##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from

to  .
 Commission File Number 333-48221
 Nebraska Book Company, Inc.
  Kansas
(State or other jurisdiction of 
incorporation or organization)
    
    47-0549819
(I.R.S. Employer
Identification No.)
 4700 South 19 th Street
Lincoln, NE 68501-0529
 (402) 421-7300
 None
 None
 Yes o Noþ
 Yesþ No o
 o No þ
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ (do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o Noþ
  Not
applicable as registrants stock is not publicly traded.
 There were 100 shares of common stock outstanding as of June 25, 2009.
 None
  Page 104




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##### 



TABLE OF CONTENTS
 PART I:Item 1 Business
    
    
    3Item 1A Risk Factors
    
    
    13Item 2 Properties
    
    
    17Item 3 Legal Proceedings
    
    
    17Item 4 Submission of Matters to a Vote of Security Holders
    
    
    17PART II:Item 5 Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
    
    
    18Item 6 Selected Financial Data
    
    
    18Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 8 Financial Statements and Supplementary Data
    
    
    40Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    79Item 9A Controls and Procedures
    
    
    79Item 9B Other Information
    
    
    79PART III:Item 10 Directors, Executive Officers, and Corporate Governance
    
    
    80Item 11 Executive Compensation
    
    
    82Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    90Item 13 Certain Relationships and Related Transactions, and Director Independence
    
    
    91Item 14 Principal Accountant Fees and Services
    
    
    92PART IV:Item 15 Exhibits and Financial Statement Schedules
    
    
    93Signatures
    
    
    102Supplemental Information to be Furnished
    
    
    102Financial Statement Schedule II  Valuation and Qualifying Accounts
    
    
    103Exhibit Index
    
    
    104Exhibit 4.7Exhibit 10.18Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I.
 
 ITEM 1. BUSINESS.
     General
   3




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Bookstore Division.
  Textbook Division. Buyers Guide
  4




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Complementary Services Division.
     Industry Segment Financial Information
 Financial Statements and Supplementary Data
 Business Strategy
  Capitalize on college bookstore opportunities.
 Enhance growth in the Textbook Division.
 Increased market penetration through technology
  5




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Expansion of other services programs
 Industry Overview
  College bookstore market. institutional contract-managed independent stores
 Wholesale textbook market.
      6




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Products and Services
 Bookstore Division.
 Textbook Division.
 Buyers Guide Buyers Guide Buyers Guide Buyers Guide
 Complementary Services Division.
  7




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Business Description
 Bookstore Division . .
     8




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BookstoresBookstores Open
    
    
    Bookstores
    
    
    Lost/Closed
    
    
    Bookstores atat Beginning of
    
    
    Added During
    
    
    During Fiscal
    
    
    End of FiscalFiscal Year
    
    Fiscal Year
    
    
    Fiscal Year
    
    
    Year (1)
    
    
    Year2005
    
    
    113
    
    
    
    11
    
    
    
    0
    
    
    
    1242006
    
    
    124
    
    
    
    17
    
    
    
    2
    
    
    
    1392007
    
    
    139
    
    
    
    120
    
    
    
    15
    
    
    
    2442008
    
    
    244
    
    
    
    23
    
    
    
    7
    
    
    
    2602009
    
    
    260
    
    
    
    24
    
    
    
    7
    
    
    
    277
 (1)
    
    In fiscal year 2006, two bookstores were closed and the leases were not renewed. In fiscal
year 2007, fifteen bookstores were closed, primarily as a result of either the lease expiring,
the contract-managed relationship not being renewed, or an agreement being reached with the
landlord terminating the lease. In fiscal year 2008, the recurrence of disappointing
operating results at two off-campus bookstore locations led to their closure while five
contract-managed agreements involving on-campus bookstores were not renewed. In fiscal year
2009, seven bookstores were closed as a result of the lease expiring, the contract-managed
relationship not being renewed, disappointing operating results, or an agreement being reached
with the landlord terminating the lease.   9




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Wholesale Procurement and Distribution
    Information Technology
     10




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Customers
     Competition
   
    
    Follett, MBS and a number of smaller companies for the opportunity to contract-manage
institutional college bookstores (Follett and MBS contract-manage more than 700 and 600
stores, respectively),
 
    
    other college bookstores located at colleges and universities that we serve,
 
    
    a number of entities that sell textbooks and other merchandise directly to students
through e-commerce bypassing the traditional college bookstore,
 
    
    student to student transactions that take place on campus and over the Internet, and
 
    
    course packs and electronic media as a source of textbook information, such as
on-line resources, E-Books, print-on-demand textbooks and CD-ROMs which may replace or
modify the need for students to purchase textbooks through the traditional college
bookstore.
  11




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
    
    college bookstores who normally repurchase books from students to be reused on that
campus the following semester or term,
 
    
    student to student transactions that take place on campus and over the Internet
 
    
    other wholesalers who purchase used textbooks from students and then resell them to
other college bookstores, and
 
    
    a number of individuals and companies that buy textbooks directly from students
through e-commerce, or in person, bypassing the traditional college bookstores who are
the Textbook Divisions suppliers and customers.
   
    
    MBS in the sale and installation of college bookstore information technology,
 
    
    MBS in the distance education textbook distribution market,
 
    
    college bookstores that provide their own e-commerce solution in competition with
CampusHub,
 
    
    the Independent College Bookstore Association (ICBA) in the centralized buying
service business (participation by college bookstores in C2Os or ICBAs centralized
buying service is voluntary, and college bookstores may, and some do, belong to both
buying associations), and
 
    
    a variety of smaller organizations and individuals involved in these businesses and
others such as marketing services and consulting services.
 Governmental Regulation
  Employees
   Geographic Financial Information
 Financial Statements and Supplementary Data
  12




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ITEM 1A. RISK FACTORS.
  Further deterioration in the economy and credit markets, a decline in consumer spending or
other conditions may adversely affect our future results of operations.
 We face competition in our markets, which could adversely impact our revenue levels, profit
margins and ability to acquire an adequate supply of used textbooks .
    13




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We have a substantial level of indebtedness.
 
    
    our ability to obtain additional financing for working capital, capital expenditures,
acquisitions, or general corporate purposes may be impaired;
 
    
    a substantial portion of our cash flow from operations must be dedicated to the payment of
interest on outstanding indebtedness, thereby reducing the funds available to us for other
purposes, such as capital expenditures and acquisitions;
 
    
    all of the indebtedness outstanding under the Senior Credit Facility is secured by
substantially all of our assets, and will mature prior to the Senior Subordinated Notes and
the Senior Discount Notes;
 
    
    we believe we are substantially more leveraged than certain of our competitors, which might
place us at a competitive disadvantage;
 
    
    we may be hindered in our ability to adjust rapidly to changing market conditions;
 
    
    we may be more vulnerable in the event of a downturn in general economic conditions or in
our industry or business; and
 
    
    our indebtedness may make it more difficult for us to satisfy our financial obligations.
 The indentures governing the Senior Subordinated Notes and NBCs Senior Discount Notes, as
well as the Senior Credit Facility, impose significant operating and financial restrictions, which
could prevent us from incurring additional indebtedness and taking certain other actions and could
result in all amounts outstanding being declared due and payable if we are not in compliance with
such restrictions .
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Recent disruptions in the financial markets could affect our ability to extend or refinance
debt as it matures, which could negatively impact our liquidity and financial condition.
  We may not be able to successfully contract-manage additional bookstores or integrate those
additional stores, which could adversely impact our ability to grow revenues and profit margins .
 We may not be able to successfully renew our contract-managed bookstores at profitable terms,
which could adversely impact our profit margins.
 We may be unable to obtain a sufficient supply of used textbooks, which could adversely impact
our revenue levels and profit margins .
 Publishers may not continue to increase prices of textbooks annually, which could adversely
impact our revenue levels and profit margins .
  15




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Publisher practices regarding new editions and materials packaged with new textbooks could
change, thereby reducing the supply of used textbooks available to us and adversely impacting our
revenue levels and profit margins.
 The loss or retirement of key members of management may occur, which could negatively affect
our ability to execute our current strategy and/or our ability to effectively react to changing
industry dynamics, thereby adversely impacting our revenue levels and profit margins .
 Our wholesale and bookstore operations are seasonal in nature  a significant reduction in
sales during our peak selling periods could adversely impact our ability to repay the Revolving
Credit Facility, thereby increasing interest expense and adversely impacting revenue levels by
restricting our ability to buy an adequate supply of used textbooks .
 We are controlled by one principal equity holder, who has the power to take unilateral action
and could have an interest in pursuing acquisitions, divestitures and other transactions, even
though such transactions might involve risks to other affected parties.
 A portion of our goodwill recently became impaired and we may be required to write down
additional amounts of goodwill or identifiable intangibles and record impairment charges if future
circumstances indicate that goodwill or identifiable intangibles are impaired. Goodwill and Other Intangible Assets Impairment of Long-Lived Assets
  16




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ITEM 2. PROPERTIES.
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   17




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND 
ISSUER
PURCHASES OF EQUITY SECURITIES.
 Managements Discussion and Analysis of Financial Condition and Results of
Operations Financial Statements and Supplementary Data
 Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
 ITEM 6. SELECTED FINANCIAL DATA.
   18




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Managements Discussion and
Analysis of Financial Condition and Results of Operations Financial Statements and Supplementary Data
 Fiscal Years EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(dollars in thousands)Statement of Operations Data:Revenues
    
    $
    610,716
    
    
    $
    581,248
    
    
    $
    544,428
    
    
    $
    420,108
    
    
    $
    402,154Costs of sales (exclusive of depreciation shown below)
    
    
    371,369
    
    
    
    354,140
    
    
    
    332,444
    
    
    
    250,914
    
    
    
    240,638Gross profit
    
    
    239,347
    
    
    
    227,108
    
    
    
    211,984
    
    
    
    169,194
    
    
    
    161,516Operating expenses:Selling, general and administrative (1)
    
    
    168,315
    
    
    
    157,193
    
    
    
    143,096
    
    
    
    107,991
    
    
    
    100,513Closure of California Warehouse
    
    
    
    
    
    
    (36
    )
    
    
    774
    
    
    
    
    
    
    
    Depreciation
    
    
    7,603
    
    
    
    7,209
    
    
    
    5,916
    
    
    
    4,913
    
    
    
    4,908Amortization
    
    
    11,384
    
    
    
    10,443
    
    
    
    9,613
    
    
    
    8,762
    
    
    
    8,258Goodwill impairment
    
    
    106,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income (Loss) from operations
    
    
    (54,927
    )
    
    
    52,299
    
    
    
    52,585
    
    
    
    47,528
    
    
    
    47,837Other expenses (income):Interest expense
    
    
    32,878
    
    
    
    33,559
    
    
    
    33,135
    
    
    
    29,395
    
    
    
    25,854Interest income
    
    
    (427
    )
    
    
    (1,332
    )
    
    
    (1,643
    )
    
    
    (1,275
    )
    
    
    (639
    )(Gain) Loss on derivative instrument
    
    
    102
    
    
    
    198
    
    
    
    225
    
    
    
    (525
    )
    
    
    Income (Loss) before income taxes
    
    
    (87,480
    )
    
    
    19,874
    
    
    
    20,868
    
    
    
    19,933
    
    
    
    22,622Income tax expense
    
    
    7,449
    
    
    
    7,418
    
    
    
    8,256
    
    
    
    7,691
    
    
    
    9,162Net income (loss)
    
    $
    (94,929
    )
    
    $
    12,456
    
    
    $
    12,612
    
    
    $
    12,242
    
    
    $
    13,460Other Data:Adjusted EBITDA (2)
    
    $
    71,032
    
    
    $
    69,951
    
    
    $
    68,114
    
    
    $
    61,203
    
    
    $
    61,003Net cash flows from operating activities
    
    
    31,666
    
    
    
    20,864
    
    
    
    27,432
    
    
    
    22,498
    
    
    
    16,944Net cash flows from investing activities
    
    
    (14,898
    )
    
    
    (22,179
    )
    
    
    (32,809
    )
    
    
    (18,122
    )
    
    
    (748
    )Net cash flows from financing activities
    
    
    (2,055
    )
    
    
    (2,341
    )
    
    
    4,976
    
    
    
    (2,218
    )
    
    
    18,248Capital expenditures
    
    
    7,979
    
    
    
    7,261
    
    
    
    6,543
    
    
    
    7,312
    
    
    
    7,666Business acquisition expenditures (3)
    
    
    6,321
    
    
    
    14,682
    
    
    
    25,874
    
    
    
    10,849
    
    
    
    20,160Number of bookstores open at end of the period
    
    
    277
    
    
    
    260
    
    
    
    244
    
    
    
    139
    
    
    
    124Balance Sheet Data (At End of Period):Cash and cash equivalents
    
    $
    44,038
    
    
    $
    29,326
    
    
    $
    32,983
    
    
    $
    33,383
    
    
    $
    31,224Working capital
    
    
    151,520
    
    
    
    137,100
    
    
    
    130,389
    
    
    
    111,066
    
    
    
    104,008Total assets
    
    
    608,067
    
    
    
    702,087
    
    
    
    695,489
    
    
    
    645,346
    
    
    
    627,239Total debt, including current maturities
    
    
    372,411
    
    
    
    375,204
    
    
    
    375,587
    
    
    
    354,309
    
    
    
    356,402
 (1)
    
    Includes share-based compensation of $1,289; $1,041 and $997 for the fiscal years ended
March 31, 2009, 2008 and 2007, respectively.(2)
    
    Adjusted EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, and goodwill impairment. There was no goodwill impairment in fiscal years
2008, 2007, 2006 and 2005; therefore, Adjusted EBITDA equals EBITDA for those years. As we
are highly-leveraged and as our equity is not publicly-traded, management believes that
non-GAAP financial measures, EBITDA and Adjusted EBITDA, are useful in measuring our
liquidity and provide additional information for determining our ability to meet debt
service requirements. The Senior Subordinated Notes and Senior Credit Facility also use
EBITDA, as defined in those agreements, for certain financial covenants. EBITDA and
Adjusted EBITDA do not represent and should not be considered as an alternative to net cash
flows from operating activities as determined by accounting principles generally accepted
in the United States of America (GAAP), and EBITDA and Adjusted EBITDA do not necessarily
indicate whether cash flows will be sufficient for cash requirements. Items excluded from
EBITDA and Adjusted EBITDA, such as interest, taxes, depreciation, amortization, and
goodwill impairment, are significant components in understanding and assessing our
financial performance. EBITDA and Adjusted EBITDA measures presented may not be comparable
to similarly titled measures presented by other registrants.  19




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Financial Statements and Supplementary Data
 Fiscal Years EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(dollars in thousands)Adjusted EBITDA (2)
    
    $
    71,032
    
    
    $
    69,951
    
    
    $
    68,114
    
    
    $
    61,203
    
    
    $
    61,003Adjustments to reconcile Adjusted
EBITDA to net cash flows from operating
activities:Share-based compensation
    
    
    1,288
    
    
    
    1,041
    
    
    
    997
    
    
    
    
    
    
    
    Interest income
    
    
    427
    
    
    
    1,332
    
    
    
    1,643
    
    
    
    1,275
    
    
    
    639Provision for losses on receivables
    
    
    1,367
    
    
    
    468
    
    
    
    834
    
    
    
    231
    
    
    
    316Cash paid for interest
    
    
    (30,654
    )
    
    
    (31,755
    )
    
    
    (31,388
    )
    
    
    (27,875
    )
    
    
    (25,796
    )Cash paid for income taxes
    
    
    (9,930
    )
    
    
    (13,031
    )
    
    
    (6,551
    )
    
    
    (9,589
    )
    
    
    (4,946
    )(Gain) Loss on disposal of assets
    
    
    125
    
    
    
    285
    
    
    
    (1
    )
    
    
    90
    
    
    
    68Due (to) from Parent
    
    
    (3,160
    )
    
    
    (237
    )
    
    
    (84
    )
    
    
    (75
    )
    
    
    262Changes in operating assets and
liabilities, net of effect of
acquisitions (4)
    
    
    1,171
    
    
    
    (7,190
    )
    
    
    (6,132
    )
    
    
    (2,762
    )
    
    
    (14,602
    )Net Cash Flows from Operating Activities
    
    $
    31,666
    
    
    $
    20,864
    
    
    $
    27,432
    
    
    $
    22,498
    
    
    $
    16,944
 (3)
    
    Business acquisition expenditures represent established businesses purchased by us.(4)
    
    Changes in operating assets and liabilities, net of effect of acquisitions includes the
changes in the balances of receivables, inventories, prepaid expenses and other current
assets, other assets, accounts payable, accrued employee compensation and benefits, accrued
incentives, accrued expenses, deferred revenue, and other long-term liabilities.  20




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Financial Statements and Supplementary
Data
 Executive Summary
 Overview
 Acquisitions.
 Revenue Results.
 Adjusted EBITDA Results.
 Goodwill Impairment. Financial Statements and Supplementary Data
 Challenges and Expectations
   21




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Fiscal Year Ended March 31, 2009 Compared With Fiscal Year Ended March 31, 2008.
 Revenues .
 Fiscal Year Ended
    
    
    ChangeMarch 31, 2009
    
    
    March 31, 2008
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    472,038,009
    
    
    $
    454,374,873
    
    
    $
    17,663,136
    
    
    
    3.9
    %Textbook Division
    
    
    147,287,779
    
    
    
    139,685,035
    
    
    
    7,602,744
    
    
    
    5.4
    %Complementary Services Division
    
    
    34,233,883
    
    
    
    34,372,223
    
    
    
    (138,340
    )
    
    
    (0.4
    )%Intercompany Eliminations
    
    
    (42,843,490
    )
    
    
    (47,184,345
    )
    
    
    4,340,855
    
    
    
    (9.2
    )%$
    610,716,181
    
    
    $
    581,247,786
    
    
    $
    29,468,395
    
    
    
    5.1
    %
   Gross profit .
 Selling, general and administrative expenses .
  22




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Earnings (loss) before interest, taxes, depreciation, amortization, and goodwill impairment
(Adjusted EBITDA).
 Fiscal Year Ended
    
    
    ChangeMarch 31, 2009
    
    
    March 31, 2008
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    44,029,528
    
    
    $
    45,941,624
    
    
    $
    (1,912,096
    )
    
    
    (4.2
    )%Textbook Division
    
    
    39,009,073
    
    
    
    33,731,382
    
    
    
    5,277,691
    
    
    
    15.6
    %Complementary Services
Division
    
    
    1,320,700
    
    
    
    1,558,414
    
    
    
    (237,714
    )
    
    
    (15.3
    )%Corporate Administration
    
    
    (13,326,971
    )
    
    
    (11,280,477
    )
    
    
    (2,046,494
    )
    
    
    (18.1
    )%$
    71,032,330
    
    
    $
    69,950,943
    
    
    $
    1,081,387
    
    
    
    1.5
    %
    23




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Financial Statements and
Supplementary Data
 Fiscal Year EndedMarch 31, 2009
    
    
    March 31, 2008Adjusted EBITDA (1)
    
    $
    71,032,330
    
    
    $
    69,950,943Adjustments to reconcile Adjusted
EBITDA to net cash flows from operating
activities:Share-based compensation
    
    
    1,288,543
    
    
    
    1,040,599Interest income
    
    
    426,536
    
    
    
    1,332,497Provision for losses on receivables
    
    
    1,366,979
    
    
    
    468,007Cash paid for interest
    
    
    (30,653,694
    )
    
    
    (31,755,319
    )Cash paid for income taxes
    
    
    (9,930,165
    )
    
    
    (13,030,853
    )Loss on disposal of assets
    
    
    124,871
    
    
    
    284,891Tax expense due to parent
    
    
    (3,160,038
    )
    
    
    (236,872
    )Changes in operating assets and
liabilities, net of effect of
acquisitions (2)
    
    
    1,170,551
    
    
    
    (7,190,132
    )Net Cash Flows from Operating Activities
    
    $
    31,665,913
    
    
    $
    20,863,761Net Cash Flows from Investing Activities
    
    $
    (14,898,403
    )
    
    $
    (22,179,160
    )Net Cash Flows from Financing Activities
    
    $
    (2,055,498
    )
    
    $
    (2,341,021
    )
 (1)
    
    March 31, 2009 Adjusted EBITDA includes an adjustment for
goodwill impairment. There was no goodwill impairment in fiscal year
2008; therefore, Adjusted EBITDA equals EBITDA for fiscal 2008.(2)
    
    Changes in operating assets and liabilities, net of effect of
acquisitions, include the changes in the balances of receivables,
inventories, prepaid expenses and other current assets, other assets,
accounts payable, accrued employee compensation and benefits, accrued
incentives, accrued expenses, deferred revenue, and other long-term
liabilities. Depreciation expense.
 Amortization expense.
 Goodwill impairment.
  24




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Interest expense, net .
 Income taxes
  25




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Fiscal Year ended March 31, 2008 Compared With Fiscal Year ended March 31, 2007.
 Revenues .
 Fiscal Year Ended
    
    
    ChangeMarch 31, 2008
    
    
    March 31, 2007
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    454,374,873
    
