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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, 2011
 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 333-48225
 NBC Acquisition Corp.
  Delaware
    
    47-0793347(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 4700 South 19th Street
Lincoln, NE 68501-0529
 (402) 421-7300
 None  None
 Yes o Noþ
 Yes þ o
 o o
 o o
 þ
 o o Non-accelerated filer þ (do
not check if a smaller reporting company) o
 o No þ
 Not
applicable as registrants stock is not publicly traded.
 There were 554,094 shares of common stock outstanding as of July 14, 2011.
 None
  Page 113




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##### 



TABLE OF CONTENTS
 PART I:Item 1 Business
    
    
    3Item 1A Risk Factors
    
    
    13Item 2 Properties
    
    
    18Item 3 Legal Proceedings
    
    
    18Item 4 (Reserved and Removed)
    
    
    19PART II:Item 5 Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases
of Equity Securities
    
    
    19Item 6 Selected Financial Data
    
    
    20Item 7 Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    23Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    42Item 8 Financial Statements and Supplementary Data
    
    
    44Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    86Item 9A Controls and Procedures
    
    
    86Item 9B Other Information
    
    
    86PART III:Item 10 Directors, Executive Officers and Corporate Governance
    
    
    87Item 11 Executive Compensation
    
    
    89Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    99Item 13 Certain Relationships and Related Transactions, and Director Independence
    
    
    100Item 14 Principal Accountant Fees and Services
    
    
    100PART IV:Item 15 Exhibits and Financial Statement Schedules
    
    
    101Signatures
    
    
    107Supplemental Information to be Furnished
    
    
    107Financial Statement Schedule I  Condensed Financial Information (Parent Company Only)
    
    
    108Financial Statement Schedule II  Valuation and Qualifying Accounts
    
    
    112Exhibit Index
    
    
    113Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I.
 
 ITEM 1. BUSINESS.
       Bankruptcy Proceedings
    3




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Financial Statements and Supplementary Data.
   Plan of Reorganization
   Going Concern
   4




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General
   Bookstore Division.
  Textbook Division. Buyers Guide
 Complementary Services Division.
  5




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Industry Segment Financial Information
 Financial Statements and Supplementary Data www.nebook.com
  Business Strategy
  Capitalize on college bookstore opportunities.
 Re-establish growth in the Textbook Division.
 Increased market penetration through technology solutions
  6




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Expansion of other services programs
 Industry Overview
  College bookstore market.
 (i)
    
    institutional bookstores that are primarily owned and operated by institutions of
higher learning, generally located on-campus;(ii)
    
    contract-managed bookstores owned by institutions of higher learning and managed by
outside, private companies, typically found on-campus; and(iii)
    
    independent privately owned and operated bookstores, generally located off campus.
 Wholesale textbook market.
      7




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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.
   8




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Business Description
 Bookstore Division
     9




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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
    
    
    Year2007
    
    
    139
    
    
    
    120
    
    
    
    15
    
    
    
    2442008
    
    
    244
    
    
    
    23
    
    
    
    7
    
    
    
    2602009
    
    
    260
    
    
    
    24
    
    
    
    7
    
    
    
    2772010
    
    
    277
    
    
    
    20
    
    
    
    17
    
    
    
    2802011
    
    
    280
    
    
    
    21
    
    
    
    9
    
    
    
    292
  Wholesale Procurement and Distribution
     10




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Information Technology
     Customers
     11




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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 800 and 600
stores, respectively);
 
    
    other college bookstores located at colleges and universities that we serve;
 
    
    a number of entities that rent or sell textbooks, sell e-books, other digital content
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.
  
    
    college bookstores who normally repurchase textbooks 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 our
internet services division;
 
    
    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.
  12




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Governmental Regulation
  Insurance
  Employees
   Geographic Financial Information
 Financial Statements and Supplementary Data
 
 ITEM 1A. RISK FACTORS.
  We are subject to a number of risks and uncertainties associated with the Chapter 11
Proceedings
 
    
    our ability to obtain approval of the Court with respect to motions filed in the
Chapter 11 Proceedings from time to time;
    
    our ability to obtain and maintain normal trade terms with suppliers and service
providers and maintain contracts that are critical to our operations;
 
    
    our ability to attract, motivate and retain key employees;
 
    
    our ability to attract and retain customers;
 
    
    our ability to attract and retain the contract-management of on-campus bookstores;
 
    
    our ability to fund and execute our business plan; and
 
    
    our ability to obtain creditor and Court approval for, and then to consummate, a plan
of reorganization to emerge from bankruptcy.
  13




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Financial Statements and
Supplementary Data Financial Statements and Supplementary Data.
  There can be no assurance that we will be able to remain in compliance with the requirements
of the DIP Credit Agreement or that the lending commitments under the DIP Credit Agreement will not
be terminated by our lenders.
  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 .
  14




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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 may not be able to continue to receive funds from NBC, our sole operating subsidiary, to
permit satisfaction of our obligations.
 We may be unable to obtain a sufficient supply of used textbooks, which could adversely impact
our revenue levels and profit margins .
 We may not be able to successfully open or contract-manage additional bookstores or integrate
those additional stores, which could adversely impact our ability to grow revenues and profit
margins .
  15




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We may not be able to successfully renew our contract-managed bookstores on profitable terms,
which could adversely impact our profit margins.
 Publishers may not continue to increase prices of textbooks annually, which could adversely
impact our revenue levels and profit margins .
 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 DIP Revolving
Facility, thereby increasing interest expense and adversely impacting revenue levels by restricting
our ability to buy an adequate supply of used textbooks .
  16




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We are controlled by one principal equity holder, which 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.
 Our substantial indebtedness could limit cash flow available for our operations and could
adversely affect our ability to service debt or obtain additional financing, if necessary.
 
    
    make it more difficult to pay our debts as they become due, especially during general
negative economic and market industry conditions because if our revenues decrease due to
general economic or industry conditions, we may not have sufficient cash flow from
operations to make our scheduled debt payments;
 
    
    limit our flexibility in planning for, or reacting to, changes in our business and
the industry in which we operate and, consequently, places us at a competitive
disadvantage to our competitors with less debt;
 
    
    require us to dedicate a substantial portion of our cash flow from operations to
service our debt, thereby reducing the availability of our cash flow to fund working
capital, capital expenditures, acquisitions and other general corporate purposes;
 
    
    limit our ability to make strategic acquisitions, invest in new products or capital
assets or take advantage of business opportunities;
 
    
    limit our ability to obtain additional financing, particularly in the current
economic environment; and
 
    
    render us more vulnerable to general adverse economic, regulatory and industry
conditions.
 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. Financial
Statements and Supplementary Data
  17




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Our operations are subject to various laws, rules and regulations relating to protection of
the environment and of human health and safety.
 Increases in the price of raw materials used by our suppliers or the reduced availability of
raw materials to our suppliers could increase their cost of goods, which could be passed on to us
through higher prices in new textbooks, clothing and general merchandise, which may decrease our
profitability.
 
 ITEM 2. PROPERTIES.
  
 ITEM 3. LEGAL PROCEEDINGS.
  Financial Statements and Supplementary Data.
    18




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ITEM 4. RESERVED AND REMOVED.
 
 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
  19




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ITEM 6. SELECTED FINANCIAL DATA.
 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 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007(dollars in thousands)Statement of Operations Data:Revenues
    
    $
    598,430
    
    
    $
    605,494
    
    
    $
    610,716
    
    
    $
    581,248
    
    
    $
    544,428Costs of sales (exclusive of depreciation shown below)
    
    
    366,160
    
    
    
    370,196
    
    
    
    371,369
    
    
    
    354,140
    
    
    
    332,444Gross profit
    
    
    232,270
    
    
    
    235,298
    
    
    
    239,347
    
    
    
    227,108
    
    
    
    211,984Operating expenses:Selling, general and administrative (1)
    
    
    176,844
    
    
    
    161,858
    
    
    
    168,315
    
    
    
    157,193
    
    
    
    143,096Closure of California warehouse (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    774Depreciation
    
    
    8,579
    
    
    
    8,517
    
    
    
    7,603
    
    
    
    7,209
    
    
    
    5,916Amortization
    
    
    8,626
    
    
    
    10,853
    
    
    
    11,384
    
    
    
    10,443
    
    
    
    9,613Goodwill impairment (3)
    
    
    89,000
    
    
    
    
    
    
    
    106,972
    
    
    
    
    
    
    
    Income (loss) from operations
    
    
    (50,779
    )
    
    
    54,070
    
    
    
    (54,927
    )
    
    
    52,299
    
    
    
    52,585Other expenses (income):Interest expense
    
    
    51,204
    
    
    
    49,405
    
    
    
    41,603
    
    
    
    41,659
    
    
    
    40,410Interest income
    
    
    (176
    )
    
    
    (180
    )
    
    
    (427
    )
    
    
    (1,332
    )
    
    
    (1,643
    )Loss on early extinguishment of debt (4)
    
    
    
    
    
    
    3,066
    
    
    
    
    
    
    
    
    
    
    
    Loss on derivative instrument (5)
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    198
    
    
    
    225Income (loss) before income taxes
    
    
    (101,807
    )
    
    
    1,779
    
    
    
    (96,205
    )
    
    
    11,774
    
    
    
    13,593Income tax expense (benefit)
    
    
    (3,497
    )
    
    
    (532
    )
    
    
    4,289
    
    
    
    4,558
    
    
    
    5,700Net income (loss)
    
    $
    (98,310
    )
    
    $
    2,311
    
    
    $
    (100,494
    )
    
    $
    7,216
    
    
    $
    7,893Earnings (loss) Per Share:Basic
    
    $
    (180.66
    )
    
    $
    1.33
    
    
    $
    (181.79
    )
    
    $
    13.02
    
    
    $
    14.25Diluted
    
    
    (180.66
    )
    
    
    1.32
    
    
    
    (181.79
    )
    
    
    12.61
    
    
    
    13.89Other Data:Adjusted EBITDA (6)
    
    $
    55,426
    
    
    $
    73,440
    
    
    $
    71,032
    
    
    $
    69,951
    
    
    $
    68,114Net cash flows from operating activities
    
    
    12,827
    
    
    
    30,831
    
    
    
    26,356
    
    
    
    21,101
    
    
    
    27,516Net cash flows from investing activities
    
    
    (16,307
    )
    
    
    (8,766
    )
    
    
    (14,898
    )
    
    
    (22,179
    )
    
    
    (32,809
    )Net cash flows from financing activities
    
    
    (1,046
    )
    
    
    (5,131
    )
    
    
    3,254
    
    
    
    (2,578
    )
    
    
    4,893Capital expenditures
    
    
    5,664
    
    
    
    5,411
    
    
    
    7,979
    
    
    
    7,261
    
    
    
    6,543Business acquisition expenditures (7)
    
    
    9,461
    
    
    
    2,848
    
    
    
    6,321
    
    
    
    14,682
    
    
    
    25,874Number of bookstores open at end of the period
    
    
    292
    
    
    
    280
    
    
    
    277
    
    
    
    260
    
    
    
    244Balance Sheet Data (At End of Period):Cash and cash equivalents
    
    $
    56,447
    
    
    $
    60,973
    
    
    $
    44,038
    
    
    $
    29,326
    
    
    $
    32,983Working capital (8)
    
    
    (280,838
    )
    
    
    168,190
    
    
    
    151,149
    
    
    
    136,729
    
    
    
    130,389Total assets
    
    
    508,307
    
    
    
    616,271
    
    
    
    609,088
    
    
    
    703,364
    
    
    
    697,005Total debt, including current maturities
    
    
    454,118
    
    
    
    454,624
    
    
    
    449,411
    
    
    
    452,204
    
    
    
    445,098Redeemable preferred stock (9)
    
    
    13,601
    
    
    
    11,806
    
    
    
    10,233
    
    
    
    
    
    
    
    
 (1)
    
    Includes share-based compensation of $448, $1,107, $1,289, $1,041 and $997 for the
fiscal years ended March 31, 2011, 2010, 2009, 2008, and 2007, respectively.(2)
    
    Closure of California warehouse expenses are attributable to costs associated with the
October 27, 2006 closure of our California warehouse facility, including one-time
termination benefits, costs to terminate contracts and costs of consolidation/relocation.
Payments of one-time termination benefits extended through April, 2008 and were slightly
lower than the remaining accrual for such benefits at March 31, 2007, resulting in an
adjustment to the accrual during fiscal year 2008.(3)
    
    We determined in the first step of our annual goodwill impairment test conducted at
March 31 that the carrying value of certain reporting units exceeded their fair values,
indicating that goodwill may be impaired for fiscal years ended 2011 and 2009. Having
determined that goodwill may be impaired, we performed the second step of the goodwill
impairment test. As a result, we recorded impairment charges of $89,000 and $106,972 in
fiscal years 2011 and 2009, respectively,
which reduced our goodwill carrying value to $129,437 and $215,436 as of March 31, 2011 and
2009, respectively. See Note G to the consolidated financial statements in Item 8, Financial
Statements and Supplementary Data.  20




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(4)
    
    The loss on early extinguishment of debt for the fiscal year ended March 31, 2010
relates to the write-off of debt issue costs as a result of the termination of the Term
Loan and Revolving Credit Facility. See Note I to the consolidated financial statements in
Item 8, Financial Statements and Supplementary Data.(5)
    
    Our interest rate swap agreement expired on September 30, 2008.(6)
    
    EBITDA is defined as earnings before interest, taxes, depreciation, and amortization.
Adjusted EBITDA is EBITDA adjusted for goodwill impairment and for loss on early
extinguishment of debt. There was no goodwill impairment or loss on early extinguishment
of debt in fiscal years 2008 and 2007; therefore, Adjusted EBITDA equals EBITDA for those
years. As we are highly leveraged and as our equity is not publicly-traded, management
believes that the non-GAAP measures, EBITDA and Adjusted EBITDA, are useful in evaluating
our results and provide additional information for determining our ability to meet debt
service requirements. That belief is driven by the consistent use of the measures in the
computations used to establish the value of our equity over the past 15 years and the fact
that our debt covenants also use those measures, as further described later in this Item,
to measure and monitor our financial results. Due to the importance of EBITDA and Adjusted
EBITDA to our equity and debt holders, our chief operating decision makers and other
members of management use EBITDA and Adjusted EBITDA to measure our overall performance, to
assist in resource allocation decision-making, to develop our budget goals, to determine
incentive compensation goals and payments, and to manage other expenditures among other
uses.With respect to covenant compliance calculations, EBITDA, as defined in the Pre-Petition ABL
Credit Agreement (hereinafter, referred to as Credit Facility EBITDA), includes additional
adjustments to EBITDA. Credit Facility EBITDA is defined in the Pre-Petition ABL Credit
Agreement as: (1) consolidated net income, as defined therein; plus (2) the following items,
to the extent deducted from consolidated net income: (a) income tax expense; (b) interest
expense, amortization or write-off of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with indebtedness; (c) depreciation and
amortization expense; (d) amortization of intangibles and organization costs; (e) any
non-cash extraordinary, unusual or non-recurring expenses or losses; (f) any other non-cash
charges; and (g) charges incurred on or prior to September 30, 2010 in connection with the
restricted stock plan not to exceed $5.0 million in the aggregate; minus (3) the following
items, to the extent included in the statement of net income for such period; (i) interest
income; (ii) any extraordinary, unusual or non-recurring income or gains; and (iii) any other
non-cash income. Credit Facility EBITDA is utilized when calculating the pro forma fixed
charge coverage ratio under the Pre-Petition ABL Credit Agreement. The pro forma
consolidated coverage ratio under the indentures to the Pre-Petition Senior Discount Notes,
the Senior Subordinated Notes and the Pre-Petition Senior Secured Notes uses EBITDA and the
indentures define EBITDA similar to Credit Facility EBITDA except that charges incurred in
connection with the restricted stock plan are not added back to consolidated net income. See
Note I to the consolidated financial statements in Item 8, Financial Statements and
Supplementary Data,for disclosure of certain of our financial covenants.There are material limitations associated with the use of EBITDA and Adjusted EBITDA. EBITDA
and Adjusted EBITDA do not represent and should not be considered as alternatives to net cash
flows from operating activities or net income as determined by accounting principles
generally accepted in the United States of America (GAAP). Furthermore, EBITDA and
Adjusted EBITDA do not necessarily indicate whether cash flows will be sufficient for cash
requirements because the measures do not include reductions for cash payments for our
obligation to service our debt, fund our working capital, make capital expenditures and make
acquisitions or pay our income taxes and dividends; nor are they a measure of our
profitability because they do not include costs and expenses such as interest, taxes,
depreciation, amortization, goodwill impairment, and loss on early extinguishment of debt,
which are significant components in understanding and assessing our financial performance.
Even with these limitations, we believe EBITDA and Adjusted EBITDA, when viewed with both our
GAAP results and the reconciliations to operating cash flows and net income, provide a more
complete understanding of our business than otherwise could be obtained absent this
disclosure. EBITDA and Adjusted EBITDA measures presented may not be comparable to similarly
titled measures presented by other companies.  21




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The following presentation reconciles net income (loss), which we believe to be the closest
GAAP performance measure, to EBITDA and Adjusted EBITDA and reconciles EBITDA and Adjusted
EBITDA to net cash flows from operating activities, which we believe to be the closest GAAP
liquidity measure, as presented in the Consolidated Statements of Cash Flows included in Item
8, Financial Statements and Supplementary Data: Fiscal Years EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007(dollars in thousands)Net income (loss)
    
    
    (98,310
    )
    
    
    2,311
    
    
    
    (100,494
    )
    
    
    7,216
    
    
    
    7,893Interest expense, net
    
    
    51,028
    
    
    
    49,225
    
    
    
    41,278
    
    
    
    40,525
    
    
    
    38,992Income tax expense (benefit)
    
    
    (3,497
    )
    
    
    (532
    )
    
    
    4,289
    
    
    
    4,558
    
    
    
    5,700Depreciation and amortization
    
    
    17,205
    
    
    
    19,370
    
    
    
    18,987
    
    
    
    17,652
    
    
    
    15,529EBITDA
    
    
    (33,574
    )
    
    
    70,374
    
    
    
    (35,940
    )
    
    
    69,951
    
    
    
    68,114Goodwill impairment
    
    
    89,000
    
    
    
    
    
    
    
    106,972
    
    
    
    
    
    
    
    Loss on early extinguishment of debt
    
    
    
    
    
    
    3,066
    
    
    
    
    
    
    
    
    
    
    
    Adjusted EBITDA (6)
    
    $
    55,426
    
    
    $
    73,440
    
    
    $
    71,032
    
    
    $
    69,951
    
    
    $
    68,114Share-based compensation
    
    
    448
    
    
    
    1,107
    
    
    
    1,288
    
    
    
    1,041
    
    
    
    997Interest income
    
    
    176
    
    
    
    180
    
    
    
    427
    
    
    
    1,332
    
    
    
    1,643Provision for losses on receivables
    
    
    2,194
    
    
    
    1,399
    
    
    
    1,367
    
    
    
    468
    
    
    
    834Cash paid for interest
    
    
    (44,905
    )
    
