-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HVrQY4++XrzIWPmMhZrT8VGuRMAAjrt+Gt+0ObH64EJiGCkFpN1i8rtli2FGNe4+ Ktad2v0W/CehNa/O1JPBkA== 0000950138-04-000613.txt : 20041005 0000950138-04-000613.hdr.sgml : 20041005 20041005171929 ACCESSION NUMBER: 0000950138-04-000613 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041005 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041005 DATE AS OF CHANGE: 20041005 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARNES & NOBLE INC CENTRAL INDEX KEY: 0000890491 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 061196501 STATE OF INCORPORATION: DE FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12302 FILM NUMBER: 041066748 BUSINESS ADDRESS: STREET 1: 122 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2126333300 MAIL ADDRESS: STREET 1: 122 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10011 8-K 1 oct_8-k.txt \B&N\2004 FILINGS\OCT 8-K\ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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): October 4, 2004 (October 1, 2004) BARNES & NOBLE, INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as Specified in its Charter) Delaware - -------------------------------------------------------------------------------- (State or other Jurisdiction of Incorporation) 1-12302 06-1196501 ------------------------ ------------------- (Commission File Number) (IRS Employer Identification No.) 122 Fifth Avenue, New York, NY 10011 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (212) 633-3300 -------------- ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement. On October 1, 2004, Barnes & Noble, Inc. (the "Company") and its wholly owned subsidiary, B&N GameStop Holding Corp. ("Seller"), entered into a Stock Purchase Agreement (the "Agreement") with GameStop Corp. ("GameStop"), pursuant to which GameStop acquired from Seller 6,107,338 shares of GameStop's Class B Common Stock, par value $.001 per share, for an aggregate consideration of $111,519,991.80, consisting of $37,500,000 in cash and a promissory note (the "Note") in the principal amount of $74,019,991.80. The principal amount of the Note is payable $37,500,000 on January 14, 2005, and the remaining $36,519,991.80 in three equal installments on the first, second and third anniversaries of the Note, respectively. The outstanding unpaid principal amount due under the Note bears interest at a rate of 5.5% per annum, payable when principal installments are due. Through its ownership of all of GameStop's Class B Common Stock, the Company, prior to entering into the Agreement, owned approximately 63.9% of the outstanding shares of GameStop's capital stock, which represented approximately 94.7% of the combined voting power of all classes of GameStop's voting stock. As a result of the reported transaction, the Company now owns approximately 59.5% of the outstanding shares of GameStop's capital stock, which represents approximately 93.6% of the combined voting power of all classes of GameStop's voting stock. A copy of the Agreement and a copy of the Note are filed as Exhibits 10.1 and 10.2, respectively, to this report on Form 8-K and are incorporated herein by reference. The press release announcing the Agreement is filed as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference. Item 2.01 Completion of Acquisition or Disposition of Assets. The information set forth in Item 1.01 of this report on Form 8-K is incorporated by reference herein. Item 8.01 Other Events. On October 1, 2004, the Company's Board of Directors (including all of the Company's independent directors) approved the transactions contemplated by the Agreement and approved a plan to distribute Seller's remaining 29,901,662 shares of GameStop's Class B Common Stock to the Company's stockholders of record as of the close of business on November 2, 2004, such distribution to occur on November 12, 2004. Following the distribution, GameStop will no longer be a subsidiary of the Company. The press release announcing the planned distribution is filed as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference. Item 9.01 Financial Statements and Exhibits. (c) Exhibits 10.1 Stock Purchase Agreement, dated as of October 1, 2004, by and among GameStop, the Company, and Seller. 10.2 Promissory Note, dated as of October 1, 2004, made by GameStop in favor of Seller. 99.1 Press Release of the Company, dated October 4, 2004. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BARNES & NOBLE, INC. (Registrant) Date: October 5, 2005 By:/s/ Joseph J. Lombardi --------------------------------- Joseph J. Lombardi Chief Financial Officer EX-10 2 ex10-1.txt STOCK PURCHASE AGREEMENT Exhibit 10.1 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of October 1, 2004, by and among GameStop Corp., a Delaware corporation ("Buyer"), Barnes & Noble, Inc., a Delaware corporation ("Barnes & Noble"), and B&N GameStop Holding Corp., a Delaware corporation and a wholly owned subsidiary of Barnes & Noble ("Seller," and together with Barnes & Noble, the "B&N Parties"). RECITALS WHEREAS, Seller is the sole record and beneficial owner of 36,009,000 shares of Class B Common Stock, par value $.001 per share (the "Class B Common Stock"), of