    
    $
    418,476,613
    
    
    $
    35,898,260
    
    
    
    8.6
    %Textbook Division
    
    
    139,685,035
    
    
    
    135,798,392
    
    
    
    3,886,643
    
    
    
    2.9
    %Complementary Services Division
    
    
    34,372,223
    
    
    
    32,215,306
    
    
    
    2,156,917
    
    
    
    6.7
    %Intercompany Eliminations
    
    
    (47,184,345
    )
    
    
    (42,062,347
    )
    
    
    (5,121,998
    )
    
    
    12.2
    %$
    581,247,786
    
    
    $
    544,427,964
    
    
    $
    36,819,822
    
    
    
    6.8
    %
   Gross profit .
 Selling, general and administrative expenses .
 Closure of California warehouse expenses.
  26




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##### Table of Contents



Earnings (loss) before interest, taxes, depreciation, and amortization (EBITDA).
 Fiscal Year Ended
    
    
    ChangeMarch 31, 2008
    
    
    March 31, 2007
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    45,941,624
    
    
    $
    44,511,202
    
    
    $
    1,430,422
    
    
    
    3.2
    %Textbook Division
    
    
    33,731,382
    
    
    
    32,210,010
    
    
    
    1,521,372
    
    
    
    4.7
    %Complementary Services
Division
    
    
    1,558,414
    
    
    
    2,716,144
    
    
    
    (1,157,730
    )
    
    
    (42.6
    )%Corporate Administration
    
    
    (11,280,477
    )
    
    
    (11,323,483
    )
    
    
    43,006
    
    
    
    0.4
    %$
    69,950,943
    
    
    $
    68,113,873
    
    
    $
    1,837,070
    
    
    
    2.7
    %
    27




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##### Table of Contents



Financial Statements and Supplementary
Data
 Fiscal Year EndedMarch 31, 2008
    
    
    March 31, 2007EBITDA
    
    $
    69,950,943
    
    
    $
    68,113,873Adjustments to reconcile EBITDA to net
cash flows from operating activities:Share-based compensation
    
    
    1,040,599
    
    
    
    996,957Interest income
    
    
    1,332,497
    
    
    
    1,643,598Provision for losses on receivables
    
    
    468,007
    
    
    
    834,442Cash paid for interest
    
    
    (31,755,319
    )
    
    
    (31,388,513
    )Cash paid for income taxes
    
    
    (13,030,853
    )
    
    
    (6,551,344
    )(Gain) Loss on disposal of assets
    
    
    284,891
    
    
    
    (575
    )Tax expense due to parent
    
    
    (236,872
    )
    
    
    (83,597
    )Changes in operating assets and
liabilities, net of effect of
acquisitions (1)
    
    
    (7,190,132
    )
    
    
    (6,132,260
    )Net Cash Flows from Operating Activities
    
    $
    20,863,761
    
    
    $
    27,432,581Net Cash Flows from Investing Activities
    
    $
    (22,179,160
    )
    
    $
    (32,808,754
    )Net Cash Flows from Financing Activities
    
    $
    (2,341,021
    )
    
    $
    4,976,327
 (1)
    
    Changes in operating assets and liabilities, net of effect of acquisitions, includes the
changes in the balances of receivables, inventories, prepaid expenses and other current
assets, other assets, accounts payable, accrued employee compensation and benefits, accrued
incentives, accrued expenses, deferred revenue, and other long-term liabilities. Depreciation expense.
 Amortization expense.
 Interest expense, net .
 Income taxes
  28




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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Revenue Recognition
 Bad Debts
 Inventory Valuation and Obsolescence
 Goodwill and Intangible Assets Goodwill and Other Intangible Assets Impairment of
Long-Lived Assets
  29




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Accrued Incentives.
 Income Taxes
 Derivative Financial Instruments.
  30




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LIQUIDITY AND CAPITAL RESOURCES
 Financing Activities
       31




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Investing Cash Flows
      32




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Operating Cash Flows
   Covenant Restrictions
   33




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Sources of and Needs for Capital
     34




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##### Table of Contents



Off-Balance Sheet Arrangements
   Payments Due by PeriodContractual
    
    
    
    
    
    Less Than
    
    
    2-3
    
    
    4-5
    
    
    After 5Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-term debt
    
    $
    368,363,179
    
    
    $
    6,917,451
    
    
    $
    361,322,726
    
    
    $
    123,002
    
    
    $
    Interest on long-term debt (1)
    
    
    73,678,595
    
    
    
    32,660,697
    
    
    
    41,005,407
    
    
    
    12,491
    
    
    
    Capital lease obligations
    
    
    4,047,350
    
    
    
    748,692
    
    
    
    1,507,043
    
    
    
    740,429
    
    
    
    1,051,186Interest on capital lease obligations
    
    
    1,139,623
    
    
    
    310,778
    
    
    
    432,131
    
    
    
    238,465
    
    
    
    158,249Operating leases
    
    
    84,472,000
    
    
    
    19,471,000
    
    
    
    28,611,000
    
    
    
    16,609,000
    
    
    
    19,781,000Uncertain tax position liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unconditional purchase obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    531,700,747
    
    
    $
    60,108,618
    
    
    $
    432,878,307
    
    
    $
    17,723,387
    
    
    $
    20,990,435
 Total
    
    
    Amount of Commitment Expiration Per PeriodOther Commercial
    
    Amounts
    
    
    Less Than
    
    
    2-3
    
    
    4-5
    
    
    Over 5Commitments
    
    Committed
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsUnused line of credit (2)
    
    $
    65,000,000
    
    
    $
    
    
    
    $
    65,000,000
    
    
    $
    
    
    
    $
    
 (1)
    
    Interest on the variable rate debt is estimated based upon implied forward rates in the
yield curve at March 31, 2009.(2)
    
    Interest is not estimated on the line of credit due to uncertainty surrounding the
timing and extent of usage of the line of credit. Transactions with Related and Certain Other Parties
   Impact of Inflation
   35




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Accounting Standards Not Yet Adopted
 Subsequent
Events
 Disclosures about Derivative Instruments and
Hedging Activities (an amendment of FASB Statement No. 133)
 Business Combinations Noncontrolling Interests in Consolidated Financial
Statements
 Fair Value Measurements
  36




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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
   37




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   Fixed Rate Debt
    
    
    Variable Rate DebtWeighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AveragePrincipal
    
    
    Interest
    
    
    Principal
    
    
    InterestCash Flows
    
    
    Rate
    
    
    Cash Flows (1)
    
    
    RateFiscal Year Ended March 31:2010
    
    $
    797,572
    
    
    
    8.64
    %
    
    $
    6,868,571
    
    
    
    9.25
    %2011
    
    
    972,328
    
    
    
    8.64
    %
    
    
    186,207,775
    
    
    
    9.25
    %2012
    
    
    175,649,666
    
    
    
    8.63
    %
    
    
    
    
    
    
    2013
    
    
    461,245
    
    
    
    8.63
    %
    
    
    
    
    
    
    2014
    
    
    402,187
    
    
    
    8.46
    %
    
    
    
    
    
    
    Thereafter
    
    
    1,051,185
    
    
    
    8.29
    %
    
    
    
    
    
    
    Total
    
    $
    179,334,183
    
    
    
    8.63
    %
    
    $
    193,076,346
    
    
    
    9.25
    %Fair Value
    
    $
    90,367,000
    
    
    
    
    
    
    $
    160,253,000
    
    
    
    
 (1)
    
    Principal cash flows represent scheduled principal payments and are adjusted for
anticipated excess cash flow payments and certain optional prepayments, if any, to be
applied toward principal balances.  38




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March 31,
    
    
    March 31,2009
    
    
    2008Carrying Values:Fixed rate debt
    
    $
    179,334,183
    
    
    $
    180,100,925Variable rate debt
    
    
    193,076,346
    
    
    
    195,103,081Interest rate swap  in-the-money (out-of-the-money)
    
    
    
    
    
    
    (1,119,000
    )Fair Values:Fixed rate debt
    
    $
    90,367,000
    
    
    $
    161,984,000Variable rate debt
    
    
    160,253,000
    
    
    
    179,495,000Interest rate swap  in-the-money (out-of-the-money)
    
    
    
    
    
    
    (1,119,000
    )Overall Weighted-Average Interest Rates:Fixed rate debt
    
    
    8.63
    %
    
    
    8.64
    %Variable rate debt
    
    
    9.25
    %
    
    
    5.38
    %Interest rate swap receive rate
    
    
    
    
    
    
    2.63
    %Interest rate swap pay rate
    
    
    
    
    
    
    4.34
    %
  39




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 Index to Consolidated Financial Statements of Nebraska Book Company, Inc.
 Report of Independent Registered Public Accounting Firm
    
    
    41Consolidated Balance Sheets as of March 31, 2009 and March 31, 2008
    
    
    42Consolidated Statements of Operations for the Years Ended March 31, 2009, 2008 and 2007
    
    
    43Consolidated Statements of Stockholders Equity for the Years Ended March 31, 2009, 2008 and 2007
    
    
    44Consolidated Statements of Cash Flows for the Years Ended March 31, 2009, 2008 and 2007
    
    
    45Notes to Consolidated Financial Statements
    
    
    46
  40




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  41




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##### Table of Contents



NEBRASKA BOOK COMPANY, INC.
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    March 31,2009
    
    
    2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    44,038,468
    
    
    $
    29,326,456Receivables, net
    
    
    61,301,636
    
    
    
    57,396,508Inventories
    
    
    93,115,663
    
    
    
    99,011,087Recoverable income taxes
    
    
    2,869,583
    
    
    
    Deferred income taxes
    
    
    6,581,802
    
    
    
    6,058,093Prepaid expenses and other assets
    
    
    3,950,874
    
    
    
    2,539,077Total current assets
    
    
    211,858,026
    
    
    
    194,331,221PROPERTY AND EQUIPMENT, net of depreciation & amortization
    
    
    45,638,522
    
    
    
    45,066,180GOODWILL
    
    
    215,436,126
    
    
    
    320,367,273CUSTOMER RELATIONSHIPS, net of amortization
    
    
    85,644,340
    
    
    
    91,385,860TRADENAME
    
    
    31,320,000
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net of amortization
    
    
    9,172,622
    
    
    
    12,103,357DEBT ISSUE COSTS, net of amortization
    
    
    6,875,122
    
    
    
    5,119,263OTHER ASSETS
    
    
    2,121,949
    
    
    
    2,394,267$
    608,066,707
    
    
    $
    702,087,421LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    26,865,614
    
    
    $
    28,631,029Accrued employee compensation and benefits
    
    
    13,780,209
    
    
    
    12,100,640Accrued interest
    
    
    678,516
    
    
    
    1,778,937Accrued incentives
    
    
    6,110,700
    
    
    
    7,108,857Accrued expenses
    
    
    4,277,105
    
    
    
    3,172,122Income taxes payable
    
    
    
    
    
    
    847,370Deferred revenue
    
    
    959,274
    
    
    
    862,994Current maturities of long-term debt
    
    
    6,917,451
    
    
    
    2,070,657Current maturities of capital lease obligations
    
    
    748,692
    
    
    
    658,415Total current liabilities
    
    
    60,337,561
    
    
    
    57,231,021LONG-TERM DEBT, net of current maturities
    
    
    361,445,728
    
    
    
    368,363,176CAPITAL LEASE OBLIGATIONS, net of current maturities
    
    
    3,298,658
    
    
    
    4,111,758OTHER LONG-TERM LIABILITIES
    
    
    5,304,166
    
    
    
    4,467,504DEFERRED INCOME TAXES
    
    
    54,313,459
    
    
    
    55,104,415DUE TO PARENT
    
    
    20,130,189
    
    
    
    16,970,151COMMITMENTS (Note H)STOCKHOLDERS EQUITY:Common stock, voting, authorized 50,000 shares
of $1.00 par value; issued and outstanding 100
shares
    
    
    100
    
    
    
    100Additional paid-in capital
    
    
    148,135,923
    
    
    
    138,087,705Retained earnings (accumulated deficit)
    
    
    (44,899,077
    )
    
    
    58,499,591Accumulated other comprehensive loss
    
    
    
    
    
    
    (748,000
    )Total stockholders equity
    
    
    103,236,946
    
    
    
    195,839,396$
    608,066,707
    
    
    $
    702,087,421
  42




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##### Table of Contents



NEBRASKA BOOK COMPANY, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2007REVENUES, net of returns
    
    $
    610,716,181
    
    
    $
    581,247,786
    
    
    $
    544,427,964COSTS OF SALES (exclusive of depreciation shown below)
    
    
    371,369,240
    
    
    
    354,139,474
    
    
    
    332,443,991Gross profit
    
    
    239,346,941
    
    
    
    227,108,312
    
    
    
    211,983,973OPERATING EXPENSES:Selling, general and administrative
    
    
    168,314,611
    
    
    
    157,193,426
    
    
    
    143,095,625Closure of California Warehouse
    
    
    
    
    
    
    (36,057
    )
    
    
    774,475Depreciation
    
    
    7,602,631
    
    
    
    7,208,504
    
    
    
    5,915,758Amortization
    
    
    11,384,020
    
    
    
    10,443,335
    
    
    
    9,613,598Goodwill impairment
    
    
    106,972,000
    
    
    
    
    
    
    
    294,273,262
    
    
    
    174,809,208
    
    
    
    159,399,456INCOME (LOSS) FROM OPERATIONS
    
    
    (54,926,321
    )
    
    
    52,299,104
    
    
    
    52,584,517OTHER EXPENSES (INCOME):Interest expense
    
    
    32,878,225
    
    
    
    33,559,239
    
    
    
    33,135,537Interest income
    
    
    (426,536
    )
    
    
    (1,332,497
    )
    
    
    (1,643,598
    )Loss on derivative financial instrument
    
    
    102,000
    
    
    
    198,000
    
    
    
    225,00032,553,689
    
    
    
    32,424,742
    
    
    
    31,716,939INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (87,480,010
    )
    
    
    19,874,362
    
    
    
    20,867,578INCOME TAX EXPENSE
    
    
    7,448,658
    
    
    
    7,418,339
    
    
    
    8,256,092NET INCOME (LOSS)
    
    $
    (94,928,668
    )
    
    $
    12,456,023
    
    
    $
    12,611,486
   43




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##### Table of Contents



NEBRASKA BOOK COMPANY, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Retained
    
    
    AccumulatedAdditional
    
    
    Earnings
    
    
    OtherCommon
    
    
    Paid-in
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCE, April 1, 2006
    
    $
    100
    
    
    $
    138,022,098
    
    
    $
    33,432,082
    
    
    $
    1,414,000
    
    
    $
    172,868,280Contributed capital
    
    
    
    
    
    
    (4,869
    )
    
    
    
    
    
    
    
    
    
    
    (4,869
    )
    
    $
    Net income
    
    
    
    
    
    
    
    
    
    
    12,611,486
    
    
    
    
    
    
    
    12,611,486
    
    
    
    12,611,486Other comprehensive loss, net of taxes:Unrealized loss on
interest rate swap
agreement, net of
taxes of $506,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (801,000
    )
    
    
    (801,000
    )
    
    
    (801,000
    )BALANCE, March 31, 2007
    
    
    100
    
    
    
    138,017,229
    
    
    
    46,043,568
    
    
    
    613,000
    
    
    
    184,673,897
    
    
    $
    11,810,486Contributed capital
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    $
    Net income
    
    
    
    
    
    
    
    
    
    
    12,456,023
    
    
    
    
    
    
    
    12,456,023
    
    
    
    12,456,023Share-based
compensation
attributable to NBC
Holdings Corp. stock
options
    
    
    
    
    
    
    70,489
    
    
    
    
    
    
    
    
    
    
    
    70,489
    
    
    
    Other comprehensive loss, net of taxes:Unrealized loss on
interest rate swap
agreement, net of
taxes of $861,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,361,000
    )
    
    
    (1,361,000
    )
    
    
    (1,361,000
    )BALANCE, March 31, 2008
    
    $
    100
    
    
    $
    138,087,705
    
    
    $
    58,499,591
    
    
    $
    (748,000
    )
    
    $
    195,839,396
    
    
    $
    11,095,023Contributed capital
    
    
    
    
    
    
    10,004,802
    
    
    
    
    
    
    
    
    
    
    
    10,004,802
    
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    (94,928,668
    )
    
    
    
    
    
    
    (94,928,668
    )
    
    
    (94,928,668
    )Share-based
compensation
attributable to NBC
Holdings Corp. stock
options
    
    
    
    
    
    
    43,416
    
    
    
    
    
    
    
    
    
    
    
    43,416
    
    
    
    Dividends declared
    
    
    
    
    
    
    
    
    
    
    (8,470,000
    )
    
    
    
    
    
    
    (8,470,000
    )
    
    
    Other comprehensive income, net of taxes:Unrealized gain on
interest rate swap
agreement, net of
taxes of $473,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    748,000
    
    
    
    748,000
    
    
    
    748,000BALANCE, March 31, 2009
    
    $
    100
    
    
    $
    148,135,923
    
    
    $
    (44,899,077
    )
    
    $
    
    
    
    $
    103,236,946
    
    
    $
    (94,180,668
    )
   44




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##### Table of Contents



NEBRASKA BOOK COMPANY, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (94,928,668
    )
    
    $
    12,456,023
    
    
    $
    12,611,486Adjustments to reconcile net income (loss) to net cash flows from operating activities:Share-based compensation
    
    
    1,288,543
    
    
    
    1,040,599
    
    
    
    996,957Provision for losses on receivables
    
    
    1,366,979
    
    
    
    468,007
    
    
    
    834,442Depreciation
    
    
    7,602,631
    
    
    
    7,208,504
    
    
    
    5,915,758Amortization
    
    
    13,589,972
    
    
    
    12,298,118
    
    
    
    11,336,553Goodwill impairment
    
    
    106,972,000
    
    
    
    
    
    
    
    Loss on derivative financial instrument
    
    
    102,000
    
    
    
    198,000
    
    
    
    225,000(Gain) Loss on disposal of assets
    
    
    124,871
    
    
    
    284,891
    
    
    
    (575
    )Deferred income taxes
    
    
    (1,947,665
    )
    
    
    (3,443,682
    )
    
    
    (2,148,119
    )Changes in operating assets and liabilities, net of effect of acquisitions:Receivables
    
    
    (5,271,324
    )
    
    
    (2,920,327
    )
    
    
    (9,924,934
    )Inventories
    
    
    8,101,584
    
    
    
    (1,425,783
    )
    
    
    (3,566,490
    )Recoverable income taxes
    
    
    (2,846,510
    )
    
    
    
    
    
    
    1,438,819Prepaid expenses and other assets
    
    
    (1,400,805
    )
    
    
    (545,433
    )
    
    
    (219,494
    )Other assets
    
    
    275,316
    
    
    
    490,219
    
    
    
    (714,295
    )Accounts payable
    
    
    (2,132,402
    )
    
    
    (1,098,060
    )
    
    
    5,123,589Accrued employee compensation and benefits
    
    
    1,679,569
    
    
    
    (2,112,361
    )
    
    
    2,617,465Accrued interest
    
    
    18,579
    
    
    
    (50,863
    )
    
    
    24,069Accrued incentives
    
    
    (998,157
    )
    
    
    125,595
    
    
    
    (576,234
    )Accrued expenses
    
    
    1,104,983
    
    
    
    837,883
    
    
    
    1,226,030Income taxes payable
    
    
    (847,370
    )
    
    
    (2,405,704
    )
    
    
    2,330,451Deferred revenue
    
    
    96,280
    
    
    
    (35,672
    )
    
    
    184,243Other long-term liabilities
    
    
    (284,493
    )
    
    
    (506,193
    )
    
    
    (282,140
    )Net cash flows from operating activities
    
    
    31,665,913
    
    
    
    20,863,761
    
    
    
    27,432,581CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (7,979,371
    )
    
    
    (7,260,909
    )
    
    
    (6,543,074
    )Acquisitions, net of cash acquired
    
    
    (6,320,772
    )
    
    
    (14,681,655
    )
    
    
    (25,873,662
    )Proceeds from sale of property and equipment
    
    
    35,503
    
    
    
    36,385
    
    
    
    313,505Software development costs
    
    
    (633,763
    )
    
    
    (272,981
    )
    
    
    (705,523
    )Net cash flows from investing activities
    
    
    (14,898,403
    )
    
    
    (22,179,160
    )
    
    
    (32,808,754
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    24,000,000Payment of financing costs
    
    
    (3,961,811
    )
    
    
    
    
    
    
    (964,774
    )Principal payments on long-term debt
    
    
    (2,070,654
    )
    
    
    (1,957,852
    )
    
    
    (3,821,172
    )Principal payments on capital lease obligations
    
    
    (722,823
    )
    
    
    (624,910
    )
    
    
    (390,205
    )Net decrease in revolving credit facility
    
    
    
    
    
    
    
    
    
    
    (13,931,119
    )Dividends paid to parent
    
    
    (8,470,000
    )
    
    
    
    
    
    
    Capital contributions
    
    
    10,009,752
    
    
    
    4,869
    
    
    
    Due to parent
    
    
    3,160,038
    
    
    