    
    (37,572
    )
    
    
    (39,124
    )
    
    
    (31,755
    )
    
    
    (31,388
    )Cash (paid) refunded for income taxes
    
    
    1,278
    
    
    
    (3,155
    )
    
    
    (9,930
    )
    
    
    (13,031
    )
    
    
    (6,551
    )(Gain) loss on disposal of assets
    
    
    (132
    )
    
    
    235
    
    
    
    125
    
    
    
    285
    
    
    
    (1
    )Changes in operating assets and
liabilities, net of effect of
acquisitions (10)
    
    
    (1,658
    )
    
    
    (4,803
    )
    
    
    1,171
    
    
    
    (7,190
    )
    
    
    (6,132
    )Net Cash Flows from Operating Activities
    
    $
    12,827
    
    
    $
    30,831
    
    
    $
    26,356
    
    
    $
    21,101
    
    
    $
    27,516
 (7)
    
    Business acquisition expenditures represent established businesses purchased by us.(8)
    
    Working capital is defined as current assets minus current liabilities. NBCs three
Pre-Petition principal tranches of debt (the Pre-Petition Senior Secured Notes, the
Pre-Petition ABL Facility and the Pre-Petition Senior Subordinated Notes) each were set to
mature within a period of six months of each other. The Pre-Petition ABL Facility was set
to mature on the earlier of October 2, 2012 or the date that was 91 days prior to the
earliest maturity of the Pre-Petition Senior Secured Notes (which were set to mature on
December 1, 2011), the Pre-Petition Senior Subordinated Notes (which were set to mature on
March 15, 2012), the Pre-Petition Senior Discount Notes (which were set to mature on March
15, 2013), or any refinancing thereof, effectively September 1, 2011. See Notes C and I to
the consolidated financial statements in Item 8, Financial Statements and Supplementary
Data.(9)
    
    In conjunction with the Pre-Petition Senior Credit Facility amendment in February,
2009, we issued 10,000 shares of preferred stock. See Note K to the consolidated financial
statements in Item 8, Financial Statements and Supplementary Data.(10)
    
    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.  22




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##### Table of Contents



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.
  Financial Statements and Supplementary Data,
  23




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##### Table of Contents



Reorganization under Chapter 11 of the U.S. Bankruptcy Code
   Chapter 11 Financing
  Plan of Reorganization
  Risk Factors
  24




---



##### Table of Contents



Challenges and Expectations
  Fiscal Year Ended March 31, 2011 Compared With Fiscal Year Ended March 31, 2010.
 Revenues .
 Fiscal Years Ended
    
    
    ChangeMarch 31, 2011
    
    
    March 31, 2010
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    468,536,378
    
    
    $
    472,492,275
    
    
    $
    (3,955,897
    )
    
    
    (0.8
    )%Textbook Division
    
    
    135,498,618
    
    
    
    140,592,220
    
    
    
    (5,093,602
    )
    
    
    (3.6
    )%Complementary Services Division
    
    
    35,397,826
    
    
    
    35,470,836
    
    
    
    (73,010
    )
    
    
    (0.2
    )%Intercompany Eliminations
    
    
    (41,002,655
    )
    
    
    (43,061,718
    )
    
    
    2,059,063
    
    
    
    (4.8
    )%$
    598,430,167
    
    
    $
    605,493,613
    
    
    $
    (7,063,446
    )
    
    
    (1.2
    )%
   Gross profit .
  25




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##### Table of Contents



Selling, general and administrative expenses .
 Earnings before interest, taxes, depreciation, amortization, goodwill impairment, and loss on
early extinguishment of debt (Adjusted EBITDA).
 Fiscal Years Ended
    
    
    ChangeMarch 31, 2011
    
    
    March 31, 2010
    
    
    Amount
    
    
    PercentageBookstore Division
    
    
    33,905,906
    
    
    $
    45,685,171
    
    
    $
    (11,779,265
    )
    
    
    (25.8
    )%Textbook Division
    
    $
    34,710,745
    
    
    
    37,050,519
    
    
    
    (2,339,774
    )
    
    
    (6.3
    )%Complementary Services
Division
    
    
    2,764,283
    
    
    
    2,301,001
    
    
    
    463,282
    
    
    
    20.1
    %Corporate Administration
    
    
    (15,955,066
    )
    
    
    (11,597,268
    )
    
    
    (4,357,798
    )
    
    
    (37.6
    )%$
    55,425,868
    
    
    $
    73,439,423
    
    
    $
    (18,013,555
    )
    
    
    (24.5
    )%
   26




---



##### Table of Contents



Financial Statements and Supplementary Data
 Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010Net income (loss)
    
    
    (98,309,733
    )
    
    
    2,311,287Interest expense, net
    
    
    51,027,654
    
    
    
    49,224,513Income tax benefit
    
    
    (3,496,878
    )
    
    
    (532,388
    )Depreciation and amortization
    
    
    17,204,825
    
    
    
    19,370,252EBITDA
    
    
    (33,574,132
    )
    
    
    70,373,664Goodwill impairment
    
    
    89,000,000
    
    
    
    Loss on early extinguishment of debt
    
    
    
    
    
    
    3,065,759Adjusted EBITDA (1)
    
    $
    55,425,868
    
    
    $
    73,439,423Share-based compensation
    
    
    447,826
    
    
    
    1,106,882Interest income
    
    
    175,859
    
    
    
    180,709Provision for losses on receivables
    
    
    2,193,739
    
    
    
    1,399,466Cash paid for interest
    
    
    (44,905,405
    )
    
    
    (37,572,221
    )Cash (paid) refunded for income taxes
    
    
    1,278,671
    
    
    
    (3,155,473
    )(Gain) loss on disposal of assets
    
    
    (131,591
    )
    
    
    235,803Changes in operating assets and liabilities, net of effect of acquisitions (2)
    
    
    (1,657,825
    )
    
    
    (4,803,359
    )Net Cash Flows from Operating Activities
    
    $
    12,827,142
    
    
    $
    30,831,230Net Cash Flows from Investing Activities
    
    $
    (16,306,546
    )
    
    $
    (8,765,940
    )Net Cash Flows from Financing Activities
    
    $
    (1,045,841
    )
    
    $
    (5,131,133
    )
 (1)
    
    March 31, 2011 Adjusted EBITDA includes an adjustment for goodwill
impairment and March 31, 2010 Adjusted EBITDA includes an adjustment
for loss on early extinguishment of debt. See Note G and Note I to
the consolidated financial statements in Item 8, Financial Statements
and Supplementary Data.(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. Amortization expense.
 Goodwill impairment.
  27




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Interest expense, net .
 Loss on early extinguishment of debt.
 Income taxes
 Fiscal Year ended March 31, 2010 Compared With Fiscal Year ended March 31, 2009.
 Revenues .
 Fiscal Years Ended
    
    
    ChangeMarch 31, 2010
    
    
    March 31, 2009
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    472,492,275
    
    
    $
    472,038,009
    
    
    $
    454,266
    
    
    
    0.1
    %Textbook Division
    
    
    140,592,220
    
    
    
    147,287,779
    
    
    
    (6,695,559
    )
    
    
    (4.5
    )%Complementary Services Division
    
    
    35,470,836
    
    
    
    34,233,883
    
    
    
    1,236,953
    
    
    
    3.6
    %Intercompany Eliminations
    
    
    (43,061,718
    )
    
    
    (42,843,490
    )
    
    
    (218,228
    )
    
    
    0.5
    %$
    605,493,613
    
    
    $
    610,716,181
    
    
    $
    (5,222,568
    )
    
    
    (0.9
    )%
    28




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##### Table of Contents



Gross profit .
 Selling, general and administrative expenses .
 Earnings before interest, taxes, depreciation, amortization, goodwill impairment, and loss on
early extinguishment of debt (Adjusted EBITDA).
 Fiscal Years Ended
    
    
    ChangeMarch 31, 2010
    
    
    March 31, 2009
    
    
    Amount
    
    
    PercentageBookstore Division
    
    $
    45,685,171
    
    
    $
    44,029,528
    
    
    $
    1,655,643
    
    
    
    3.8
    %Textbook Division
    
    
    37,050,519
    
    
    
    39,009,073
    
    
    
    (1,958,554
    )
    
    
    (5.0
    )%Complementary Services Division
    
    
    2,301,001
    
    
    
    1,320,700
    
    
    
    980,301
    
    
    
    74.2
    %Corporate Administration
    
    
    (11,597,268
    )
    
    
    (13,326,971
    )
    
    
    1,729,703
    
    
    
    13.0
    %$
    73,439,423
    
    
    $
    71,032,330
    
    
    $
    2,407,093
    
    
    
    3.4
    %
   29




---



##### Table of Contents



Financial Statements and Supplementary Data
 Fiscal Years EndedMarch 31, 2010
    
    
    March 31, 2009Net income (loss)
    
    
    2,311,287
    
    
    
    (100,494,023
    )Interest expense, net
    
    
    49,224,513
    
    
    
    41,279,082Income tax expense (benefit)
    
    
    (532,388
    )
    
    
    4,288,620Depreciation and amoritzation
    
    
    19,370,252
    
    
    
    18,986,651EBITDA
    
    
    70,373,664
    
    
    
    (35,939,670
    )Goodwill impairment
    
    
    
    
    
    
    106,972,000Loss on early extinguishment of debt
    
    
    3,065,759
    
    
    
    Adjusted EBITDA (1)
    
    $
    73,439,423
    
    
    $
    71,032,330Share-based compensation
    
    
    1,106,882
    
    
    
    1,288,543Interest income
    
    
    180,709
    
    
    
    426,536Provision for losses on receivables
    
    
    1,399,466
    
    
    
    1,366,979Cash paid for interest
    
    
    (37,572,221
    )
    
    
    (39,123,694
    )Cash paid for income taxes
    
    
    (3,155,473
    )
    
    
    (9,930,165
    )Loss on disposal of assets
    
    
    235,803
    
    
    
    124,871Changes in operating assets and liabilities, net of effect of acquisitions (2)
    
    
    (4,803,359
    )
    
    
    1,170,551Net Cash Flows from Operating Activities
    
    $
    30,831,230
    
    
    $
    26,355,951Net Cash Flows from Investing Activities
    
    $
    (8,765,940
    )
    
    $
    (14,898,403
    )Net Cash Flows from Financing Activities
    
    $
    (5,131,133
    )
    
    $
    3,254,464
 (1)
    
    March 31, 2010 Adjusted EBITDA includes an adjustment for loss on early
extinguishment of debt and March 31, 2009 Adjusted EBITDA includes an adjustment for
goodwill impairment. See Note G and Note I to the consolidated financial statements in
Item 8, Financial Statements and Supplementary Data.(2)
    
    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.
 Goodwill impairment.
  30




---



##### Table of Contents



Interest expense, net .
 Loss on early extinguishment of debt.
 Income taxes
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Revenue Recognition
 Bad Debts
  31




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Inventory Valuation and Obsolescence
 Goodwill and Intangible Assets
     32




---



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Accrued Incentives.
  33




---



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Income Taxes
 LIQUIDITY AND CAPITAL RESOURCES
 Financing Activities
 Implications of Chapter 11 Proceedings
  Financial Statements and Supplementary Data.
 Pre-Petition Debt
    34




---



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Investing Cash Flows
    35




---



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Operating Cash Flows
   Covenant Restrictions
   36




---



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37




---



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Sources of and Needs for Capital
  Liquidity after Chapter 11 Bankruptcy Filing
  Liquidity prior to Chapter 11 Bankruptcy Filing
      38




---



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Off-Balance Sheet Arrangements
  Contractual Obligations
  Payments Due by PeriodContractual
    
    
    
    
    
    Less Than
    
    
    2-3
    
    
    4-5
    
    
    After 5Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-term debt (1)
    
    $
    451,820,685
    
    
    $
    451,697,680
    
    
    $
    123,005
    
    
    $
    
    
    
    $
    Interest on long-term debt
    
    
    43,593,046
    
    
    
    43,580,555
    
    
    
    12,491
    
    
    
    
    
    
    
    Capital lease obligations
    
    
    2,297,183
    
    
    
    505,562
    
    
    
    740,433
    
    
    
    581,993
    
    
    
    469,195Interest on capital lease obligations
    
    
    555,067
    
    
    
    158,353
    
    
    
    238,465
    
    
    
    130,060
    
    
    
    28,189Operating leases
    
    
    85,556,000
    
    
    
    21,922,000
    
    
    
    31,035,000
    
    
    
    18,280,000
    
    
    
    14,319,000Purchase obligations
    
    
    2,300,000
    
    
    
    2,300,000
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    586,121,981
    
    
    $
    520,164,150
    
    
    $
    32,149,394
    
    
    $
    18,992,053
    
    
    $
    14,816,384
 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)
    
    $
    75,000,000
    
    
    $
    75,000,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
 (1)
    
    Does not include the effect of $0.4 million of unamortized discount for the
Pre-Petition Senior Secured Notes. Substantially all of our pre-petition debt is in
default, including $200.0 million principal amount due under the Pre-Petition Senior
Secured Notes; $175.0 million principal amount under the Pre-Petition Senior Subordinated
Notes and $77.0 million principal amount under the Pre-Petition Senior Discount Notes. See
Notes C and I to the consolidated financial statements at Item 8, Financial Statements and
Supplementary Data.(2)
    
    Interest is not estimated on the line of credit due to uncertainty surrounding the
timing and extent of usage of the pre-petition line of credit.  Transactions with Related and Certain Other Parties
    39




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Impact of Inflation
  Accounting Standards Not Yet Adopted
    Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
 Risk Factors
  40




---



##### Table of Contents




    
    our ability to satisfy our future capital and liquidity requirements; our ability to
access the credit and capital markets at the times and in the amounts needed and on terms
acceptable to us; our ability to comply with covenants applicable to us; and the
continuation of acceptable supplier payment terms;
 
    
    the potential adverse impact of the Chapter 11 Proceedings on our business, financial
condition or results of operations, including our ability to maintain contracts and other
customer and vendor relationships that are critical to our business and the actions and
decisions of our creditors and other third parties with interests in the Chapter 11
Proceedings;
 
    
    our ability to maintain adequate liquidity to fund our operations during the Chapter 11
Proceedings and to fund a plan of reorganization and thereafter, including obtaining
sufficient exit financing; maintaining normal terms with our vendors and service
providers during the Chapter 11 Proceedings and complying with the covenants and other
terms of our financing agreements;
 
    
    our ability to obtain court approval with respect to motions in the Chapter 11
Proceedings prosecuted from time to time and to develop, prosecute, confirm and consummate
one or more plans of reorganization with respect to the Chapter 11 Proceedings and to
consummate all of the transactions contemplated by one or more such plans of reorganization
or upon which consummation of such plans may be conditioned;
 
    
    increased competition from other companies that target our markets;
 
    
    increased competition from alternative sources of textbooks for students and alternative
media, including digital or other educational content sold or rented directly to students
and increased competition for the purchase and sale of used textbooks from
student-to-student transactions;
 
    
    further deterioration in the economy and credit markets, a decline in consumer spending,
and/or changes in general economic conditions in the markets in which we compete or may
compete;
 
    
    our inability to successfully start-up or contract-manage additional bookstores or to
integrate those additional bookstores and/or to cost-effectively maintain our current
contract-managed bookstores;
 
    
    our inability to purchase a sufficient supply of used textbooks;
 
    
    changes in pricing of new and/or used textbooks or in publisher practices regarding new
editions and materials packaged with new textbooks;
 
    
    the loss or retirement of key members of management;
 
    
    the impact of seasonality of the wholesale and bookstore operations;
 
    
    goodwill impairment or impairment of identifiable intangibles resulting in a non-cash
write down of goodwill or identifiable intangibles; and
 
    
    other risks detailed in our SEC filings, all of which are difficult or impossible to
predict accurately and many of which are beyond our control.
   41




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   Fixed Rate DebtWeighted-AveragePrincipal
    
    
    InterestCash Flows (1)
    
    
    RateFiscal Year Ended March 31:2012
    
    $
    452,203,241
    
    
    
    9.63
    %2013
    
    
    461,247
    
    
    
    8.63
    %2014
    
    
    402,192
    
    
    
    8.46
    %2015
    
    
    273,739
    
    
    
    8.29
    %2016
    
    
    308,254
    
    
    
    8.29
    %Thereafter
    
    
    469,195
    
    
    
    8.29
    %Total
    
    $
    454,117,868
    
    
    
    9.62
    %Fair Value as of March 31, 2011 (2)
    
    $
    377,465,000
    
    
    
    
 (1)
    
    Principal cash flows represent scheduled principal payments and are adjusted for
certain optional prepayments, if any, to be applied toward principal balances. Does not
include the effect of $0.4 million of unamortized discount for the Pre-Petition Senior
Secured Notes.(2)
    
    Due to the chapter 11 bankruptcy filing on June 27, 2011, substantially all of our
pre-petition debt is in default. See Notes C and I to the consolidated financial
statements included in Item 8, Financial Statements and Supplementary Data.  42




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##### Table of Contents



March 31,
    
    
    March 31,2011
    
    
    2010Carrying Values:Fixed rate debt
    
    $
    454,117,868
    
    
    $
    454,624,262Fair Values:Fixed rate debt (1)
    
    $
    377,465,000
    
    
    $
    438,537,000Overall Weighted-Average Interest Rates:Fixed rate debt
    
    
    9.62
    %
    
    
    9.73
    %
 (1)
    
    Due to the chapter 11 bankruptcy filing on June 27, 2011, substantially all of our
pre-petition debt is in default. See Notes C and I to the consolidated financial
statements included in Item 8, Financial Statements and Supplementary Data.  43




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 Index to Consolidated Financial Statements of NBC Acquisition Corp.
 Report of Independent Registered Public Accounting Firm
    
    
    45Consolidated Balance Sheets as of March 31, 2011 and March 31, 2010
    
    
    46Consolidated Statements of Operations for the Years Ended March 31, 2011, 2010 and 2009
    
    
    47Consolidated Statements of Stockholders Equity (Deficit) for the Years Ended March
31, 2011, 2010 and 2009
    
    
    48Consolidated Statements of Cash Flows for the Years Ended March 31, 2011, 2010 and 2009
    
    
    49Notes to Consolidated Financial Statements
    
    
    50
  44




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      DELOITTE & TOUCHE LLP
 
  45




---



##### Table of Contents



NBC ACQUISITION CORP.
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
 
 CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    March 31,2011
    
    
    2010ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    56,447,380
    
    
    $
    60,972,625Receivables, net
    
    
    54,966,305
    
    
    
    57,987,794Inventories
    
    
    90,114,197
    
    
    
    97,497,689Recoverable income taxes
    
    
    7,398,901
    
    
    
    2,435,287Deferred income taxes
    
    
    5,172,819
    
    
    
    6,247,559Prepaid expenses and other assets
    
    
    7,200,472
    
    
    
    4,070,281Total current assets
    
    
    221,300,074
    
    
    
    229,211,235PROPERTY AND EQUIPMENT, net of depreciation & amortization
    
    
    39,391,650
    
    
    
