BGP


RESTATED ARTICLES OF INCORPORATION


Pursuant to the provisions of Act 284, Public Acts of 1972, the
undersigned corporation executes the following Articles:

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1. The present name of the corporation is: Michigan Borders Group, Inc.


2. The identification number assigned by the Bureau is: 462-982


3. All former names of the corporation are: None


4. The date of filing the original Article of Incorporation was: April 3, 1997

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The following Restated Articles of Incorporation supersede the Articles
of Incorporation as amended and shall be the Articles of Incorporation for the
corporation:

ARTICLE I

The name of the corporation is: Borders Group, Inc.

ARTICLE II

The purpose or purposes for which the corporation is formed is to
engage in any activity within the purposes for which corporations may be formed
under the Business Corporation Act of Michigan ("MCBA").


ARTICLE III

The total authorized shares:


Common shares: 300,000.000 Preferred shares: 10,000,000

A statement of all or any of the relative rights, preferences and limitations of
the shares of each class is as follows:

A. Common Stock


1. Voting Rights. Except as otherwise required by law or by the Articles
of Incorporation, each holder of Common Stock shall have one vote for
each share of Common Stock held by a holder on all matters voted upon
by the holders of Common Stock.


2. Dividends. Subject to the preferential dividend rights, if any,
applicable to shares of Preferred Stock and subject to applicable
requirements, if any; with respect to the setting aside of sums for
purchase, retirement or sinking funds for Preferred Stock, the holders
of Common Stock shall be entitled to receive, to the extent permitted
by law, such dividends as may be declared from time to time by the
Board of Directors in its discretion.


3. Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the Corporation, the holders of Common Stock shall be
entitled, after payment or provision for payment of the debts and other
liabilities of the Corporation and the amounts to which the holders of
any Preferred Stock shall be entitled, to share ratably in the
remaining net assets of the Corporation.


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B. Preferred Stock

The Board of Directors is expressly authorized at any time, and from time to
time, to provide for the issuance of shares of Preferred Stock in one or
more series, and for such consideration or considerations as the Board
of Directors may determine, with such voting powers, full or limited, or
without voting powers, and with such designations, preferences and
relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated
and expressed in the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, all except as otherwise
required by law or the Articles of Incorporation, and including, without
limiting the generality of the foregoing, the following:

1. The distinctive designation and number of shares comprising such
series.

2. The dividend rate or rates on the shares of such series and the
relation which such dividends shall bear to the dividends payable on
any other class of capital stock or on any other series of Preferred
Stock, the terms and conditions upon which and the periods in respect
of which dividends shall be payable, whether and upon what conditions
such dividends shall be cumulative, and, if cumulative, the date or
dates from which dividends shall accumulate.

3. Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, at the option of either the holder
or the Corporation or upon the happening of a specified event, the
limitations and restrictions with respect to such redemption, the time
or times when, the price or prices or rate or rates at which, the
adjustments with which and the manner in which such shares shall be
redeemable, including the manner of selecting shares of such series for
redemption if less than all shares are to be redeemed.

4. The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any
other series over such series), upon the voluntary or involuntary
liquidation, dissolution, distribution or winding up of the
Corporation, which rights may vary depending on whether such
liquidation, dissolution, distribution or winding up is voluntary or
involuntary, and, if voluntary, may vary at different dates.

5. Whether the shares of such series shall be subject to the operation of
a purchase, retirement or sinking fund, and, if so, whether and upon
what conditions such purchase, retirement or sinking fund shall be
cumulative or, noncumulative, the extent to which and the manner in
which such fund shall be applied to the purchase or redemption of the
shares of such series for retirement or to other corporate purposes and
the terms and provisions relative to the operation thereof.

6. Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or of any other series of
any class of capital stock or other securities of the Corporation, or
the securities of any other corporation, or entity, and, if so,
convertible or exchangeable, the price or prices or the rate or rates
of conversion or exchange and the method, if any, of adjusting the
same, and any other terms and conditions of such conversion or
exchange.

7. The voting powers, full and/or limited, if any, of the shares of such
series, and whether and under what conditions, the shares of such
series (alone or together with the shares of one or more other series)
shall be entitled to vote separately as a single class upon any matter,
including, without limitation, the election of one or more additional
directors of the Corporation in case of dividend arrearages or other
specified events.

8. Whether the issuance of any additional shares such series, or of any
shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such other
series.

9. Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the Board of Directors
may deem advisable and as shall not be inconsistent with the provisions
of the Articles of Incorporation.


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10. All shares of Preferred Stock of any one series shall be of equal rank
and identical in all respects, except that shares of any one series
issued at different times may differ as to the dates from which
dividends thereon, if cumulative, shall be cumulative.


C. General Provisions


1. No stockholder shall have any preemptive right to subscribe for
additional issues of stock of the Corporation.

2. Shares of any class or series of capital stock redeemed, converted,
exchanged, purchased, retired or surrendered to the Corporation, or
which have been issued and reacquired in any manner shall, upon
compliance with any applicable provisions of the MBCA, be given the
status of authorized and unissued shares of the same class undesignated
as to series.


ARTICLE IV

1 The address of the current registered office is:

500 East Washington Street Ann Arbor MICHIGAN 48104

2 The mailing address of the registered office, if different than above:
Same

3 The name of the resident agent at the registered office is: Thomas D.
Carney


ARTICLE V


The following provisions are inserted for the management of the business and the
conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:

(1) The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. In addition to the powers and authority
expressly conferred upon them by statute or by these Articles of Incorporation
or the By-laws of the Corporation, the directors are empowered to exercise all
such powers and do all such acts and things as may be exercised or done by the
Corporation, subject to the provisions of the MBCA, these Articles of
Incorporation and any By-laws adopted by the stockholders; provided, however,
that no By-laws hereafter adopted by the stockholders shall invalidate any prior
act of the directors that would have been valid if such By-laws had not been
adopted.