    236,872
    
    
    
    83,597Net cash flows from financing activities
    
    
    (2,055,498
    )
    
    
    (2,341,021
    )
    
    
    4,976,327NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    14,712,012
    
    
    
    (3,656,420
    )
    
    
    (399,846
    )CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    29,326,456
    
    
    
    32,982,876
    
    
    
    33,382,722CASH AND CASH EQUIVALENTS, End of period
    
    $
    44,038,468
    
    
    $
    29,326,456
    
    
    $
    32,982,876SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:Cash paid during the period for:Interest
    
    $
    30,653,694
    
    
    $
    31,755,319
    
    
    $
    31,388,513Income taxes
    
    
    9,930,165
    
    
    
    13,030,853
    
    
    
    6,551,344Noncash investing and financing activities:Property acquired through capital leases
    
    $
    
    
    
    $
    2,200,000
    
    
    $
    1,079,000Accumulated other comprehensive income (loss):Unrealized gain (loss) on interest rate swap agreement, net of income taxes
    
    
    748,000
    
    
    
    (1,361,000
    )
    
    
    (801,000
    )Deferred taxes resulting from unrealized gain (loss) on interest rate swap agreement
    
    
    473,000
    
    
    
    (861,000
    )
    
    
    (506,000
    )Other intangible agreement to be paid over three years
    
    
    
    
    
    
    1,585,407
    
    
    
    Unpaid consideration associated with bookstore acquisitions
    
    
    155,000
    
    
    
    700,000
    
    
    
    
  45




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##### Table of Contents



NEBRASKA BOOK COMPANY, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 A. NATURE OF OPERATIONS
    B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Principles of Consolidation:
 Revenue Recognition:
 Bookstore Division
 Textbook Division
 Complementary Services Division
  46




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##### Table of Contents



Shipping and Handling Fees and Costs:
 Sales Tax Collections:
 Advertising
 Use of Estimates:
 Cash and Cash Equivalents:
 Inventories:
 Property and Equipment:
 Goodwill:
  47




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##### Table of Contents



Identifiable Intangibles  Customer Relationships:
 Accounting for the Impairment or Disposal of Long-Lived Assets
 Identifiable Intangibles  Tradename: Goodwill and Other
Intangible Assets,
 Other Identifiable Intangibles  Developed Technology: Accounting
for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use
  Accounting for the Impairment or Disposal of Long-Lived Assets
   Other Identifiable Intangibles  Covenants Not to Compete:
  48




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##### Table of Contents



Other Identifiable Intangibles  Contract-Managed Acquisition Costs:
 Other Identifiable Intangibles  Other:
 Debt Issue Costs:
 Accrued Incentives.
 Derivative Financial Instruments
 Fair Value of Financial Instruments:
 Share-Based Compensation: Share-Based Payment Accounting for
Stock-Based Compensation , Accounting for Stock Issued to Employees
   49




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##### Table of Contents



Nonvested Stock:
 Income Taxes:
 Accounting for Uncertainty
to Income Taxes
 Comprehensive Income (Loss):
 Accounting Standards Not Yet Adopted : Subsequent
Events
 Disclosures about Derivative Instruments and
Hedging Activities (an amendment of FASB Statement No. 133)
 Business Combinations Noncontrolling Interests in Consolidated Financial
Statements
  50




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##### Table of Contents



Fair Value Measurements
 C. RECEIVABLES
  March 31,2009
    
    
    2008Trade receivables, less allowance for
doubtful accounts of $1,283,360 and
$1,033,360 at March 31, 2009 and 2008,
respectively
    
    $
    29,097,291
    
    
    $
    24,992,495Receivables from book publishers for returns
    
    
    25,233,975
    
    
    
    25,096,497Advances for book buy-backs
    
    
    2,795,286
    
    
    
    3,773,634Other
    
    
    4,175,084
    
    
    
    3,533,882$
    61,301,636
    
    
    $
    57,396,508
  D. INVENTORIES
  March 31,2009
    
    
    2008Bookstore Division
    
    $
    59,785,703
    
    
    $
    65,769,314Textbook Division
    
    
    30,571,333
    
    
    
    30,575,106Complementary Services Division
    
    
    2,758,627
    
    
    
    2,666,667$
    93,115,663
    
    
    $
    99,011,087
    51




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##### Table of Contents



E. PROPERTY AND EQUIPMENT
  March 31,2009
    
    
    2008Land
    
    $
    3,565,382
    
    
    $
    3,565,382Buildings and improvements
    
    
    25,675,055
    
    
    
    25,028,868Leasehold improvements
    
    
    14,598,193
    
    
    
    10,376,770Furniture and fixtures
    
    
    15,976,841
    
    
    
    13,750,380Information systems
    
    
    14,650,613
    
    
    
    12,831,900Automobiles and trucks
    
    
    220,008
    
    
    
    234,620Machinery
    
    
    378,966
    
    
    
    374,074Projects in process
    
    
    178,309
    
    
    
    1,282,80175,243,367
    
    
    
    67,444,795Less: Accumulated depreciation & amortization
    
    
    (29,604,845
    )
    
    
    (22,378,615
    )$
    45,638,522
    
    
    $
    45,066,180
 F. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLES
      52




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##### Table of Contents



Bookstore
    
    
    CorporateDivision
    
    
    Administration
    
    
    TotalBalance, April 1, 2007
    
    $
    42,544,489
    
    
    $
    269,061,875
    
    
    $
    311,606,364Additions to goodwill:Bookstore acquisitions
    
    
    8,760,909
    
    
    
    
    
    
    
    8,760,909Balance, March 31, 2008
    
    
    51,305,398
    
    
    
    269,061,875
    
    
    
    320,367,273Additions to goodwill:Bookstore acquisitions
    
    
    2,040,853
    
    
    
    
    
    
    
    2,040,853Impairment
    
    
    
    
    
    
    (106,972,000
    )
    
    
    (106,972,000
    )Balance, March 31, 2009
    
    $
    53,346,251
    
    
    $
    162,089,875
    
    
    $
    215,436,126
    53




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##### Table of Contents



March 31, 2009Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountCustomer relationships
    
    $
    114,830,000
    
    
    $
    (29,185,660
    )
    
    $
    85,644,340Developed technology
    
    
    13,086,017
    
    
    
    (10,069,126
    )
    
    
    3,016,891Covenants not to compete
    
    
    6,614,699
    
    
    
    (4,069,131
    )
    
    
    2,545,568Contract-managed acquisition costs
    
    
    4,816,378
    
    
    
    (1,954,878
    )
    
    
    2,861,500Other
    
    
    1,585,407
    
    
    
    (836,744
    )
    
    
    748,663$
    140,932,501
    
    
    $
    (46,115,539
    )
    
    $
    94,816,962
 March 31, 2008Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountCustomer relationships
    
    $
    114,830,000
    
    
    $
    (23,444,140
    )
    
    $
    91,385,860Developed technology
    
    
    12,452,254
    
    
    
    (7,950,631
    )
    
    
    4,501,623Covenants not to compete
    
    
    7,451,032
    
    
    
    (3,546,939
    )
    
    
    3,904,093Contract-managed acquisition costs
    
    
    3,652,771
    
    
    
    (1,232,261
    )
    
    
    2,420,510Other
    
    
    1,585,407
    
    
    
    (308,276
    )
    
    
    1,277,131$
    139,971,464
    
    
    $
    (36,482,247
    )
    
    $
    103,489,217
  AmortizationExpenseFiscal year ended March 31, 2009
    
    $
    11,384,020Fiscal year ended March 31, 2008
    
    
    10,443,335Fiscal year ended March 31, 2007
    
    
    9,613,598Estimated amortization expense
for the fiscal years ending March 31:2010
    
    $
    10,709,7582011
    
    
    7,593,7252012
    
    
    6,565,8862013
    
    
    6,251,0482014
    
    
    5,990,047
   54




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##### Table of Contents



G. ACCRUED EXPENSES
  March 31,2009
    
    
    2008Accrued rent
    
    $
    3,725,616
    
    
    $
    2,626,901Accrued property taxes
    
    
    551,489
    
    
    
    545,221$
    4,277,105
    
    
    $
    3,172,122
 H. LONG-TERM DEBT
  March 31,2009
    
    
    2008Term Loan due March 4, 2011, principal
and interest payments due quarterly,
interest accrues at a floating rate based
on Eurodollar rate plus an applicable
margin percent (9.25% and 5.13%, as reset
on March 31, 2009 and March 30, 2008,
respectively)
    
    $
    193,076,346
    
    
    $
    195,103,081Senior Subordinated Notes, unsecured,
principal due on March 15, 2012, interest
payments accrue at a fixed rate of
8.625% and are payable semi-annually on
March 15 and September 15 beginning
September 15, 2004
    
    
    175,000,000
    
    
    
    175,000,000Mortgage note payable with an insurance
company assumed with the acquisition of a
bookstore facility, due December 1, 2013,
monthly payments of $6,446 including
interest at 10.75%
    
    
    286,833
    
    
    
    330,752368,363,179
    
    
    
    370,433,833Less current maturities of long-term debt
    
    
    (6,917,451
    )
    
    
    (2,070,657
    )Long-term debt
    
    $
    361,445,728
    
    
    $
    368,363,176
    55




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##### Table of Contents



FiscalYear2010
    
    $
    6,917,4512011
    
    
    186,262,1782012
    
    
    175,060,5482013
    
    
    67,3872014
    
    
    55,615
  56




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##### Table of Contents



I. LEASES AND OTHER COMMITMENTS
    Capital
    
    
    OperatingFiscal Year
    
    Leases
    
    
    Leases2010
    
    $
    1,059,469
    
    
    $
    19,471,0002011
    
    
    1,174,565
    
    
    
    15,583,0002012
    
    
    764,607
    
    
    
    13,028,0002013
    
    
    529,922
    
    
    
    9,931,0002014
    
    
    448,973
    
    
    
    6,678,000Thereafter
    
    
    1,209,437
    
    
    
    19,781,000Total minimum lease payments
    
    
    5,186,973
    
    
    $
    84,472,000Less amount representing interest at 9.2%
    
    
    (1,139,623
    )Present value of minimum lease payments
    
    
    4,047,350Less obligations due within one year
    
    
    (748,692
    )Long-term obligations
    
    $
    3,298,658
   57




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##### Table of Contents



J. DERIVATIVE FINANCIAL INSTRUMENTS
 Accounting for Derivative Instruments and Hedging Activities
  March 31,2008Total indebtedness outstanding
    
    $
    375,204,006Term Loan subject to Eurodollar interest rate fluctuations
    
    
    195,103,081Notional amount under swap agreement
    
    
    130,000,000Fixed interest rate indebtedness
    
    
    180,100,925Variable interest rate, including applicable margin:Term Loan
    
    
    5.13
    %
  (1)
    
    Formal documentation of the hedging relationship and the Companys risk
management objective and strategy for undertaking the hedge were in place.(2)
    
    The interest rate swap agreement was expected to be highly effective in
offsetting the change in the value of the hedged portion of the interest payments
attributable to the Term Loan.
    58




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##### Table of Contents



Fiscal Years EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Balance Sheet Components:Other assets (Accrued interest)  fair
value of swap agreement
    
    $
    
    
    
    $
    (1,119,000
    )
    
    $
    1,301,000Deferred income taxes
    
    
    
    
    
    
    433,473
    
    
    
    (503,975
    )$
    
    
    
    $
    (685,527
    )
    
    $
    797,025Portion of Agreement Subsequent to September
30, 2005 Hedge Designation:Increase (Decrease) in fair value of
swap agreement
    
    $
    1,221,000
    
    
    $
    (2,222,000
    )
    
    $
    (1,307,000
    )Portion of Agreement Prior to September
30, 2005 Hedge Designation:Decrease in fair value of swap agreement
    
    
    (102,000
    )
    
    
    (198,000
    )
    
    
    (225,000
    )
 K. FAIR VALUE MEASUREMENTS
 Fair Value Measurements
   59




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##### Table of Contents



Fair Value Measurements at Reporting Date Using:Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableMarch 31,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash equivalents (Treasury note)
    
    $
    4,999,319
    
    
    $
    
    
    
    $
    4,999,319
    
    
    $
    Fixed rate debt
    
    
    90,367,000
    
    
    
    
    
    
    
    90,367,000
    
    
    
    Variable rate debt (excluding Revolving Credit Facility)
    
    
    160,253,000
    
    
    
    
    
    
    
    160,253,000
    
    
    
    
 L. INCOME TAXES
  Fiscal Years EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Current:Federal
    
    $
    8,043,362
    
    
    $
    9,375,591
    
    
    $
    8,964,579State
    
    
    1,352,961
    
    
    
    1,486,430
    
    
    
    1,439,632Deferred
    
    
    (1,947,665
    )
    
    
    (3,443,682
    )
    
    
    (2,148,119
    )$
    7,448,658
    
    
    $
    7,418,339
    
    
    $
    8,256,092
  60




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##### Table of Contents



Fiscal Years EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Goodwill impairment
    
    
    (46.7
    )
    
    
    
    
    
    
    State income tax effect
    
    
    4.2
    
    
    
    1.0
    
    
    
    3.8Meals and entertainment
    
    
    0.8
    
    
    
    1.0
    
    
    
    0.8Other
    
    
    (1.8
    )
    
    
    0.3
    
    
    
    (8.5
    %)
    
    
    37.3
    %
    
    
    39.6
    %
   March 31,2009
    
    
    2008Deferred income tax assets (liabilities), current:Vacation accruals
    
    $
    983,822
    
    
    $
    1,022,517Inventories
    
    
    802,365
    
    
    
    642,910Allowance for doubtful accounts
    
    
    494,055
    
    
    
    400,298Product returns
    
    
    1,142,856
    
    
    
    1,104,107Incentive programs
    
    
    2,336,180
    
    
    
    2,730,654Interest rate swap agreement
    
    
    
    
    
    
    433,473Other
    
    
    822,524
    
    
    
    (275,866
    )6,581,802
    
    
    
    6,058,093Deferred income tax assets (liabilities), noncurrent:Deferred compensation agreements
    
    
    138,953
    
    
    
    133,014Goodwill amortization
    
    
    (8,612,071
    )
    
    
    (6,793,181
    )Covenants not to compete
    
    
    1,424,543
    
    
    
    1,180,890Identifiable intangibles
    
    
    (46,109,986
    )
    
    
    (49,160,579
    )Property and equipment
    
    
    (1,233,192
    )
    
    
    (1,130,263
    )Other
    
    
    78,294
    
    
    
    665,704(54,313,459
    )
    
    
    (55,104,415
    )$
    (47,731,657
    )
    
    $
    (49,046,322
    )
   61




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##### Table of Contents



M. RETIREMENT PLANS
   N. DEFERRED COMPENSATION
  O. SHARE-BASED COMPENSATION
  2004 Stock Option Plan 
     62




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##### Table of Contents



Stock Options Granted October 12, 2007:General information:Grant date calculated fair value per option
    
    $
    38.23Shares at March 31, 2009:Vested
    
    
    2,384Nonvested
    
    
    2,383Total
    
    
    4,767Unrecognized share-based compensation at March 31, 2009
    
    $
    68,333Period over which unrecognized share-based compensation
will be realized (in years) at March 31, 2009
    
    
    1.5
  Fiscal Year EndedMarch 31,2009Consolidated Statement of Operations:Share-based compensation
    
    $
    43,416Deferred tax benefit
    
    
    16,547Other Required Disclosures:Total calculated fair value of shares vested during the period
    
    $
    44,154
  63




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##### Table of Contents



Fiscal Year EndedMarch 31, 2009Weighted-AverageExerciseNumber
    
    
    Price2004 Stock Option Plan:Outstanding  beginning of year
    
    
    80,441
    
    
    $
    117.39Granted
    
    
    
    
    
    
    Exercised or converted
    
    
    
    
    
    
    Forfeited
    
    
    (238
    )
    
    
    188.36Expired
    
    
    
    
    
    
    Outstanding  end of year
    
    
    80,203
    
    
    $
    117.18Exercisable  end of year
    
    
    77,820
    
    
    $
    114.49
 2004 Stock Option PlanOutstanding
    
    
    ExercisableWeighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageRemaining
    
    
    
    
    
    
    RemainingContractual
    
    
    
    
    
    
    ContractualNumber
    
    
    Term (Yrs)
    
    
    Number
    
    
    Term (Yrs)March 31, 2009:Exercise price of $52.47
    
    
    26,628
    
    
    
    4.9
    
    
    
    26,628
    
    
    
    4.9Exercise price of $106
    
    
    11,760
    
    
    
    4.9
    
    
    
    11,760
    
    
    
    4.9Exercise price of $146
    
    
    10,750
    
    
    
    4.9
    
    
    
    10,750
    
    
    
    4.9Exercise price of $160
    
    
    26,298
    
    
    
    6.1
    
    
    
    26,298
    
    
    
    6.1Exercise price of $205
    
    
    4,767
    
    
    
    8.5
    
    
    
    2,384
    
    
    
    8.580,203
    
    
    
    5.5
    
    
    
    77,820
    
    
    
    5.4
 2005 Restricted Stock Plan 
    64




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65




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##### Table of Contents



Valuation of Privately-Held-Company Equity
Securities .
 Fiscal Years EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Minimum
    
    
    Minimum
    
    
    MinimumNonvested Stock:
    
    Compensation
    
    
    Compensation
    
    
    CompensationValuation methodologyShare-based compensation:Recognized:Value of nonvested shares
    
    $
    666,667
    
    
    $
    666,666
    
    
    $
    666,667Reimbursement for taxes
    
    
    578,460
    
    
    
    303,444
    
    
    
    330,290Total
    
    $
    1,245,127
    
    
    $
    970,110
    
    
    $
    996,957Unrecognized:Value of nonvested shares
    
    $
    1,000,000
    
    
    $
    1,666,667
    
    
    $
    2,333,333Reimbursement for taxes
    
    
    606,097
    
    
    
    839,618
    
    
    
    1,180,357Total
    
    $
    1,606,097
    
    
    $
    2,506,285
    
    
    $
    3,513,690Deferred tax benefit
    
    $
    476,298
    
    
    $
    375,797
    
    
    $
    125,880Period over which
unrecognized share-based
compensation will be
realized (in years)
    
    
    1.5
    
    
    
    2.5
    
    
    
    3.5
  66




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##### Table of Contents



P. SEGMENT INFORMATION
     ComplementaryBookstore
    
    
    Textbook
    
    
    ServicesDivision
    
    
    Division
    
    
    Division
    
    
    TotalFiscal year ended March 31, 2009:External customer revenues
    
    $
    470,690,964
    
    
    $
    111,715,360
    
    
    $
    28,309,857
    
    
    $
    610,716,181Intersegment revenues
    
    
    1,347,045
    
    
    
    35,572,419
    
    
    
    5,924,026
    
    
    
    42,843,490Depreciation and amortization expense
    
    
    9,009,168
    
    
    
    6,086,334
    
    
    
    2,644,555
    
    
    
    17,740,057Adjusted Earnings before interest,
taxes, depreciation, amortization,
and goodwill impairment (Adjusted
EBITDA)
    
    
    44,029,528
    
    
    
    39,009,073
    
    
    
    1,320,700
    
    
    
    84,359,301Total assets
    
    
    179,192,480
    
    
    
    131,827,129
    
    
    
    17,836,018
    
    
    
    328,855,627Fiscal year ended March 31, 2008:External customer revenues
    
    $
    452,992,078
    
    
    $
    99,584,957
    
    
    $
    28,670,751
    
    
    $
    581,247,786Intersegment revenues
    
    
    1,382,795
    
    
    
    40,100,078
    
    
    
    5,701,472
    
    
    
    47,184,345Depreciation and amortization expense
    
    
    7,908,134
    
    
    
    6,096,196
    
    
    
    2,614,015
    
    
    
    16,618,345Earnings before interest, taxes,
depreciation, and amortization
(EBITDA)
    
    
    45,941,624
    
    
    
    33,731,382
    
    
    
    1,558,414
    
    
    
    81,231,420Total assets
    
    
    186,707,038
    
    
    
    137,629,109
    
    
    
    21,639,502
    
    
    
    345,975,649Fiscal year ended March 31, 2007:External customer revenues
    
    $
    417,112,526
    
    
    $
    100,486,178
    
    
    $
    26,829,260
    
    
    $
    544,427,964Intersegment revenues
    
    
    1,364,087
    
    
    
    35,312,214
    
    
    
    5,386,046
    
    
    
    42,062,347Depreciation and amortization expense
    
    
    6,395,788
    
    
    
    6,077,021
    
    
    
    2,570,654
    
    
    
    15,043,463Earnings before interest, taxes,
depreciation, and amortization
(EBITDA)
    
    
    44,511,202
    
    
    
    32,210,010
    
    
    
    2,716,144
    
    
    
    79,437,356Total assets
    
    
    164,948,074
    
    
    
    145,870,214
    
    
    
    24,616,067
    
    
    
    335,434,355
  67




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Fiscal Years EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Revenues:Total for reportable segments
    