    42,155,424GOODWILL
    
    
    129,436,730
    
    
    
    215,571,126CUSTOMER RELATIONSHIPS, net of amortization
    
    
    74,161,300
    
    
    
    79,902,820TRADENAME
    
    
    31,320,000
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net of amortization
    
    
    5,973,049
    
    
    
    5,295,324DEBT ISSUE COSTS, net of amortization
    
    
    4,211,013
    
    
    
    9,964,874OTHER ASSETS
    
    
    2,513,165
    
    
    
    2,850,632$
    508,306,981
    
    
    $
    616,271,435LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS
EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    20,005,468
    
    
    $
    26,387,040Accrued employee compensation and benefits
    
    
    8,609,377
    
    
    
    9,401,468Accrued interest
    
    
    7,666,970
    
    
    
    7,666,997Accrued incentives
    
    
    5,850,936
    
    
    
    6,313,933Accrued expenses
    
    
    6,396,689
    
    
    
    9,051,651Deferred revenue
    
    
    1,405,802
    
    
    
    1,299,960Current maturities of long-term debt
    
    
    451,697,680
    
    
    
    54,403Current maturities of capital lease obligations
    
    
    505,562
    
    
    
    846,053Total current liabilities
    
    
    502,138,484
    
    
    
    61,021,505LONG-TERM DEBT, net of current maturities
    
    
    123,005
    
    
    
    451,343,069CAPITAL LEASE OBLIGATIONS, net of current maturities
    
    
    1,791,621
    
    
    
    2,380,737OTHER LONG-TERM LIABILITIES
    
    
    1,567,913
    
    
    
    2,278,963DEFERRED INCOME TAXES
    
    
    42,072,157
    
    
    
    40,401,490COMMITMENTS (Note I)REDEEMABLE PREFERRED STOCKSeries A redeemable preferred stock, $.01 par value,
20,000 shares authorized, 10,000 shares issued and
outstanding, at redemption value
    
    
    13,601,368
    
    
    
    11,805,888STOCKHOLDERS EQUITY (DEFICIT):Common stock, voting, authorized 5,000,000 shares of
$.01 par value; issued and outstanding 554,094 shares
    
    
    5,541
    
    
    
    5,541Additional paid-in capital
    
    
    111,281,289
    
    
    
    111,203,506Note receivable from stockholder
    
    
    (92,675
    )
    
    
    (92,755
    )Accumulated deficit
    
    
    (164,181,722
    )
    
    
    (64,076,509
    )Total stockholders equity (deficit)
    
    
    (52,987,567
    )
    
    
    47,039,783$
    508,306,981
    
    
    $
    616,271,435
   46




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##### Table of Contents



NBC ACQUISITION CORP.
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2009REVENUES, net of returns
    
    $
    598,430,167
    
    
    $
    605,493,613
    
    
    $
    610,716,181COSTS OF SALES (exclusive of depreciation shown below)
    
    
    366,159,699
    
    
    
    370,195,916
    
    
    
    371,369,240Gross profit
    
    
    232,270,468
    
    
    
    235,297,697
    
    
    
    239,346,941OPERATING EXPENSES:Selling, general and administrative
    
    
    176,844,600
    
    
    
    161,858,274
    
    
    
    168,314,611Depreciation
    
    
    8,579,092
    
    
    
    8,517,004
    
    
    
    7,602,631Amortization
    
    
    8,625,733
    
    
    
    10,853,248
    
    
    
    11,384,020Goodwill impairment
    
    
    89,000,000
    
    
    
    
    
    
    
    106,972,000283,049,425
    
    
    
    181,228,526
    
    
    
    294,273,262INCOME (LOSS) FROM OPERATIONS
    
    
    (50,778,957
    )
    
    
    54,069,171
    
    
    
    (54,926,321
    )OTHER EXPENSES (INCOME):Interest expense
    
    
    51,203,513
    
    
    
    49,405,222
    
    
    
    41,603,618Interest income
    
    
    (175,859
    )
    
    
    (180,709
    )
    
    
    (426,536
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    3,065,759
    
    
    
    Loss on derivative financial instrument
    
    
    
    
    
    
    
    
    
    
    102,00051,027,654
    
    
    
    52,290,272
    
    
    
    41,279,082INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (101,806,611
    )
    
    
    1,778,899
    
    
    
    (96,205,403
    )INCOME TAX EXPENSE (BENEFIT)
    
    
    (3,496,878
    )
    
    
    (532,388
    )
    
    
    4,288,620NET INCOME (LOSS)
    
    $
    (98,309,733
    )
    
    $
    2,311,287
    
    
    $
    (100,494,023
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    (180.66
    )
    
    $
    1.33
    
    
    $
    (181.79
    )Diluted
    
    $
    (180.66
    )
    
    $
    1.32
    
    
    $
    (181.79
    )
   47




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##### Table of Contents



NBC ACQUISITION CORP.
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
 Note
    
    
    Retained
    
    
    AccumulatedAdditional
    
    
    Receivable
    
    
    Earnings
    
    
    OtherCommon
    
    
    Paid-in
    
    
    From
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    
    
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Stockholder
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    Total
    
    
    Income (Loss)BALANCE, April 1, 2008
    
    $
    5,541
    
    
    $
    111,098,666
    
    
    $
    (97,517
    )
    
    $
    35,912,115
    
    
    $
    (748,000
    )
    
    $
    146,170,805Payment on stockholder note
    
    
    
    
    
    
    
    
    
    
    9,752
    
    
    
    
    
    
    
    
    
    
    
    9,752Interest accrued on stockholder note
    
    
    
    
    
    
    
    
    
    
    (4,950
    )
    
    
    
    
    
    
    
    
    
    
    (4,950
    )
    
    $
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100,494,023
    )
    
    
    
    
    
    
    (100,494,023
    )
    
    
    (100,494,023
    )Share-based compensation attributable to stock options
    
    
    
    
    
    
    43,416
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,416
    
    
    
    Cumulative preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233,334
    )
    
    
    
    
    
    
    (233,334
    )
    
    
    Other comprehensive loss, 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
    
    
    5,541
    
    
    
    111,142,082
    
    
    
    (92,715
    )
    
    
    (64,815,242
    )
    
    
    
    
    
    
    46,239,666
    
    
    $
    (99,746,023
    )Payment on stockholder note
    
    
    
    
    
    
    
    
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    4,869
    
    
    $
    Interest accrued on stockholder note
    
    
    
    
    
    
    
    
    
    
    (4,909
    )
    
    
    
    
    
    
    
    
    
    
    (4,909
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,311,287
    
    
    
    
    
    
    
    2,311,287
    
    
    
    2,311,287Share-based compensation attributable to stock options
    
    
    
    
    
    
    61,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,424
    
    
    
    Cumulative preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,572,554
    )
    
    
    
    
    
    
    (1,572,554
    )
    
    
    BALANCE, March 31, 2010
    
    
    5,541
    
    
    
    111,203,506
    
    
    
    (92,755
    )
    
    
    (64,076,509
    )
    
    
    
    
    
    
    47,039,783
    
    
    $
    2,311,287Payment on stockholder note
    
    
    
    
    
    
    
    
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    4,869
    
    
    $
    Interest accrued on stockholder note
    
    
    
    
    
    
    
    
    
    
    (4,789
    )
    
    
    
    
    
    
    
    
    
    
    (4,789
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,309,733
    )
    
    
    
    
    
    
    (98,309,733
    )
    
    
    (98,309,733
    )Share-based compensation attributable to stock options
    
    
    
    
    
    
    77,783
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,783
    
    
    
    Cumulative preferred dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,795,480
    )
    
    
    
    
    
    
    (1,795,480
    )
    
    
    BALANCE, March 31, 2011
    
    $
    5,541
    
    
    $
    111,281,289
    
    
    $
    (92,675
    )
    
    $
    (164,181,722
    )
    
    $
    
    
    
    $
    (52,987,567
    )
    
    $
    (98,309,733
    )
   48




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##### Table of Contents



NBC ACQUISITION CORP.
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    (98,309,733
    )
    
    $
    2,311,287
    
    
    $
    (100,494,023
    )Adjustments to reconcile net income (loss) to net cash flows from operating activities:Share-based compensation
    
    
    447,826
    
    
    
    1,106,882
    
    
    
    1,288,543Provision for losses on receivables
    
    
    2,193,739
    
    
    
    1,399,466
    
    
    
    1,366,979Depreciation
    
    
    8,579,092
    
    
    
    8,517,004
    
    
    
    7,602,631Amortization
    
    
    8,625,733
    
    
    
    10,853,248
    
    
    
    11,384,020Goodwill impairment
    
    
    89,000,000
    
    
    
    
    
    
    
    106,972,000Loss on early extinguishment of debt
    
    
    
    
    
    
    3,065,759
    
    
    
    Amortization of debt issue costs and bond discount
    
    
    6,298,135
    
    
    
    5,215,808
    
    
    
    2,461,345Loss on derivative financial instrument
    
    
    
    
    
    
    
    
    
    
    102,000(Gain) loss on disposal of assets
    
    
    (131,591
    )
    
    
    235,803
    
    
    
    124,871Deferred income taxes
    
    
    2,745,407
    
    
    
    (4,122,157
    )
    
    
    (1,947,665
    )Changes in operating assets and liabilities, net of effect of acquisitions:Receivables
    
    
    822,961
    
    
    
    1,252,806
    
    
    
    (5,271,324
    )Inventories
    
    
    11,441,862
    
    
    
    (2,874,880
    )
    
    
    8,101,584Recoverable income taxes
    
    
    (4,963,614
    )
    
    
    434,296
    
    
    
    (2,846,510
    )Prepaid expenses and other assets
    
    
    (3,118,275
    )
    
    
    30,593
    
    
    
    (1,400,805
    )Other assets
    
    
    337,467
    
    
    
    462,071
    
    
    
    275,316Accounts payable
    
    
    (6,518,606
    )
    
    
    (376,486
    )
    
    
    (2,132,402
    )Accrued employee compensation and benefits
    
    
    (792,091
    )
    
    
    (4,378,741
    )
    
    
    1,679,569Accrued interest
    
    
    (27
    )
    
    
    6,617,193
    
    
    
    18,579Accrued incentives
    
    
    (462,997
    )
    
    
    203,233
    
    
    
    (998,157
    )Accrued expenses
    
    
    (2,654,962
    )
    
    
    516,894
    
    
    
    1,104,983Income taxes payable
    
    
    
    
    
    
    
    
    
    
    (847,370
    )Deferred revenue
    
    
    105,842
    
    
    
    340,686
    
    
    
    96,280Other long-term liabilities
    
    
    (819,068
    )
    
    
    20,465
    
    
    
    (284,493
    )Net cash flows from operating activities
    
    
    12,827,100
    
    
    
    30,831,230
    
    
    
    26,355,951CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (5,663,780
    )
    
    
    (5,410,976
    )
    
    
    (7,979,371
    )Acquisitions, net of cash acquired
    
    
    (9,461,308
    )
    
    
    (2,847,608
    )
    
    
    (6,320,772
    )Proceeds from sale of property and equipment
    
    
    452,180
    
    
    
    141,167
    
    
    
    35,503Software development costs
    
    
    (1,633,638
    )
    
    
    (648,523
    )
    
    
    (633,763
    )Net cash flows from investing activities
    
    
    (16,306,546
    )
    
    
    (8,765,940
    )
    
    
    (14,898,403
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    
    
    
    
    199,000,000
    
    
    
    Proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    10,000,000Payment of financing costs
    
    
    (66,660
    )
    
    
    (10,190,217
    )
    
    
    (3,961,811
    )Principal payments on long-term debt
    
    
    (54,401
    )
    
    
    (193,125,225
    )
    
    
    (2,070,654
    )Principal payments on capital lease obligations
    
    
    (929,607
    )
    
    
    (820,560
    )
    
    
    (722,823
    )Borrowings under revolving credit facility
    
    
    44,200,000
    
    
    
    85,000,000
    
    
    
    200,600,000Payments under revolving credit facility
    
    
    (44,200,000
    )
    
    
    (85,000,000
    )
    
    
    (200,600,000
    )Proceeds from payment on note receivable from stockholder
    
    
    4,869
    
    
    
    4,869
    
    
    
    9,752Net cash flows from financing activities
    
    
    (1,045,799
    )
    
    
    (5,131,133
    )
    
    
    3,254,464NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (4,525,245
    )
    
    
    16,934,157
    
    
    
    14,712,012CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    60,972,625
    
    
    
    44,038,468
    
    
    
    29,326,456CASH AND CASH EQUIVALENTS, End of period
    
    $
    56,447,380
    
    
    $
    60,972,625
    
    
    $
    44,038,468SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:Cash paid (refunded) during the period for:Interest
    
    $
    44,905,405
    
    
    $
    37,572,221
    
    
    $
    39,123,694Income taxes
    
    
    (1,278,671
    )
    
    
    3,155,473
    
    
    
    9,930,165Noncash investing and financing activities:Accumulated other comprehensive income:Unrealized gain on interest rate swap agreement, net of income taxes
    
    $
    
    
    
    $
    
    
    
    $
    748,000Deferred taxes resulting from unrealized gain on interest rate swap agreement
    
    
    
    
    
    
    
    
    
    
    473,000Unpaid consideration associated with bookstore acquisitions
    
    
    
    
    
    
    574,465
    
    
    
    155,000
   49




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##### Table of Contents



NBC ACQUISITION CORP.
(DEBTOR IN POSESSION AS OF JUNE 27, 2011)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 A. NATURE OF OPERATIONS
  Reorganization under Chapter 11 of the U.S. Bankruptcy Code
   Going Concern
  B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Principles of Consolidation:
 Chapter 11 Financing:
  50




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##### Table of Contents



Basis of Presentation:
 Revenue Recognition:
 Bookstore Division
 Textbook Division
 Complementary Services Division
 Shipping and Handling Fees and Costs:
 Sales Tax Collections:
 Advertising
 Use of Estimates:
 Cash and Cash Equivalents:
  51




---



##### Table of Contents



Accounts Receivable and Allowance for Doubtful Accounts:
 Inventories:
 Property and Equipment:
 Goodwill:
      52




---



##### Table of Contents



Identifiable Intangibles  Customer Relationships:
 Identifiable Intangibles  Tradename: ,
 Other Identifiable Intangibles  Developed Technology
    Other Identifiable Intangibles  Covenants Not to Compete:
 Other Identifiable Intangibles  Contract-Managed Relationships:
 Other Identifiable Intangibles  Other:
  53




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##### Table of Contents



Debt Issue Costs:
 Accrued Incentives.
 Derivative Financial Instruments
 Fair Value of Financial Instruments:
 Share-Based Compensation: Share-Based Payment
  Nonvested Stock:
 Income Taxes:
  54




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##### Table of Contents



Earnings Per Share:
 Redeemable Preferred Stock:
 Common Stock Shares Issued and Outstanding:
 Comprehensive Income (Loss):
 Accounting Standards Not Yet Adopted:
  ,  .
 C. VOLUNTARY REORGANIZATION UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
   55




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##### Table of Contents



Implications of Chapter 11 Proceedings
    Chapter 11 Financing
  Going Concern
  D. RECEIVABLES
  March 31,2011
    
    
    2010Trade receivables, less allowance for doubtful accounts of $1,283,360
    
    $
    28,251,599
    
    
    $
    30,944,300Receivables from book publishers for returns
    
    
    23,041,274
    
    
    
    22,148,190Advances for book buy-backs
    
    
    1,279,026
    
    
    
    1,675,625Other
    
    
    2,394,406
    
    
    
    3,219,679$
    54,966,305
    
    
    $
    57,987,794
   56




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##### Table of Contents



E. INVENTORIES
  March 31,2011
    
    
    2010Bookstore Division
    
    $
    62,076,174
    
    
    $
    68,765,952Textbook Division
    
    
    26,211,651
    
    
    
    26,132,007Complementary Services Division
    
    
    1,826,372
    
    
    
    2,599,730$
    90,114,197
    
    
    $
    97,497,689
   F. PROPERTY AND EQUIPMENT
  March 31,2011
    
    
    2010Land
    
    $
    3,537,858
    
    
    $
    3,565,382Buildings and improvements
    
    
    25,616,853
    
    
    
    25,774,209Leasehold improvements
    
    
    17,270,358
    
    
    
    16,207,697Furniture and fixtures
    
    
    18,252,704
    
    
    
    17,153,671Information systems
    
    
    16,400,952
    
    
    
    14,640,695Automobiles and trucks
    
    
    369,693
    
    
    
    231,743Machinery
    
    
    497,232
    
    
    
    351,011Projects in process
    
    
    136,988
    
    
    
    83,70382,082,638
    
    
    
    78,008,111Less: Accumulated depreciation &
amortization
    
    
    (42,690,988
    )
    
    
    (35,852,687
    )$
    39,391,650
    
    
    $
    42,155,424
 G. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLES
   57




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##### Table of Contents



Bookstore
    
    
    CorporateDivision
    
    
    Administration
    
    
    TotalBalance, April 1, 2009
    
    $
    53,346,251
    
    
    $
    162,089,875
    
    
    $
    215,436,126Additions to goodwill:Bookstore acquisitions
    
    
    135,000
    
    
    
    
    
    
    
    135,000Balance, March 31, 2010
    
    
    53,481,251
    
    
    
    162,089,875
    
    
    
    215,571,126Additions to goodwill:Bookstore acquisitions
    
    
    2,865,604
    
    
    
    
    
    
    
    2,865,604Impairment
    
    
    
    
    
    
    (89,000,000
    )
    
    
    (89,000,000
    )Balance, March 31, 2011
    
    $
    56,346,855
    
    
    $
    73,089,875
    
    
    $
    129,436,730
  58




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##### Table of Contents



Gross carrying
    
    
    Accumulated
    
    
    Net carryingamount
    
    
    impairment
    
    
    amountBalance, April 1, 2009
    
    $
    322,408,126
    
    
    $
    (106,972,000
    )
    
    $
    215,436,126Additions
    
    
    135,000
    
    
    
    
    
    
    
    135,000Balance, March 31, 2010
    
    $
    322,543,126
    
    
    $
    (106,972,000
    )
    
    $
    215,571,126Balance April 1, 2010
    
    $
    322,543,126
    
    
    $
    (106,972,000
    )
    
    $
    215,571,126Additions
    
    
    2,865,604
    
    
    
    
    
    
    
    2,865,604Impairment
    
    
    
    
    
    $
    (89,000,000
    )
    
    
    (89,000,000
    )Balance, March 31, 2011
    
    $
    325,408,730
    
    
    $
    (195,972,000
    )
    
    $
    129,436,730
       59




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##### Table of Contents



March 31, 2011Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountCustomer relationships
    
    $
    114,830,000
    
    
    $
    (40,668,700
    )
    
    $
    74,161,300Developed technology
    
    
    15,342,410
    
    
    
    (12,673,678
    )
    
    
    2,668,732Covenants not to compete
    
    
    1,458,300
    
    
    
    (739,880
    )
    
    
    718,420Contract-managed relationships
    
    
    5,217,261
    
    
    