Buyer, which 36,009,000 shares of Class B Common Stock constitute all of the issued and outstanding shares of Class B Common Stock; WHEREAS, Barnes & Noble and Seller desire to dispose of all of Seller's shares of Class B Common Stock and that for various business purposes, such complete disposition will be implemented by selling the Purchased Stock (defined below) and distributing the balance of Seller's shares of Class B Common Stock to the stockholders of Barnes & Noble as part of an overall plan or series of interrelated transactions; WHEREAS, Buyer desires to buy from Seller, and Seller desires to sell to Buyer, 6,107,338 of the shares of the Class B Common Stock owned by Seller (the "Purchased Stock"); WHEREAS, on or about the date hereof, Barnes & Noble is publicly disclosing its intention to distribute Seller's remaining 29,901,662 shares of Class B Common Stock to Barnes & Noble's stockholders in a dividend intended to be tax-free under Section 355 ("Section 355") of the Internal Revenue Code of 1986, as amended (the "Spin-Off"); WHEREAS, the management of Barnes & Noble has determined that the Spin-Off will further substantial corporate business purposes because it will (1) enable Barnes & Noble's management to focus more closely on its core business, (2) reduce investor confusion, and (3) enhance Barnes & Noble's ability to utilize its equity capital for (a) future acquisitions and (b) employee compensation; and WHEREAS, the management of Buyer has determined that the Spin-Off will further substantial corporate business purposes because it will (1) enable Buyer's management to focus more closely on its core business, (2) increase the number of Buyer's shareholders and the number of Buyer's publicly traded shares, (3) reduce investor confusion, and (4) enhance Buyer's ability to utilize its equity capital for (a) potential equity offerings and equity-linked debt offerings, (b) future acquisitions and (c) employee compensation. NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements contained herein, and upon the terms and subject to the conditions hereinafter set forth, the parties hereto hereby agree as follows: 1. Purchase and Sale. Subject to the terms and conditions of this Agreement, in consideration of an aggregate purchase price of $111,519,991.80, consisting of $37,500,000 in cash (the "Cash Consideration") and a promissory note in the form attached hereto as Exhibit A in the principal amount of $74,019,991.80 (the "Note"), Seller hereby sells, assigns and transfers to Buyer the Purchased Stock. 2. Deliveries. On the date hereof, (i) Seller shall deliver to Buyer a certificate or certificates representing the Purchased Stock, together with stock powers or other instruments of transfer duly endorsed in the name of Buyer, and (ii) Buyer shall deliver to Seller (x) the Cash Consideration by wire transfer of immediately available funds to an account or accounts designated by Seller, (y) the duly executed Note, and (z) to the extent that the certificate or certificates delivered pursuant to clause (i) above represents more shares than the Purchased Stock, a certificate or certificates registered in the name of Seller representing such excess shares of Class B Common Stock. 3. Representations and Warranties. (a) The B&N Parties hereby, jointly and severally, represent and warrant to Buyer as follows: (i) Each B&N Party is duly organized, validly existing and in good standing under the laws of the State of Delaware, and each B&N Party has the full right, power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereunder. This Agreement has been duly and validly executed and delivered by each B&N Party and, assuming the due execution and delivery of this Agreement by Buyer, constitutes the legal, valid and binding obligation of such B&N Party, enforceable against such B&N Party in accordance with its terms, subject to all laws and rules of law including (x) those of general application relating to bankruptcy, insolvency and the relief of debtors, and (y) those governing specific performance, injunctive relief and other equitable remedies. (ii) The execution, delivery and performance by each B&N Party of this Agreement and the consummation by each B&N Party of the transactions contemplated hereby will not, with or without the giving of notice or the lapse of time, or both, (x) violate any provision of law, rule or regulation to which such B&N Party is subject, (y) violate any order, judgment or decree applicable to such B&N Party, or (z) conflict with, or result in a breach or default under any agreements or other instruments to which such B&N Party is a party or by it or any of its properties or assets are bound, except, in each case, for violations, conflicts, breaches or defaults which in the aggregate would not have a material adverse effect on the businesses, operations, assets, properties or financial condition of such B&N Party or the consummation of the transactions contemplated under this Agreement. (iii) Seller is the sole record and beneficial owner of the Purchased Stock, free and clear of all liens, claims, security and other interests, pledges, mortgages, rights of first refusal, preemptive rights, transfer restrictions, options, proxies, voting