Rue 21 2011 Annual Report Download - page 53

rue21, inc. and subsidiary
Notes to Consolidated Financial Statements — (continued)
Note 3 — Property and Equipment
Property and equipment consisted of the following:
January 28, January 29,
2012 2011
Furniture and fixtures ............................................. $ 93,301 $ 73,635
Leasehold improvements ........................................... 102,731 75,445
Computer equipment, software and other .............................. 22,541 18,044
Property and equipment, at cost ..................................... 218,573 167,124
Less accumulated depreciation and amortization ........................ (100,775) (75,753)
Property and equipment, net ........................................ $117,798 $ 91,371
Depreciation and amortization expense was $26,618, $21,980, and $16,994 for fiscal years 2011, 2010 and
2009, respectively.
Note 4 — Long-Term Debt
Effective April 10, 2008, the Company established a five-year $60,000 senior secured revolving credit facility
(the Senior Secured Credit Facility) with Bank of America N.A. The ceiling is expandable at the Company’s option
in increments of $5,000 up to a limit of $85,000 under certain defined conditions. The Senior Secured Credit
Facility initial borrowing was $27,217. Proceeds from the initial borrowing were used for the extinguishment of all
of the Company’s existing long-term debt facilities and the Bank of America N.A. commitment fee. Availability
under the Senior Secured Credit Facility is collateralized by a first priority interest in all the Company’s assets. On
November 24, 2009, the Company amended its Senior Secured Credit Facility with Bank of America, N.A. Key
provisions of the amendment include an increase in the borrowing ceiling to $85,000 from $60,000, which is further
expandable at the Company’s option in increments of $5,000 up to a limit of $100,000 under certain defined
conditions. Interest accrues at the higher of the Federal Funds rate plus 0.50%, the prime rate or the adjusted LIBOR
rate plus the applicable margin which ranges from 1.25% to 3.00% set quarterly dependent upon average net
availability on the facility during the previous quarter. As of January 28, 2012 and January 2011, there were no
outstanding borrowings under the Senior Secured Credit Facility. Accordingly, the weighted-average interest rate
under the Senior Secured Credit Facility was nil for both of the fiscal years ended January 28, 2012 and January 29,
2011. The Senior Secured Credit Facility includes a fixed charge covenant applicable only if net availability falls
below thresholds of 10%. The Company is in compliance with all covenants under the Senior Secured Credit
Facility at January 28, 2012. The Senior Secured Credit Facility matures in April 2013.
Note 5 — Stock-Based Compensation
In November 2009, the Company adopted the 2009 Omnibus Incentive Plan (the 2009 Plan) in connection with
the Company’s initial public offering, pursuant to which key employees, officers, and directors shall be eligible to
receive grants of stock options, stock appreciation rights, restricted stock or restricted stock units to purchase or
receive, as applicable, up to an aggregate of 3,626,000 shares of common stock based on eligibility, vesting, and
performance standards established by the board of directors. Stock options granted are generally exercisable ratably
over 3 or 4 years, subject to certain employment terms and conditions. The stock options generally expire ten years
from the date of issuance. To date, 777,378 stock options have been granted, 174,298 restricted stock units have
been granted and no stock appreciation rights or restricted stock have been issued under the 2009 Plan.
Effective May 15, 2003, the Company adopted the 2003 Ownership Incentive Plan (the 2003 Plan) pursuant to
which key employees, officers, and directors were eligible to receive options to purchase common stock for an
aggregate of up to 19.8% of the number of shares of the common stock outstanding upon adoption of the 2003 Plan
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