    (2,631,364
    )
    
    
    2,585,897Other
    
    
    1,585,407
    
    
    
    (1,585,407
    )
    
    
    $
    138,433,378
    
    
    $
    (58,299,029
    )
    
    $
    80,134,349
 March 31, 2010Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    AmountCustomer relationships
    
    $
    114,830,000
    
    
    $
    (34,927,180
    )
    
    $
    79,902,820Developed technology
    
    
    13,709,789
    
    
    
    (12,137,672
    )
    
    
    1,572,117Covenants not to compete
    
    
    3,416,000
    
    
    
    (2,268,172
    )
    
    
    1,147,828Contract-managed relationships
    
    
    4,555,740
    
    
    
    (2,200,557
    )
    
    
    2,355,183Other
    
    
    1,585,407
    
    
    
    (1,365,211
    )
    
    
    220,196$
    138,096,936
    
    
    $
    (52,898,792
    )
    
    $
    85,198,144
  AmortizationExpenseFiscal year ended March 31, 2011
    
    $
    8,625,733Fiscal year ended March 31, 2010
    
    
    10,853,248Fiscal year ended March 31, 2009
    
    
    11,384,020Estimated amortization expense for the fiscal years ending March 31:2012
    
    $
    7,709,7532013
    
    
    7,164,8482014
    
    
    6,734,3312015
    
    
    6,521,0592016
    
    
    6,177,342
   60




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H. ACCRUED EXPENSES
  March 31,2011
    
    
    2010Accrued rent
    
    $
    5,892,171
    
    
    $
    4,285,622Accrued share-based compensation
    
    
    
    
    
    
    4,257,652Accrued property taxes
    
    
    504,518
    
    
    
    508,377$
    6,396,689
    
    
    $
    9,051,651
  I. LONG-TERM DEBT
 Pre-Petition Debt
  March 31,2011
    
    
    2010Senior Secured Notes, second-priority to
ABL Facility, unamortized bond discount
at March 31, 2011 and 2010 of $362,868
and $840,482, respectively, principal
due December 1, 2011, interest payments
accrue at fixed rate of 10.0% and are
payable semi-annually on December 1 and
June 1 beginning December 1, 2009
    
    $
    199,637,132
    
    
    $
    199,159,518Senior 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
    
    
    
    175,000,000Senior Discount Notes, unsecured,
principal due on March 15, 2013,
interest accreted at a rate of 11.0% to
a face amount of $77.0 million on March
15, 2008, interest payments accrue
beginning March 15, 2008 at a fixed rate
of 11.0% and are payable semi-annually
on March 15 and September 15 beginning
September 15, 2008
    
    
    77,000,000
    
    
    
    77,000,000Mortgage 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%
    
    
    183,553
    
    
    
    237,954451,820,685
    
    
    
    451,397,472Less current maturities of long-term debt
    
    
    (451,697,680
    )
    
    
    (54,403
    )Long-term debt
    
    $
    123,005
    
    
    $
    451,343,069
  61




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Chapter 11 Financing
      Pre-Petition Debt
    62




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63




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##### Table of Contents



FiscalYear2012
    
    $
    451,697,6802013
    
    
    67,3872014
    
    
    55,6182015
    
    
    2016
    
    
    
 J. LEASES AND OTHER COMMITMENTS
    64




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Capital
    
    
    OperatingFiscal Year
    
    Leases
    
    
    Leases2012
    
    $
    663,914
    
    
    $
    21,922,0002013
    
    
    529,925
    
    
    
    17,440,0002014
    
    
    448,973
    
    
    
    13,595,0002015
    
    
    350,765
    
    
    
    10,857,0002016
    
    
    361,288
    
    
    
    7,423,000Thereafter
    
    
    497,385
    
    
    
    14,319,000Total minimum lease payments
    
    
    2,852,250
    
    
    $
    85,556,000Less amount representing interest at 8.6%
    
    
    (555,067
    )Present value of minimum lease payments
    
    
    2,297,183Less obligations due within one year
    
    
    (505,562
    )Long-term obligations
    
    $
    1,791,621
  K. REDEEMABLE PREFERRED STOCK
    L. FAIR VALUE MEASUREMENTS
     65




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March 31,
    
    
    March 31,2011
    
    
    2010Carrying Values:Fixed rate debt
    
    $
    454,117,868
    
    
    $
    454,624,262Fair Values:Fixed rate debt
    
    $
    377,465,000
    
    
    $
    438,537,000
 .
 M. NOTE RECEIVABLE FROM STOCKHOLDER
  N. INCOME TAXES
  Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Current:Federal
    
    $
    (6,717,324
    )
    
    $
    1,646,948
    
    
    $
    4,984,002State
    
    
    475,039
    
    
    
    1,942,821
    
    
    
    1,252,283Deferred
    
    
    2,745,407
    
    
    
    (4,122,157
    )
    
    
    (1,947,665
    )$
    (3,496,878
    )
    
    $
    (532,388
    )
    
    $
    4,288,620
  66




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Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.3
    %Goodwill impairment
    
    
    (29.7
    )
    
    
    
    
    
    
    (44.3
    )Valuation allowance
    
    
    (0.9
    )
    
    
    
    
    
    
    Adjustment to state deferred tax rate
    
    
    0.4
    
    
    
    (81.6
    )
    
    
    NOL carryforward benefit
    
    
    
    
    
    
    (20.6
    )
    
    
    State income tax effect
    
    
    (0.1
    )
    
    
    22.5
    
    
    
    6.2Meals and entertainment
    
    
    (0.1
    )
    
    
    6.5
    
    
    
    1.4Non-deductible debt discount accretion
    
    
    (0.1
    )
    
    
    3.2
    
    
    
    0.5Other
    
    
    (0.1
    )
    
    
    6.1
    
    
    
    (2.6
    )3.4
    %
    
    
    (29.9
    )%
    
    
    (4.5
    %)
   March 31,2011
    
    
    2010Deferred
income tax assets (liabilities), current:Vacation accruals
    
    $
    1,021,060
    
    
    $
    1,053,004Inventories
    
    
    1,295,657
    
    
    
    1,176,603NOL carryforward benefit
    
    
    
    
    
    
    759,526Allowance for doubtful accounts
    
    
    475,750
    
    
    
    488,432Product returns
    
    
    1,052,254
    
    
    
    1,140,441Incentive programs
    
    
    2,162,773
    
    
    
    2,391,251Other
    
    
    (834,675
    )
    
    
    (761,698
    )5,172,819
    
    
    
    6,247,559Deferred income tax assets (liabilities), noncurrent:Rental textbook assets
    
    
    (1,926,312
    )
    
    
    Deferred compensation agreements
    
    
    112,358
    
    
    
    140,707Interest on Senior Discount Notes
    
    
    9,805,559
    
    
    
    10,065,529Goodwill amortization
    
    
    (11,492,248
    )
    
    
    (10,270,824
    )Covenants not to compete
    
    
    1,606,013
    
    
    
    1,608,593Identifiable intangibles
    
    
    (40,056,937
    )
    
    
    (42,496,001
    )Property and equipment
    
    
    (466,635
    )
    
    
    (492,925
    )NOL carryforward benefit
    
    
    1,126,272
    
    
    
    NOL valuation allowance
    
    
    (899,808
    )Other
    
    
    119,581
    
    
    
    1,043,431(42,072,157
    )
    
    
    (40,401,490
    )$
    (36,899,338
    )
    
    $
    (34,153,931
    )
  67




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O. RETIREMENT PLANS
   P. DEFERRED COMPENSATION
  Q. SHARE-BASED COMPENSATION
  2004 Stock Option Plan 
   68




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69




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Stock Options Granted October 12, 2007:General information:Grant date calculated fair value per option
    
    $
    38.23Shares at March 31, 2011:Vested
    
    
    4,717Nonvested
    
    
    Total
    
    
    4,717Unrecognized share-based compensation at March 31, 2011
    
    $
    Period over which unrecognized share-based compensation
will be realized (in years) at March 31, 2011
    
    
    Stock Options Granted February 3, 2010:General information:Grant date calculated fair value per option
    
    $
    13.87Shares at March 31, 2011:Vested
    
    
    2,296Nonvested
    
    
    1,942Total
    
    
    4,238Unrecognized share-based compensation at March 31, 2011
    
    $
    26,930Period over which unrecognized share-based compensation
will be realized (in years) at March 31, 2011
    
    
    1.8Stock Options Granted April 26, 2010:General information:Grant date calculated fair value per option
    
    $
    17.09Shares at March 31, 2011:Vested
    
    
    2,396Nonvested
    
    
    2,604Total
    
    
    5,000Unrecognized share-based compensation at March 31, 2011
    
    $
    44,507Period over which unrecognized share-based compensation
will be realized (in years) at March 31, 2011
    
    
    2.1
 Fiscal Year EndedMarch 31,Financial information:
    
    2011Consolidated Statement of Operations:Share-based compensation
    
    $
    77,783Deferred tax benefit
    
    
    93,138Other Required Disclosures:Total calculated fair value of shares vested during the period
    
    $
    77,783
  70




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Fiscal Year EndedMarch 31, 2011Weighted-AverageExerciseNumber
    
    
    Price2004 Stock Option Plan:Outstanding  beginning of year
    
    
    84,391
    
    
    $
    117.75Granted
    
    
    5,000
    
    
    
    85.00Exercised or converted
    
    
    
    
    
    
    Forfeited
    
    
    (150
    )
    
    
    85.00Expired
    
    
    
    
    
    
    Outstanding  end of year
    
    
    89,241
    
    
    $
    113.73Exercisable  end of year
    
    
    83,447
    
    
    $
    115.86
 2004 Stock Option PlanOutstanding
    
    
    ExercisableWeighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageRemaining
    
    
    
    
    
    
    RemainingContractual
    
    
    
    
    
    
    ContractualNumber
    
    
    Term (Yrs)
    
    
    Number
    
    
    Term (Yrs)March 31, 2011:Exercise price of $52.47
    
    
    26,628
    
    
    
    2.9
    
    
    
    26,628
    
    
    
    2.9Exercise price of $106
    
    
    11,760
    
    
    
    2.9
    
    
    
    11,760
    
    
    
    2.9Exercise price of $146
    
    
    10,750
    
    
    
    2.9
    
    
    
    10,750
    
    
    
    2.9Exercise price of $160
    
    
    26,298
    
    
    
    4.1
    
    
    
    26,298
    
    
    
    4.1Exercise price of $205
    
    
    4,717
    
    
    
    6.5
    
    
    
    4,717
    
    
    
    6.5Exercise price of $85
    
    
    9,088
    
    
    
    9.0
    
    
    
    3,294
    
    
    
    9.089,241
    
    
    
    4.1
    
    
    
    83,447
    
    
    
    3.7
 2005 Restricted Stock Plan 
    71




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72




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Valuation of Privately-Held-Company Equity Securities .
 Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Minimum CompensationNonvested Stock:Valuation methodologyShare-based compensation:Recognized:Value of nonvested shares
    
    $
    333,333
    
    
    $
    666,667
    
    
    $
    666,667Reimbursement for taxes
    
    
    36,751
    
    
    
    378,791
    
    
    
    578,460Total
    
    $
    370,084
    
    
    $
    1,045,458
    
    
    $
    1,245,127Unrecognized: (1)Value of nonvested shares
    
    $
    
    
    
    $
    333,333
    
    
    $
    1,000,000Reimbursement for taxes
    
    
    
    
    
    
    198,825
    
    
    
    606,097Total
    
    $
    
    
    
    $
    532,158
    
    
    $
    1,606,097Deferred tax benefit
    
    $
    
    
    
    $
    375,824
    
    
    $
    476,298Period over which unrecognized
share-based compensation will
be realized (in years)
    
    
    
    
    
    
    0.5
    
    
    
    1.5
 R. SEGMENT INFORMATION
    73




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##### Table of Contents



ComplementaryBookstore
    
    
    Textbook
    
    
    ServicesDivision
    
    
    Division
    
    
    Division
    
    
    TotalFiscal year ended March 31, 2011:External customer revenues
    
    $
    468,299,457
    
    
    $
    102,889,379
    
    
    $
    27,241,331
    
    
    $
    598,430,167Intersegment revenues
    
    
    236,921
    
    
    
    32,609,239
    
    
    
    8,156,495
    
    
    
    41,002,655Depreciation and amortization expense
    
    
    8,901,801
    
    
    
    6,089,249
    
    
    
    1,054,568
    
    
    
    16,045,618Earnings before interest, taxes,
depreciation, amortization, and
goodwill impairment (Adjusted
EBITDA)
    
    
    33,905,906
    
    
    
    34,710,745
    
    
    
    2,764,283
    
    
    
    71,380,934Total assets
    
    
    173,974,208
    
    
    
    117,814,656
    
    
    
    14,264,903
    
    
    
    306,053,767Fiscal year ended March 31, 2010:External customer revenues
    
    $
    471,028,406
    
    
    $
    104,918,932
    
    
    $
    29,546,275
    
    
    $
    605,493,613Intersegment revenues
    
    
    1,463,869
    
    
    
    35,673,288
    
    
    
    5,924,561
    
    
    
    43,061,718Depreciation and amortization expense
    
    
    9,285,089
    
    
    
    6,075,652
    
    
    
    2,606,650
    
    
    
    17,967,391Earnings before interest, taxes,
depreciation, amortization, and loss
on early extinguishment of debt
(Adjusted EBITDA)
    
    
    45,685,171
    
    
    
    37,050,519
    
    
    
    2,301,001
    
    
    
    85,036,691Total assets
    
    
    189,058,497
    
    
    
    121,026,790
    
    
    
    15,312,328
    
    
    
    325,397,615Fiscal 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
    
    
    
    17,740,057Earnings 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
    
    
    
    328,855,627
  74




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Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Revenues:Total for reportable segments
    
    $
    639,432,822
    
    
    $
    648,555,331
    
    
    $
    653,559,671Elimination of intersegment revenues
    
    
    (41,002,655
    )
    
    
    (43,061,718
    )
    
    
    (42,843,490
    )Consolidated total
    
    $
    598,430,167
    
    
    $
    605,493,613
    
    
    $
    610,716,181Depreciation and Amortization Expense:Total for reportable segments
    
    $
    16,045,618
    
    
    $
    17,967,391
    
    
    $
    17,740,057Corporate Administration
    
    
    1,159,207
    
    
    
    1,402,861
    
    
    
    1,246,594Consolidated total
    
    $
    17,204,825
    
    
    $
    19,370,252
    
    
    $
    18,986,651Goodwill impairment
    
    $
    89,000,000
    
    
    $
    
    
    
    $
    106,972,000Income (Loss) Before Income Taxes:Total Adjusted EBITDA for reportable segments (1)
    
    $
    71,380,934
    
    
    $
    85,036,691
    
    
    $
    84,359,301Corporate Administration Adjusted EBITDA loss
(including interdivision profit elimination) (1)
    
    
    (15,955,066
    )
    
    
    (11,597,268
    )
    
    
    (13,326,971
    )55,425,868
    
    
    
    73,439,423
    
    
    
    71,032,330Depreciation and amortization
    
    
    (17,204,825
    )
    
    
    (19,370,252
    )
    
    
    (18,986,651
    )Goodwill impairment
    
    
    (89,000,000
    )
    
    
    
    
    
    
    (106,972,000
    )Consolidated income (loss) from operations
    
    
    (50,778,957
    )
    
    
    54,069,171
    
    
    
    (54,926,321
    )Interest and other expenses, net
    
    
    (51,027,654
    )
    
    
    (49,224,513
    )
    
    
    (41,279,082
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    (3,065,759
    )
    
    
    Consolidated income (loss) before income taxes
    
    $
    (101,806,611
    )
    
    $
    1,778,899
    
    
    $
    (96,205,403
    )
 March 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Total Assets:Total for reportable segments
    
    $
    306,053,767
    
    
    $
    325,397,615
    
    
    $
    328,855,627Assets not allocated to segments:Cash and cash equivalents
    
    
    45,012,983
    
    
    
    49,933,615
    
    
    
    36,090,627Receivables, net
    
    
    23,437,942
    
    
    
    17,839,544
    
    
    
    19,857,099Recoverable income taxes
    
    
    7,398,901
    
    
    
    2,435,287
    
    
    
    2,869,583Deferred income taxes
    
    
    1,644,974
    
    
    
    1,690,559
    
    
    
    2,350,802Prepaid expenses and other assets
    
    
    2,197,991
    
    
    
    2,216,334
    
    
    
    3,485,273Property and equipment, net
    
    
    11,718,278
    
    
    
    11,711,425
    
    
    
    12,258,135Goodwill (2)
    
    
    73,089,875
    
    
    
    162,089,875
    
    
    
    162,089,875Identifiable intangibles, net
    
    
    31,656,404
    
    
    
    32,035,514
    
    
    
    32,722,900Debt issue costs, net
    
    
    4,211,013
    
    
    
    9,964,874
    
    
    
    7,896,706Other assets
    
    
    1,884,853
    
    
    
    956,793
    
    
    
    611,664Consolidated total
    
    $
    508,306,981
    
    
    $
    616,271,435
    
    
    $
    609,088,291
 (1)
    
    Adjusted EBITDA is defined as earnings before interest, taxes, depreciation,
amortization, goodwill impairment, and loss on early extinguishment of debt.(2)
    
    We determined in the first step of our annual goodwill impairment test conducted
at March 31 that the carrying value of certain reporting units exceeded their fair
values, indicating that goodwill may be impaired for fiscal years ended 2011 and 2009.
Having determined that goodwill may be impaired, we performed the second step of the
goodwill impairment test. As a result, we recorded an impairment charge of $89.0
million and $107.0 million in fiscal years 2011 and 2009, respectively, which reduced
our goodwill carrying value to $129.4 million and $215.4 million as of March 31, 2011
and 2009, respectively.   75




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S. RELATED PARTY TRANSACTIONS
   T. EARNINGS PER SHARE
  Fiscal Years EndedMarch 31, 2011
    
    
    March 31, 2010
    
    
    March 31, 2009Net income (loss)
    
    $
    (98,309,733
    )
    
    $
    2,311,287
    
    
    $
    (100,494,023
    )Less: preferred stock dividends
    
    
    (1,795,480
    )
    
    
    (1,572,554
    )
    
    
    (233,334
    )Net income (loss) available to common shareholders
    
    $
    (100,105,213
    )
    
    $
    738,733
    
    
    $
    (100,727,357
    )Weighted-average common shares outstanding-basic
    
    
    554,094
    
    
    
    554,094
    
    
    
    554,094Effect of dilutive securities:Potential shares of common stock, attributable
to stock options
    
    
    
    
    
    
    5,768
    
    
    
    Weighted-average common shares outstanding-diluted
    
    
    554,094
    
    
    
    559,862
    
    
    
    554,094
  U. SUBSEQUENT EVENT
   76




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##### Table of Contents



V. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
   77




---



##### Table of Contents



NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2011
 NBC
    
    
    NebraskaAcquistion
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    49,526,530
    
    
    $
    6,920,850
    
    
    $
    
    
    
