve Riggio for the men to serve as chairman and vice chairman, respectively. Len Riggio has long served as chairman of the book retailer, but did so without a formal contract. The new agreement is for one year beginning on May 12 and will automatically renew for another year unless either party gives the other party 90 days’ written notice, materials filed with the SEC said. Steve Riggio will serve a similar term.
According to the agreement with B&N’s board of directors, Len Riggio is serving “at will” and will not be entitled to any severance benefits under the deal. Steve Riggio, however, while also be serving in an “at will” capacity and will be entitled to severance benefits under certain circumstances, including “change in control” of the company. If Steve Riggio’s employment is terminated because of a change in control of B&N, he is eligible to receive three times the total of his base salary ($400,000), plus bonus and benefits. In the event Steve Riggio’s employment is terminated by B&N without “cause” or he terminates for “good reason,” he will be entitled to an amount equal to two times the sum of his annual base salary, average bonus and benefits costs, the agreement reads.
Burkle has been pushing to acquire a bigger stake in B&N and recently filed a lawsuit charging that the poison pill adopted by the board is unfair to outside shareholders and gives preferential treatment to insider shareholders led by the Riggio brothers. Burkle has said he plays to field an alternative slate to run for the B&N board at this year’s annual meeting.