    $
    653,559,671
    
    
    $
    628,432,131
    
    
    $
    586,490,311Elimination of intersegment revenues
    
    
    (42,843,490
    )
    
    
    (47,184,345
    )
    
    
    (42,062,347
    )Consolidated total
    
    $
    610,716,181
    
    
    $
    581,247,786
    
    
    $
    544,427,964Depreciation and Amortization Expense:Total for reportable segments
    
    $
    17,740,057
    
    
    $
    16,618,345
    
    
    $
    15,043,463Corporate Administration
    
    
    1,246,594
    
    
    
    1,033,494
    
    
    
    485,893Consolidated total
    
    $
    18,986,651
    
    
    $
    17,651,839
    
    
    $
    15,529,356Goodwill impairment
    
    $
    106,972,000
    
    
    $
    
    
    
    $
    Income (Loss) Before Income Taxes:Total Adjusted EBITDA for reportable segments (1)
    
    $
    84,359,301
    
    
    $
    81,231,420
    
    
    $
    79,437,356Corporate Administration Adjusted EBITDA loss
(including interdivision profit elimination) (1)
    
    
    (13,326,971
    )
    
    
    (11,280,477
    )
    
    
    (11,323,483
    )71,032,330
    
    
    
    69,950,943
    
    
    
    68,113,873Depreciation and amortization
    
    
    (18,986,651
    )
    
    
    (17,651,839
    )
    
    
    (15,529,356
    )Goodwill impairment
    
    
    (106,972,000
    )
    
    
    
    
    
    
    Consolidated income (loss) from operations
    
    
    (54,926,321
    )
    
    
    52,299,104
    
    
    
    52,584,517Interest and other expenses, net
    
    
    (32,553,689
    )
    
    
    (32,424,742
    )
    
    
    (31,716,939
    )Consolidated income (loss) before income taxes
    
    $
    (87,480,010
    )
    
    $
    19,874,362
    
    
    $
    20,867,578
 March 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2007Total Assets:Total for reportable segments
    
    $
    328,855,627
    
    
    $
    345,975,649
    
    
    $
    335,434,355Assets not allocated to segments:Cash and cash equivalents
    
    
    36,090,627
    
    
    
    12,110,876
    
    
    
    20,180,524Receivables, net
    
    
    19,857,099
    
    
    
    19,490,619
    
    
    
    13,985,140Recoverable income taxes
    
    
    2,869,583
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    2,350,802
    
    
    
    1,901,092
    
    
    
    1,290,113Prepaid expenses and other assets
    
    
    3,485,273
    
    
    
    2,259,681
    
    
    
    1,791,710Property and equipment, net
    
    
    12,258,135
    
    
    
    12,017,331
    
    
    
    12,453,302Goodwill
    
    
    162,089,875
    
    
    
    269,061,875
    
    
    
    269,061,875Identifiable intangibles, net
    
    
    32,722,900
    
    
    
    33,347,263
    
    
    
    31,968,596Debt issue costs, net
    
    
    6,875,122
    
    
    
    5,119,263
    
    
    
    6,939,046Other assets
    
    
    611,664
    
    
    
    803,772
    
    
    
    2,382,931Consolidated total
    
    $
    608,066,707
    
    
    $
    702,087,421
    
    
    $
    695,487,592
 (1)
    
    Adjusted EBITDA is defined as earnings before
interest, taxes, depreciation, amortization, and goodwill impairment.
There was no goodwill impairment in fiscal years 2008 and 2007; therefore
Adjusted EBITDA equals EBTIDA for those years.  Q. RELATED PARTY TRANSACTIONS
    68




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R. CLOSURE OF CALIFORNIA WAREHOUSE
  Fiscal YearEndedMarch 31,2007 (1)Costs of Closure:One-time termination benefits
    
    $
    473,000Costs to terminate contracts
    
    
    189,000Costs of consolidation/relocation
    
    
    112,475$
    774,475
 Balance,Balance,
    
    
    Costs Incurred and
    
    
    Costs
    
    
    
    
    
    
    March 31,April 1, 2006
    
    
    Charged to Expense
    
    
    Paid/Settled
    
    
    Adjustments (2)
    
    
    2007 (1)Liability Reconciliation:One-time termination benefits
    
    $
    
    
    
    $
    473,000
    
    
    $
    (232,840
    )
    
    $
    
    
    
    $
    240,160Costs to terminate contracts
    
    
    
    
    
    
    372,000
    
    
    
    (189,000
    )
    
    
    (183,000
    )
    
    
    Costs of consolidation/relocation
    
    
    
    
    
    
    112,475
    
    
    
    (112,475
    )
    
    
    
    
    
    
    $
    
    
    
    $
    957,475
    
    
    $
    (534,315
    )
    
    $
    (183,000
    )
    
    $
    240,160
 (1)

One-time termination benefits, costs to terminate a contract, and costs of
consolidation/relocation are included in accounts payable in the consolidated balance sheets
until paid. In the consolidated statements of operations, such costs are separately identified as
part of income from operations.(2)

The landlord identified a new tenant for the warehouse space, resulting in early termination
of the lease on March 31, 2007 that differs from original expectation at time of warehouse closing
on October 27, 2006.
   69




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S. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
   70




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2009
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    40,811,478
    
    
    $
    3,226,990
    
    
    $
    
    
    
    $
    44,038,468Receivables, net
    
    
    52,201,871
    
    
    
    58,276,880
    
    
    
    (49,177,115
    )
    
    
    61,301,636Inventories
    
    
    47,625,966
    
    
    
    45,489,697
    
    
    
    
    
    
    
    93,115,663Recoverable income taxes
    
    
    2,869,583
    
    
    
    
    
    
    
    
    
    
    
    2,869,583Deferred income taxes
    
    
    2,350,802
    
    
    
    4,231,000
    
    
    
    
    
    
    
    6,581,802Prepaid expenses and other assets
    
    
    3,648,635
    
    
    
    302,239
    
    
    
    
    
    
    
    3,950,874Total current assets
    
    
    149,508,335
    
    
    
    111,526,806
    
    
    
    (49,177,115
    )
    
    
    211,858,026PROPERTY AND EQUIPMENT, net
    
    
    40,057,891
    
    
    
    5,580,631
    
    
    
    
    
    
    
    45,638,522GOODWILL
    
    
    199,900,017
    
    
    
    15,536,109
    
    
    
    
    
    
    
    215,436,126CUSTOMER RELATIONSHIPS, net
    
    
    4,625,181
    
    
    
    81,019,159
    
    
    
    
    
    
    
    85,644,340TRADENAME
    
    
    31,320,000
    
    
    
    
    
    
    
    
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net
    
    
    7,071,442
    
    
    
    2,101,180
    
    
    
    
    
    
    
    9,172,622INVESTMENT IN SUBSIDIARIES
    
    
    151,290,937
    
    
    
    
    
    
    
    (151,290,937
    )
    
    
    OTHER ASSETS
    
    
    8,388,921
    
    
    
    608,150
    
    
    
    
    
    
    
    8,997,071$
    592,162,724
    
    
    $
    216,372,035
    
    
    $
    (200,468,052
    )
    
    $
    608,066,707LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    54,110,551
    
    
    $
    21,932,178
    
    
    $
    (49,177,115
    )
    
    $
    26,865,614Accrued employee compensation and benefits
    
    
    9,705,781
    
    
    
    4,074,428
    
    
    
    
    
    
    
    13,780,209Accrued interest
    
    
    678,516
    
    
    
    
    
    
    
    
    
    
    
    678,516Accrued incentives
    
    
    42,593
    
    
    
    6,068,107
    
    
    
    
    
    
    
    6,110,700Accrued expenses
    
    
    3,804,787
    
    
    
    472,318
    
    
    
    
    
    
    
    4,277,105Income taxes payable
    
    
    (2,187,068
    )
    
    
    2,187,068
    
    
    
    
    
    
    
    Deferred revenue
    
    
    959,274
    
    
    
    
    
    
    
    
    
    
    
    959,274Current maturities of long-term debt
    
    
    6,917,451
    
    
    
    
    
    
    
    
    
    
    
    6,917,451Current maturities of capital lease obligations
    
    
    748,692
    
    
    
    
    
    
    
    
    
    
    
    748,692Total current liabilities
    
    
    74,780,577
    
    
    
    34,734,099
    
    
    
    (49,177,115
    )
    
    
    60,337,561LONG-TERM DEBT, net of current maturities
    
    
    361,445,728
    
    
    
    
    
    
    
    
    
    
    
    361,445,728CAPITAL LEASE OBLIGATIONS, net of current
maturities
    
    
    3,298,658
    
    
    
    
    
    
    
    
    
    
    
    3,298,658OTHER LONG-TERM LIABILITIES
    
    
    5,234,166
    
    
    
    70,000
    
    
    
    
    
    
    
    5,304,166DEFERRED INCOME TAXES
    
    
    24,036,460
    
    
    
    30,276,999
    
    
    
    
    
    
    
    54,313,459DUE TO PARENT
COMMITMENTS
    
    
    20,130,189
    
    
    
    
    
    
    
    
    
    
    
    20,130,189STOCKHOLDERS EQUITY
    
    
    103,236,946
    
    
    
    151,290,937
    
    
    
    (151,290,937
    )
    
    
    103,236,946$
    592,162,724
    
    
    $
    216,372,035
    
    
    $
    (200,468,052
    )
    
    $
    608,066,707
  71




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2008
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    23,588,130
    
    
    $
    5,738,326
    
    
    $
    
    
    
    $
    29,326,456Receivables, net
    
    
    50,231,144
    
    
    
    35,404,082
    
    
    
    (28,238,718
    )
    
    
    57,396,508Inventories
    
    
    54,029,013
    
    
    
    44,982,074
    
    
    
    
    
    
    
    99,011,087Deferred income taxes
    
    
    1,901,092
    
    
    
    4,157,001
    
    
    
    
    
    
    
    6,058,093Prepaid expenses and other assets
    
    
    2,259,681
    
    
    
    279,396
    
    
    
    
    
    
    
    2,539,077Total current assets
    
    
    132,009,060
    
    
    
    90,560,879
    
    
    
    (28,238,718
    )
    
    
    194,331,221PROPERTY AND EQUIPMENT, net
    
    
    39,757,056
    
    
    
    5,309,124
    
    
    
    
    
    
    
    45,066,180GOODWILL
    
    
    304,831,164
    
    
    
    15,536,109
    
    
    
    
    
    
    
    320,367,273CUSTOMER RELATIONSHIPS, net
    
    
    4,935,249
    
    
    
    86,450,611
    
    
    
    
    
    
    
    91,385,860TRADENAME
    
    
    31,320,000
    
    
    
    
    
    
    
    
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net
    
    
    10,331,727
    
    
    
    1,771,630
    
    
    
    
    
    
    
    12,103,357INVESTMENT IN SUBSIDIARIES
    
    
    131,583,301
    
    
    
    
    
    
    
    (131,583,301
    )
    
    
    OTHER ASSETS
    
    
    6,750,356
    
    
    
    763,174
    
    
    
    
    
    
    
    7,513,530$
    661,517,913
    
    
    $
    200,391,527
    
    
    $
    (159,822,019
    )
    
    $
    702,087,421LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    32,282,516
    
    
    $
    24,587,231
    
    
    $
    (28,238,718
    )
    
    $
    28,631,029Accrued employee compensation and benefits
    
    
    8,963,654
    
    
    
    3,136,986
    
    
    
    
    
    
    
    12,100,640Accrued interest
    
    
    1,778,937
    
    
    
    
    
    
    
    
    
    
    
    1,778,937Accrued incentives
    
    
    59,736
    
    
    
    7,049,121
    
    
    
    
    
    
    
    7,108,857Accrued expenses
    
    
    2,843,900
    
    
    
    328,222
    
    
    
    
    
    
    
    3,172,122Income taxes payable
    
    
    (121,296
    )
    
    
    968,666
    
    
    
    
    
    
    
    847,370Deferred revenue
    
    
    862,994
    
    
    
    
    
    
    
    
    
    
    
    862,994Current maturities of long-term debt
    
    
    2,070,657
    
    
    
    
    
    
    
    
    
    
    
    2,070,657Current maturities of capital lease obligations
    
    
    658,415
    
    
    
    
    
    
    
    
    
    
    
    658,415Total current liabilities
    
    
    49,399,513
    
    
    
    36,070,226
    
    
    
    (28,238,718
    )
    
    
    57,231,021LONG-TERM DEBT, net of current maturities
    
    
    368,363,176
    
    
    
    
    
    
    
    
    
    
    
    368,363,176CAPITAL LEASE OBLIGATIONS, net of current
maturities
    
    
    4,111,758
    
    
    
    
    
    
    
    
    
    
    
    4,111,758OTHER LONG-TERM LIABILITIES
    
    
    4,387,504
    
    
    
    80,000
    
    
    
    
    
    
    
    4,467,504DEFERRED INCOME TAXES
    
    
    22,446,415
    
    
    
    32,658,000
    
    
    
    
    
    
    
    55,104,415DUE TO PARENT
COMMITMENTS
    
    
    16,970,151
    
    
    
    
    
    
    
    
    
    
    
    16,970,151STOCKHOLDERS EQUITY
    
    
    195,839,396
    
    
    
    131,583,301
    
    
    
    (131,583,301
    )
    
    
    195,839,396$
    661,517,913
    
    
    $
    200,391,527
    
    
    $
    (159,822,019
    )
    
    $
    702,087,421
  72




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2009
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUES, net of returns
    
    $
    386,910,695
    
    
    $
    260,062,026
    
    
    $
    (36,256,540
    )
    
    $
    610,716,181COSTS OF SALES (exclusive of depreciation shown below)
    
    
    244,484,547
    
    
    
    165,056,393
    
    
    
    (38,171,700
    )
    
    
    371,369,240Gross profit
    
    
    142,426,148
    
    
    
    95,005,633
    
    
    
    1,915,160
    
    
    
    239,346,941OPERATING EXPENSES (INCOME):Selling, general and administrative
    
    
    115,276,253
    
    
    
    51,123,198
    
    
    
    1,915,160
    
    
    
    168,314,611Depreciation
    
    
    6,054,313
    
    
    
    1,548,318
    
    
    
    
    
    
    
    7,602,631Amortization
    
    
    5,180,117
    
    
    
    6,203,903
    
    
    
    
    
    
    
    11,384,020Goodwill impairment
    
    
    106,972,000
    
    
    
    
    
    
    
    
    
    
    
    106,972,000Intercompany administrative fee
    
    
    (4,923,600
    )
    
    
    4,923,600
    
    
    
    
    
    
    
    Equity in earnings of subsidiaries
    
    
    (19,707,636
    )
    
    
    
    
    
    
    19,707,636
    
    
    
    208,851,447
    
    
    
    63,799,019
    
    
    
    21,622,796
    
    
    
    294,273,262INCOME (LOSS) FROM OPERATIONS
    
    
    (66,425,299
    )
    
    
    31,206,614
    
    
    
    (19,707,636
    )
    
    
    (54,926,321
    )OTHER EXPENSES (INCOME):Interest expense
    
    
    32,878,225
    
    
    
    
    
    
    
    
    
    
    
    32,878,225Interest income
    
    
    (385,514
    )
    
    
    (41,022
    )
    
    
    
    
    
    
    (426,536
    )Loss on derivative financial instrument
    
    
    102,000
    
    
    
    
    
    
    
    
    
    
    
    102,00032,594,711
    
    
    
    (41,022
    )
    
    
    
    
    
    
    32,553,689INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (99,020,010
    )
    
    
    31,247,636
    
    
    
    (19,707,636
    )
    
    
    (87,480,010
    )INCOME TAX EXPENSE (BENEFIT)
    
    
    (4,091,342
    )
    
    
    11,540,000
    
    
    
    
    
    
    
    7,448,658NET INCOME (LOSS)
    
    $
    (94,928,668
    )
    
    $
    19,707,636
    
    
    $
    (19,707,636
    )
    
    $
    (94,928,668
    )
  73




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2008
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUES, net of returns
    
    $
    381,697,820
    
    
    $
    240,155,652
    
    
    $
    (40,605,686
    )
    
    $
    581,247,786COSTS OF SALES (exclusive of
depreciation shown below)
    
    
    240,688,980
    
    
    
    156,028,070
    
    
    
    (42,577,576
    )
    
    
    354,139,474Gross profit
    
    
    141,008,840
    
    
    
    84,127,582
    
    
    
    1,971,890
    
    
    
    227,108,312OPERATING EXPENSES (INCOME):Selling, general and administrative
    
    
    108,050,482
    
    
    
    47,171,054
    
    
    
    1,971,890
    
    
    
    157,193,426Closure of California Warehouse
    
    
    
    
    
    
    (36,057
    )
    
    
    
    
    
    
    (36,057
    )Depreciation
    
    
    5,676,303
    
    
    
    1,532,201
    
    
    
    
    
    
    
    7,208,504Amortization
    
    
    4,511,635
    
    
    
    5,931,700
    
    
    
    
    
    
    
    10,443,335Intercompany administrative fee
    
    
    (4,838,800
    )
    
    
    4,838,800
    
    
    
    
    
    
    
    Equity in earnings of subsidiary
    
    
    (15,608,834
    )
    
    
    
    
    
    
    15,608,834
    
    
    
    97,790,786
    
    
    
    59,437,698
    
    
    
    17,580,724
    
    
    
    174,809,208INCOME FROM OPERATIONS
    
    
    43,218,054
    
    
    
    24,689,884
    
    
    
    (15,608,834
    )
    
    
    52,299,104OTHER EXPENSES (INCOME):Interest expense
    
    
    33,559,239
    
    
    
    
    
    
    
    
    
    
    
    33,559,239Interest income
    
    
    (1,287,547
    )
    
    
    (44,950
    )
    
    
    
    
    
    
    (1,332,497
    )Loss on derivative financial instrument
    
    
    198,000
    
    
    
    
    
    
    
    
    
    
    
    198,00032,469,692
    
    
    
    (44,950
    )
    
    
    
    
    
    
    32,424,742INCOME BEFORE INCOME TAXES
    
    
    10,748,362
    
    
    
    24,734,834
    
    
    
    (15,608,834
    )
    
    
    19,874,362INCOME TAX EXPENSE (BENEFIT)
    
    
    (1,707,661
    )
    
    
    9,126,000
    
    
    
    
    
    
    
    7,418,339NET INCOME
    
    $
    12,456,023
    
    
    $
    15,608,834
    
    
    $
    (15,608,834
    )
    
    $
    12,456,023
  74




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2007
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUES, net of returns
    
    $
    344,250,733
    
    
    $
    235,668,504
    
    
    $
    (35,491,273
    )
    
    $
    544,427,964COSTS OF SALES (exclusive of
depreciation shown below)
    
    
    215,799,510
    
    
    
    154,760,028
    
    
    
    (38,115,547
    )
    
    
    332,443,991Gross profit
    
    
    128,451,223
    
    
    
    80,908,476
    
    
    
    2,624,274
    
    
    
    211,983,973OPERATING EXPENSES (INCOME):Selling, general and administrative
    
    
    96,426,536
    
    
    
    44,044,815
    
    
    
    2,624,274
    
    
    
    143,095,625Closure of California Warehouse
    
    
    
    
    
    
    774,475
    
    
    
    
    
    
    
    774,475Depreciation
    
    
    4,553,736
    
    
    
    1,362,022
    
    
    
    
    
    
    
    5,915,758Amortization
    
    
    3,778,990
    
    
    
    5,834,608
    
    
    
    
    
    
    
    9,613,598Intercompany administrative fee
    
    
    (3,933,600
    )
    
    
    3,933,600
    
    
    
    
    
    
    
    Equity in earnings of subsidiary
    
    
    (17,075,676
    )
    
    
    
    
    
    
    17,075,676
    
    
    
    83,749,986
    
    
    
    55,949,520
    
    
    
    19,699,950
    
    
    
    159,399,456INCOME FROM OPERATIONS
    
    
    44,701,237
    
    
    
    24,958,956
    
    
    
    (17,075,676
    )
    
    
    52,584,517OTHER EXPENSES (INCOME):Interest expense
    
    
    33,113,297
    
    
    
    22,240
    
    
    
    
    
    
    
    33,135,537Interest income
    
    
    (1,593,838
    )
    
    
    (49,760
    )
    
    
    
    
    
    
    (1,643,598
    )Gain on derivative financial instrument
    
    
    225,000
    
    
    
    
    
    
    
    
    
    
    
    225,00031,744,459
    
    
    
    (27,520
    )
    
    
    
    
    
    
    31,716,939INCOME BEFORE INCOME TAXES
    
    
    12,956,778
    
    
    
    24,986,476
    
    
    
    (17,075,676
    )
    
    
    20,867,578INCOME TAX EXPENSE
    
    
    345,292
    
    
    
    7,910,800
    
    
    
    
    
    
    
    8,256,092NET INCOME
    
    $
    12,611,486
    
    
    $
    17,075,676
    
    
    $
    (17,075,676
    )
    
    $
    12,611,486
  75




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2009
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    29,207,254
    
    
    $
    2,458,659
    
    
    $
    
    
    