    $
    56,447,380Intercompany receivables
    
    
    26,103,749
    
    
    
    15,756,276
    
    
    
    75,596,987
    
    
    
    (117,457,012
    )
    
    
    Receivables, net
    
    
    42
    
    
    
    31,909,645
    
    
    
    23,056,618
    
    
    
    
    
    
    
    54,966,305Inventories
    
    
    
    
    
    
    47,874,164
    
    
    
    42,240,033
    
    
    
    
    
    
    
    90,114,197Recoverable income taxes
    
    
    
    
    
    
    7,398,901
    
    
    
    
    
    
    
    
    
    
    
    7,398,901Deferred income taxes
    
    
    (45,585
    )
    
    
    715,404
    
    
    
    4,503,000
    
    
    
    
    
    
    
    5,172,819Prepaid expenses and other assets
    
    
    
    
    
    
    4,338,486
    
    
    
    2,861,986
    
    
    
    
    
    
    
    7,200,472Total current assets
    
    
    26,058,206
    
    
    
    157,519,406
    
    
    
    155,179,474
    
    
    
    (117,457,012
    )
    
    
    221,300,074PROPERTY AND EQUIPMENT, net
    
    
    
    
    
    
    33,971,546
    
    
    
    5,420,104
    
    
    
    
    
    
    
    39,391,650GOODWILL
    
    
    
    
    
    
    113,765,621
    
    
    
    15,671,109
    
    
    
    
    
    
    
    129,436,730CUSTOMER RELATIONSHIPS, net
    
    
    
    
    
    
    4,005,045
    
    
    
    70,156,255
    
    
    
    
    
    
    
    74,161,300TRADENAME
    
    
    
    
    
    
    31,320,000
    
    
    
    
    
    
    
    
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net
    
    
    
    
    
    
    3,533,284
    
    
    
    2,439,765
    
    
    
    
    
    
    
    5,973,049INVESTMENT IN SUBSIDIARIES
    
    
    1,123,613
    
    
    
    188,466,295
    
    
    
    
    
    
    
    (189,589,908
    )
    
    
    OTHER ASSETS
    
    
    510,798
    
    
    
    5,885,251
    
    
    
    328,129
    
    
    
    
    
    
    
    6,724,178$
    27,692,617
    
    
    $
    538,466,448
    
    
    $
    249,194,836
    
    
    $
    (307,046,920
    )
    
    $
    508,306,981LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    
    
    
    $
    17,456,720
    
    
    $
    2,548,748
    
    
    $
    
    
    
    $
    20,005,468Intercompany payables
    
    
    
    
    
    
    75,596,987
    
    
    
    15,756,276
    
    
    
    (91,353,263
    )
    
    
    Accrued employee compensation and benefits
    
    
    
    
    
    
    6,097,248
    
    
    
    2,512,129
    
    
    
    
    
    
    
    8,609,377Accrued interest
    
    
    371,288
    
    
    
    7,295,682
    
    
    
    
    
    
    
    
    
    
    
    7,666,970Accrued incentives
    
    
    
    
    
    
    16,896
    
    
    
    5,834,040
    
    
    
    
    
    
    
    5,850,936Accrued expenses
    
    
    
    
    
    
    5,154,291
    
    
    
    1,242,398
    
    
    
    
    
    
    
    6,396,689Income taxes payable
    
    
    
    
    
    
    (3,469,950
    )
    
    
    3,469,950
    
    
    
    
    
    
    
    Deferred revenue
    
    
    
    
    
    
    1,405,802
    
    
    
    
    
    
    
    
    
    
    
    1,405,802Current maturities of long-term debt
    
    
    77,000,000
    
    
    
    374,697,680
    
    
    
    
    
    
    
    
    
    
    
    451,697,680Current maturities of capital lease obligations
    
    
    
    
    
    
    505,562
    
    
    
    
    
    
    
    
    
    
    
    505,562Total current liabilities
    
    
    77,371,288
    
    
    
    484,756,918
    
    
    
    31,363,541
    
    
    
    (91,353,263
    )
    
    
    502,138,484LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    123,005
    
    
    
    
    
    
    
    
    
    
    
    123,005CAPITAL LEASE OBLIGATIONS, net of current maturities
    
    
    
    
    
    
    1,791,621
    
    
    
    
    
    
    
    
    
    
    
    1,791,621OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    1,367,913
    
    
    
    200,000
    
    
    
    
    
    
    
    1,567,913DEFERRED INCOME TAXES
    
    
    (10,292,472
    )
    
    
    23,199,629
    
    
    
    29,165,000
    
    
    
    
    
    
    
    42,072,157DUE TO PARENT
    
    
    
    
    
    
    26,103,749
    
    
    
    
    
    
    
    (26,103,749
    )
    
    
    COMMITMENTSREDEEMABLE PREFERRED STOCK
    
    
    13,601,368
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,601,368STOCKHOLDERS EQUITY (DEFICIT)
    
    
    (52,987,567
    )
    
    
    1,123,613
    
    
    
    188,466,295
    
    
    
    (189,589,908
    )
    
    
    (52,987,567
    )$
    27,692,617
    
    
    $
    538,466,448
    
    
    $
    249,194,836
    
    
    $
    (307,046,920
    )
    
    $
    508,306,981
  78




---



##### Table of Contents



NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2010
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    
    
    
    $
    55,410,821
    
    
    $
    5,561,804
    
    
    $
    
    
    
    $
    60,972,625Intercompany receivables
    
    
    23,194,711
    
    
    
    17,716,457
    
    
    
    57,770,424
    
    
    
    (98,681,592
    )
    
    
    Receivables, net
    
    
    
    
    
    
    32,613,517
    
    
    
    25,374,277
    
    
    
    
    
    
    
    57,987,794Inventories
    
    
    
    
    
    
    55,017,307
    
    
    
    42,480,382
    
    
    
    
    
    
    
    97,497,689Recoverable income taxes
    
    
    
    
    
    
    2,435,287
    
    
    
    
    
    
    
    
    
    
    
    2,435,287Deferred income taxes
    
    
    
    
    
    
    1,690,559
    
    
    
    4,557,000
    
    
    
    
    
    
    
    6,247,559Prepaid expenses and other assets
    
    
    
    
    
    
    3,494,754
    
    
    
    575,527
    
    
    
    
    
    
    
    4,070,281Total current assets
    
    
    23,194,711
    
    
    
    168,378,702
    
    
    
    136,319,414
    
    
    
    (98,681,592
    )
    
    
    229,211,235PROPERTY AND EQUIPMENT, net
    
    
    
    
    
    
    36,815,903
    
    
    
    5,339,521
    
    
    
    
    
    
    
    42,155,424GOODWILL
    
    
    
    
    
    
    199,900,018
    
    
    
    15,671,108
    
    
    
    
    
    
    
    215,571,126CUSTOMER RELATIONSHIPS, net
    
    
    
    
    
    
    4,315,113
    
    
    
    75,587,707
    
    
    
    
    
    
    
    79,902,820TRADENAME
    
    
    
    
    
    
    31,320,000
    
    
    
    
    
    
    
    
    
    
    
    31,320,000OTHER IDENTIFIABLE INTANGIBLES, net
    
    
    
    
    
    
    3,455,593
    
    
    
    1,839,731
    
    
    
    
    
    
    
    5,295,324INVESTMENT IN SUBSIDIARIES
    
    
    102,190,528
    
    
    
    171,532,241
    
    
    
    
    
    
    
    (273,722,769
    )
    
    
    OTHER ASSETS
    
    
    766,191
    
    
    
    10,892,382
    
    
    
    1,156,933
    
    
    
    
    
    
    
    12,815,506$
    126,151,430
    
    
    $
    626,609,952
    
    
    $
    235,914,414
    
    
    $
    (372,404,361
    )
    
    $
    616,271,435LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    
    
    
    $
    22,622,816
    
    
    $
    3,764,224
    
    
    $
    
    
    
    $
    26,387,040Intercompany payables
    
    
    
    
    
    
    57,770,424
    
    
    
    17,716,457
    
    
    
    (75,486,881
    )
    
    
    Accrued employee compensation and benefits
    
    
    
    
    
    
    6,921,873
    
    
    
    2,479,595
    
    
    
    
    
    
    
    9,401,468Accrued interest
    
    
    371,288
    
    
    
    7,295,709
    
    
    
    
    
    
    
    
    
    
    
    7,666,997Accrued incentives
    
    
    
    
    
    
    31,148
    
    
    
    6,282,785
    
    
    
    
    
    
    
    6,313,933Accrued expenses
    
    
    
    
    
    
    8,195,313
    
    
    
    856,338
    
    
    
    
    
    
    
    9,051,651Income taxes payable
    
    
    
    
    
    
    (3,651,775
    )
    
    
    3,651,775
    
    
    
    
    
    
    
    Deferred revenue
    
    
    
    
    
    
    1,299,960
    
    
    
    
    
    
    
    
    
    
    
    1,299,960Current maturities of long-term debt
    
    
    
    
    
    
    54,403
    
    
    
    
    
    
    
    
    
    
    
    54,403Current maturities of capital lease obligations
    
    
    
    
    
    
    846,053
    
    
    
    
    
    
    
    
    
    
    
    846,053Total current liabilities
    
    
    371,288
    
    
    
    101,385,924
    
    
    
    34,751,174
    
    
    
    (75,486,881
    )
    
    
    61,021,505LONG-TERM DEBT, net of current maturities
    
    
    77,000,000
    
    
    
    374,343,069
    
    
    
    
    
    
    
    
    
    
    
    451,343,069CAPITAL LEASE OBLIGATIONS, net of current maturities
    
    
    
    
    
    
    2,380,737
    
    
    
    
    
    
    
    
    
    
    
    2,380,737OTHER LONG-TERM LIABILITIES
    
    
    
    
    
    
    1,918,963
    
    
    
    360,000
    
    
    
    
    
    
    
    2,278,963DEFERRED INCOME TAXES
    
    
    (10,065,529
    )
    
    
    21,196,020
    
    
    
    29,270,999
    
    
    
    
    
    
    
    40,401,490DUE TO PARENT
    
    
    
    
    
    
    23,194,711
    
    
    
    
    
    
    
    (23,194,711
    )
    
    
    COMMITMENTSREDEEMABLE PREFERRED STOCK
    
    
    11,805,888
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,805,888STOCKHOLDERS EQUITY
    
    
    47,039,783
    
    
    
    102,190,528
    
    
    
    171,532,241
    
    
    
    (273,722,769
    )
    
    
    47,039,783$
    126,151,430
    
    
    $
    626,609,952
    
    
    $
    235,914,414
    
    
    $
    (372,404,361
    )
    
    $
    616,271,435
  79




---



##### Table of Contents



NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2011
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUES, net of returns
    
    $
    
    
    
    $
    354,526,859
    
    
    $
    272,897,127
    
    
    $
    (28,993,819
    )
    
    $
    598,430,167COSTS OF SALES (exclusive of depreciation shown below)
    
    
    
    
    
    
    219,787,829
    
    
    
    176,156,445
    
    
    
    (29,784,575
    )
    
    
    366,159,699Gross profit
    
    
    
    
    
    
    134,739,030
    
    
    
    96,740,682
    
    
    
    790,756
    
    
    
    232,270,468OPERATING EXPENSES (INCOME):Selling, general and administrative
    
    
    
    
    
    
    122,988,058
    
    
    
    53,065,786
    
    
    
    790,756
    
    
    
    176,844,600Depreciation
    
    
    
    
    
    
    6,707,569
    
    
    
    1,871,523
    
    
    
    
    
    
    
    8,579,092Amortization
    
    
    
    
    
    
    2,191,853
    
    
    
    6,433,880
    
    
    
    
    
    
    
    8,625,733Goodwill impairment
    
    
    
    
    
    
    89,000,000
    
    
    
    
    
    
    
    
    
    
    
    89,000,000Intercompany administrative fee
    
    
    
    
    
    
    (8,685,564
    )
    
    
    8,685,564
    
    
    
    
    
    
    
    Equity in earnings of subsidiaries
    
    
    92,674,736
    
    
    
    (16,934,057
    )
    
    
    
    
    
    
    (75,740,679
    )
    
    
    92,674,736
    
    
    
    195,267,859
    
    
    
    70,056,753
    
    
    
    (74,949,923
    )
    
    
    283,049,425INCOME (LOSS) FROM OPERATIONS
    
    
    (92,674,736
    )
    
    
    (60,528,829
    )
    
    
    26,683,929
    
    
    
    75,740,679
    
    
    
    (50,778,957
    )OTHER EXPENSES (INCOME):Interest expense
    
    
    8,725,393
    
    
    
    42,478,097
    
    
    
    23
    
    
    
    
    
    
    
    51,203,513Interest income
    
    
    
    
    
    
    (83,708
    )
    
    
    (92,151
    )
    
    
    
    
    
    
    (175,859
    )8,725,393
    
    
    
    42,394,389
    
    
    
    (92,128
    )
    
    
    
    
    
    
    51,027,654INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (101,400,129
    )
    
    
    (102,923,218
    )
    
    
    26,776,057
    
    
    
    75,740,679
    
    
    
    (101,806,611
    )INCOME TAX EXPENSE (BENEFIT)
    
    
    (3,090,396
    )
    
    
    (10,248,482
    )
    
    
    9,842,000
    
    
    
    
    
    
    
    (3,496,878
    )NET INCOME (LOSS)
    
    $
    (98,309,733
    )
    
    $
    (92,674,736
    )
    
    $
    16,934,057
    
    
    $
    75,740,679
    
    
    $
    (98,309,733
    )
  80




---



##### Table of Contents



NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2010
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsREVENUES, net of returns
    
    $
    
    
    
    $
    377,306,980
    
    
    $
    264,870,178
    
    
    $
    (36,683,545
    )
    
    $
    605,493,613COSTS OF SALES (exclusive of
depreciation shown below)
    
    
    
    
    
    
    236,892,355
    
    
    
    171,376,403
    
    
    
    (38,072,842
    )
    
    
    370,195,916Gross profit
    
    
    
    
    
    
    140,414,625
    
    
    
    93,493,775
    
    
    
    1,389,297
    
    
    
    235,297,697OPERATING EXPENSES (INCOME):Selling, general and administrative
    
    
    
    
    
    
    113,325,037
    
    
    
    47,143,940
    
    
    
    1,389,297
    
    
    
    161,858,274Depreciation
    
    
    
    
    
    
    6,751,707
    
    
    
    1,765,297
    
    
    
    
    
    
    
    8,517,004Amortization
    
    
    
    
    
    
    4,674,439
    
    
    
    6,178,809
    
    
    
    
    
    
    
    10,853,248Intercompany administrative fee
    
    
    
    
    
    
    (6,732,823
    )
    
    
    6,732,823
    
    
    
    
    
    
    
    Equity in earnings of subsidiaries
    
    
    (7,362,198
    )
    
    
    (20,241,303
    )
    
    
    
    
    
    
    27,603,501
    
    
    
    (7,362,198
    )
    
    
    97,777,057
    
    
    
    61,820,869
    
    
    
    28,992,798
    
    
    
    181,228,526INCOME FROM OPERATIONS
    
    
    7,362,198
    
    
    
    42,637,568
    
    
    
    31,672,906
    
    
    
    (27,603,501
    )
    
    
    54,069,171OTHER EXPENSES (INCOME):Interest expense
    
    
    8,725,393
    
    
    
    40,678,890
    
    
    
    939
    
    
    
    
    
    
    
    49,405,222Interest income
    
    
    
    
    
    
    (83,373
    )
    
    
    (97,336
    )
    
    
    
    
    
    
    (180,709
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    3,065,759
    
    
    
    
    
    
    
    
    
    
    
    3,065,7598,725,393
    
    
    
    43,661,276
    
    
    
    (96,397
    )
    
    
    
    
    
    
    52,290,272INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (1,363,195
    )
    
    
    (1,023,708
    )
    
    
    31,769,303
    
    
    
    (27,603,501
    )
    
    
    1,778,899INCOME TAX EXPENSE (BENEFIT)
    
    
    (3,674,482
    )
    
    
    (8,385,906
    )
    
    
    11,528,000
    
    
    
    
    
    
    
    (532,388
    )NET INCOME
    
    $
    2,311,287
    
    
    $
    7,362,198
    
    
    $
    20,241,303
    
    
    $
    (27,603,501
    )
    
    $
    2,311,287
  81




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NBC ACQUISTION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MARCH 31, 2009
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, 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
    
    
    94,928,668
    
    
    
    (19,707,636
    )
    
    
    
    
    
    
    (75,221,032
    )
    
    
    94,928,668
    
    
    
    208,851,447
    
    
    
    63,799,019
    
    
    
    (73,305,872
    )
    
    
    294,273,262INCOME (LOSS) FROM OPERATIONS
    
    
    (94,928,668
    )
    
    
    (66,425,299
    )
    
    
    31,206,614
    
    
    
    75,221,032
    
    
    
    (54,926,321
    )OTHER EXPENSES (INCOME):Interest expense
    
    
    8,725,393
    
    
    
    32,878,225
    
    
    
    
    
    
    
    
    
    
    
    41,603,618Interest income
    
    
    
    
    
    
    (385,514
    )
    
    
    (41,022
    )
    
    
    
    
    
    
    (426,536
    )Loss on derivative financial instrument
    
    
    
    
    
    
    102,000
    
    
    
    
    
    
    
    
    
    
    
    102,0008,725,393
    
    
    
    32,594,711
    
    
    
    (41,022
    )
    
    
    
    
    
    
    41,279,082INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (103,654,061
    )
    
    
    (99,020,010
    )
    
    
    31,247,636
    
    
    
    75,221,032
    
    
    
    (96,205,403
    )INCOME TAX EXPENSE (BENEFIT)
    
    
    (3,160,038
    )
    
    
    (4,091,342
    )
    
    
    11,540,000
    
    
    
    
    
    
    
    4,288,620NET INCOME (LOSS)
    
    $
    (100,494,023
    )
    
    $
    (94,928,668
    )
    
    $
    19,707,636
    
    
    $
    75,221,032
    
    
    $
    (100,494,023
    )
  82




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NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2011
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    (5,561,004
    )
    
    $
    11,233,876
    
    
    $
    7,154,228
    
    
    $
    
    
    
    $
    12,827,100CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    
    
    
    
    (3,661,112
    )
    
    
    (2,012,336
    )
    
    
    9,668
    
    
    
    (5,663,780
    )Acquisitions, net of cash acquired
    
    
    
    
    
    
    (5,657,765
    )
    
    
    (3,803,543
    )
    
    
    
    
    
    
    (9,461,308
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    441,151
    
    
    
    20,697
    
    
    
    (9,668
    )
    
    
    452,180Software development costs
    
    
    
    
    
    
    (1,633,638
    )
    
    
    
    
    
    
    
    
    
    
    (1,633,638
    )Net cash flows from investing activities
    
    
    
    
    
    
    (10,511,364
    )
    
    
    (5,795,182
    )
    
    
    
    
    
    
    (16,306,546
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Payment of financing costs
    
    
    
    
    
    
    (66,660
    )
    