(2) (2) The number of directors of the Corporation shall be as from time to
time fixed by, or in the manner provided in, the By-laws of the Corporation. The
directors of the Corporation need not be elected by written ballot unless the
By-laws so provide.

(3) Special meetings of stockholders of the Corporation may be called only
by the Chief Executive Officer or by the Board of Directors acting pursuant to a
resolution adopted by a majority of the Whole Board. For purposes of these
Articles of Incorporation, the term "Whole Board" shall mean the exact number of
directors determined from time to time by resolution adopted by the affirmative
vote of a majority of the directors then in office.

(4) Meetings of stockholders may be held within or without the State of
Michigan, as the By-laws may provide. The books of the Corporation may be kept
(subject to any provision contained in the MBCA) outside the State of Michigan
at such place or places as may be designated from time to time by the Board of
Directors or in the By-laws of the Corporation.


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ARTICLE VI

The Board of Directors is expressly empowered to adopt, amend or repeal By-laws
of the Corporation. Any adoption, amendment or repeal of the By-laws of the
Corporation by the Board of Directors shall require the approval of a majority
of the Whole Board. The stockholders shall also have power to adopt, amend or
repeal the By-laws of the Corporation.


ARTICLE VII

A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability for (i) any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) a violation of Section 551 (1) of the MBCA or (iv) any
transaction from which the director derived an improper personal benefit. If the
MBCA is amended to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the MBCA, as so amended.

Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification with respect to acts or omissions occurring prior to such repeal
or modification.


ARTICLE VIII

1. The Corporation shall indemnify its directors and officers to the
fullest extent authorized or permitted by the MBCA, as the same exists or may
hereafter be amended, and such right to indemnification shall continue as to a
person who has ceased to be a director or officer of the Corporation and shall
inure to the benefit of his or her heirs, personal representatives, executors
and administrators; provided, however, that, except for proceedings to enforce
rights to indemnification, the Corporation shall not be obligated to indemnity
any director or officer (or his or her heirs, personal representatives,
executors or administrators) in connection with a proceeding (or part thereof)
initiated by such person unless such proceeding (or part thereof) was authorized
at consented to by the Board of Directors of the Corporation.

2. The right to indemnification conferred in this Article VIII shall
include the right to be paid by the Corporation the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses"); provided, however,
that, if the MBCA requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such indemnitee is not entitled to be indemnified or such expenses
under this Article VIII or otherwise. The rights to indemnification and to the
advancement of expenses conferred in this Article VIII shall be contract rights
and such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, personal representatives, executors and administrators.

3. The Corporation may, to the extent authorized from time to time by
the Board of Directors, provide rights to indemnification and to the advancement
of expenses to employees and agents of the Corporation who are not directors or
officers similar to those conferred in this Article VIII to directors and
officers of the Corporation.

4. The rights to indemnification and to the advancement of expenses
conferred in this Article VIII shall extend to the directors and officers of any
predecessor corporation to the Corporation and shall not be exclusive of any
other right which any person may have or hereafter acquire under the Articles of
Incorporation, the By-laws, any statute, agreement, vote of stockholders or
disinterested directors, or otherwise.

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5. Any repeal or modification, of this Article VIII by the stockholders
of the Corporation shall not adversely affect any rights to indemnification and
advancement of expenses of a director or officer of the Corporation existing
pursuant to this Article VIII with respect to any acts or omissions occurring
prior to such repeal or modification.


ARTICLE IX

The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by the laws of the State of Michigan and all rights
conferred upon stockholders herein are granted subject to this reservation.


ARTICLE X

The Corporation expressly elects not to be governed by Section 780 of
the MBCA as to business combinations with interested stockholders.

 

 

 

 AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION

OF THE COMPANY

 

Article V, Section (2)

 

(2) The number of directors shall be as from time to time fixed by, or in the manner provided in, the By-laws of the Corporation. Directors shall be elected by the affirmative vote of the majority of the votes cast in person or by proxy at any meeting for the election of directors at which a quorum is present; provided that, if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting. For purposes of this Section, a majority of the votes cast means that the number of shares voted “for” a nominee exceeds the shares voted “against” or “withheld” with respect to the nominee. Abstentions and broker non-votes shall not be deemed to be votes cast for purposes of tabulating the vote.

 

Any incumbent director who fails to receive, in an election as to which majority voting applies, the affirmative vote of the majority of the votes cast shall tender his or her resignation to the Board of Directors promptly following certification of the shareholder vote. The Nominating and Corporate Governance Committee shall promptly consider the tender of resignation and make a recommendation to the Board as to whether to accept or reject the tendered resignation or whether other action should be taken. Any director who tenders his or her resignation shall not participate in any Committee or Board deliberations, recommendations or decisions relating thereto.

 

The Board shall act on the Committee’s recommendation no later than 90 days following the date of the shareholders’ meeting at which the election occurred. Following the Board’s decision, the Corporation shall promptly publicly disclose the Board’s decision as to whether or not to accept the resignation as tendered in a Form 8-K filed with the Securities and Exchange Commission.

 

In the event that the application of this Section (2) results in a vacancy on the Board, the Board shall determine whether to fill such vacancy or to reduce the size of the Board.