    $
    31,665,913CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (6,096,566
    )
    
    
    (1,989,243
    )
    
    
    106,438
    
    
    
    (7,979,371
    )Acquisitions, net of cash acquired
    
    
    (3,236,139
    )
    
    
    (3,084,633
    )
    
    
    
    
    
    
    (6,320,772
    )Proceeds from sale of property and equipment
    
    
    38,060
    
    
    
    103,881
    
    
    
    (106,438
    )
    
    
    35,503Software development costs
    
    
    (633,763
    )
    
    
    
    
    
    
    
    
    
    
    (633,763
    )Net cash flows from investing activities
    
    
    (9,928,408
    )
    
    
    (4,969,995
    )
    
    
    
    
    
    
    (14,898,403
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of financing costs
    
    
    (3,961,811
    )
    
    
    
    
    
    
    
    
    
    
    (3,961,811
    )Principal payments on long-term debt
    
    
    (2,070,654
    )
    
    
    
    
    
    
    
    
    
    
    (2,070,654
    )Principal payments on capital lease obligations
    
    
    (722,823
    )
    
    
    
    
    
    
    
    
    
    
    (722,823
    )Dividends paid to parent
    
    
    (8,470,000
    )
    
    
    
    
    
    
    
    
    
    
    (8,470,000
    )Capital contributions
    
    
    10,009,752
    
    
    
    
    
    
    
    
    
    
    
    10,009,752Change in due to parent
    
    
    3,160,038
    
    
    
    
    
    
    
    
    
    
    
    3,160,038Net cash flows from financing activities
    
    
    (2,055,498
    )
    
    
    
    
    
    
    
    
    
    
    (2,055,498
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    17,223,348
    
    
    
    (2,511,336
    )
    
    
    
    
    
    
    14,712,012CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    23,588,130
    
    
    
    5,738,326
    
    
    
    
    
    
    
    29,326,456CASH AND CASH EQUIVALENTS, End of period
    
    $
    40,811,478
    
    
    $
    3,226,990
    
    
    $
    
    
    
    $
    44,038,468
  76




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2008
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    18,407,954
    
    
    $
    2,455,807
    
    
    $
    
    
    
    $
    20,863,761CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (6,607,380
    )
    
    
    (690,551
    )
    
    
    37,022
    
    
    
    (7,260,909
    )Acquisitions, net of cash acquired
    
    
    (14,246,655
    )
    
    
    (435,000
    )
    
    
    
    
    
    
    (14,681,655
    )Proceeds from sale of property and equipment
    
    
    21,985
    
    
    
    51,422
    
    
    
    (37,022
    )
    
    
    36,385Software development costs
    
    
    (272,981
    )
    
    
    
    
    
    
    
    
    
    
    (272,981
    )Net cash flows from investing activities
    
    
    (21,105,031
    )
    
    
    (1,074,129
    )
    
    
    
    
    
    
    (22,179,160
    )CASH FLOWS FROM FINANCING ACTIVITIES:Payment of financing costs
    
    
    (1,957,852
    )
    
    
    
    
    
    
    
    
    
    
    (1,957,852
    )Principal payments on long-term debt
    
    
    (624,910
    )
    
    
    
    
    
    
    
    
    
    
    (624,910
    )Capital contributions
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    4,869Change in due to parent
    
    
    236,872
    
    
    
    
    
    
    
    
    
    
    
    236,872Net cash flows from financing activities
    
    
    (2,341,021
    )
    
    
    
    
    
    
    
    
    
    
    (2,341,021
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    (5,038,098
    )
    
    
    1,381,678
    
    
    
    
    
    
    
    (3,656,420
    )CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    28,626,228
    
    
    
    4,356,648
    
    
    
    
    
    
    
    32,982,876CASH AND CASH EQUIVALENTS, End of period
    
    $
    23,588,130
    
    
    $
    5,738,326
    
    
    $
    
    
    
    $
    29,326,456
  77




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NEBRASKA BOOK COMPANY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2007
 NebraskaBook
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCompany, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    27,351,399
    
    
    $
    81,182
    
    
    $
    
    
    
    $
    27,432,581CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (4,770,795
    )
    
    
    (1,772,279
    )
    
    
    
    
    
    
    (6,543,074
    )Acquisitions, net of cash acquired
    
    
    (25,200,030
    )
    
    
    (673,632
    )
    
    
    
    
    
    
    (25,873,662
    )Proceeds from sale of property and equipment
    
    
    107,100
    
    
    
    206,405
    
    
    
    
    
    
    
    313,505Software development costs
    
    
    (705,523
    )
    
    
    
    
    
    
    
    
    
    
    (705,523
    )Cash acquired in acquisition of subsidiary guarantor
    
    
    (3,087,617
    )
    
    
    3,087,617
    
    
    
    
    
    
    
    Net cash flows from investing activities
    
    
    (33,656,865
    )
    
    
    848,111
    
    
    
    
    
    
    
    (32,808,754
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    24,000,000
    
    
    
    
    
    
    
    
    
    
    
    24,000,000Payment of financing costs
    
    
    (964,774
    )
    
    
    
    
    
    
    
    
    
    
    (964,774
    )Principal payments on long-term debt
    
    
    (3,411,172
    )
    
    
    (410,000
    )
    
    
    
    
    
    
    (3,821,172
    )Principal payments on capital lease obligations
    
    
    (390,205
    )
    
    
    
    
    
    
    
    
    
    
    (390,205
    )Intercompany financing activity
    
    
    (14,341,119
    )
    
    
    14,341,119
    
    
    
    
    
    
    
    Net decrease in revolving credit facility
    
    
    
    
    
    
    (13,931,119
    )
    
    
    
    
    
    
    (13,931,119
    )Change in due to parent
    
    
    83,597
    
    
    
    
    
    
    
    
    
    
    
    83,597Net cash flows from financing activities
    
    
    4,976,327
    
    
    
    
    
    
    
    
    
    
    
    4,976,327NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (1,329,139
    )
    
    
    929,293
    
    
    
    
    
    
    
    (399,846
    )CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    29,955,367
    
    
    
    3,427,355
    
    
    
    
    
    
    
    33,382,722CASH AND CASH EQUIVALENTS, End of period
    
    $
    28,626,228
    
    
    $
    4,356,648
    
    
    $
    
    
    
    $
    32,982,876
  78




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 (a) Evaluation of disclosure controls and procedures.
 (b) Managements annual report on internal control over financial reporting
  Internal
Control  Integrated Framework
 (c) Attestation report of the registered public accounting firm
 (d) Changes in internal control over financial reporting .
 
 ITEM 9B. OTHER INFORMATION.
   79




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  Name
    
    Age
    
    
    PositionMark L. Bono
    
    
    49
    
    
    DirectorR. Sean Honey
    
    
    38
    
    
    DirectorMark W. Oppegard
    
    
    59
    
    
    Chief Executive Officer and DirectorBarry S. Major
    
    
    52
    
    
    Chief Operating Officer, President, and DirectorAlan G. Siemek
    
    
    48
    
    
    Chief Financial Officer, Senior Vice President of Finance and Administration, Treasurer, and Assistant SecretaryRobert A. Rupe
    
    
    61
    
    
    Senior Vice President - Bookstore DivisionMichael J. Kelly
    
    
    51
    
    
    Senior Vice President - Textbook DivisionLarry R. Rempe
    
    
    61
    
    
    Senior Vice President - Complementary ServicesNathan D. Rempe
    
    
    31
    
    
    Chief Technology Officer
  Mark L. Bono
 R. Sean Honey
 Mark W. Oppegard
 Barry S. Major
 Alan G. Siemek,
 Robert A. Rupe,
 Michael J. Kelly,
  80




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##### Table of Contents



Larry R. Rempe
 Nathan D. Rempe
 Audit Committee
  Code of Ethics
   81




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##### Table of Contents



ITEM 11. EXECUTIVE COMPENSATION.
  Compensation Discussion and Analysis
 Compensation Philosophy
 Compensation Committee and Compensation Process
 Executive Compensation Components
 1)
    
    Base Salary. Base salaries are intended to compensate the Executives and all other
salaried employees for their basic services performed for us on an annual basis. In
setting base salaries, we take into account the Executives experience, the functions and
responsibilities of the job, and any other factors relevant to that particular job. Base
salaries are typically adjusted annually by our chief executive officer and President;
however, we do not limit ourselves to this schedule. The chief executive officers base
salary is approved by Messrs. Bono and Honey of the Board of Directors, the two directors
affiliated with Weston Presidio.
 2)
    
    Bonus Plan. We use our executive bonus plan to incent each Executive on an annual
basis. Bonuses for each Executive are initially determined by a preset percentage of the
Executives salary based upon attainment of goals related to our consolidated EBITDA and
Adjusted EBITDA compared to budget. Such goals may be revised for material unbudgeted
events. Typically the minimum percentage needed to qualify for a bonus is 93% of budgeted
EBITDA, and the maximum bonus amounts are achieved at 110% of budgeted EBITDA. Such
initial calculated amounts are then adjusted by our chief executive officer and President
based upon non-quantifiable criteria in evaluating job performance.
 3)
    
    Stock Option and Other Equity Awards. We use nonqualified stock options and other
equity awards to incent our Executives to remain with us and to maximize long-term value
for our shareholders. We have generally awarded stock options on an annual basis to each
Executive based upon informal performance measures. Generally, we must achieve at least
93% of the budgeted EBITDA before options are granted. Messrs. Bono and Honey, the two
directors affiliated with Weston Presidio, receive a recommendation from our chief
executive officer regarding the number of stock options to be granted to each Executive and
then adjust such recommendation as they consider appropriate. In addition, in March 2006,
upon the approval of the entire Board of Directors, our chief executive officer, chief
financial officer, and President were each issued 1,400 shares of nonvested stock for $0.01
per share. This issuance of shares was designed to incent those named Executives to remain
with us until at least September 30, 2010. Since this issuance of nonvested stock, these
named Executives have not received any further grants of stock options.
 4)
    
    Severance Plans. Each Executive has signed a memorandum of understanding under which
they may be paid severance of up to (i) one year of base salary, (ii) pro rata bonuses and
(iii) continuation of health, life and disability benefits for up to 12 months if they are
terminated without cause (as defined in those agreements).
  82




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##### Table of Contents



5)
    
    Other Benefits. We maintain health, dental and vision insurance plans for the benefit
of eligible employees, including the Executives. The health and dental plans require the
employee to pay a portion of the premium and we pay the remainder. The vision plan premium
is paid in its entirety by the employee. We also maintain a 401(k) retirement plan that is
available to all eligible employees. For all fiscal years presented, we matched elective
employee-participant contributions on the basis of 100% of the employees contribution up
to 5% of their total compensation. Certain amounts of life, accidental death and
dismemberment, and short and long-term disability insurance coverage is also offered to all
eligible employees and premiums or costs are paid in full by us. Certain other voluntary
insurance coverages are available to eligible employees, such as supplemental life, cancer
and personal accident insurance with the entire premium paid by the employee. The
foregoing benefits are available to each Executive on the same basis as all other eligible
employees.
   83




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##### Table of Contents



Summary Compensation Table
  Summary Compensation Table
 Change inNonqualifiedDeferred
    
    
    (3)Fiscal
    
    
    
    
    
    
    
    
    
    
    Stock
    
    
    Option
    
    
    Compensation
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Awards (1)
    
    
    Awards (2)
    
    
    Earnings
    
    
    Compensation
    
    
    TotalMark W. Oppegard 
Chief Executive
Officer and
Director
    
    
    2009
    
    
    $
    266,500
    
    
    $
    100,000
    
    
    $
    415,042
    
    
    $
    
    
    
    $
    206
    
    
    $
    11,752
    
    
    $
    793,5002008
    
    
    
    295,006
    
    
    
    76,000
    
    
    
    323,370
    
    
    
    
    
    
    
    5,439
    
    
    
    11,502
    
    
    
    711,3172007
    
    
    
    295,006
    
    
    
    195,000
    
    
    
    332,319
    
    
    
    
    
    
    
    4,374
    
    
    
    11,516
    
    
    
    838,215Alan G. Siemek 
Chief Financial
Officer, Senior
Vice President of
Finance and
Administration,
Treasurer, and
Assistant Secretary
    
    
    2009
    
    
    
    214,857
    
    
    
    80,000
    
    
    
    415,042
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    721,6512008
    
    
    
    209,690
    
    
    
    25,000
    
    
    
    323,370
    
    
    
    
    
    
    
    
    
    
    
    11,502
    
    
    
    569,5622007
    
    
    
    202,766
    
    
    
    144,000
    
    
    
    332,319
    
    
    
    
    
    
    
    
    
    
    
    11,180
    
    
    
    690,265Barry S. Major 
Chief Operating
Officer, President,
and Director
    
    
    2009
    
    
    
    287,694
    
    
    
    106,000
    
    
    
    415,042
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    820,4882008
    
    
    
    279,691
    
    
    
    73,000
    
    
    
    323,370
    
    
    
    
    
    
    
    
    
    
    
    11,502
    
    
    
    687,5632007
    
    
    
    272,770
    
    
    
    189,000
    
    
    
    332,319
    
    
    
    
    
    
    
    
    
    
    
    11,180
    
    
    
    805,269Robert A. Rupe 
Senior Vice
President 
Bookstore Division
    
    
    2009
    
    
    
    230,928
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    292,6802008
    
    
    
    222,926
    
    
    
    40,000
    
    
    
    
    
    
    
    12,429
    
    
    
    
    
    
    
    11,502
    
    
    
    286,8572007
    
    
    
    188,307
    
    
    
    130,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,431
    
    
    
    329,738Michael J. Kelly 
Senior Vice
President 
Textbook Division
    
    
    2009
    
    
    
    204,083
    
    
    
    65,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    280,8352008
    
    
    
    199,771
    
    
    
    50,000
    
    
    
    
    
    
    
    10,035
    
    
    
    
    
    
    
    11,502
    
    
    
    271,3082007
    
    
    
    194,846
    
    
    
    80,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,922
    
    
    
    284,768
 (1)
    
    Represents share-based compensation recognized in connection with the 1,400 shares of
nonvested stock issued to each of Messrs. Oppegard, Siemek, and Major on March 31, 2006.
Share-based compensation is being recognized from the date of issuance of the nonvested
stock through September 30, 2010. See Note O of the notes to the consolidated financial
statements in Item 8, Financial Statements and Supplementary Data.(2)
    
    The assumptions underlying share-based compensation recognized in connection with the
options granted in fiscal year 2008 are outlined in Note O of the notes to the consolidated
financial statements in Item 8, Financial Statements and Supplementary Data.There were no
stock options granted in fiscal years 2009 and 2007. As further discussed in Note B of the
notes to the consolidated financial statements in Item 8, Financial Statements and
Supplementary Data, options granted prior to April 1, 2006 are accounted for under the
provisions of APB Opinion No. 25, Accounting for Stock Issued to Employeesand related
interpretations utilizing the intrinsic value method. Under this method, share-based
compensation is recorded on the date of grant only if the current market price of the
underlying stock exceeds the exercise price. No share-based compensation was recognized in
conjunction with such grants.(3)
    
    All other compensation consists of the following components: (a) matching contributions
to the NBC Retirement Plan; and (b) life insurance premiums paid by us on the Executives
behalf. See Note M of the notes to the consolidated financial statements in Item 8,
Financial Statements and Supplementary Data. 
  84




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##### Table of Contents



Grants of Plan-Based Awards
  Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table -
Employment Agreements
  Financial Statements and Supplementary Data
  
    
    Termination of Employment upon Expiration of the Term of the Employment Agreement If
we have given the Executive notice of our intention to terminate employment at the end of
the term of the Employment Agreement, the Executive is entitled to continued payment of base
salary and health, life insurance and disability insurance benefits for a period of one year
following the expiration of the term of the Employment Agreement.
 
    
    Termination of Employment Without Cause prior to the Expiration of the Term of the
Employment Agreement- If we have given the Executive notice of our intention to terminate
employment without cause prior to the end of the term of the Employment Agreement, the
Executive is entitled to continued payment of base salary and health, life insurance and
disability insurance benefits for a period of one year following the date of termination.
Additionally, the Executive is entitled to payment of any incentive bonus when otherwise
due, prorated through the date of termination.
 
    
    Termination of Employment upon Death or Disability If an Executives employment is
terminated as a result of death or disability, the Executive is entitled to continued
payment of base salary for a period of six months following the date of termination.
Additionally, the Executive is entitled to payment of any incentive bonus when otherwise
due, prorated through the date of termination.
    85




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##### Table of Contents



Outstanding Equity Awards
  Outstanding Equity Awards at March 31, 2009
 Option Awards
    
    
    Stock AwardsEquityEquity
    
    
    IncentiveIncentive
    
    
    Plan Awards:Market
    
    
    Plan Awards:
    
    
    Market or(1)
    
    
    (1)
    
    
    
    
    
    
    
    
    
    
    Number
    
    
    Value of
    
    
    Number of
    
    
    Payout ValueNumber
    
    
    Number
    
    
    
    
    
    
    
    
    
    
    of Shares
    
    
    Shares or
    
    
    Unearned
    
    
    of Unearnedof Securities
    
    
    of Securities
    
    
    
    
    
    
    
    
    
    
    or Units
    
    
    Units of
    
    
    Shares, Units
    
    
    Shares, UnitsUnderlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    of Stock
    
    
    Stock
    
    
    or Other
    
    
    or OtherUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    Option
    
    
    That
    
    
    That
    
    
    Rights That
    
    
    Rights ThatOptions -
    
    
    Options -
    
    
    Exercise
    
    
    Expiration
    
    
    Have Not
    
    
    Have Not
    
    
    Have Not
    
    
    Have NotName
    
    Exercisable
    
    
    Unexercisable
    
    
    Price
    
    
    Date
    
    
    Vested (2)
    
    
    Vested (3)
    
    
    Vested (2)
    
    
    Vested (4)Mark W. Oppegard 
Chief Executive
Officer, and
Director
    
    
    5,950
    
    
    
    
    
    
    $
    52.47
    
    
    
    3/4/20142,675
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20142,200
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,963
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014933
    
    
    $
    1,070,731
    
    
    
    467
    
    
    $
    535,366Alan G. Siemek 
Chief Financial
Officer, Senior
Vice President of
Finance and
Administration,
Treasurer, and
Assistant Secretary
    
    
    4,728
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20141,375
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20141,375
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,885
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014933
    
    
    
    1,070,731
    
    
    
    467
    
    
    
    535,366Barry S. Major 
Chief Operating
Officer, President,
and Director
    
    
    4,780
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20142,500
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20142,050
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,963
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014933
    
    
    
    1,070,731
    
    
    
    467
    
    
    
    535,366Robert A. Rupe 
Senior Vice
President 
Bookstore Division
    
    
    1,375
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20141,250
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20141,175
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,700
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/20142,400
    
    
    
    
    
    
    
    160.00
    
    
    
    8/29/20151,180
    
    
    
    
    
    
    
    160.00
    
    
    
    3/30/2016434
    
    
    
    433
    
    
    
    205.00
    
    
    
    10/12/2017Michael J. Kelly 
Senior Vice
President 
Textbook Division
    
    
    2,111
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20141,375
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20141,175
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,600
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/20142,400
    
    
    
    
    
    
    
    160.00
    
    
    
    8/29/20151,180
    
    
    
    
    
    
    
    160.00
    
    
    
    3/30/2016350
    
    
    
    350
    
    
    
    205.00
    
    
    
    10/12/2017
  86




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##### Table of Contents



(1)
    
    Separate grants of stock options occurred on October 12, 2007, March 30, 2006, August
29, 2005 and November 9, 2004. Twenty-five percent of the options granted were exercisable
immediately upon granting with the remaining options becoming exercisable in 25% increments
over the subsequent three years. In connection with the March 4, 2004 Transaction, all
existing options at March 4, 2004 vested, certain of which were cancelled in exchange for
new options granted under the 2004 Stock Option Plan. Options granted in fiscal year 2004
under the 2004 Stock Option Plan were fully vested and exercisable at prices consistent
with the options which were cancelled.(2)
    
    Except in certain circumstances, the shares of nonvested stock do not vest until
September 30, 2010.(3)
    
    Represents the recognized portion of share-based compensation associated with the 1,400
shares of nonvested stock issued to each of Messrs. Oppegard, Siemek, and Major on March
31, 2006. Due to the existence of the put rights, share-based compensation is being
remeasured at the end of each reporting period and recognized from the date of issuance of
the nonvested stock through September 30, 2010. See Note O of the notes to the
consolidated financial statements in Item 8, Financial Statements and Supplementary Data.(4)
    
    Represents the unrecognized portion of share-based compensation associated with the
1,400 shares of nonvested stock issued to each of Messrs. Oppegard, Siemek, and Major on
March 31, 2006. Due to the existence of the put rights, share-based compensation is
being remeasured at the end of each reporting period and recognized from the date of
issuance of the nonvested stock through September 30, 2010. See Note O of the notes to the
consolidated financial statements in Item 8, Financial Statements and Supplementary Data. Nonqualified Deferred Compensation
  Nonqualified Deferred Compensation  March 31, 2009 (1)
 (2)
    