    
    
    
    
    
    
    
    
    
    (66,660
    )Principal payments on long-term debt
    
    
    
    
    
    
    (54,401
    )
    
    
    
    
    
    
    
    
    
    
    (54,401
    )Principal payments on capital lease obligations
    
    
    
    
    
    
    (929,607
    )
    
    
    
    
    
    
    
    
    
    
    (929,607
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    44,200,000
    
    
    
    
    
    
    
    
    
    
    
    44,200,000Payments under revolving credit facility
    
    
    
    
    
    
    (44,200,000
    )
    
    
    
    
    
    
    
    
    
    
    (44,200,000
    )Dividends received from subsidiary (paid to parent)
    
    
    8,470,000
    
    
    
    (8,470,000
    )
    
    
    
    
    
    
    
    
    
    
    Proceeds from payment on note receivable from
stockholder
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,869Capital contributions
    
    
    (4,869
    )
    
    
    4,827
    
    
    
    
    
    
    
    42
    
    
    
    Change in due from subsidiary
    
    
    (2,908,996
    )
    
    
    2,909,038
    
    
    
    
    
    
    
    (42
    )
    
    
    Net cash flows from financing activities
    
    
    5,561,004
    
    
    
    (6,606,803
    )
    
    
    
    
    
    
    
    
    
    
    (1,045,799
    )NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    
    
    
    
    (5,884,291
    )
    
    
    1,359,046
    
    
    
    
    
    
    
    (4,525,245
    )CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    
    
    
    
    55,410,821
    
    
    
    5,561,804
    
    
    
    
    
    
    
    60,972,625CASH AND CASH EQUIVALENTS, End of period
    
    $
    
    
    
    $
    49,526,530
    
    
    $
    6,920,850
    
    
    $
    
    
    
    $
    56,447,380
  83




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NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2010
 NBC
    
    
    NebraskaAcquistion
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    (5,405,478
    )
    
    $
    29,900,573
    
    
    $
    6,336,135
    
    
    $
    
    
    
    $
    30,831,230CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    
    
    
    
    (3,737,872
    )
    
    
    (1,730,751
    )
    
    
    57,647
    
    
    
    (5,410,976
    )Acquisitions, net of cash acquired
    
    
    
    
    
    
    (463,474
    )
    
    
    (2,384,134
    )
    
    
    
    
    
    
    (2,847,608
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    85,250
    
    
    
    113,564
    
    
    
    (57,647
    )
    
    
    141,167Software development costs
    
    
    
    
    
    
    (648,523
    )
    
    
    
    
    
    
    
    
    
    
    (648,523
    )Net cash flows from investing activities
    
    
    
    
    
    
    (4,764,619
    )
    
    
    (4,001,321
    )
    
    
    
    
    
    
    (8,765,940
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of long-term debt
    
    
    
    
    
    
    199,000,000
    
    
    
    
    
    
    
    
    
    
    
    199,000,000Payment of financing costs
    
    
    
    
    
    
    (10,190,217
    )
    
    
    
    
    
    
    
    
    
    
    (10,190,217
    )Principal payments on long-term debt
    
    
    
    
    
    
    (193,125,225
    )
    
    
    
    
    
    
    
    
    
    
    (193,125,225
    )Principal payments on capital lease obligations
    
    
    
    
    
    
    (820,560
    )
    
    
    
    
    
    
    
    
    
    
    (820,560
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    85,000,000
    
    
    
    
    
    
    
    
    
    
    
    85,000,000Payments under revolving credit facility
    
    
    
    
    
    
    (85,000,000
    )
    
    
    
    
    
    
    
    
    
    
    (85,000,000
    )Dividends received from subsidiary (paid to parent)
    
    
    8,470,000
    
    
    
    (8,470,000
    )
    
    
    
    
    
    
    
    
    
    
    Proceeds from payment on note receivable from stockholder
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,869Capital contributions
    
    
    (4,869
    )
    
    
    4,869
    
    
    
    
    
    
    
    
    
    
    
    Change in due from subsidiary
    
    
    (3,064,522
    )
    
    
    3,064,522
    
    
    
    
    
    
    
    
    
    
    
    Net cash flows from financing activities
    
    
    5,405,478
    
    
    
    (10,536,611
    )
    
    
    
    
    
    
    
    
    
    
    (5,131,133
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    14,599,343
    
    
    
    2,334,814
    
    
    
    
    
    
    
    16,934,157CASH AND CASH EQUIVALENTS, Beginning of period
    
    
    
    
    
    
    40,811,478
    
    
    
    3,226,990
    
    
    
    
    
    
    
    44,038,468CASH AND CASH EQUIVALENTS, End of period
    
    $
    
    
    
    $
    55,410,821
    
    
    $
    5,561,804
    
    
    $
    
    
    
    $
    60,972,625
  84




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##### Table of Contents



NBC ACQUISITION CORP. AND SUBSIDIARY
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED MARCH 31, 2009
 NBC
    
    
    NebraskaAcquisition
    
    
    Book
    
    
    Subsidiary
    
    
    
    
    
    
    ConsolidatedCorp.
    
    
    Company, Inc.
    
    
    Guarantors
    
    
    Eliminations
    
    
    TotalsCASH FLOWS FROM OPERATING ACTIVITIES
    
    $
    (5,309,962
    )
    
    $
    29,207,254
    
    
    $
    2,458,659
    
    
    $
    
    
    
    $
    26,355,951CASH 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:Proceeds from issuance of preferred stock
    
    
    10,000,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000,000Payment 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
    )Borrowings under revolving credit facility
    
    
    
    
    
    
    200,600,000
    
    
    
    
    
    
    
    
    
    
    
    200,600,000Payments under revolving credit facility
    
    
    
    
    
    
    (200,600,000
    )
    
    
    
    
    
    
    
    
    
    
    (200,600,000
    )Dividends received from subsidiary (paid to parent)
    
    
    8,470,000
    
    
    
    (8,470,000
    )
    
    
    
    
    
    
    
    
    
    
    Proceeds from payment on note receivable from stockholder
    
    
    9,752
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,752Capital contributions
    
    
    (10,009,752
    )
    
    
    10,009,752
    
    
    
    
    
    
    
    
    
    
    
    Change in due from subsidiary
    
    
    (3,160,038
    )
    
    
    3,160,038
    
    
    
    
    
    
    
    
    
    
    
    Net cash flows from financing activities
    
    
    5,309,962
    
    
    
    (2,055,498
    )
    
    
    
    
    
    
    
    
    
    
    3,254,464NET 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
  85




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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.
   86




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  Name
    
    Age
    
    
    PositionMark L. Bono
    
    
    51
    
    
    DirectorR. Sean Honey
    
    
    40
    
    
    DirectorMark W. Oppegard
    
    
    61
    
    
    Chief Executive Officer, Secretary and DirectorBarry S. Major
    
    
    54
    
    
    President/Chief Operating Officer, NBC and DirectorAlan G. Siemek
    
    
    51
    
    
    Vice President and TreasurerSteven A. Clemente
    
    
    41
    
    
    Senior Vice President  Bookstore Division, NBCMichael J. Kelly
    
    
    53
    
    
    Senior Vice President  Textbook Division, NBCLarry R. Rempe
    
    
    63
    
    
    Senior Vice President  Complementary Services, NBCNathan D. Rempe
    
    
    33
    
    
    Chief Technology Officer, NBCAmanda L. Towne
    
    
    38
    
    
    Chief Accounting Officer, NBC
  Mark L. Bono
 R. Sean Honey
 Mark W. Oppegard
 Barry S. Major
 Alan G. Siemek,
  87




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##### Table of Contents



Steven A. Clemente
 Michael J. Kelly,
 Larry R. Rempe
 Nathan D. Rempe,
 Amanda L. Towne,
 Board of Directors
    Audit Committee
   88




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##### Table of Contents



Code of Ethics
  
 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. These
shares vested September 30, 2010 and were subsequently paid out. See Note Q to the
consolidated financial statements in Item 8, Financial Statements and Supplementary Data.
  89




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##### Table of Contents



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).
 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 fiscal years ended March 31, 2011 and 2010, we
matched elective employee-participant contributions on the basis of 100% of the employees
contribution up to 1% of their total compensation plus 50% of the employees contribution
on the next 5% of their total compensation. For fiscal year ended March 31, 2009, 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.
   90




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##### Table of Contents



Summary Compensation Table
  Summary Compensation Table
 (2)
    
    
    
    
    
    
    Change inNon-Equity
    
    
    
    
    
    
    NonqualifiedIncentive
    
    
    
    
    
    
    Deferred
    
    
    (5)Fiscal
    
    
    
    
    
    
    (1)
    
    
    Plan
    
    
    Option
    
    
    Compensation
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Compensation
    
    
    Awards (3)
    
    
    Earnings (4)
    
    
    Compensation
    
    
    TotalMark W. Oppegard  Chief Executive Officer and Director, NBC
    
    
    2011
    
    
    $
    199,992
    
    
    $
    
    
    
    $
    1,333,510
    
    
    $
    
    
    
    $
    
    
    
    $
    8,827
    
    
    $
    1,542,3292010
    
    
    
    200,426
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,827
    
    
    
    209,2532009
    
    
    
    266,500
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    206
    
    
    
    11,752
    
    
    
    378,458Alan G. Siemek  Chief Financial Officer, Senior Vice President of Finance and
Administration, Treasurer, and Assistant Secretary, NBC
    
    
    2011
    
    
    
    213,990
    
    
    
    
    
    
    
    1,333,510
    
    
    
    
    
    
    
    
    
    
    
    8,827
    
    
    
    1,556,3272010
    
    
    
    214,373
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,827
    
    
    
    223,2002009
    
    
    
    214,857
    
    
    
    80,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    306,609Barry S. Major  Chief Operating Officer, President and Director, NBC
    
    
    2011
    
    
    
    284,003
    
    
    
    
    
    
    
    1,333,510
    
    
    
    
    
    
    
    
    
    
    
    8,827
    
    
    
    1,626,3402010
    
    
    
    284,446
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,827
    
    
    
    293,2732009
    
    
    
    287,694
    
    
    
    106,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    405,446Steven A. Clemente  Senior Vice President  Bookstore Division, NBC (6)
    
    
    2011
    
    
    
    248,558
    
    
    
    100,000
    
    
    
    
    
    
    
    85,450
    
    
    
    
    
    
    
    67,138
    
    
    
    501,1462010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael J. Kelly  Senior Vice President  Textbook Division, NBC
    
    
    2011
    
    
    
    203,008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,379
    
    
    
    210,3872010
    
    
    
    203,250
    
    
    
    
    
    
    
    
    
    
    
    9,709
    
    
    
    
    
    
    
    8,827
    
    
    
    221,7862009
    
    
    
    204,083
    
    
    
    65,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,752
    
    
    
    280,835
 (1)
    
    Bonus paid to Steven A. Clemente for fiscal year 2011 was paid pursuant to his
employment agreement.(2)
    
    Amounts paid related to the 2005 Restricted Stock Plan and Restricted Stock Special
Bonus Agreement. See Note Q of the notes to the consolidated financial statements in Item
8, Financial Statements and Supplementary Data.(3)
    
    The amounts shown represent the aggregate grant date fair value for awards granted in
fiscal years 2011 and 2010, computed in accordance with FASB ASC Topic 718. See Note Q of
the notes to the consolidated financial statements in Item 8, Financial Statements and
Supplementary Data.(4)
    
    The amounts shown represent above market earnings on non-qualified deferred
compensation.(5)
    
    All other compensation consists of the following components: (a) matching contributions
to the NBC Retirement Plan; (b) life insurance premiums paid by us on the Executives
behalf and (c) relocation expenses paid by us on the Executives behalf. Relocation
expenses paid on behalf of Steven A. Clemente amounted to $8,947 in relocation benefits,
$25,000 for loss on sale of residence and $22,990 as tax gross up. Directors do not
receive compensation for their services as a director. See Note O of the notes to the
consolidated financial statements in Item 8, Financial Statements and Supplementary Data.(6)
    
    Steven A. Clemente joined the company in April, 2010.  91




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##### Table of Contents



Grants of Plan-Based Awards
  All OtherOption Awards:
    
    
    Exercise
    
    
    GrantNumber of
    
    
    or Base
    
    
    Date FairSecurities
    
    
    Price of
    
    
    Value ofGrant
    
    
    Underlying
    
    
    Option
    
    
    OptionName
    
    Date
    
    
    Options
    
    
    Awards
    
    
    AwardsMark W. Oppegard  Chief Executive Officer and Director, NBC
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    Alan G. Siemek  Chief Financial Officer, Senior Vice
President of Finance and Administration, Treasurer, and Assistant Secretary, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Barry S. Major  Chief Operating Officer, President and Director, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Steven A. Clemente  Senior Vice President  Bookstore Division, NBC
    
    
    4/26/2010
    
    
    
    5,000
    
    
    
    85
    
    
    
    85,450Michael J. Kelly  Senior Vice President  Textbook Division, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Financial Statements and
Supplementary Data
 Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table -
Employment Agreements
  Financial Statements and Supplementary Data
  92




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##### Table of Contents




    
    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.
    93




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##### Table of Contents



Outstanding Equity Awards
  Outstanding Equity Awards at March 31, 2011
 Option Awards(1)
    
    
    (1)Number
    
    
    Numberof Securities
    
    
    of SecuritiesUnderlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    OptionOptions -
    
    
    Options -
    
    
    Exercise
    
    
    ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    Price
    
    
    DateMark W. Oppegard  Chief Executive Officer and Director, NBC
    
    
    5,950
    
    
    
    
    
    
    $
    52.47
    
    
    
    3/4/20142,675
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20142,200
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,963
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014Alan G. Siemek  Chief Financial Officer, Senior Vice
President of Finance and Administration,
Treasurer, and Assistant Secretary, NBC
    
    
    4,728
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20141,375
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20141,375
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,885
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014Barry S. Major  Chief Operating Officer, President and Director, NBC
    
    
    4,780
    
    
    
    
    
    
    
    52.47
    
    
    
    3/4/20142,500
    
    
    
    
    
    
    
    106.00
    
    
    
    3/4/20142,050
    
    
    
    
    
    
    
    146.00
    
    
    
    3/4/20141,963
    
    
    
    
    
    
    
    160.00
    
    
    
    11/9/2014Steven A. Clemente  Senior Vice President  Bookstore Division, NBC
    
    
    1,250
    
    
    
    3,750
    
    
    
    85.00
    
    
    
    4/26/2020Michael J. Kelly  Senior Vice President  Textbook Division, NBC
    
    
    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
    
    
    
    3/30/2016700
    
    
    
    
    
    
    
    205.00
    
    
    
    10/12/2017350
    
    
    
    350
    
    
    
    85.00
    
    
    
    2/3/2020
 (1)
    
    Separate grants of stock options occurred on April 26, 2010, February 3, 2010, 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.  94




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##### Table of Contents



Option Exercises and Stock Vested
  Option Awards
    
    
    Stock Awards (1)Number of
    
    
    
    
    
    
    Number ofShares
    
    
    Value
    
    
    Shares
    
    
    ValueAcquired
    
    
    Realized
    
    
    Acquired
    
    
    Realizedon Exercise
    
    
    on Exercise
    
    
    on Vesting
    
    
    on VestingName
    
    (#)
    
    
    ($)
    
    
    (#)
    
    
    ($)Mark W. Oppegard 
Chief Executive
Officer and
Director, NBC
    
    
    
    
    
    $
    
    
    
    
    1,400
    
    
    $
    209,069Alan G. Siemek 
Chief Financial
Officer, Senior
Vice President of
Finance and
Administration,
Treasurer, and
Assistant
Secretary, NBC
    
    
    
    
    
    
    
    
    
    
    1,400
    
    
    
    209,069Barry S. Major 
Chief Operating
Officer, President
and Director, NBC
    
    
    
    
    
    
    
    
    
    
    1,400
    
    
    
    209,069Steven A. Clemente
 Senior Vice
President 
Bookstore Division,
NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael J. Kelly 
Senior Vice
President 
Textbook Division,
NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Represents the restricted shares received on vesting date September 30, 2010 and the
subsequent payment received by the named executive officers directly related to the vested
restricted stock. The value realized was equal to the estimated fair market value of
$149.34 per unit on the day of vesting multiplied by the number of units that vested.  95




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##### Table of Contents



Nonqualified Deferred Compensation
  Nonqualified Deferred Compensation  March 31, 2011 (1)
 (2)
    
    
    Aggregate
    
    
    AggregateExecutive
    
    
    Registrant
    
    
    Aggregate
    
    
    Withdrawals/
    
    
    BalanceContributions
    
    
    Contributions
    
    
    Earnings
    
    
    Distributions
    
    
    as ofin Fiscal
    
    
    in Fiscal
    
    
    in Fiscal
    
    
    in Fiscal
    
    
    March 31,Name
    
    Year 2011
    
    
    Year 2011
    
    
    Year 2011
    
    
    Year 2011
    
    
    Year 2011Mark W. Oppegard  Chief Executive Officer and Director, NBC
    
    $
    
    
    
    $
    
    
    
    $
    9,540
    
    
    $
    
    
    
    $
    303,091Alan G. Siemek  Chief Financial Officer, Senior Vice President of
Finance and Administration, Treasurer, and Assistant Secretary, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Barry S. Major  Chief Operating Officer, President and Director, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Steven A. Clemente  Senior Vice President  Bookstore Division, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael J. Kelly  Senior Vice President  Textbook Division, NBC
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    See Note P 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)
    
    There are no above market earnings included herein for fiscal years 2011 and 2010;
above market earnings in prior years were $206 in fiscal year 2009 which are included in
the Summary Compensation Table above.  96




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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, 2011 (1)Total(3)
    
    
    (4)
    
    
    (4)
    
    
    (4)
    
    
    Potential(2)
    
    
    Prorated
    
    
    Health
    
    
    Life
    
    
    Disability
    
    
    PaymentBase
    
    
    Incentive
    
    
    Insurance
    
    
    Insurance
    
    
    Insurance
    
    
    UponName
    
    Salary
    
    
    Bonus
    
    
    Benefits
    
    
    Benefits
    
    
    Benefits
    
    
    TerminationMark W. Oppegard  Chief Executive
Officer and Director, NBCTermination of Employment upon
Expiration of Term
    
    $
    199,992
    
    
    $
    
    
    
    $
    13,543
    
    
    $
    252
    
    
    $
    285
    
    
    $
    214,072Termination of Employment Without Cause
    
    
    199,992
    
    
    
    
    
    
    
    13,543
    
    
    
    252
    
    
    
    285
    
    
    
    214,072Termination of Employment upon Death
or Disability
    
    
    99,996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,996Alan G. Siemek  Chief Financial
Officer, Senior Vice President of
Finance and Administration, Treasurer,
and Assistant Secretary, NBCTermination of Employment upon
Expiration of Term
    
    
    213,990
    
    
    
    
    
    
    
    12,868
    
    
    
    252
    
    
    
    285
    
    
    
    227,395Termination of Employment Without Cause
    
    
    213,990
    
    
    