trusts and other encumbrances ("Liens"), other than Liens that may exist pursuant to Barnes & Noble's Amended and Restated Credit and Term Loan Agreement, dated as of August 10, 2004, with Bank of America, N.A., as administrative agent, and the security documents relating thereto, which permit the sale of the Purchased Stock contemplated by this Agreement. (iv) No consent, approval or authorization of, or filing with, any governmental or regulatory authority or any other person or entity is required in connection with the execution, delivery and performance by Seller of this Agreement, except post-transaction filings pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). -2- (b) Buyer hereby represents and warrants to the B&N Parties as follows: (i) Buyer is duly organized, validly existing and in good standing under the laws of the State of Delaware, and Buyer has the full right, power and authority to execute and deliver this Agreement and the Note and to consummate the transactions contemplated hereunder and thereunder. This Agreement and the Note have been duly and validly executed and delivered by Buyer, and, assuming the due execution and delivery of this Agreement by the B&N Parties, this Agreement and the Note constitute the legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their terms, subject to all laws and rules of law including (x) those of general application relating to bankruptcy, insolvency and the relief of debtors, and (y) those governing specific performance, injunctive relief and other equitable remedies. (ii) The execution, delivery and performance by Buyer of this Agreement and the Note and the consummation by Buyer of the transactions contemplated hereby and thereby will not, with or without the giving of notice or the lapse of time, or both, (x) violate any provision of law, rule or regulation to which Buyer is subject, (y) violate any order, judgment or decree applicable to Buyer, or (z) conflict with, or result in a breach or default under any agreements or other instruments to which Buyer is a party or by which it or any of its properties or assets are bound, except, in each case, for violations, conflicts, breaches or defaults which in the aggregate would not have a material adverse effect on the businesses, operations, assets, properties or financial condition of Buyer or the consummation of the transactions contemplated under this Agreement and the Note. (iii) No consent, approval or authorization of, or filing with, any governmental or regulatory authority or any other person or entity is required in connection with the execution, delivery and performance by Buyer of this Agreement and the Note, except post-transaction filings pursuant to the Exchange Act. (c) The representations and warranties set forth herein shall survive the consummation of the transactions contemplated by this Agreement, and shall terminate upon the full payment of the principal and interest due and owing under the Note. 4. Further Assurances. At any time and from time to time after the date hereof, the B&N Parties, on the one hand, and the Buyer, on the other hand, shall, at the request of the other and at the expense of such requesting party, execute and deliver any further instruments or documents and take all such further action as shall be necessary, desirable or expedient to make effective the consummation of the transactions contemplated hereby. The parties hereto agree and acknowledge that the Separation Agreement between Barnes & Noble and the Buyer, dated as of January 1, 2002, shall continue to be in full force and effect following the Spin-Off, in accordance with its terms, and the parties hereto shall fully cooperate in effecting the Spin-Off as tax free under Section 355. 5. Miscellaneous. (a) This Agreement and the Note constitute the sole understanding of the parties with respect to the subject matter hereof and supersede and cancel all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter. -3- (b) No amendment or modification of this Agreement shall be binding unless the same shall be in writing and duly executed by the parties hereto, except that any of the terms and provisions of this Agreement may be waived in writing at any time by the party which is entitled to the benefits thereof. No waiver of any provision of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof. (c) The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto; provided, however, that this Agreement may not be assigned by any of the B&N Parties without the prior written consent of Buyer or by Buyer without the prior written consent of the B&N Parties, except that any of the B&N Parties may, at its discretion, assign this Agreement to any direct or indirect wholly owned subsidiary of Barnes & Noble. Notwithstanding anything to the contrary contained herein, Seller shall be entitled to assign its rights under the Note in its sole and absolute discretion. (d) All notices and other communications under this Agreement must be in writing and will be deemed to have been duly given or made as follows: (i) if sent by registered or certified mail in the United States, return receipt requested upon receipt, five business days after being