    
    Aggregate
    
    
    AggregateExecutive
    
    
    Registrant
    
    
    Aggregate
    
    
    Withdrawals/
    
    
    BalanceContributions
    
    
    Contributions
    
    
    Earnings
    
    
    Distributions
    
    
    as ofin Fiscal
    
    
    in Fiscal
    
    
    in Fiscal
    
    
    in Fiscal
    
    
    March 31,Name
    
    Year 2009
    
    
    Year 2009
    
    
    Year 2009
    
    
    Year 2009
    
    
    2009 (2)Mark W. Oppegard
Chief Executive
Officer and
Director
    
    $
    
    
    
    $
    
    
    
    $
    13,842
    
    
    $
    
    
    
    $
    284,311Alan G. Siemek 
Chief Financial
Officer, Senior
Vice President of
Finance and
Administration,
Treasurer, and
Assistant Secretary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Barry S. Major 
Chief Operating
Officer, President,
and Director
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert A. Rupe 
Senior Vice
President 
Bookstore Division
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael J. Kelly 
Senior Vice
President 
Textbook Division
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    See Note N of the notes to the consolidated financial statements in Item 8, Financial
Statements and Supplementary Datafor a brief description of the deferred compensation
plan.(2)
    
    Included herein are above-market earnings of $206 in fiscal year 2009, $5,439 in fiscal
year 2008 and $4,374 in fiscal year 2007 which are included in the Summary Compensation
Table above.  87




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##### Table of Contents



Potential Payments Upon Termination or Change-In-Control
  Potential Payments Upon Termination or Change in Control  March 31, 2009 (1)
 Total(3)
    
    
    
    
    
    
    (5)
    
    
    (5)
    
    
    (5)
    
    
    Potential(2)
    
    
    Prorated
    
    
    (4)
    
    
    Health
    
    
    Life
    
    
    Disability
    
    
    PaymentBase
    
    
    Incentive
    
    
    Restricted
    
    
    Insurance
    
    
    Insurance
    
    
    Insurance
    
    
    UponName
    
    Salary
    
    
    Bonus
    
    
    Stock
    
    
    Benefits
    
    
    Benefits
    
    
    Benefits
    
    
    TerminationMark W. Oppegard 
Chief Executive
Officer and DirectorTermination of
Employment upon
Expiration of
Term
    
    $
    199,992
    
    
    $
    
    
    
    $
    1,070,731
    
    
    $
    8,182
    
    
    $
    252
    
    
    $
    285
    
    
    $
    1,279,442Termination of
Employment
Without Cause
    
    
    199,992
    
    
    
    
    
    
    
    1,070,731
    
    
    
    8,182
    
    
    
    252
    
    
    
    285
    
    
    
    1,279,442Termination of
Employment upon
Death or
Disability
    
    
    99,996
    
    
    
    
    
    
    
    1,070,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,170,727Alan G. Siemek 
Chief Financial
Officer, Senior
Vice President of
Finance and
Administration,
Treasurer, and
Assistant SecretaryTermination of
Employment upon
Expiration of
Term
    
    
    213,990
    
    
    
    
    
    
    
    1,070,731
    
    
    
    8,182
    
    
    
    252
    
    
    
    285
    
    
    
    1,293,440Termination of
Employment
Without Cause
    
    
    213,990
    
    
    
    
    
    
    
    1,070,731
    
    
    
    8,182
    
    
    
    252
    
    
    
    285
    
    
    
    1,293,440Termination of
Employment upon
Death or
Disability
    
    
    106,995
    
    
    
    
    
    
    
    1,070,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,177,726Barry S. Major 
Chief Operating
Officer, President,
and DirectorTermination of
Employment upon
Expiration of
Term
    
    
    284,003
    
    
    
    
    
    
    
    1,070,731
    
    
    
    11,583
    
    
    
    252
    
    
    
    285
    
    
    
    1,366,854Termination of
Employment
Without Cause
    
    
    284,003
    
    
    
    
    
    
    
    1,070,731
    
    
    
    11,583
    
    
    
    252
    
    
    
    285
    
    
    
    1,366,854Termination of
Employment upon
Death or
Disability
    
    
    142,002
    
    
    
    
    
    
    
    1,070,731
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,212,733Robert A. Rupe 
Senior Vice
President -
Bookstore DivisionTermination of
Employment upon
Expiration of
Term
    
    
    230,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    252
    
    
    
    285
    
    
    
    230,543Termination of
Employment
Without Cause
    
    
    230,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    252
    
    
    
    285
    
    
    
    230,543Termination of
Employment upon
Death or
Disability
    
    
    115,003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,003Michael J. Kelly 
Senior Vice
President 
Textbook DivisionTermination of
Employment upon
Expiration of
Term
    
    
    203,008
    
    
    
    
    
    
    
    
    
    
    
    6,660
    
    
    
    252
    
    
    
    285
    
    
    
    210,205Termination of
Employment
Without Cause
    
    
    203,008
    
    
    
    
    
    
    
    
    
    
    
    6,660
    
    
    
    252
    
    
    
    285
    
    
    
    210,205Termination of
Employment upon
Death or
Disability
    
    
    101,504
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,504
  88




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##### Table of Contents



(1)
    
    The Employment Agreements are silent as to how payment amounts are ultimately
determined and how payment is to be made (i.e.  monthly, lump sum, etc.). Our Board of
Directors would ultimately be responsible for approving the terms of such termination
payments.(2)
    
    Base salary in place at time of termination.(3)
    
    It is assumed that the incentive bonus earned for fiscal year 2009 was paid in the
normal course of business. As the assumed termination does not fall within a fiscal year,
no pro rata allocation is necessary.(4)
    
    In accordance with the Stock Repurchase Agreement, if Messrs. Oppegard, Siemek, or
Major are terminated by us without cause or by reason of their death or disability during
the period from March 31, 2006 to September 30, 2010, a number of the shares of nonvested
stock will become vested on the date of termination equal to the 1,400 shares which were
issued times the number of days from March 31, 2006 to the date of termination divided by
the number of days from March 31, 2006 to September 30, 2010. This value represents the
cumulative balance of share-based compensation recognized at March 31, 2009 in Other
Long-Term Liabilities  see Note O of the notes to the consolidated financial statements in
Item 8, Financial Statements and Supplementary Data. For purposes of this table, it is
assumed that Messrs. Oppegard, Siemek, and Major would put the vested shares in
accordance with the Stock Repurchase Agreement upon termination.(5)
    
    Represents premiums paid by us on the Executives behalf. Compensation of Directors
  Compensation Committee Interlocks and Insider Participation
  Compensation Committee Report
   
  89




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##### Table of Contents



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 Security Ownership of Certain Beneficial Owners and Management Executive Compensation th
 Amount andNature ofBeneficial
    
    
    Percent ofTitle of Class/Name of Beneficial Owner
    
    Ownership (1)
    
    
    Class (3)Common Stock:Owning Greater Than 5% of Shares:Weston Presidio Capital IV, L.P. (2)
    
    
    365,449
    
    
    
    66.0
    %Weston Presidio Capital III, L.P. (2)
    
    
    153,623
    
    
    
    27.7
    %WPC Entrepreneur Fund, L.P. (2)
    
    
    7,579
    
    
    
    1.4
    %WPC Entrepreneur Fund II, L.P. (2)
    
    
    5,785
    
    
    
    1.0
    %Ownership of Directors:Mark L. Bono (2)
    
    
    532,436
    
    
    
    96.1
    %R. Sean Honey (2)
    
    
    
    
    
    
    Ownership of Senior Executive Officers Named in Item 11:Mark W. Oppegard
    
    
    18,188
    
    
    
    3.2
    %Alan G. Siemek
    
    
    10,763
    
    
    
    1.9
    %Barry S. Major (4)
    
    
    14,440
    
    
    
    2.6
    %Robert A. Rupe
    
    
    9,514
    
    
    
    1.7
    %Michael J. Kelly
    
    
    10,191
    
    
    
    1.8
    %Ownership of Directors and All Senior Executive Officers as a Group
    
    
    603,457
    
    
    
    98.4
    %
 (1)
    
    Beneficial ownership is determined in accordance with the rules of the SEC and includes
voting and investment power with respect to the shares of NBC common stock. Such shares include
NBC Holdings Corp. shares underlying nonqualified stock options exercisable within sixty days, as
follows: Mr. Oppegard  12,788 shares; Mr. Siemek  9,363 shares; Mr. Major  11,293 shares;
Mr. Rupe  9,514 shares; Mr. Kelly  10,191 shares; and 59,074 shares for all directors and
senior executive officers as a group.(2)
    
    The sole general partner of Weston Presidio Capital IV, L.P., Weston Presidio Capital
III, L.P., WPC Entrepreneur Fund, L.P., and WPC Entrepreneur Fund II, L.P. (the Weston
Presidio Funds) is a limited liability company of which Messrs. Bono and Honey are
members. Messrs. Bono and Honey disclaim beneficial ownership of the shares held by the
Weston Presidio Funds, except to the extent of their respective pecuniary interests
therein. The address of the Weston Presidio Funds, and Messrs. Bono and Honey is 200
Clarendon Street, 50th Floor, Boston, Massachusetts 02116.(3)
    
    The percentages are calculated based upon 554,094 shares of NBC common stock
outstanding as of June 25, 2009 and shares underlying nonqualified stock options
exercisable within sixty days as detailed in footnote (1).(4)
    
    Beneficial ownership includes 1,747 shares of NBC common stock which are pledged as
security for the full and timely payment of remaining amounts due under a promissory note
Mr. Major has with NBC. In January, 1999, NBC issued 4,765 shares of its common stock to
Mr. Major at a price of $52.47 per share, in exchange for $25,000 in cash and a promissory
note in the principal amount of $225,000 bearing interest at 5.25% per year. Remaining
amounts due under the promissory note at March 31, 2009 totaled approximately $91,000.  90




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Securities Authorized for Issuance under Equity Compensation Plans Financial Statements and Supplementary Data
 Number of
    
    
    Weighted-
    
    
    Number ofSecurities to
    
    
    Average
    
    
    Securitiesbe Issued Upon
    
    
    Exercise
    
    
    RemainingExercise of
    
    
    Price of
    
    
    Available forOutstanding
    
    
    Outstanding
    
    
    FuturePlan
    
    Options
    
    
    Options
    
    
    Issuance2004 Stock Option Plan
    
    
    80,203
    
    
    $
    117.18
    
    
    
    4,4632005 Restricted Stock Plan
    
    
    
    
    
    
    
    
    
    
    
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 Director Independence
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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  Fiscal Year Ended March 31,2009
    
    
    2008Audit Fees
    
    $
    215,000
    
    
    $
    218,000Audit-Related Fees
    
    
    
    
    
    
    47,583Tax Fees
    
    
    187,039
    
    
    
    191,460Other Fees
    
    
    
    
    
    
    Total
    
    $
    402,039
    
    
    $
    457,043
 Audit Fees
 Audit-Related Fees
 Tax Fees
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PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    Financial Statements, Financial Statement Schedules, and Exhibits.
 (1)
    
    Consolidated Financial Statements of Nebraska Book Company, Inc.Index to Consolidated Financial Statements.Report of Independent Registered Public Accounting Firm.Consolidated Balance Sheets as of March 31, 2009 and 2008.Consolidated Statements of Operations for the Years Ended March 31, 2009, 2008 and
2007.Consolidated Statements of Stockholders Equity for the Years Ended March 31, 2009,
2008 and 2007.Consolidated Statements of Cash Flows for the Years Ended March 31, 2009, 2008 and
2007.Notes to Consolidated Financial Statements.(2)
    
    Financial Statement Schedules.Schedule II (Item 15(a)(2))  Valuation and Qualifying Accounts.(3)
    
    Exhibits.2.1
    
    Agreement for Purchase and Sale of Stock, dated as of May 26, 1999 by and among
Nebraska Book Company, Inc., Dennis Rother, and Larry Rother, filed as Exhibit 2.1 to
Nebraska Book Company, Inc. Form 8-K, as amended, dated June 4, 1999, is incorporated
herein by reference.2.2
    
    Agreement of Sale, dated as of September 30, 1999 by and among Nebraska Book
Company, Inc., Michigan College Book Company, Inc., Neds Berkeley Book Company, Inc.,
Ned Shure, Fred Shure, and Jack Barenfanger filed as Exhibit 2.1 to Nebraska Book
Company, Inc. Form 8-K, as amended, dated November 12, 1999, is incorporated herein by
reference.2.3
    
    Agreement of Sale, as amended, dated as of May 11, 2001 between Nebraska Book
Company, Inc. and University Co-operative Society, filed as Exhibit 2.1 to Nebraska
Book Company, Inc. Form 8-K dated May 11, 2001, is incorporated herein by reference.2.4
    
    Agreement and Plan of Merger, dated as of July 1, 2003, by and among
TheCampusHub.com, Inc., Nebraska Book Company, Inc., and NBC Acquisition Corp., filed
as Exhibit 2.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
2003, is incorporated herein by reference.2.5
    
    Share Purchase Agreement, dated as of April 2, 2006, by and among Nebraska
Book, CBA and the Sellers referenced therein, filed as Exhibit 2.1 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated April 6, 2006, is incorporated herein by
reference.2.6
    
    Second Amendment to Share Purchase Agreement, dated as of April 30, 2006, by
and among Nebraska Book, CBA and the Sellers referenced therein, filed as Exhibit 2.1
to Nebraska Book Company, Inc. Current Report on Form 8-K dated May 4, 2006, is
incorporated herein by reference.3.1
    
    Certificate of Incorporation, as amended, of Nebraska Book Company, Inc.,
filed as Exhibit 3.1 to Nebraska Book Company, Inc. Registration Statement on Form S-4,
as amended (File No. 333-48221), is incorporated herein by reference.
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3.2
    
    First Restated By-laws of Nebraska Book Company, Inc., filed as Exhibit 3.2 to
Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 2003, is
incorporated herein by reference.4.1
    
    Indenture dated as of February 13, 1998 by and between Nebraska Book Company,
Inc. and United States Trust Company of New York, as Trustee, filed as Exhibit 4.1 to
Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.4.2
    
    Supplemental Indenture, dated as of July 1, 2002, by and among Specialty Books,
Inc., Nebraska Book Company, Inc., and The Bank of New York, as Trustee, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September
30, 2002, is incorporated herein by reference.4.3
    
    Second Supplemental Indenture, dated March 4, 2004, by and among Nebraska Book
Company, Inc., the subsidiary guarantor named therein and The Bank of New York, as
Trustee, filed as Exhibit 4.3 to Nebraska Book Company, Inc. Registration Statement on
Form S-4 (File No. 333-114891), is incorporated herein by reference.4.4
    
    Supplemental Indenture, dated as of December 31, 2004, by and among NBC
Textbooks LLC, Nebraska Book Company, Inc., each other then existing Subsidiary
Guarantor under the Indenture, and the Trustee, filed as Exhibit 10.1 to Nebraska Book
Company. Inc. Current Report on Form 8-K dated January 6, 2005, is incorporated herein
by reference.4.5
    
    Supplemental Indenture, dated as of May 1, 2006, by and among CBA, Nebraska
Book Company, Inc., each other then existing Subsidiary Guarantor under the Indenture,
and the Trustee, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Current Report on
Form 8-K dated May 4, 2006, is incorporated herein by reference.4.6
    
    Supplemental Indenture, dated as of May 1, 2007, by and among Net Textstore
LLC, Nebraska Book Company, Inc., each other then existing Subsidiary Guarantor under
the Indenture, and the Trustee, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated May 7, 2007, is incorporated herein by reference.4.7
    
    Supplemental Indenture, dated as of January 26, 2009, by and among Campus
Authentic LLC, Nebraska Book Company, Inc., each other then existing Subsidiary
Guarantor under the Indenture, and the Trustee.4.8
    
    Form of Initial Note of Nebraska Book Company, Inc. (included in Exhibit 4.1 as
Exhibit A), filed as Exhibit 4.3 to Nebraska Book Company, Inc. Registration Statement
on Form S-4, as amended (File No. 333-48221), is incorporated herein by reference.4.9
    
    Form of Exchange Note of Nebraska Book Company, Inc. (included in Exhibit 4.1
as Exhibit B), filed as Exhibit 4.4 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.4.10
    
    Indenture, dated March 4, 2004, by and among Nebraska Book Company, Inc., the
subsidiary guarantors parties thereto and BNY Midwest Trust Company as Trustee, filed
as Exhibit 4.6 to Nebraska Book Company, Inc. Registration Statement on Form S-4 (File
No. 333-114891), is incorporated herein by reference.4.11
    
    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in Exhibit 4.6),
filed as Exhibit 4.7 to Nebraska Book Company, Inc. Registration Statement on Form S-4
(File No. 333-114891), is incorporated herein by reference.4.12
    
    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8% Senior Subordinated
Note Due 2012, filed as Exhibit 4.8 to Nebraska Book Company, Inc. Form 10-K for the
fiscal year ended March 31, 2004, is incorporated herein by reference.10.1
    
    Credit Agreement dated as of February 13, 1998 by and among NBC Acquisition
Corp., Nebraska Book Company, Inc., the Chase Manhattan Bank and certain other
financial institutions, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Registration Statement on Form S-4, as amended (File No. 333-48221), is incorporated
herein by reference.
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10.2
    
    First Amendment, dated as of May 21, 1999, to the Credit Agreement, dated as of
February 13, 1998 by and among NBC Acquisition Corp., Nebraska Book Company, Inc., the
Chase Manhattan Bank, and certain other financial institutions, filed as Exhibit 10.1
to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30, 1999, is
incorporated herein by reference.10.3
    
    Second Amendment and Waiver, dated as of April 27, 2000, to the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., the Chase Manhattan Bank, and certain other financial institutions,
filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
June 30, 2000, is incorporated herein by reference.10.4
    
    Third Amendment, dated as of December 20, 2001, to the Credit Agreement, dated
as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska Book Company,
Inc., J.P. Morgan Chase Bank, and certain other financial institutions, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December
31, 2001, is incorporated herein by reference.10.5
    
    Fourth Amendment and Waiver, dated as of June 4, 2002, to and under the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., JPMorgan Chase Bank, and certain other financial institutions,
filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
June 30, 2002, is incorporated herein by reference.10.6
    
    Fifth Amendment and Waiver, dated as of June 13, 2003, to and under the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., JPMorgan Chase Bank, and certain other financial institutions,
filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
June 30, 2003, is incorporated herein by reference.10.7
    
    Amended and Restated Credit Agreement, dated February 13, 1998, as amended and
restated as of December 10, 2003, by and among NBC Acquisition Corp., Nebraska Book
Company, Inc., and the other parties thereto, filed as Exhibit 99.1 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated December 10, 2003, is incorporated
herein by reference.10.8
    
    Amended and Restated Credit Agreement, dated as of March 4, 2004, by and among
NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Several
Lenders parties thereto, JPMorgan Chase Bank as Administrative Agent and Collateral
Agent, Citigroup Global Markets Inc. as Syndication Agent, and Fleet National Bank and
Wells Fargo Bank N.A., as Co-Documentation Agents, filed as Exhibit 10.8 to Nebraska
Book Company, Inc. Registration Statement on Form S-4 (File No. 333-114891), is
incorporated herein by reference.10.9
    
    Second Amendment, dated as of October 20, 2004, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, by and among NBC Holdings Corp., NBC
Acquisition Corp., Nebraska Book Company, Inc., the Several Lenders parties thereto,
JPMorgan Chase Bank as Administrative Agent and Collateral Agent, Citigroup Global
Markets Inc. as Syndication Agent, and Fleet National Bank and Wells Fargo Bank N.A.,
as Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated and filed on October 26, 2004, is incorporated herein
by reference.10.10
    
    Third Amendment, dated as of August 1, 2005, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, by and among NBC Holdings Corp., NBC
Acquisition Corp., Nebraska Book Company, Inc., the Several Lenders parties thereto,
JPMorgan Chase Bank, N.A. as Administrative Agent and Collateral Agent, Citigroup
Global Markets Inc. as Syndication Agent, and Bank of America, N.A. and Wells Fargo
Bank N.A., as Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2005, is incorporated herein by
reference.10.11
    
    Fourth Amendment, dated as of April 26, 2006, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, and as amended by the First Amendment
thereto, dated as of August 6, 2004, the Second Amendment thereto, dated as of October
20, 2004 and the Third Amendment thereto, dated as of August 1, 2005, among Nebraska
Book, NBC Holdings Corp., NBC Acquisition Corp., the lenders party from time to time
thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),as
administrative agent and collateral agent, Citigroup Global Markets Inc. as syndication
agent, and Bank of America, N.A. (as
successor by merger to Fleet National Bank) and Wells Fargo Bank N.A., as
co-documentation agents, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated May 4, 2006, is incorporated herein by reference.
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10.12
    
