Barnes and Noble 2010 Annual Report Download - page 57

Rights will expire on November 17, 2012, unless earlier
redeemed or canceled by the Company. If a person or group
becomes an Acquiring Person, each Rights holder (other
than the Acquiring Person) will be entitled to receive, upon
exercise of the Right and payment of the Purchase Price,
that number of 1/1000ths of a share of Preferred Stock
equal to the number of shares of Common Stock which at
the time of the applicable triggering transaction would have
a market value of twice the Purchase Price. In the event
the Company is acquired in a merger or other business
combination by an Acquiring Person, or 50% or more
of the Company’s assets are sold to an Acquiring Person,
each Right will entitle its holder (other than an Acquiring
Person) to purchase common shares in the surviving entity
at 50% of the market price. The Company intends to submit
the Rights Agreement for stockholder ratification within
12 months of its adoption. See Note 21 for a description
of certain pending legal proceedings with respect to the
Rights Agreement.
On May 15, 2007, the Company’s Board of Directors autho-
rized a stock repurchase program for the purchase of up to
$400,000 of the Company’s common stock. The maximum
dollar value of common stock that may yet be purchased
under the current program is approximately $2,471 as of
May 1, 2010. Stock repurchases under this program may be
made through open market and privately negotiated trans-
actions from time to time and in such amounts as manage-
ment deems appropriate. As of May 1, 2010, the Company
has repurchased 33,284,610 shares at a cost of approxi-
mately $1,052,356 under its stock repurchase programs.
The repurchased shares are held in treasury.
19. COMMITMENTS AND CONTINGENCIES
The Company leases retail stores, warehouse facilities,
office space and equipment. Substantially all of the B&N
Retail stores are leased under noncancelable agreements
which expire at various dates through 2036 with various
renewal options for additional periods. The agreements,
which have been classified as operating leases, generally
provide for both minimum and percentage rentals and
require the Company to pay insurance, taxes and other
maintenance costs. Percentage rentals are based on sales
performance in excess of specified minimums at various
stores.
B&N College’s 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 the college or
university, without penalty.
Rental expense under operating leases is as follows:
Fiscal 2010
13 Weeks
Ended
May 2, 2009 Fiscal 2008 Fiscal 2007
Minimum
rentals $ 400,511 75,161 310,967 302,060
Percentage
rentals 3,186 842 4,380 6,932
$ 403,697 76,003 315,347 308,992
Future minimum annual rentals, excluding percentage
rentals, required under B&N Retail leases that had initial,
noncancelable lease terms greater than one year, and under
B&N College leases as of May 1, 2010 are:
Fiscal Year a
2011 $ 441,302
2012 382,918
2013 331,221
2014 284,291
2015 223,767
After 2015 641,280
$ 2,304,779
a Includes B&N College capital lease obligations of $1,391, $1,391, $1,339,
$766, $511 and $0, for fiscal 2011, 2012, 2013, 2014, 2015 and after 2015,
respectively.
The Company provides for minimum 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 tenant allowances) is reflected primarily
in other long-term liabilities in the accompanying balance
sheets.
On June 26, 2008, the Company exercised its purchase
option under a lease on one of its distribution facilities
located in South Brunswick, New Jersey from the New
Jersey Economic Development Authority. Under the terms
of the lease expiring in June 2011, the Company purchased
the distribution facility and equipment for approximately
$21,000.
20. SEGMENT REPORTING
The Company identifies its operating segments based on
the way the business is managed (focusing on the financial
information distributed) and the manner in which the chief
operating decision maker interacts with other members of
management. As a result of this assessment, the Company
has determined that it has two operating and reporting
segments: B&N Retail and B&N College. The Company
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