so sent; (ii) if sent by reputable overnight air courier, two business days after being so sent; (iii) if sent by telecopy transmission, with a copy mailed on the same day in the manner provided in clause (i) or (ii) above, when transmitted and receipt is confirmed by telephone; or (iv) if otherwise actually personally delivered, when delivered, and shall be sent or delivered as follows: If to the Buyer, to: GameStop Corp. 2250 William D. Tate Avenue, Grapevine, Texas 76051 Attention: David W. Carlson Fax: (817) 424-2820 If to any B&N Party, to: Barnes & Noble, Inc. 122 Fifth Avenue New York, NY 10011 Attention: Larry Zilavy Fax: (212) 807-6033 (e) This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York. Each of the parties hereby irrevocably and unconditionally submits to the nonexclusive personal jurisdiction of the Supreme Court of the State of New York sitting in New York County and to the United States District Court for the Southern District of New York, and any appellate court thereof in any action or proceeding arising out of or relating to this Agreement or the Note or for the recognition or enforcement of any judgment arising out of or relating to this Agreement or the Note, and hereby waives any objection as to venue and forum non -4- conveniens with respect to any such actions brought in any of such courts. Process in any such action or proceeding may be served by certified mail on any party hereto anywhere in the world where such party is found and may also be served upon any party in the manner provided for the service of process under the laws of the State of New York or the laws of the place or jurisdiction where such party is found. (f) The section and paragraph headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. (g) All costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be the obligation of the party incurring such costs and expenses. (h) This Agreement may be executed in counterparts, each of which shall be deemed an original and together which shall constitute one and the same instrument. -5- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. GAMESTOP CORP. By: /s/ David W. Carlson ------------------------- David W. Carlson Executive Vice President and Chief Financial Officer BARNES & NOBLE, INC. By: /s/ Larry Zilavy ------------------------- Larry Zilavy Executive Vice President of Corporate Finance and Strategic Planning B&N GAMESTOP HOLDING CORP. By: /s/ Larry Zilavy ------------------------- Larry Zilavy Executive Vice President of Corporate Finance and Strategic Planning -6- EX-10 3 ex10-2.txt PROMISSORY NOTE Exhibit 10.2 PROMISSORY NOTE $74,019,991.80 New York, New York October 1, 2004 FOR VALUE RECEIVED, GameStop Corp., a Delaware corporation ("Payor"), promises to pay to the order of B&N GameStop Holding Corp., a Delaware corporation ("Payee"), in lawful money of the United States of America and in immediately available funds, (i) the sum of $74,019,991.80 (Seventy-Four Million Nineteen Thousand Nine Hundred Ninety-One Dollars and Eighty Cents), payable $37,500,000 on January 14, 2005 and the remaining $36,519,991.80 in three equal installments on the first, second and third anniversaries of the date hereof, respectively (each, a "Payment Date"), and (ii) interest on the outstanding unpaid principal amount due hereunder on each Payment Date at the interest rate of 5.5% per annum. This Note may be voluntarily prepaid in whole or in part without premium or penalty and without the prior consent of Payee, provided that concurrently therewith, all accrued interest under this Note is paid through the date of such prepayment. Payor hereby waives presentment for payment, notice of dishonor, protest, notice of protest and any other demand, notice or formality with respect to this Note. This Note is the Promissory Note referred to in the Stock Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to which Payee has sold to Payor 6,107,338 shares of Payor's Class B Common Stock. In the event of the nonpayment of any principal or interest payment due hereunder, which continues for more than thirty (30) days after any Payment Date, then at the option of Payee by written notice to Payor, all amounts then remaining unpaid on this Note may be declared to be immediately due and payable. In addition, this Note shall automatically become due, and the outstanding principal amount of this Note, together with all accrued and unpaid interest thereon, shall automatically become payable without any action on the part of the Payee, (a) upon the written request of Payee in the event that any representation or warranty made by the Payor in the Purchase Agreement shall prove to have been incorrect in any material respect on or after the date hereof, (b) if Payor is involved in a proceeding relating to, or which may result in, a forfeiture of all or substantially all of Payor's assets, or (c) if the Payor (i) shall generally not, or be unable to, or shall admit in writing its inability to, pay its debts as its debts become due, (ii) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation, (iii) shall have had any such petition filed, or any such proceeding shall have been commenced against it, in which an adjudication is made or