    
    
    
    
    12,868
    
    
    
    252
    
    
    
    285
    
    
    
    227,395Termination of Employment upon Death
or Disability
    
    
    106,995
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,995Barry S. Major  Chief Operating
Officer, President and Director, NBCTermination of Employment upon
Expiration of Term
    
    
    284,003
    
    
    
    
    
    
    
    11,482
    
    
    
    252
    
    
    
    285
    
    
    
    296,022Termination of Employment Without Cause
    
    
    284,003
    
    
    
    
    
    
    
    11,482
    
    
    
    252
    
    
    
    285
    
    
    
    296,022Termination of Employment upon Death
or Disability
    
    
    142,002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142,002Steven A. Clemente  Senior Vice
President  Bookstore Division, NBCTermination of Employment upon
Expiration of Term
    
    
    275,000
    
    
    
    
    
    
    
    12,868
    
    
    
    252
    
    
    
    285
    
    
    
    288,405Termination of Employment Without Cause
    
    
    275,000
    
    
    
    
    
    
    
    12,868
    
    
    
    252
    
    
    
    285
    
    
    
    288,405Termination of Employment upon Death
or Disability
    
    
    137,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    137,500Michael J. Kelly  Senior Vice President
 Textbook Division, NBCTermination of Employment upon
Expiration of Term
    
    
    203,008
    
    
    
    
    
    
    
    10,291
    
    
    
    252
    
    
    
    285
    
    
    
    213,836Termination of Employment Without Cause
    
    
    203,008
    
    
    
    
    
    
    
    10,291
    
    
    
    252
    
    
    
    285
    
    
    
    213,836Termination of Employment upon Death
or Disability
    
    
    101,504
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,504
 (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.  97




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##### Table of Contents



(2)
    
    Base salary in place at time of termination.(3)
    
    It is assumed that the incentive bonus earned for fiscal year 2011, if any, 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)
    
    Represents premiums paid by us on the Executives behalf. Compensation of Directors
  Compensation Risk Assessment
  Compensation Committee Interlocks and Insider Participation
  Compensation Committee Report
   
  98




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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
    
    
    16,788
    
    
    
    3.0
    %Alan G. Siemek
    
    
    9,363
    
    
    
    1.7
    %Barry S. Major (4)
    
    
    13,040
    
    
    
    2.3
    %Steven A. Clemente
    
    
    2,500
    
    
    
    0.4
    %Michael J. Kelly
    
    
    10,891
    
    
    
    1.9
    %Ownership of Directors and All Senior Executive Officers as a Group
    
    
    593,662
    
    
    
    97.7
    %
 (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 our 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. Clemente  2,500 shares; Mr. Kelly  10,891 shares; and 53,479 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 shares of NBC Acquisition Corp. common stock
outstanding as of July 14, 2011 and shares underlying nonqualified stock options
exercisable within sixty days as detailed in footnote (1).(4)
    
    Beneficial ownership includes 1,747 shares of our 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 us. In January, 1999, we issued 4,765
shares of our 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, 2011 totaled
approximately $91,000.  99




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##### Table of Contents



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
    
    
    89,241
    
    
    $
    113.73
    
    
    
    10,425
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 Director Independence
 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  Fiscal Years Ended March 31,2011
    
    
    2010Audit Fees
    
    $
    213,250
    
    
    $
    234,500Audit-Related Fees
    
    
    
    
    
    
    118,600Tax Fees
    
    
    235,920
    
    
    
    173,162Other Fees
    
    
    
    
    
    
    Total
    
    $
    449,170
    
    
    $
    526,262
 Audit Fees
 Audit-Related Fees
  100




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##### Table of Contents



Tax Fees
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    Financial Statements, Financial Statement Schedules, and Exhibits.
 (1)
    
    Consolidated Financial Statements of NBC Acquisition Corp.
        (2)
    
    Financial Statement Schedules.Schedule I  Condensed Financial Information of NBC Acquisition Corp. (Parent Company
Only).Schedule II (Item 15(a)(2))  Valuation and Qualifying Accounts.(3)
    
    Exhibits.
 2.1
    
    
    Agreement and Plan of Merger, dated as of February 18, 2004, by and among NBC
Holdings Corp., New NBC Acquisition Corp., NBC Acquisition Corp., certain Selling
Stockholders named therein, and HWH Capital Partners, L.P., filed as Exhibit 2.1 to NBC
Acquisition Corp. Registration Statement on Form S-4 (No. 333-114889), is incorporated
herein by reference.2.2
    
    
    Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 2, 2004,
by and among NBC Holdings Corp., New NBC Acquisition Corp., NBC Acquisition Corp.,
certain Selling Stockholders named therein, and HWH Capital Partners, L.P., filed as
Exhibit 2.2 to NBC Acquisition Corp. Registration Statement on Form S-4 (No.
333-114889), is incorporated herein by reference.2.3
    
    
    Stock Purchase Agreement, dated as of February 18, 2004, by and among Weston
Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund
L.P., WPC Entrepreneur Fund II, MSD Ventures, L.P., HWH Capital Partners, L.P., NBC
Acquisition Corp., and NBC Holdings Corp., filed as Exhibit 2.3 to NBC Acquisition
Corp. Registration Statement on Form S-4 (No. 333-114889), 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 NBC Acquisition Corp. Form 10-Q for the quarter ended June 30, 2003,
is incorporated herein by reference.
  101




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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 NBC Acquisition
Corp. 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 NBC Acquisition Corp. Current Report on Form 8-K dated May 4, 2006, is incorporated
herein by reference.3.1
    
    
    Amended and Restated Certificate of Incorporation of NBC Acquisition Corp.,
filed as Exhibit 3.1 to NBC Acquisition Corp. Current Report on Form 8-K dated February
3, 2009, is incorporated herein by reference.3.2
    
    
    By-laws of NBC Acquisition Corp., filed as Exhibit 3.2 to NBC Acquisition Corp.
Registration Statement on Form S-4, as amended (File No. 333-48225), is incorporated
herein by reference.3.3
    
    
    Amendment, dated as of August 2, 2002, to By-laws of NBC Acquisition Corp.,
filed as Exhibit 3.2 to NBC Acquisition Corp. Form 10-Q for the quarter ended December
31, 2002, is incorporated herein by reference.4.1
    
    
    Indenture, dated March 4, 2004, by and among NBC Acquisition Corp., the
subsidiary guarantors parties thereto and BNY Midwest Trust Company as Trustee, filed
as Exhibit 4.5 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.4.2
    
    
    Form of 11% Senior Discount Notes Due 2013 (included in Exhibit 4.5), filed as
Exhibit 4.6 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.4.3
    
    
    Form of Exchange Note of NBC Acquisition Corp. 11% Senior Discount Notes Due
2013, filed as Exhibit 4.7 to NBC Acquisition Corp. Form 10-K for the fiscal year ended
March 31, 2004, is incorporated herein by reference.4.4
    
    
    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 4.12 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.4.5
    
    
    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in Exhibit 4.13),
filed as Exhibit 4.13 to NBC Acquisition Corp. Registration Statement on Form S-4 (File
No. 333-114889), is incorporated herein by reference.4.6
    
    
    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8% Senior Subordinated
Note Due 2012, filed as Exhibit 4.15 to NBC Acquisition Corp. Form 10-K for the fiscal
year ended March 31, 2004, is incorporated herein by reference.4.7
    
    
    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 NBC
Acquisition Corp. Current Report on Form 8-K dated January 6, 2005, is incorporated
herein by reference.4.8
    
    
    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 NBC Acquisition Corp. Current Report on Form
8-K dated May 4, 2006, is incorporated herein by reference.4.9
    
    
    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 NBC Acquisition Corp. Current
Report on Form 8-K dated May 7, 2007, is incorporated herein by reference.4.10
    
    
    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, filed as Exhibit 4.14 to NBC
Acquisition Corp. Form 10-K for the fiscal year ended March 31, 2009, is incorporated
herein by reference.
  102




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4.11
    
    
    Indenture, dated October 2, 2009, by and among Nebraska Book Company, Inc., the
Subsidiary Guarantors and Wilmington Trust FSB, as trustee and note holder collateral
agent, filed as Exhibit 4.1 to NBC Acquisition Corp. Current Report on Form 8-K filed
October 7, 2009, is incorporated herein by reference.4.12
    
    
    Form of 10% Senior Secured Note Due 2011 (included in Exhibit 4.1 as Exhibit A
to NBC Acquisition Corp. Current Report on Form 8-K filed October 7, 2009), is
incorporated herein by reference.4.13
    
    
    Pledge and Security Agreement, dated October 2, 2009, among Nebraska Book
Company, Inc., the Subsidiary Guarantors and Wilmington Trust FSB, as Noteholder
Collateral Agent, filed as Exhibit 4.3 to NBC Acquisition Corp. Current Report on Form
8-K filed October 7, 2009, is incorporated herein by reference.10.1
    
    
    Restructuring Support Agreement, dated June 26, 2011, by and among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
undersigned holders of Nebraska Book Company Inc.s 8.625% Senior Subordinated Notes due 2012
and the undersigned holders of our 11.0% Senior Discount Notes due 2013, filed herewith.10.2
    
    
    Super-Priority Debtor-in-Possession Credit Agreement, dated as of June 30, 2011,
among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the
Subsidiary Guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, filed herewith.10.3
    
    
    Guarantee and Collateral Agreement, dated June 30, 2011, among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
and JPMorgan Chase Bank, N.A., as administrative agent, filed herewith.10.4
    
    
    Amended and Restated Credit Agreement, dated October 2, 2009, among Nebraska
Book, the Subsidiary Guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A.,
as administrative agent, Wells Fargo Bank, National Association, as syndication agent,
Bank of America, N.A., as documentation agent, filed as Exhibit 10.1 to NBC Acquisition
Corp. Form 10-Q for the quarter ended September 30, 2009, is incorporated herein by
reference.10.5
    
    
    First Amendment, dated as of March 22, 2010, to the Amended and Restated Credit
Agreement, dated October 2, 2009, among NBC Holdings Corp., NBC Acquisition Corp.,
Nebraska Book Company, Inc., the Subsidiary Guarantors, the lenders party thereto,
JPMorgan Chase Bank, N.A., as administrative agent, Wells Fargo Bank, National
Association, as syndication agent, and Bank of America, N.A., as documentation agent,
filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K filed March
25, 2010, is incorporated herein by reference.10.6
    
    
    First Lien Amended and Restated Guarantee and Collateral Agreement, dated
October 2, 2009, among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book
Company, Inc., the Subsidiary Guarantors, and JPMorgan Chase Bank, N.A., as
administrative agent, filed as Exhibit 10.2 to NBC Acquisition Corp. Form 10-Q for the
quarter ended September 30, 2009, is incorporated herein by reference.10.7
    
    
    First Amendment, dated as of March 22, 2010, to the First Lien Amended and
Restated Guarantee and Collateral Agreement, dated October 2, 2009, among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
and JPMorgan Chase Bank, N.A., as administrative agent, filed as Exhibit 10.1 to NBC
Acquisition Corp. Current Report on Form 8-K filed March 25, 2010, is incorporated
herein by reference.10.8
    
    
    Intercreditor Agreement, dated October 2, 2009, by and among Nebraska Book
Company, Inc., the Subsidiary Guarantors and Wilmington Trust FSB, as trustee, filed as
Exhibit 10.3 to NBC Acquisition Corp. Current Report on Form 8-K filed October 7, 2009,
is incorporated herein by reference.10.9
    
    
    Purchase Agreement, dated as of March 4, 2004, by and among NBC Acquisition
Corp. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Fleet
Securities, Inc., filed as Exhibit 10.13 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.
  103




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10.10
    
    
    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 10.15 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.10.11
    
    
    Stockholders Agreement, dated as of July 11, 2002, by and among NBC
Acquisition Corp., HWH Capital Partners, L.P., HWH Cornhusker Partners, L.P., Weston
Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund,
L.P., WPC Entrepreneur Fund II, L.P., and the other stockholders party thereto, filed
as Exhibit 4.1 to NBC Acquisition Corp. Form 10-Q for the quarter ended June 30, 2002,
is incorporated herein by reference.10.12
    
    
    Amended and Restated Stockholders Agreement, dated as of July 1, 2003, by and
among NBC Acquisition Corp., HWH Capital Partners, L.P., HWH Cornhusker Partners, L.P.,
Weston Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur
Fund, L.P., WPC Entrepreneur Fund II, L.P., MSD Ventures, L.P., and the other
stockholders party thereto, filed as Exhibit 4.1 to NBC Acquisition Corp. Form 10-Q for
the quarter ended June 30, 2003, is incorporated herein by reference.10.13
    
    
    Stock Subscription Agreement between NBC Acquisition Corp. and NBC Holdings
Corp., dated as of February 3, 2009, filed as Exhibit 10.2 to NBC Acquisition Corp.
Current Report on Form 8-K dated February 3, 2009, is incorporated herein by reference.10.14
    
    
    Registration Rights Agreement, dated as of March 4, 2004, by and among NBC
Acquisition Corp. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and
Fleet Securities, Inc., filed as Exhibit 10.22 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.10.15
    
    
    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 10.24 to NBC Acquisition Corp.
Registration Statement on Form S-4 (File No. 333-114889), is incorporated herein by
reference.10.16
    
    
    Registration Rights Agreement, dated as of October 2, 2009, by and among
Nebraska Book Company, Inc., the guarantors listed in Schedule 1 thereto, J.P. Morgan
Securities Inc., Banc of America Securities LLC, Wells Fargo Securities, LLC and Piper
Jaffray & Co., filed as Exhibit 10.4 to NBC Acquisition Corp. Form 10-Q for the quarter
ended December 31, 2009, is incorporated herein by reference.10.17
    *
    
    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 10.5 to NBC Acquisition Corp. Registration Statement on Form S-4, as amended
(File No. 333-48225), is incorporated herein by reference.10.18
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended December 31, 1998, is
incorporated herein by reference.10.19
    *
    
    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 10.10 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31,
2002, is incorporated herein by reference.10.20
    *
    
    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 NBC Acquisition Corp.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.
  104




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10.21*
    
    
    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.10.22*
    
    
    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 NBC
Acquisition Corp. Form 10-Q for the quarter ended September 30, 1999, is incorporated
herein by reference.10.23*
    
    
    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
10.12 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31, 2002, is
incorporated herein by reference.10.24*
    
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended December 31, 1999, is
incorporated herein by reference.10.25*
    
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended June 30, 2001,
is incorporated herein by reference.10.26*
    
    
    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 10.36 to NBC Acquisition Corp. Form 10-K for the
fiscal year ended March 31, 2004, is incorporated herein by reference.10.27*
    
    
    Executive Employment Agreement dated as of March 27, 2010, by and between Nebraska
Book Company, Inc. and Steven Clemente, Senior Vice President of the Bookstore
Division, filed as Exhibit 10.24 to NBC Acquisition Corp. Form 10-K for the fiscal year ended
March 31, 2010, is incorporated herein by reference.10.28*
    
    
    NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004, filed as Exhibit
10.43 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.10.29*
    
    
    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.10.30*
    
    
    Second Amendment, dated January 14, 2010, to the NBC Holdings Corp. 2004 Stock Option
Plan, filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K filed
January 19, 2010, is incorporated herein by reference.10.31*
    
    
    NBC Holdings Corp. 2005 Restricted Stock Plan adopted September 29, 2005, filed as
Exhibit 10.1 to NBC Acquisition Corp. Form 10-Q for the quarter ended September 30,
2005, is incorporated herein by reference.10.32*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.33*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Major, filed as Exhibit 10.2 to NBC Acquisition Corp. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.34*
    
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Siemek, filed as Exhibit 10.3 to NBC Acquisition Corp. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.
  105




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10.35
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.4 to NBC Acquisition Corp. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.36
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Major,
filed as Exhibit 10.5 to NBC Acquisition Corp. Current Report on Form 8-K dated April
6, 2006, is incorporated herein by reference.10.37
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Siemek,
filed as Exhibit 10.6 to NBC Acquisition Corp. Current Report on Form 8-K dated April
6, 2006, is incorporated herein by reference.10.38
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Oppegard, filed as Exhibit 10.7 to NBC Acquisition Corp. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.39
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Major, filed as Exhibit 10.8 to NBC Acquisition Corp. Current Report
on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.40
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Siemek, filed as Exhibit 10.9 to NBC Acquisition Corp. Current Report
on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.41
    *
    
    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 10.7 to NBC Acquisition Corp. Registration Statement on Form S-4, as amended
(File No. 333-48225), is incorporated herein by reference.10.42
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the
quarter ended December 31, 2002, is incorporated herein by reference.10.43
    *
    
    NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.8 to NBC Acquisition
Corp. Registration Statement on Form S-4, as amended (File No. 333-48225), is
incorporated herein by reference.12.1
    
    
    Statements regarding computation of ratios, filed as Exhibit 12.1 to NBC
Acquisition Corp. Registration Statement on Form S-4 (File No. 333-114889), 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 NBC Acquisition Corp., filed as
Exhibit 14.1 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31,
2004, is incorporated herein by reference.21.1
    
    
    Subsidiaries of NBC Acquisition Corp., filed as Exhibit 21.1 to NBC Acquisition
Corp. Registration Statement on Form S-4 (File No. 333-114889), 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 Principal Financial and Accounting 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 Principal Financial and Accounting 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 NBC Acquisition Corp. 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 NBC Acquisition Corp.
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.   106




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NBC ACQUISITION CORP./s/  Mark W. OppegardMark W. OppegardChief Executive Officer, Secretary, 
and DirectorJuly 14, 2011  /s/ Mark W. Oppegard
    
    
    
    /s/ Mark L. BonoMark W. Oppegard
    
    
    
    Mark L. BonoChief Executive Officer, Secretary, and Director
    
    
    
    Director(principal executive officer)
    
    
    
    July 14, 2011July 14, 2011/s/ Alan G. Siemek
    
    
    
    /s/ R. Sean HoneyAlan G. Siemek
    
    
    
    R. Sean HoneyVice President and Treasurer
    
    
    
    Director(principal financial and accounting officer)
    
    
    
    July 14, 2011July 14, 2011/s/ Barry S. MajorBarry S. MajorPresident and DirectorJuly 14, 2011
 
 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:
   107




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##### Table of Contents



NBC ACQUISITION CORP. (PARENT COMPANY ONLY)
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
 
 SCHEDULE I  CONDENSED FINANCIAL INFORMATION
BALANCE SHEETS
 March 31,
    
    
    March 31,2011
    
    
    2010ASSETSOTHER ASSETS:Due from subsidiary (Note A)
    
    $
    26,103,791
    
    
    $
    23,194,711Investment in subsidiary (Note A)
    
    
    1,123,613
    
    
    
    102,190,528Debt issue costs, net of amortization
    
    
    510,798
    
    
    
    766,191Deferred income taxes
    
    
    10,246,887
    
    
    
    10,065,529$
    37,985,089
    
    
    $
    136,216,959LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accrued interest
    
    $
    371,288
    
    
    $
    371,288Current maturities of long-term debt
    
    
    77,000,000
    
    
    