    Fifth Amendment, dated as of March 30, 2007, to the Amended and Restated
Credit Agreement, dated as of February 13, 1998, as amended and restated as of December
10, 2003, as further amended and restated as of March 4, 2004, and as amended by the
First Amendment thereto, dated as of August 6, 2004, the Second Amendment thereto,
dated as of October 20, 2004 the Third Amendment thereto, dated as of August 1, 2005,
and the Fourth Amendment thereto, dated as of April 26, 2006, among Nebraska Book, NBC
Holdings Corp., NBC Acquisition Corp., the lenders party from time to time thereto,
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),as administrative
agent and collateral agent, Citigroup Global Markets Inc. as syndication agent, and
Bank of America, N.A. (as successor by merger to Fleet National Bank) and Wells Fargo
Bank N.A., as co-documentation agents, filed as Exhibit 10.1 to Nebraska Book Company,
Inc. Current Report on Form 8-K dated April 3, 2007, is incorporated herein by
reference.10.13
    
    Sixth Amendment, dated as of February 3, 2009, to the Amended and Restated
Credit Agreement, dated as of February 13, 1998, as amended and restated as of December
10, 2003, as further amended and restated as of March 4, 2004, and as amended by the
First Amendment thereto, dated as of August 6, 2004, the Second Amendment thereto,
dated as of October 20, 2004, the Third Amendment thereto, dated as of August 1, 2005,
the Fourth Amendment thereto, dated as of April 26, 2006, and the Fifth Amendment
thereto, dated as of March 30, 2007, among Nebraska Book Company, Inc., NBC Holdings
Corp., NBC Acquisition Corp., the lenders party from time to time thereto, JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrative agent and
collateral agent, Citigroup Global Markets Inc., as syndication agent, and Bank of
America, N.A. (as successor by merger to Fleet National Bank) and Wells Fargo N.A., as
co-documentation agents, filed as exhibit 10.1 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated February 3, 2009, is incorporated herein by reference.10.14
    
    Assumption Agreement, dated as of July 1, 2002 between Specialty Books, Inc.
and JPMorgan Chase Bank, as Administrative Agent, filed as Exhibit 10.2 to Nebraska
Book Company, Inc. Form 10-Q for the quarter ended September 30, 2002, is incorporated
herein by reference.10.15
    
    Assumption Agreement, dated as of December 31, 2004, made by NBC Textbooks
LLC, in favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and
other financial institutions parties to the Credit Agreement, filed as Exhibit 10.2 to
Nebraska Book Company, Inc. Current Report on Form 8-K dated January 6, 2005, is
incorporated herein by reference.10.16
    
    Assumption Agreement, dated as of May 1, 2006, made by CBA, in favor of
JPMorgan Chase Bank, N.A., as administrative agent for the banks and other financial
institutions parties to the Credit Agreement, filed as Exhibit 10.3 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated May 4, 2006, is incorporated herein by
reference.10.17
    
    Assumption Agreement, dated as of May 1, 2007, made by Net Textstore LLC, in
favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and other
financial institutions parties to the Credit Agreement, filed as Exhibit 10.16 to
Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March 31, 2007, is
incorporated herein by reference.10.18
    
    Assumption Agreement, dated as of January 26, 2009, made by Campus Authentic
LLC, in favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and
other financial institutions parties to the Credit Agreement.10.19
    
    Guarantee and Collateral Agreement, dated as of February 13, 1998 made by NBC
Acquisition Corp. and Nebraska Book Company, Inc. in favor of the Chase Manhattan Bank,
as administrative agent, filed as Exhibit 10.2 to Nebraska Book Company, Inc.
Registration Statement on Form S-4, as amended (File No. 333-48221), is incorporated
herein by reference.10.20
    
    Amended and Restated Guarantee and Collateral Agreement, dated March 4, 2004,
by and among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc. and
Specialty Books, Inc. in favor of JPMorgan Chase Bank, as administrative agent, filed as Exhibit 10.11 to Nebraska Book
Company, Inc. Registration Statement on Form S-4 (File No. 333-114891), is
incorporated herein by reference.
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10.21
    
    Purchase Agreement dated February 10, 1998 by and between Nebraska Book
Company, Inc. and Chase Securities Inc., filed as Exhibit 10.3 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.10.22
    
    Purchase Agreement, dated as of March 4, 2004, by and among Nebraska Book
Company, Inc. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Fleet
Securities, Inc., filed as Exhibit 10.13 to Nebraska Book Company, Inc. Registration
Statement on Form S-4 (File No. 333-114891), is incorporated herein by reference.10.23
    
    Exchange and Registration Rights Agreement, dated as of February 13, 1998 by
and among Nebraska Book Company, Inc. and Chase Securities Inc., filed as Exhibit 4.2
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.10.24
    
    Registration Rights Agreement, dated as of March 4, 2004, by and among
Nebraska Book Company, Inc. and J.P. Morgan Securities Inc., Citigroup Global Markets
Inc. and Fleet Securities, Inc., filed as Exhibit 10.15 to Nebraska Book Company, Inc.
Registration Statement on Form S-4 (File No. 333-114891), is incorporated herein by
reference.10.25*
    
    Form of Memorandum of Understanding, dated as of February 13, 1998 by and between NBC
Acquisition Corp. and each of Mark W. Oppegard, Bruce E. Nevius, Larry R. Rempe,
Kenneth F. Jirovsky, William H. Allen, Thomas A. Hoff and Ardean A. Arndt, filed as
Exhibit 10.4 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.26*
    
    Memorandum of Understanding, dated as of December 22, 1998 by and between Nebraska
Book Company, Inc. and Barry S. Major, Chief Operating Officer, filed as Exhibit 10.1
to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December 31, 1998, is
incorporated herein by reference.10.27*
    
    Addendum to the Memorandum of Understanding, dated as of December 22, 1998 by and
between Nebraska Book Company, Inc. and Barry S. Major, dated March 29, 2002, filed as
Exhibit 10.9 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March
31, 2002, is incorporated herein by reference.10.28*
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Barry S. Major, filed as Exhibit 10.4 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by
reference.10.29*
    
    First Amendment to the Amended and Restated Secured Promissory Note, dated as of
December 31, 2008, between Barry S. Major and NBC Acquisition Corp., filed as Exhibit
10.1 to NBC Acquisition Corp. Current Report on Form 8-K dated January 7, 2009, is
incorporated herein by reference.10.30*
    
    Memorandum of Understanding, dated as of July 1, 1999 by and between Nebraska Book
Company, Inc. and Alan Siemek, Chief Financial Officer, filed as Exhibit 10.1 to
Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 1999, is
incorporated herein by reference.10.31*
    
    Addendum to the Memorandum of Understanding, dated as of July 1, 1999 by and between
Nebraska Book Company, Inc. and Alan Siemek, dated March 29, 2002, filed as Exhibit
10.11 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March 31,
2002, is incorporated herein by reference.10.32*
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Alan Siemek, filed as Exhibit 10.5 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.33*
    
    Memorandum of Understanding, dated as of November 1, 1999 by and between Nebraska
Book Company, Inc. and Michael J. Kelly, Vice President of e-commerce, filed as Exhibit
10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December 31, 1999,
is incorporated herein by reference.
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10.34*
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Michael J. Kelly, filed as Exhibit 10.6 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by
reference.10.35*
    
    Memorandum of Understanding, dated as of April 17, 2001 by and between Nebraska Book
Company, Inc. and Robert Rupe, Senior Vice President of the Bookstore Division, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
2001, is incorporated herein by reference.10.36*
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Robert Rupe, filed as Exhibit 10.7 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.37*
    
    Amendment to the Memorandums of Understanding by and between Nebraska Book Company,
Inc. and each of Mark W. Oppegard, Larry R. Rempe, Kenneth F. Jirovsky, William H.
Allen, Thomas A. Hoff, Barry S. Major, Alan Siemek, Michael J. Kelly, and Robert Rupe,
dated March 4, 2004, filed as Exhibit 10.27 to Nebraska Book Company, Inc. Form 10-K
for the fiscal year ended March 31, 2004, is incorporated herein by reference.10.38*
    
    NBC Acquisition Corp. 1995 Stock Incentive Plan adopted August 31, 1995, filed as
Exhibit 10.5 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.39*
    
    NBC Acquisition Corp. 1998 Performance Stock Option Plan adopted June 30, 1998, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
1998, is incorporated herein by reference.10.40*
    
    First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp. 1998
Performance Stock Option Plan adopted June 30, 1998, filed as Exhibit 10.2 to Nebraska
Book Company, Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated
herein by reference.10.41*
    
    NBC Acquisition Corp. 1998 Stock Option Plan adopted June 30, 1998, filed as Exhibit
10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30, 1998, is
incorporated herein by reference.10.42*
    
    First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp. 1998 Stock
Option Plan adopted June 30, 1998, filed as Exhibit 10.3 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.43*
    
    NBC Acquisition Corp. 2003 Performance Stock Option Plan adopted July 1, 2003, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
September 30, 2003, is incorporated herein by reference.10.44*
    
    NBC Acquisition Corp. 2003 Stock Option Plan adopted July 1, 2003, filed as Exhibit
10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 2003,
is incorporated herein by reference.10.45*
    
    NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004, filed as Exhibit
10.34 to Nebraska Book Company, Inc. Registration Statement on Form S-4 (File No.
333-114891), is incorporated herein by reference.10.46*
    
    First Amendment, dated August 18, 2008, to the NBC Holdings Corp. 2004 Stock Option
Plan adopted March 4, 2004, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form
10-Q for the quarter ended September 30, 2008, is incorporated herein by reference.10.47*
    
    NBC Holdings Corp. 2005 Restricted Stock Plan adopted September 29, 2005, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September
30, 2005, is incorporated herein by reference.10.48*
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Current Report on Form
8-K dated April 6, 2006, is incorporated herein by reference.
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10.49*
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Major, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.50*
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Siemek, filed as Exhibit 10.3 to Nebraska Book Company, Inc. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.51*
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.4 to Nebraska Book Company, Inc. Current Report on Form
8-K dated April 6, 2006, is incorporated herein by reference.10.52*
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Major,
filed as Exhibit 10.5 to Nebraska Book Company, Inc. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.53*
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Siemek,
filed as Exhibit 10.6 to Nebraska Book Company, Inc. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.54*
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Oppegard, filed as Exhibit 10.7 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.55*
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Major, filed as Exhibit 10.8 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.56*
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Siemek, filed as Exhibit 10.9 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.57*
    
    NBC Acquisition Corp. Senior Management Bonus Plan adopted June 30, 1998, filed as
Exhibit 10.3 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
1998, is incorporated herein by reference.10.58*
    
    Form of Deferred Compensation Agreement by and among Nebraska Book Company, Inc. and
each of Mark W. Oppegard, Bruce E. Nevius, Larry R. Rempe and Thomas A. Hoff, filed as
Exhibit 10.6 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.59*
    
    Amendment of Form of Deferred Compensation Agreement, dated December 30, 2002, by and
among Nebraska Book Company, Inc. and each of Mark W. Oppegard, Larry R. Rempe and
Thomas A. Hoff, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
quarter ended December 31, 2002, is incorporated herein by reference.10.60*
    
    NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.7 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.10.61
    
    Agreement for Purchase and Sale of Stock dated January 9, 1998 by and among
Nebraska Book Company, Inc. and Martin D. Levine, the Lauren E. Levine Grantor Trust
and the Jonathan L. Levine Grantor Trust (the Collegiate Stores Corporation
Agreement), filed as Exhibit 10.8.1 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.10.62
    
    First Amendment dated January 23, 1998 to the Collegiate Stores Corporation
Agreement, filed as Exhibit 10.8.2 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.
  99




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10.63
    
    Commercial Lease Agreement made and entered into March 8, 1989, by and among
Robert J. Chaney, Mary Charlotte Chaney and Robert J. Chaney, as Trustee under the Last
Will and Testament of James A Chaney, and Nebraska Book Company, Inc., filed as Exhibit
10.9 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended
(File No. 333-48221), is incorporated herein by reference.10.64
    
    Lease Agreement entered into as of September 1, 1986, by and among Odell
Associates Limited Partnership and Nebraska Book Company, Inc., filed as Exhibit 10.10
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.10.65
    
    Lease Agreement entered into as of September 1, 1986, by and among John B.
DeVine, successor trustee of the Fred C. Ulrich Trust, as amended, and Nebraska Book
Company, Inc., filed as Exhibit 10.11 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.10.66
    
    Lease Agreement entered into as of September 1, 1986 by and among Odell
Associates Limited Partnership and Nebraska Book Company, Inc., filed as Exhibit 10.12
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.10.67
    
    Lease Agreement made and entered into October 12, 1988 by and among Hogarth
Management and Nebraska Book Company, Inc., filed as Exhibit 10.13 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.
  100




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12.1
    
    Statements regarding computation of ratios, filed as Exhibit 12.1 to Nebraska Book
Company, Inc. Registration Statement on Form S-4 (File No. 333-114891), is
incorporated herein by reference.14.1
    
    Code of Business Conduct and Ethics and Code of Ethics for Our Principal
Executive Officer and Senior Financial Officers for Nebraska Book Company, Inc., filed
as Exhibit 14.1 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended
March 31, 2004, is incorporated herein by reference.21.1
    
    Subsidiaries of Nebraska Book Company, Inc., filed as Exhibit 21.1 to Nebraska
Book Company, Inc. Form 10-K for the fiscal year ended March 31, 2007, is incorporated
herein by reference.31.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Mirror Option Agreement between NBC Acquisition Corp. and NBC Holdings Corp.,
dated September 30, 2005, filed as Exhibit 99.1 to Nebraska Book Company, Inc. Form
10-Q for the quarter ended September 30, 2005, is incorporated herein by reference.99.2
    
    Mirror Restricted Stock Agreement between NBC Acquisition Corp. and NBC
Holdings Corp., dated March 31, 2006, filed as Exhibit 99.2 to Nebraska Book Company,
Inc. Form 10-K for the fiscal year ended March 31, 2006, is incorporated herein by
reference.
 *-
    
    Management contracts or compensatory plans filed herewith or incorporated by reference.   101




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Signature  NEBRASKA BOOK COMPANY, INC./s/  Mark W. OppegardMark W. OppegardChief Executive Officer and DirectorJune 25, 2009  /s/ Mark W. Oppegard
    
    /s/ Mark L. BonoMark W. Oppegard
    
    Mark L. BonoChief Executive Officer and Director
    
    Director(principal executive officer)
    
    June 25, 2009June 25, 2009/s/ Alan G. Siemek
    
    /s/ R. Sean HoneyAlan G. Siemek
    
    R. Sean HoneyChief Financial Officer, Senior Vice President of Finance
    
    Directorand Administration, Treasurer, and Assistant Secretary
    
    June 25, 2009(principal financial and accounting officer)June 25, 2009/s/ Barry S. MajorBarry S. MajorPresident and DirectorJune 25, 2009
 
 Supplemental Information to Be Furnished With Reports Filed Pursuant to Section 15(d) of the
Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act:
   102




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NEBRASKA BOOK COMPANY, INC.
 
 SCHEDULE II (ITEM 15(a)(2))  VALUATION AND QUALIFYING ACCOUNTS
 Charged to
    
    
    AddedBeginning of
    
    
    Charged to
    
    
    Other
    
    
    through
    
    
    
    
    
    
    End ofFiscal Year
    
    
    Costs and
    
    
    Accounts
    
    
    Stock
    
    
    Net
    
    
    Fiscal YearBalance
    
    
    Expenses
    
    
    (Revenue)
    
    
    Acquisitions
    
    
    Charge-Offs
    
    
    BalanceFISCAL YEAR ENDED MARCH 31, 2009Allowance for doubtful accounts
    
    $
    1,033,360
    
    
    $
    1,366,979
    
    
    $
    
    
    
    $
    
    
    
    $
    (1,116,979
    )
    
    $
    1,283,360Allowance for sales returns
    
    
    5,292,620
    
    
    
    
    
    
    
    32,627,107
    
    
    
    
    
    
    
    (32,467,561
    )
    
    
    5,452,166FISCAL YEAR ENDED MARCH 31, 2008Allowance for doubtful accounts
    
    
    1,100,360
    
    
    
    468,007
    
    
    
    
    
    
    
    
    
    
    
    (535,007
    )
    
    
    1,033,360Allowance for sales returns
    
    
    4,958,090
    
    
    
    
    
    
    
    29,591,517
    
    
    
    
    
    
    
    (29,256,987
    )
    
    
    5,292,620FISCAL YEAR ENDED MARCH 31, 2007Allowance for doubtful accounts
    
    
    510,839
    
    
    
    834,442
    
    
    
    
    
    
    
    510,846
    
    
    
    (755,767
    )
    
    
    1,100,360Allowance for sales returns
    
    
    4,874,516
    
    
    
    
    
    
    
    29,553,584
    
    
    
    
    
    
    
    (29,470,010
    )
    
    
    4,958,090
  103




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##### Table of Contents



EXHIBIT INDEX
 2.1
    
    
    Agreement for Purchase and Sale of Stock, dated as of May 26, 1999 by and among
Nebraska Book Company, Inc., Dennis Rother, and Larry Rother, filed as Exhibit 2.1 to
Nebraska Book Company, Inc. Form 8-K, as amended, dated June 4, 1999, is incorporated
herein by reference.2.2
    
    
    Agreement of Sale, dated as of September 30, 1999 by and among Nebraska Book
Company, Inc., Michigan College Book Company, Inc., Neds Berkeley Book Company, Inc.,
Ned Shure, Fred Shure, and Jack Barenfanger filed as Exhibit 2.1 to Nebraska Book
Company, Inc. Form 8-K, as amended, dated November 12, 1999, is incorporated herein by
reference.2.3
    
    
    Agreement of Sale, as amended, dated as of May 11, 2001 between Nebraska Book
Company, Inc. and University Co-operative Society, filed as Exhibit 2.1 to Nebraska
Book Company, Inc. Form 8-K dated May 11, 2001, is incorporated herein by reference.2.4
    
    
    Agreement and Plan of Merger, dated as of July 1, 2003, by and among
TheCampusHub.com, Inc., Nebraska Book Company, Inc. and NBC Acquisition Corp., filed as
Exhibit 2.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
2003, is incorporated herein by reference.2.5
    
    
    Share Purchase Agreement, dated as of April 2, 2006, by and among Nebraska
Book, CBA and the Sellers referenced therein, filed as Exhibit 2.1 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated April 6, 2006, is incorporated herein by
reference.2.6
    
    
    Second Amendment to Share Purchase Agreement, dated as of April 30, 2006, by
and among Nebraska Book, CBA and the Sellers referenced therein, filed as Exhibit 2.1
to Nebraska Book Company, Inc. Current Report on Form 8-K dated May 4, 2006, is
incorporated herein by reference.3.1
    
    
    Certificate of Incorporation, as amended, of Nebraska Book Company, Inc.,
filed as Exhibit 3.1 to Nebraska Book Company, Inc. Registration Statement on Form S-4,
as amended (File No. 333-48221), is incorporated herein by reference.3.2
    
    
    First Restated By-laws of Nebraska Book Company, Inc., filed as Exhibit 3.2 to
Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 2003, is
incorporated herein by reference.4.1
    
    
    Indenture, dated as of February 13, 1998 by and between Nebraska Book Company,
Inc. and United States Trust Company of New York, as Trustee, filed as Exhibit 4.1 to
Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.4.2
    
    
    Supplemental Indenture, dated as of July 1, 2002, by and among Specialty Books,
Inc., Nebraska Book Company, Inc., and The Bank of New York, as Trustee, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September
30, 2002, is incorporated herein by reference.4.3
    
    
    Second Supplemental Indenture, dated March 4, 2004, by and among Nebraska Book
Company, Inc., the subsidiary guarantor named therein and The Bank of New York, as
Trustee, filed as Exhibit 4.3 to Nebraska Book Company, Inc. Registration Statement on
Form S-4 (File No. 333-114891), is incorporated herein by reference.4.4
    
    
    Supplemental Indenture, dated as of December 31, 2004, by and among NBC
Textbooks LLC, Nebraska Book Company, Inc., each other then existing Subsidiary
Guarantor under the Indenture, and the Trustee, filed as Exhibit 10.1 to Nebraska Book
Company. Inc. Current Report on Form 8-K dated and filed on January 6, 2005, is
incorporated herein by reference.4.5
    
    
    Supplemental Indenture, dated as of May 1, 2006, by and among CBA, Nebraska
Book Company, Inc., each other then existing Subsidiary Guarantor under the Indenture,
and the Trustee, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Current Report on
Form 8-K dated May 4, 2006, is incorporated herein by reference.
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4.6
    
    
    Supplemental Indenture, dated as of May 1, 2007, by and among Net Textstore
LLC, Nebraska Book Company, Inc., each other then existing Subsidiary Guarantor under
the Indenture, and the Trustee, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated May 7, 2007, is incorporated herein by reference.4.7
    
    
    Supplemental Indenture, dated as of January 26, 2009, by and among Campus
Authentic LLC, Nebraska Book Company, Inc., each other then existing Subsidiary
Guarantor under the Indenture, and the Trustee.4.8
    
    
    Form of Initial Note of Nebraska Book Company, Inc. (included in Exhibit 4.1 as
Exhibit A), filed as Exhibit 4.3 to Nebraska Book Company, Inc. Registration Statement
on Form S-4, as amended (File No. 333-48221), is incorporated herein by reference.4.9
    