order for relief is entered or which remains undismissed for a period of at least 30 days, (iv) shall have had a receiver, custodian or trustee appointed for all or a substantial part of its property, or (v) takes any action effectuating, approving or consenting to any of the events described in the foregoing clauses (i) through (iv). Payor agrees to pay all reasonable costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by Payee in collecting or enforcing payment of this Note in accordance with its terms. If any payment under this Note becomes due and payable on a Saturday, Sunday or a legal holiday under the laws of the State of New York, the date for payment shall be extended to the next succeeding business day, provided that any such payment bearing interest shall continue to accrue interest until paid. All notices and other communications hereunder must be in writing and will be deemed to have been duly given or made as follows: (i) if sent by registered or certified mail in the United States, return receipt requested upon receipt, five business days after being so sent; (ii) if sent by reputable overnight air courier, two business days after being so sent; (iii) if sent by telecopy transmission, with a copy mailed on the same day in the manner provided in clause (i) or (ii) above, when transmitted and receipt is confirmed by telephone; or (iv) if otherwise actually personally delivered, when delivered, and shall be sent or delivered to the respective addresses of the Payee and the Payor set forth in the Purchase Agreement or such other address as Payee or Payor, as the case may be, shall have given to the other by notice in accordance herewith. This Note may be modified or cancelled only by the written agreement of Payor and Payee. No failure on the part of Payee to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof or preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. This Note shall be binding on Payor and its successors and assigns and shall inure to the benefit of Payee and its successors and assigns, except that Payor may not delegate any of its obligations hereunder without the prior written consent of Payee. Notwithstanding anything to the contrary contained herein, Payee shall be entitled to assign its rights hereunder in its sole and absolute discretion. This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York. Payor hereby irrevocably and unconditionally submits to the nonexclusive personal jurisdiction of the Supreme Court of the State of New York sitting in New York County and to the United States District Court for the Southern District of New York, and any appellate court thereof in any action or proceeding arising out of or relating to this Note or for the recognition or enforcement of any judgment arising out of or relating to this Note, and hereby waives any objection as to venue and forum non conveniens with respect to any such actions brought in any of such courts. Process in any such action or proceeding may be served by certified mail on the Payor anywhere in the world where Payor is found and may also be served upon Payor in the manner provided for the service of process under the laws of the State of New York or the laws of the place or jurisdiction where such party is found. GAMESTOP CORP. By:/s/ David W. Carlson ---------------------------- David W. Carlson Executive Vice President and Chief Financial Officer EX-99 4 ex99-1.txt PRESS RELEASE Exhibit 99.1 FOR IMMEDIATE RELEASE Media Contact: Investor Contacts: Mary Ellen Keating Larry Zilavy Senior Vice President Executive Vice President Corporate Communications Corporate Finance & Strategic Planning Barnes & Noble, Inc. Barnes & Noble, Inc. (212) 633-3323 (212) 633-3336 and Joseph J. Lombardi Chief Financial Officer Barnes & Noble, Inc. (212) 633-3215 BARNES & NOBLE ANNOUNCES SALE OF SHARES TO GAMESTOP AND BOARD OF DIRECTORS AUTHORIZES GAMESTOP SPIN-OFF 2004 GUIDANCE UPDATED New York, NY (October 4, 2004)--Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller, today announced that GameStop Corp. has purchased approximately 6.1 million shares of Barnes & Noble's Class B common stock in GameStop for a total purchase price of approximately $111.5 million, consisting of $37.5 million in cash and a promissory note in the principal amount of approximately $74.0 million. The note is payable in installments over three years and bears an interest rate of 5.5% per annum. The sale has reduced Barnes & Noble's economic ownership interest in GameStop from 64% to 59%. Barnes & Noble's independent directors approved the transaction. At the same time and as part of an overall plan of complete disposition of its stockholdings in GameStop, Barnes & Noble's Board of Directors authorized the company to distribute the remaining 29.9 million Class B shares in GameStop to Barnes & Noble stockholders and has set the close of regular trading on November 2, 2004 as the record date for the distribution, which will occur on November 12, 2004. This distribution is intended to qualify as a tax-free dividend. The Class B shares will retain their super voting power of 10 votes per share and will be separately listed on the New York Stock Exchange under the symbol GME.B. - more - Barnes & Noble, Inc. Page 2 October 4, 2004 Based on the number of shares of Barnes & Noble stock currently outstanding, the company estimates that each share of Barnes & Noble stock will receive approximately .43 shares of GameStop Class B common stock in the distribution. The actual ratio will be determined based on the number of shares of Barnes & Noble stock outstanding on the record date. Cash will be paid in lieu of fractional shares. "By all measures, Barnes & Noble's acquisition of GameStop has been a huge success," said Leonard Riggio, chairman of Barnes & Noble, Inc. "Though both companies are doing extremely well and are each industry leaders, we believe they will be more valuable trading separately than together." Mr. Riggio went on to say that Barnes & Noble's approximate $400 million investment in GameStop has turned out to be worth over $850 million, of which about $360 million has been returned as cash to the company and over $500 million will be distributed to shareholders through the spin-off. As a result of this transaction, the company has updated guidance to reflect both GameStop's change in their guidance as well as Barnes &Noble's earnings decrease expected as a result of the divestiture of ownership of GameStop. See the attached table, which reflects revised guidance for the video game operating segment for the remainder of the year. In accordance with the terms of the company's $500 million revolving credit agreement, the facility has been reduced to $400 million as a result of the transaction. The company projects minimal usage under the credit facility for the remainder of the year and does not anticipate any need to increase the credit facility for the foreseeable future. -more- Barnes & Noble, Inc. Page 3 October 4, 2004 Revised Previous THIRD QUARTER EPS 2004 Guidance(a) 2004 Guidance(a) - ----------------- ---------------- ---------------- Low High Low High ------ -------- ------- ------- Barnes & Noble Bookstores $ 0.08 $ 0.10 $ 0.08 $ 0.10 Barnes & Noble.com (0.09) (0.08) (0.09) (0.08) ------ ------- ------ ------ Total Book Operating Segment (0.01) 0.02 (0.01) 0.02 Total Video Game Operating Segment (b) 0.08 0.09 0.10 0.11 ------ ------- ------ ------ Consolidated $ 0.07 $ 0.11 $ 0.09 $ 0.13 ====== ======= ====== ====== Revised Previous FOURTH QUARTER EPS 2004 Guidance(a) 2004 Guidance(a) - ------------------ ---------------- ---------------- Low High Low High ------ -------- ------- ------- Barnes & Noble Bookstores $ 1.54 $ 1.58 $ 1.54 $ 1.58 Barnes & Noble.com (0.03) (0.02) (0.03) (0.02) ------ ------- ------ ------ Total Book Operating Segment 1.51 1.56 1.51 1.56 Total Video Game Operating Segment (b) - - 0.36 0.38 ------ ------- ------ ------ Consolidated $ 1.51 $ 1.56 $ 1.87 $ 1.94 ====== ======= ====== ====== Revised Previous FULL YEAR EPS 2004 Guidance(c) 2004 Guidance(c) - ------------- ---------------- ---------------- Low High Low High ------ -------- ------- ------- Barnes & Noble Bookstores $ 2.06 $ 2.10 $ 2.06 $ 2.10 Barnes & Noble.com (0.28) (0.26) (0.28) (0.26) ------ ------- ------ ------ Total Book Operating Segment 1.78 1.84 1.78 1.84 Total Video Game Operating Segment (b) 0.18 0.20 0.56 0.58 ------ ------- ------ ------ Consolidated before debt redemption 1.96 2.04 2.34 2.42 Debt redemption charge (0.11) (0.11) (0.11) (0.11) ------ ------- ------ ------ Consolidated GAAP EPS $ 1.85 $ 1.93 $ 2.23 $ 2.31 ====== ======= ====== ====== (a) Based on a weighted average share count of approximately 72 million. (b) Revised guidance is based on the effective ownership percentages of approximately 59%, 0% and 46% for the third quarter, the fourth quarter and the full year, respectively. Previous guidance was based on the effective ownership percentage of approximately 63% for all periods presented. (c) Based on a weighted average share count of approximately 75 million. - more - Barnes & Noble, Inc. Page 4 October 4, 2004 ABOUT BARNES & NOBLE, INC. Barnes & Noble, Inc. (NYSE: BKS), the world's largest bookseller and a Fortune 500 company, operates 840 bookstores in 49 states. For the third year in a row, the company is the nation's top retail brand for quality, according to the EquiTrend(R) Brand Study by Harris Interactive(R). Barnes & Noble conducts its e-commerce business through Barnes & Noble.com (www.bn.com), which is ranked fifth in traffic among retailers with their own Web site, according to Media Metrix, and the number-one brand among e-commerce companies, according to the latest EquiTrend survey. In addition to its retail operations, Barnes & Noble is one of the largest book publishers in the world. Its subsidiary, Sterling Publishing, publishes over 1,300 new titles a year and has an active list of over 6,000 titles. General financial information on Barnes & Noble, Inc. can be obtained via the Internet by visiting the company's corporate Web site: http://www.barnesandnobleinc.com/financials. SAFE HARBOR This press release contains "forward-looking statements." Barnes & Noble is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. Please refer to the company's annual, quarterly and periodic reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially. # # # -----END PRIVACY-ENHANCED MESSAGE-----