Barnes and Noble 2011 Annual Report Download - page 55

16. DISCONTINUED OPERATIONS
During the fourth quarter of fi scal 2008, the Company
committed to a plan to dispose of its approximate 74%
interest in Calendar Club. The Company subsequently sold
its interest in Calendar Club in February 2009 to Calendar
Club and its chief executive offi cer for $7,000, which was
comprised of $1,000 in cash and $6,000 in notes. Calendar
Club qualifi ed for held for sale accounting treatment in
fi scal 2008 and was written down to its fair value. The
Company recorded a charge of $18,655 ($9,675 after
tax) related to the write down in fi scal 2008. The results
of Calendar Club have been classifi ed as discontinued
operations in all periods presented. During fi scal 2011, the
Company received the $6,000 note payment from Calendar
Club. The note was received prior to its scheduled due date.
The operations of Calendar Club have been segregated from
continuing operations and are refl ected as discontinued
operations in each period’s consolidated statement of
operations as follows:
13 weeks
ended
May 2, 2009 Fiscal 2008 Fiscal 2007
Sales $ 347 113,539 124,154
Earnings (loss) from discontinued
operations, net of tax $ (654) (9,506) 888
Diluted earnings (loss) per
common share from discontinued
operations, net of tax $ (0.01) (0.17) 0.01
17. SHAREHOLDERS’ EQUITY
On November 17, 2009, the Board of Directors of the
Company declared a dividend, payable to stockholders of
record on November 27, 2009 of one right (a Right) per
each share of outstanding Common Stock of the Company,
par value $0.001 per share (Common Stock), to purchase
1/1000th of a share of Series I Preferred Stock, par value
$0.001 per share, of the Company (the Preferred Stock),
at a price of $100.00 per share (such amount, as may
be adjusted from time to time as provided in the Rights
Agreement described below, the Purchase Price). In con-
nection therewith, on November 17, 2009, the Company
entered into a Rights Agreement, dated November 17,
2009 (as amended February 17, 2010, June 23, 2010 and
October 29, 2010, and as may be further amended from
time to time, the Rights Agreement) with Mellon Investor
Services LLC, as Rights Agent. The Rights will be exercis-
able upon the earlier of (i) such date the Company learns
that a person or group, without Board approval, acquires or
obtains the right to acquire benefi cial ownership of 20%
or more of the Company’s outstanding common stock or
a person or group that already benefi cially owns 20% or
more of the Company’s outstanding common stock at the
time the Rights Agreement was entered into, without Board
approval, acquires any additional shares (other than pursu-
ant to the Company’s compensation or benefi t plans) (any
person or group specifi ed in this sentence, an Acquiring
Person) and (ii) such date a person or group announces an
intention to commence or following the commencement
of (as designated by the Board) a tender or exchange off er
which could result in the benefi cial ownership of 20% or
more of the Company’s outstanding common stock. The
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. In connection with the 2010
Annual Meeting of Stockholders, held on September 28,
2010, Yucaipa American Alliance Fund II, L.P. and Yucaipa
American Alliance (Parallel) Fund II, L.P. submitted a
non-binding proposal requesting the Board of Directors
amend the Rights Agreement to increase the benefi cial
ownership threshold in the Rights Agreement from 20%
to 30%. A majority of the votes cast by stockholders at the
2010 Annual Meeting of Stockholders were against this
non-binding proposal. On October 28, 2010 the Board of
Directors of the Company gave notice of a Special Meeting
of Stockholders on November 17, 2010 to seek stockholder
ratifi cation of the Rights Agreement. At the November
17, 2010 Special Meeting, the holders of a majority of the
outstanding Common Stock entitled to vote at that Special
Meeting voted to ratify the Board’s adoption of the Rights
Agreement. See Note 20 for a description of certain 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
2011 Annual Report 53