    
    Form of Exchange Note of Nebraska Book Company, Inc. (included in Exhibit 4.1
as Exhibit B), filed as Exhibit 4.4 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.4.10
    
    
    Indenture, dated March 4, 2004, by and among Nebraska Book Company, Inc., the
subsidiary guarantors parties thereto and BNY Midwest Trust Company as Trustee, filed
as Exhibit 4.6 to Nebraska Book Company, Inc. Registration Statement on Form S-4 (File
No. 333-114891), is incorporated herein by reference.4.11
    
    
    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in Exhibit 4.6),
filed as Exhibit 4.7 to Nebraska Book Company, Inc. Registration Statement on Form S-4
(File No. 333-114891), is incorporated herein by reference.4.12
    
    
    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8% Senior Subordinated
Note Due 2012, filed as Exhibit 4.8 to Nebraska Book Company, Inc. Form 10-K for the
fiscal year ended March 31, 2004, is incorporated herein by reference.10.1
    
    
    Credit Agreement dated as of February 13, 1998 by and among NBC Acquisition
Corp., Nebraska Book Company, Inc., the Chase Manhattan Bank and certain other
financial institutions, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Registration Statement on Form S-4, as amended (File No. 333-48221), is incorporated
herein by reference.10.2
    
    
    First Amendment, dated as of May 21, 1999, to the Credit Agreement, dated as of
February 13, 1998 by and among NBC Acquisition Corp., Nebraska Book Company, Inc., the
Chase Manhattan Bank, and certain other financial institutions, filed as Exhibit 10.1
to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30, 1999, is
incorporated herein by reference.10.3
    
    
    Second Amendment and Waiver, dated as of April 27, 2000, to the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., the Chase Manhattan Bank, and certain other financial institutions,
filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
June 30, 2000, is incorporated herein by reference.10.4
    
    
    Third Amendment, dated as of December 20, 2001, to the Credit Agreement, dated
as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska Book Company,
Inc., J.P. Morgan Chase Bank, and certain other financial institutions, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December
31, 2001, is incorporated herein by reference.10.5
    
    
    Fourth Amendment and Waiver, dated as of June 4, 2002, to and under the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., JPMorgan Chase Bank, and certain other financial institutions,
filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
June 30, 2002, is incorporated herein by reference.
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10.6
    
    
    Fifth Amendment and Waiver, dated as of June 13, 2003, to and under the Credit
Agreement, dated as of February 13, 1998, by and among NBC Acquisition Corp., Nebraska
Book Company, Inc., JPMorgan ChaseBank, and certain other financial institutions, filed as Exhibit 10.1 to Nebraska Book
Company, Inc. Form 10-Q for the quarter ended June 30, 2003, is incorporated herein by
reference.10.7
    
    
    Amended and Restated Credit Agreement, dated February 13, 1998, as amended and
restated as of December 10, 2003, by and among NBC Acquisition Corp., Nebraska Book
Company, Inc., and the other parties thereto, filed as Exhibit 99.1 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated December 10, 2003, is incorporated
herein by reference.10.8
    
    
    Amended and Restated Credit Agreement, dated as of March 4, 2004, by and among
NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Several
Lenders parties thereto, JPMorgan Chase Bank as Administrative Agent and Collateral
Agent, Citigroup Global Markets Inc. as Syndication Agent, and Fleet National Bank and
Wells Fargo Bank N.A., as Co-Documentation Agents, filed as Exhibit 10.8 to Nebraska
Book Company, Inc. Registration Statement on Form S-4 (File No. 333-114891), is
incorporated herein by reference.10.9
    
    
    Second Amendment, dated as of October 20, 2004, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, by and among NBC Holdings Corp., NBC
Acquisition Corp., Nebraska Book Company, Inc., the Several Lenders parties thereto,
JPMorgan Chase Bank as Administrative Agent and Collateral Agent, Citigroup Global
Markets Inc. as Syndication Agent, and Fleet National Bank and Wells Fargo Bank N.A.,
as Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated and filed on October 26, 2004, is incorporated herein
by reference.10.10
    
    
    Third Amendment, dated as of August 1, 2005, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, by and among NBC Holdings Corp., NBC
Acquisition Corp., Nebraska Book Company, Inc., the Several Lenders parties thereto,
JPMorgan Chase Bank, N.A. as Administrative Agent and Collateral Agent, Citigroup
Global Markets Inc. as Syndication Agent, and Bank of America, N.A. and Wells Fargo
Bank N.A., as Co-Documentation Agents, filed as Exhibit 10.1 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2005, is incorporated herein by
reference.10.11
    
    
    Fourth Amendment, dated as of April 26, 2006, to the Amended and Restated
Credit Agreement, dated as of March 4, 2004, and as amended by the First Amendment
thereto, dated as of August 6, 2004, the Second Amendment thereto, dated as of October
20, 2004 and the Third Amendment thereto, dated as of August 1, 2005, among Nebraska
Book, NBC Holdings Corp., NBC Acquisition Corp., the lenders party from time to time
thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),as
administrative agent and collateral agent, Citigroup Global Markets Inc. as syndication
agent, and Bank of America, N.A. (as successor by merger to Fleet National Bank) and
Wells Fargo Bank N.A., as co-documentation agents, filed as Exhibit 10.1 to Nebraska
Book Company, Inc. Current Report on Form 8-K dated May 4, 2006, is incorporated herein
by reference.10.12
    
    
    Fifth Amendment, dated as of March 30, 2007, to the Amended and Restated
Credit Agreement, dated as of February 13, 1998, as amended and restated as of December
10, 2003, as further amended and restated as of March 4, 2004, and as amended by the
First Amendment thereto, dated as of August 6, 2004, the Second Amendment thereto,
dated as of October 20, 2004 the Third Amendment thereto, dated as of August 1, 2005,
and the Fourth Amendment thereto, dated as of April 26, 2006, among Nebraska Book, NBC
Holdings Corp., NBC Acquisition Corp., the lenders party from time to time thereto,
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank),as administrative
agent and collateral agent, Citigroup Global Markets Inc. as syndication agent, and
Bank of America, N.A. (as successor by merger to Fleet National Bank) and Wells Fargo
Bank N.A., as co-documentation agents, filed as Exhibit 10.1 to Nebraska Book Company,
Inc. Current Report on Form 8-K dated April 3, 2007, is incorporated herein by
reference.
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10.13
    
    
    Sixth Amendment, dated as of February 3, 2009, to the Amended and Restated
Credit Agreement, dated as of February 13, 1998, as amended and restated as of December
10, 2003, as further amended and restated as of March 4, 2004, and as amended by the
First Amendment thereto, dated as of August 6, 2004, the Second Amendment thereto,
dated as of October 20, 2004, the Third Amendment thereto, dated as of August 1, 2005,
the Fourth Amendment thereto, dated as of April 26, 2006, the Fifth Amendment thereto,
dated as of March 30, 2007, among Nebraska Book Company, Inc., NBC Holdings Corp., NBC
Acquisition Corp., the lenders party
from time to time thereto, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase
Bank), as administrative agent and collateral agent, Citigroup Global Markets Inc., as
syndication agent, and Bank of America, N.A. (as successor by merger to Fleet National
Bank) and Wells Fargo Bank N.A., as co-documentation agents, filed as Exhibit 10.1 to
Nebraska Book Company, Inc. Current Report on form 8-K dated February 3, 2009, is
incorporated herein by reference.10.14
    
    
    Assumption Agreement, dated as of July 1, 2002 between Specialty Books, Inc.
and JPMorgan Chase Bank, as Administrative Agent, filed as Exhibit 10.2 to Nebraska
Book Company, Inc. Form 10-Q for the quarter ended September 30, 2002, is incorporated
herein by reference.10.15
    
    
    Assumption Agreement, dated as of December 31, 2004, made by NBC Textbooks
LLC, in favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and
other financial institutions parties to the Credit Agreement, filed as Exhibit 10.2 to
Nebraska Book Company, Inc. Current Report on Form 8-K dated January 6, 2005, is
incorporated herein by reference.10.16
    
    
    Assumption Agreement, dated as of May 1, 2006, made by CBA, in favor of
JPMorgan Chase Bank, N.A., as administrative agent for the banks and other financial
institutions parties to the Credit Agreement, filed as Exhibit 10.3 to Nebraska Book
Company, Inc. Current Report on Form 8-K dated May 4, 2006, is incorporated herein by
reference.10.17
    
    
    Assumption Agreement, dated as of May 1, 2007, made by Net Textstore LLC, in
favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and other
financial institutions parties to the Credit Agreement, filed as Exhibit 10.16 to
Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March 31, 2007, is
incorporated herein by reference.10.18
    
    
    Assumption Agreement, dated as of January 26, 2009, made by Campus Authentic
LLC, in favor of JPMorgan Chase Bank, N.A., as administrative agent for the banks and
other financial institutions parties to the Credit Agreement.10.19
    
    
    Guarantee and Collateral Agreement, dated as of February 13, 1998 made by NBC
Acquisition Corp. and Nebraska Book Company, Inc. in favor of the Chase Manhattan Bank,
as administrative agent, filed as Exhibit 10.2 to Nebraska Book Company, Inc.
Registration Statement on Form S-4, as amended (File No. 333-48221), is incorporated
herein by reference.10.20
    
    
    Amended and Restated Guarantee and Collateral Agreement, dated March 4, 2004,
by and among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc. and
Specialty Books, Inc. in favor of JPMorgan Chase Bank, as administrative agent, filed
as Exhibit 10.11 to Nebraska Book Company, Inc. Registration Statement on Form S-4
(File No. 333-114891), is incorporated herein by reference.10.21
    
    
    Purchase Agreement dated February 10, 1998 by and between Nebraska Book
Company, Inc. and Chase Securities Inc., filed as Exhibit 10.3 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.10.22
    
    
    Purchase Agreement, dated as of March 4, 2004, by and among Nebraska Book
Company, Inc. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Fleet
Securities, Inc., filed as Exhibit 10.13 to Nebraska Book Company, Inc. Registration
Statement on Form S-4 (File No. 333-114891), is incorporated herein by reference.10.23
    
    
    Exchange and Registration Rights Agreement, dated as of February 13, 1998 by
and among Nebraska Book Company, Inc. and Chase Securities Inc., filed as Exhibit 4.2
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.10.24
    
    
    Registration Rights Agreement, dated as of March 4, 2004, by and among
Nebraska Book Company, Inc. and J.P. Morgan Securities Inc., Citigroup Global Markets
Inc. and Fleet Securities, Inc., filed as Exhibit 10.15 to
Nebraska Book Company, Inc. Registration Statement on Form S-4 (File No. 333-114891),
is incorporated herein by reference.
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10.25*
    
    
    Form of Memorandum of Understanding, dated as of February 13, 1998 by and between NBC
Acquisition Corp. and each of Mark W. Oppegard, Bruce E. Nevius, Larry R. Rempe,
Kenneth F. Jirovsky, William H. Allen, Thomas A. Hoff and Ardean A. Arndt, filed as
Exhibit 10.4 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.26*
    
    
    Memorandum of Understanding, dated as of December 22, 1998 by and between Nebraska
Book Company, Inc. and Barry S. Major, Chief Operating Officer, filed as Exhibit 10.1
to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December 31, 1998, is
incorporated herein by reference.10.27*
    
    
    Addendum to the Memorandum of Understanding, dated as of December 22, 1998 by and
between Nebraska Book Company, Inc. and Barry S. Major, dated March 29, 2002, filed as
Exhibit 10.9 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March
31, 2002, is incorporated herein by reference.10.28*
    
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Barry S. Major, filed as Exhibit 10.4 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by
reference.10.29*
    
    First Amendment to the Amended and Restated Secured Promissory Note, dated as of
December 31, 2008, between Barry S. Major and NBC Acquisition Corp., filed as Exhibit
10.1 to NBC Acquisition Corp. Current Report on Form 8-K dated January 7, 2009, is
incorporated herein by reference.10.30*
    
    
    Memorandum of Understanding, dated as of July 1, 1999 by and between Nebraska Book
Company, Inc. and Alan Siemek, Chief Financial Officer, filed as Exhibit 10.1 to
Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 1999, is
incorporated herein by reference.10.31*
    
    
    Addendum to the Memorandum of Understanding, dated as of July 1, 1999 by and between
Nebraska Book Company, Inc. and Alan Siemek, dated March 29, 2002, filed as Exhibit
10.11 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March 31,
2002, is incorporated herein by reference.10.32*
    
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Alan Siemek, filed as Exhibit 10.5 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.33*
    
    
    Memorandum of Understanding, dated as of November 1, 1999 by and between Nebraska
Book Company, Inc. and Michael J. Kelly, Vice President of e-commerce, filed as Exhibit
10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended December 31, 1999,
is incorporated herein by reference.10.34*
    
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Michael J. Kelly, filed as Exhibit 10.6 to Nebraska Book Company,
Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by
reference.10.35*
    
    
    Memorandum of Understanding, dated as of April 17, 2001 by and between Nebraska Book
Company, Inc. and Robert Rupe, Senior Vice President of the Bookstore Division, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
2001, is incorporated herein by reference.10.36*
    
    
    Amended and Restated Secured Promissory Note dated July 9, 2002 by and between NBC
Acquisition Corp. and Robert Rupe, filed as Exhibit 10.7 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.37*
    
    
    Amendment to the Memorandums of Understanding by and between Nebraska Book Company,
Inc. and each of Mark W. Oppegard, Larry R. Rempe, Kenneth F. Jirovsky, William H.
Allen, Thomas A. Hoff, Barry S. Major,
Alan Siemek, Michael J. Kelly, and Robert Rupe, dated March 4, 2004, filed as Exhibit
10.27 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended March 31,
2004, is incorporated herein by reference.
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10.38*
    
    
    NBC Acquisition Corp. 1995 Stock Incentive Plan adopted August 31, 1995, filed as
Exhibit 10.5 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.39*
    
    
    NBC Acquisition Corp. 1998 Performance Stock Option Plan adopted June 30, 1998, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
1998, is incorporated herein by reference.10.40*
    
    
    First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp. 1998
Performance Stock Option Plan adopted June 30, 1998, filed as Exhibit 10.2 to Nebraska
Book Company, Inc. Form 10-Q for the quarter ended June 30, 2002, is incorporated
herein by reference.10.41*
    
    
    NBC Acquisition Corp. 1998 Stock Option Plan adopted June 30, 1998, filed as Exhibit
10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30, 1998, is
incorporated herein by reference.10.42*
    
    
    First Amendment, dated as of June 12, 2002, to the NBC Acquisition Corp. 1998 Stock
Option Plan adopted June 30, 1998, filed as Exhibit 10.3 to Nebraska Book Company, Inc.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.43*
    
    
    NBC Acquisition Corp. 2003 Performance Stock Option Plan adopted July 1, 2003, filed
as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended
September 30, 2003, is incorporated herein by reference.10.44*
    
    
    NBC Acquisition Corp. 2003 Stock Option Plan adopted July 1, 2003, filed as Exhibit
10.2 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September 30, 2003,
is incorporated herein by reference.10.45*
    
    
    NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004, filed as Exhibit
10.34 to Nebraska Book Company, Inc. Registration Statement on Form S-4 (File No.
333-114891), is incorporated herein by reference.10.46*
    
    
    First Amendment, dated August 18, 2008, to the NBC Holdings Corp. 2004 Stock Option
Plan adopted March 4, 2004, filed as Exhibit 10.1 to NBC Acquisition Corp. Form 10-Q
for the quarter ended September 30, 2008, is incorporated herein by reference.10.47*
    
    
    NBC Holdings Corp. 2005 Restricted Stock Plan adopted September 29, 2005, filed as
Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended September
30, 2005, is incorporated herein by reference.10.48*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Current Report on Form
8-K dated April 6, 2006, is incorporated herein by reference.10.49*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Major, filed as Exhibit 10.2 to Nebraska Book Company, Inc. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.50*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Siemek, filed as Exhibit 10.3 to Nebraska Book Company, Inc. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.51*
    
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.4 to Nebraska Book Company, Inc. Current Report on Form
8-K dated April 6, 2006, is incorporated herein by reference.
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10.52*
    
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Major,
filed as Exhibit 10.5 to Nebraska Book Company, Inc. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.53*
    
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Siemek,
filed as Exhibit 10.6 to Nebraska Book Company, Inc. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.54*
    
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Oppegard, filed as Exhibit 10.7 to Nebraska Book Company, Inc.
Current Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.55*
    
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Major, filed as Exhibit 10.8 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.56*
    
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Siemek, filed as Exhibit 10.9 to Nebraska Book Company, Inc. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.57*
    
    
    NBC Acquisition Corp. Senior Management Bonus Plan adopted June 30, 1998, filed as
Exhibit 10.3 to Nebraska Book Company, Inc. Form 10-Q for the quarter ended June 30,
1998, is incorporated herein by reference.10.58*
    
    
    Form of Deferred Compensation Agreement by and among Nebraska Book Company, Inc. and
each of Mark W. Oppegard, Bruce E. Nevius, Larry R. Rempe and Thomas A. Hoff, filed as
Exhibit 10.6 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as
amended (File No. 333-48221), is incorporated herein by reference.10.59*
    
    
    Amendment of Form of Deferred Compensation Agreement, dated December 30, 2002, by and
among Nebraska Book Company, Inc. and each of Mark W. Oppegard, Larry R. Rempe and
Thomas A. Hoff, filed as Exhibit 10.1 to Nebraska Book Company, Inc. Form 10-Q for the
quarter ended December 31, 2002, is incorporated herein by reference.10.60*
    
    
    NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.7 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.10.61
    
    
    Agreement for Purchase and Sale of Stock dated January 9, 1998 by and among
Nebraska Book Company, Inc. and Martin D. Levine, the Lauren E. Levine Grantor Trust
and the Jonathan L. Levine Grantor Trust (the Collegiate Stores Corporation
Agreement), filed as Exhibit 10.8.1 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.10.62
    
    
    First Amendment dated January 23, 1998 to the Collegiate Stores Corporation
Agreement, filed as Exhibit 10.8.2 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.10.63
    
    
    Commercial Lease Agreement made and entered into March 8, 1989, by and among
Robert J. Chaney, Mary Charlotte Chaney and Robert J. Chaney, as Trustee under the Last
Will and Testament of James A Chaney, and Nebraska Book Company, Inc., filed as Exhibit
10.9 to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended
(File No. 333-48221), is incorporated herein by reference.10.64
    
    
    Lease Agreement entered into as of September 1, 1986, by and among Odell
Associates Limited Partnership and Nebraska Book Company, Inc., filed as Exhibit 10.10
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.
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10.65
    
    
    Lease Agreement entered into as of September 1, 1986, by and among John B.
DeVine, successor trustee of the Fred C. Ulrich Trust, as amended, and Nebraska Book
Company, Inc., filed as Exhibit 10.11 to Nebraska Book Company, Inc. Registration
Statement on Form S-4, as amended (File No. 333-48221), is incorporated herein by
reference.10.66
    
    
    Lease Agreement entered into as of September 1, 1986 by and among Odell
Associates Limited Partnership and Nebraska Book Company, Inc., filed as Exhibit 10.12
to Nebraska Book Company, Inc. Registration Statement on Form S-4, as amended (File No.
333-48221), is incorporated herein by reference.10.67
    
    
    Lease Agreement made and entered into October 12, 1988 by and among Hogarth
Management and Nebraska Book Company, Inc., filed as Exhibit 10.13 to Nebraska Book
Company, Inc. Registration Statement on Form S-4, as amended (File No. 333-48221), is
incorporated herein by reference.12.1
    
    
    Statements regarding computation of ratios, filed as Exhibit 12.1 to Nebraska
Book Company, Inc. Registration Statement on Form S-4 (File No. 333-114891), is
incorporated herein by reference.14.1
    
    
    Code of Business Conduct and Ethics and Code of Ethics for Our Principal
Executive Officer and Senior Financial Officers for Nebraska Book Company, Inc., filed
as Exhibit 14.1 to Nebraska Book Company, Inc. Form 10-K for the fiscal year ended
March 31, 2004, is incorporated herein by reference.21.1
    
    
    Subsidiaries of Nebraska Book Company, Inc., filed as Exhibit 21.1 to Nebraska
Book Company, Inc. Form 10-K for the fiscal year ended March 31, 2007, is incorporated
herein by reference.31.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    
    Mirror Option Agreement between NBC Acquisition Corp. and NBC Holdings Corp.,
dated September 30, 2005, filed as Exhibit 99.1 to Nebraska Book Company, Inc. Form
10-Q for the quarter ended September 30, 2005, is incorporated herein by reference.99.2
    
    
    Mirror Restricted Stock Agreement between NBC Acquisition Corp. and NBC
Holdings Corp., dated March 31, 2006, filed as Exhibit 99.2 to Nebraska Book Company,
Inc. Form 10-K for the fiscal year ended March 31, 2006, is incorporated herein by
reference.
 *
    
    - Management contracts or compensatory plans filed herewith or incorporated by reference.   111