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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 15, 1998
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(July 10, 1998)
BARNES & NOBLE, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-12302 06-1196501
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
122 Fifth Avenue, New York, NY 10011
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 633-3300
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On July 10, 1998, the Board of Directors of Barnes & Noble, Inc.
(the "Company") declared a dividend of one right (a "Right") for each
outstanding share of Common Stock, par value $.001 per share (the "Common
Shares"), of the Company. The dividend is payable on July 21, 1998 (the
"Record Date") to the stockholders of record on that date. The Board of
Directors has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date (as defined below), the Final
Expiration Date (as defined below) and the date the Rights are redeemed.
Each Right entitles the registered holder to purchase from the Company one
four-hundredth of a share of a series of preferred stock, designated as
Series H Preferred Stock, par value $.001 per share (the "Preferred Stock")
at a price of $225 per one four-hundredth of a share (the "Purchase Price"),
subject to adjustment.
The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and The Bank of New
York, as Rights Agent (the "Rights Agent"). A copy of the Rights Agreement
is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
The description of the Rights Agreement contained in this Item 5 does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement attached hereto as Exhibit 4.1 and incorporated herein by
reference.
Until the earlier to occur of (i) a public announcement that,
without the prior consent of the Board of Directors of the Company, a person
or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 15% or more of the outstanding Common Shares
(or an additional 5% or more of the outstanding Common Shares in the case of
any Acquiring Person who beneficially owns 15% or more of the outstanding
Common Shares as of July 10, 1998) or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to such
time as any person becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a
person or group of 15% or more of such outstanding Common Shares (the earlier
of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding
as of the Record Date, by such Common Share certificate.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Shares. Until
the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Share certificates issued after the Record Date, upon transfer or
new issuance of Common Shares, will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on July 20, 2008 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed
by the Company, in each case, as described below.
The Purchase Price payable, and the number of one four-hundredth
shares of Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) upon the grant
to holders of the Preferred Stock of certain rights or warrants to subscribe
for or purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or divi-
dends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights associated with each Common Share
and the voting and economic rights of each one four-hundredth of a share of
Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
In the event that any person becomes an Acquiring Person, each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person and its Affiliates and Associates (which will thereafter be null and
void), will thereafter have the right to receive upon exercise of the Right
and payment of then current Purchase Price that number of one four-hundredths
of a share of Preferred Stock having a market value of two times that
Purchase Price.
In the event that, after the Distribution Date, the Company is
acquired in a merger or other business combination transaction or 50% or more
of its consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of the
Right, that number of shares of common stock of the acquiring company which
at the time of such transaction will have a market value of two times that
Purchase Price.
If the Company does not have sufficient shares of Preferred Stock
to satisfy such obligation to issue Preferred Stock, or if the Board of
Directors so elects, the Company shall deliver upon payment of the Purchase
Price of a Right an amount of cash or securities equivalent in value to the
shares of Preferred Stock issuable upon exercise of a Right; provided that,
if the Company fails to meet such obligation within 30 days following the
later of (x) the first occurrence of an event triggering the right to
purchase Common Shares and (y) the date on which the Company's right to
redeem the Rights expires, the Company must deliver, upon exercise of a Right
but without requiring payment of the Purchase Price then in effect, shares of
Preferred Stock (to the extent available) and cash equal in value to the
difference between the value of the shares of Preferred Stock otherwise
issuable upon the exercise of a Right and the Purchase Price then in effect.
The Board of Directors may extend the 30-day period described above for up to
an additional 60 days to permit the taking of action that may be necessary to
authorize sufficient additional shares of Preferred Stock to permit the
issuance of Preferred Stock upon the exercise in full of the Rights.
At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of
the outstanding Common Shares and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Shares, the Board of Directors
of the Company may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, at an exchange
ratio of one four-hundredth of a share of Preferred Stock or one Common Share
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%
in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one four-
hundredth of a share of Preferred Stock) and in lieu thereof, an adjustment
in cash will be made, based on the market price of the Preferred Stock on the
last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of
the outstanding Common Shares, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"). The redemption of the Rights may be made effective
at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
The Preferred Stock purchasable upon the exercise of the Rights
will be nonredeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock).
Each share of Preferred Stock will be entitled to a preferred dividend equal
to the greater of (a) $2.00 or (b) 400 times any dividend declared on the
Common Shares. In the event of liquidation, the holders of Preferred Stock
will receive a preferred liquidation payment equal to $1,000 per share of
Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon. Each share of Preferred Stock will have 400 votes,
voting together with the Common Shares. Notwithstanding the immediately
preceding sentence, in the event that dividends on the Preferred Stock shall
be in arrears in an amount equal to six quarterly dividends thereon, holders
of the Preferred Stock shall have the right, voting as a class, to elect two
of the Company's Directors. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each share of
Preferred Stock will be entitled to receive 400 times the amount and type of
consideration received per Common Share. The rights of the Preferred Stock
as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
Fractional shares of Preferred Stock in integral multiples of one four-
hundredth of a share of Preferred Stock will be issuable. In lieu of
fractional shares other than fractions that are multiples of one four-
hundredth of a share, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, except that
from and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights
(other than the Acquiring Person and its Affiliates and Associates).
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit 3.1 - Certificate of Designation of Preferences and Rights
of Preferred Stock, Series H of Barnes & Noble, Inc.
Exhibit 4.1 - Rights Agreement, dated as of July 10, 1998, between
Barnes & Noble, Inc. and The Bank of New York, as
Rights Agent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 15, 1998
BARNES & NOBLE, INC.
By: /s/ Marie J. Toulantis
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Marie J. Toulantis
Executive Vice President, Finance