    Total current liabilities
    
    
    77,371,288
    
    
    
    371,288LONG-TERM DEBT, net of current maturities
    
    
    
    
    
    
    77,000,000COMMITMENTS (Note B)REDEEMABLE PREFERRED STOCKSeries A redeemable preferred stock, $.01 par value 20,000 shares
authorized, 10,000 shares issued and outstanding,
at redemption value
    
    
    13,601,368
    
    
    
    11,805,888STOCKHOLDERS EQUITY (DEFICIT):Common stock, voting, authorized 5,000,000 shares of $.01 par value; issued and outstanding 554,094 shares
    
    
    5,541
    
    
    
    5,541Additional paid-in-capital
    
    
    111,281,289
    
    
    
    111,203,506Note receivable from stockholder
    
    
    (92,675
    )
    
    
    (92,755
    )Accumulated deficit
    
    
    (164,181,722
    )
    
    
    (64,076,509
    )Total stockholders equity (deficit)
    
    
    (52,987,567
    )
    
    
    47,039,783$
    37,985,089
    
    
    $
    136,216,959
   108




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##### Table of Contents



NBC ACQUISITION CORP. (PARENT COMPANY ONLY)
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
SCHEDULE I  CONDENSED FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2009INTEREST EXPENSE
    
    $
    (8,725,393
    )
    
    $
    (8,725,393
    )
    
    $
    (8,725,393
    )INCOME TAX BENEFIT
    
    
    3,090,396
    
    
    
    3,674,482
    
    
    
    3,160,038EQUITY IN EARNINGS (DEFICIT) OF SUBSIDIARY
    
    
    (92,674,736
    )
    
    
    7,362,198
    
    
    
    (94,928,668
    )NET INCOME (LOSS)
    
    $
    (98,309,733
    )
    
    $
    2,311,287
    
    
    $
    (100,494,023
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    (180.66
    )
    
    $
    1.33
    
    
    $
    (181.79
    )Diluted
    
    $
    (180.66
    )
    
    $
    1.32
    
    
    $
    (181.79
    )
   109




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NBC ACQUISITION CORP. (PARENT COMPANY ONLY)
(DEBTOR IN POSSESSION AS OF JUNE 27, 2011)
SCHEDULE I  CONDENSED FINANCIAL INFORMATION
STATEMENTS OF CASH FLOWS
 Year Ended
    
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net cash flows from operating activities
    
    $
    (5,561,004
    )
    
    $
    (5,405,478
    )
    
    $
    (5,309,962
    )CASH FLOWS FROM INVESTING ACTIVITIES:Net cash flows from investing activities
    
    
    
    
    
    
    
    
    
    
    CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    10,000,000Dividends received from subsidiary
    
    
    8,470,000
    
    
    
    8,470,000
    
    
    
    8,470,000Change in due from subsidiary
    
    
    (2,908,996
    )
    
    
    (3,064,522
    )
    
    
    (3,160,038
    )Proceeds from payment on note receivable from stockholder
    
    
    4,869
    
    
    
    4,869
    
    
    
    9,752Contributions to subsidiary
    
    
    (4,869
    )
    
    
    (4,869
    )
    
    
    (10,009,752
    )Net cash flows from financing activities
    
    
    5,561,004
    
    
    
    5,405,478
    
    
    
    5,309,962NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    CASH AND CASH EQUIVALENTS, Beginning of year
    
    
    
    
    
    
    
    
    
    
    CASH AND CASH EQUIVALENTS, End of year
    
    $
    
    
    
    $
    
    
    
    $
    SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:Cash paid during the period for interest
    
    $
    8,470,000
    
    
    $
    8,470,000
    
    
    $
    8,470,000Noncash investing and financing activities:Accumulated other comprehensive income associated with
derivative financial instrument of subsidiary
    
    
    
    
    
    
    
    
    
    
    748,000
   110




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##### Table of Contents



NBC ACQUISITION CORP. (PARENT COMPANY ONLY)
(DEBTOR IN POSESSION AS OF JUNE 27, 2011)
SCHEDULE I  CONDENSED FINANCIAL INFORMATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
 A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Due From Subsidiary
 Investment In Subsidiary
 B. COMMITMENTS
  C. DIVIDENDS
 Financial Statements and
Supplementary Data.
 D. REDEEMABLE PREFERRED STOCK
 Financial Statements and Supplementary Data.
  111




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NBC ACQUISITION CORP.
 
 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, 2011Allowance for doubtful accounts
    
    $
    1,283,360
    
    
    $
    2,193,739
    
    
    $
    
    
    
    $
    
    
    
    $
    (2,193,739
    )
    
    $
    1,283,360Allowance for sales returns
    
    
    5,273,651
    
    
    
    
    
    
    
    32,215,351
    
    
    
    
    
    
    
    (32,584,000
    )
    
    
    4,905,002FISCAL YEAR ENDED MARCH 31, 2010Allowance for doubtful accounts
    
    
    1,283,360
    
    
    
    1,399,466
    
    
    
    
    
    
    
    
    
    
    
    (1,399,466
    )
    
    
    1,283,360Allowance for sales returns
    
    
    5,452,166
    
    
    
    
    
    
    
    31,799,536
    
    
    
    
    
    
    
    (31,978,051
    )
    
    
    5,273,651FISCAL 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
    )
    
    
    5,452,166
  112




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##### Table of Contents



EXHIBIT INDEX
 2.1
    
    
    Agreement and Plan of Merger, dated as of February 18, 2004, by and among NBC
Holdings Corp., New NBC Acquisition Corp., NBC Acquisition Corp., certain Selling
Stockholders named therein, and HWH Capital Partners, L.P., filed as Exhibit 2.1 to NBC
Acquisition Corp. Registration Statement on Form S-4 (No. 333-114889), is incorporated
herein by reference.2.2
    
    
    Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 2, 2004,
by and among NBC Holdings Corp., New NBC Acquisition Corp., NBC Acquisition Corp.,
certain Selling Stockholders named therein, and HWH Capital Partners, L.P., filed as
Exhibit 2.2 to NBC Acquisition Corp. Registration Statement on Form S-4 (No.
333-114889), is incorporated herein by reference.2.3
    
    
    Stock Purchase Agreement, dated as of February 18, 2004, by and among Weston
Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund
L.P., WPC Entrepreneur Fund II, MSD Ventures, L.P., HWH Capital Partners, L.P., NBC
Acquisition Corp., and NBC Holdings Corp., filed as Exhibit 2.3 to NBC Acquisition
Corp. Registration Statement on Form S-4 (No. 333-114889), 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 NBC Acquisition Corp. 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 NBC Acquisition
Corp. 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 NBC Acquisition Corp. Current Report on Form 8-K dated May 4, 2006, is incorporated
herein by reference.3.1
    
    
    Amended and Restated Certificate of Incorporation of NBC Acquisition Corp.,
filed as Exhibit 3.1 to NBC Acquisition Corp. Current Report on Form 8-K dated February
3, 2009, is incorporated herein by reference.3.2
    
    
    By-laws of NBC Acquisition Corp., filed as Exhibit 3.2 to NBC Acquisition Corp.
Registration Statement on Form S-4, as amended (File No. 333-48225), is incorporated
herein by reference.3.3
    
    
    Amendment, dated as of August 2, 2002, to By-laws of NBC Acquisition Corp.,
filed as Exhibit 3.2 to NBC Acquisition Corp. Form 10-Q for the quarter ended December
31, 2002, is incorporated herein by reference.4.1
    
    
    Indenture, dated March 4, 2004, by and among NBC Acquisition Corp., the
subsidiary guarantors parties thereto and BNY Midwest Trust Company as Trustee, filed
as Exhibit 4.5 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.4.2
    
    
    Form of 11% Senior Discount Notes Due 2013 (included in Exhibit 4.5), filed as
Exhibit 4.6 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.4.3
    
    
    Form of Exchange Note of NBC Acquisition Corp. 11% Senior Discount Notes Due
2013, filed as Exhibit 4.7 to NBC Acquisition Corp. Form 10-K for the fiscal year ended
March 31, 2004, is incorporated herein by reference.4.4
    
    
    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 4.12 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.
  113




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4.5
    
    
    Form of 8 5/8% Senior Subordinated Note Due 2012 (included in Exhibit 4.13),
filed as Exhibit 4.13 to NBC Acquisition Corp. Registration Statement on Form S-4 (File
No. 333-114889), is incorporated herein by reference.4.6
    
    
    Form of Exchange Note of Nebraska Book Company, Inc. 8 5/8% Senior Subordinated
Note Due 2012, filed as Exhibit 4.15 to NBC Acquisition Corp. Form 10-K for the fiscal
year ended March 31, 2004, is incorporated herein by reference.4.7
    
    
    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 NBC
Acquisition Corp. Current Report on Form 8-K dated and filed on January 6, 2005, is
incorporated herein by reference.4.8
    
    
    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 NBC Acquisition Corp. Current Report on Form
8-K dated May 4, 2006, is incorporated herein by reference.4.9
    
    
    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 NBC Acquisition Corp. Current
Report on Form 8-K dated May 7, 2007, is incorporated herein by reference.4.10
    
    
    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, filed as Exhibit 4.14 to NBC
Acquisition Corp. Form 10-K for the fiscal year ended March 31, 2009, is incorporated
herein by reference.4.11
    
    
    Indenture, dated October 2, 2009, by and among Nebraska Book Company, Inc., the
Subsidiary Guarantors and Wilmington Trust FSB, as trustee and noteholder collateral
agent, filed as Exhibit 4.1 to NBC Acquisition Corp. Current Report on Form 8-K filed
October 7, 2009, is incorporated herein by reference.4.12
    
    
    Form of 10% Senior Secured Note Due 2011 (included in Exhibit 4.1 as Exhibit A
to NBC Acquisition Corp Current Report on Form 8-K filed October 7, 2009), is
incorporated herein by reference.4.13
    
    
    Pledge and Security Agreement, dated October 2, 2009, among Nebraska Book
Company, Inc., the Subsidiary Guarantors and Wilmington Trust FSB, as Noteholder
Collateral Agent, filed as Exhibit 4.3 to NBC Acquisition Corp. Current Report on Form
8-K filed October 7, 2009, is incorporated herein by reference.10.1
    
    
    Restructuring Support Agreement, dated June 26, 2011, by and among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
undersigned holders of Nebraska Book Company Inc.s 8.625% Senior Subordinated Notes due 2012 and the undersigned holders of our 11.0%
Senior Discount Notes due 2013, filed herewith.10.2
    
    
    Super-Priority Debtor-in-Possession Credit Agreement, dated as of June 30, 2011,
among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the
Subsidiary Guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, filed herewith.10.3
    
    
    Guarantee and Collateral Agreement, dated June 30, 2011, among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
and JPMorgan Chase Bank, N.A., as administrative agent, filed herewith.10.4
    
    
    Amended and Restated Credit Agreement, dated October 2, 2009, among Nebraska
Book, the Subsidiary Guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A.,
as administrative agent, Wells Fargo Bank, National Association, as syndication agent,
Bank of America, N.A., as documentation agent, filed as Exhibit 10.1 to NBC Acquisition
Corp. Form 10-Q for the quarter ended September 30, 2009, is incorporated herein by
reference.
  114




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10.5
    
    
    First Amendment, dated as of March 22, 2010, to the Amended and Restated Credit
Agreement, dated October 2, 2009, among NBC Holdings Corp., NBC Acquisition Corp.,
Nebraska Book Company, Inc., the Subsidiary Guarantors, the lenders party thereto,
JPMorgan Chase Bank, N.A., as administrative agent, Wells Fargo Bank, National
Association, as syndication agent, and Bank of America, N.A., as documentation agent,
filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K filed March
25, 2010, is incorporated herein by reference.10.6
    
    
    First Lien Amended and Restated Guarantee and Collateral Agreement, dated
October 2, 009, among NBC Holdings Corp., NBC Acquisition Corp., Nebraska Book Company,
Inc., the Subsidiary Guarantors, and JPMorgan Chase Bank, N.A., as administrative
agent, filed as Exhibit 10.2 to NBC Acquisition Corp. Form 10-Q for the quarter ended
September 30, 2009, is incorporated herein by reference.10.7
    
    
    First Amendment, dated as of March 22, 2010 to the First Lien Amended and
Restated Guarantee and Collateral Agreement, dated October 2, 2009, among NBC Holdings
Corp., NBC Acquisition Corp., Nebraska Book Company, Inc., the Subsidiary Guarantors,
and JPMorgan Chase Bank, N.A., as administrative agent, filed as Exhibit 10.1 to NBC
Acquisition Corp. Current Report on Form 8-K filed March 25, 2010, is incorporated
herein by reference.10.8
    
    
    Intercreditor Agreement, dated October 2, 2009, by and among Nebraska Book
Company, Inc., the Subsidiary Guarantors and Wilmington Trust FSB, as trustee, filed as
Exhibit 10.3 to NBC Acquisition Corp. Current Report on Form 8-K filed October 7, 2009,
is incorporated herein by reference.10.9
    
    
    Purchase Agreement, dated as of March 4, 2004, by and among NBC Acquisition
Corp. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Fleet
Securities, Inc., filed as Exhibit 10.13 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.10.10
    
    
    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 10.15 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.10.11
    
    
    Stockholders Agreement, dated as of July 11, 2002, by and among NBC
Acquisition Corp., HWH Capital Partners, L.P., HWH Cornhusker Partners, L.P., Weston
Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund,
L.P., WPC Entrepreneur Fund II, L.P., and the other stockholders party thereto, filed
as Exhibit 4.1 to NBC Acquisition Corp. Form 10-Q for the quarter ended June 30, 2002,
is incorporated herein by reference.10.12
    
    
    Amended and Restated Stockholders Agreement, dated as of July 1, 2003, by and
among NBC Acquisition Corp., HWH Capital Partners, L.P., HWH Cornhusker Partners, L.P.,
Weston Presidio Capital III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur
Fund, L.P., WPC Entrepreneur Fund II, L.P., MSD Ventures, L.P., and the other
stockholders party thereto, filed as Exhibit 4.1 to NBC Acquisition Corp. Form 10-Q for
the quarter ended June 30, 2003, is incorporated herein by reference.10.13
    
    
    Stock Subscription Agreement between NBC Acquisition Corp. and NBC Holdings
Corp., dated as of February 3, 2009, filed as Exhibit 10.2 to NBC Acquisition Corp.
Current Report on Form 8-K dated February 3, 2009, is incorporated herein by reference.10.14
    
    
    Registration Rights Agreement, dated as of March 4, 2004, by and among NBC
Acquisition Corp. and J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and
Fleet Securities, Inc., filed as Exhibit 10.22 to NBC Acquisition Corp. Registration
Statement on Form S-4 (File No. 333-114889), is incorporated herein by reference.10.15
    
    
    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 10.24 to
NBC Acquisition Corp. Registration Statement on Form S-4 (File No. 333-114889), is
incorporated herein by reference.
  115




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10.16
    
    
    Registration Rights Agreement, dated as of October 2, 2009, by and among
Nebraska Book Company, Inc., the guarantors listed in Schedule 1 thereto, J.P. Morgan
Securities Inc., Banc of America Securities LLC, Wells Fargo Securities, LLC and Piper
Jaffray & Co., filed as Exhibit 10.4 to NBC Acquisition Corp. Form 10-Q for the quarter
ended December 31, 2009, is incorporated herein by reference.10.17
    *
    
    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 10.5 to NBC Acquisition Corp. Registration Statement on Form S-4, as amended
(File No. 333-48225), is incorporated herein by reference.10.18
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended December 31, 1998, is
incorporated herein by reference.10.19
    *
    
    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 10.10 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31,
2002, is incorporated herein by reference.10.20
    *
    
    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 NBC Acquisition Corp.
Form 10-Q for the quarter ended June 30, 2002, is incorporated herein by reference.10.21
    *
    
    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.10.22
    *
    
    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 NBC
Acquisition Corp. Form 10-Q for the quarter ended September 30, 1999, is incorporated
herein by reference.10.23
    *
    
    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
10.12 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31, 2002, is
incorporated herein by reference.10.24
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended December 31, 1999, is
incorporated herein by reference.10.25
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the quarter ended June 30, 2001,
is incorporated herein by reference.10.26
    *
    
    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 10.36 to NBC Acquisition Corp. Form 10-K for the
fiscal year ended March 31, 2004, is incorporated herein by reference.10.27
    *
    
    Executive Employment Agreement dated as of March 27, 2010, by and between Nebraska
Book Company, Inc. and Steven Clemente, Senior Vice President of the Bookstore
Division, filed as Exhibit 10.24 to NBC Acquisition Corp. Form 10-K for the fiscal year ended
March 31, 2010, is incorporated herein by reference.
  116




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10.28
    *
    
    NBC Holdings Corp. 2004 Stock Option Plan adopted March 4, 2004, filed as Exhibit
10.43 to NBC Acquisition Corp. Registration Statement on Form S-4 (File No.
333-114889), is incorporated herein by reference.10.29
    *
    
    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.10.30
    *
    
    Second Amendment, dated January 14, 2010, to the NBC Holdings Corp. 2004 Stock Option
Plan, filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K filed
January 19, 2010, is incorporated herein by reference.10.31
    *
    
    NBC Holdings Corp. 2005 Restricted Stock Plan adopted September 29, 2005, filed as
Exhibit 10.1 to NBC Acquisition Corp. Form 10-Q for the quarter ended September 30,
2005, is incorporated herein by reference.10.32
    *
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.1 to NBC Acquisition Corp. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.33
    *
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Major, filed as Exhibit 10.2 to NBC Acquisition Corp. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.34
    *
    
    Restricted Stock Purchase Agreement, dated as of March 31, 2006, between Holdings and
Siemek, filed as Exhibit 10.3 to NBC Acquisition Corp. Current Report on Form 8-K dated
April 6, 2006, is incorporated herein by reference.10.35
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and
Oppegard, filed as Exhibit 10.4 to NBC Acquisition Corp. Current Report on Form 8-K
dated April 6, 2006, is incorporated herein by reference.10.36
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Major,
filed as Exhibit 10.5 to NBC Acquisition Corp. Current Report on Form 8-K dated April
6, 2006, is incorporated herein by reference.10.37
    *
    
    Stock Repurchase Agreement, dated as of March 31, 2006, between Holdings and Siemek,
filed as Exhibit 10.6 to NBC Acquisition Corp. Current Report on Form 8-K dated April
6, 2006, is incorporated herein by reference.10.38
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Oppegard, filed as Exhibit 10.7 to NBC Acquisition Corp. Current
Report on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.39
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Major, filed as Exhibit 10.8 to NBC Acquisition Corp. Current Report
on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.40
    *
    
    Restricted Stock Plan Special Bonus Agreement, dated as of March 31, 2006, between
Nebraska Book and Siemek, filed as Exhibit 10.9 to NBC Acquisition Corp. Current Report
on Form 8-K dated April 6, 2006, is incorporated herein by reference.10.41
    *
    
    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 10.7 to NBC Acquisition Corp. Registration Statement on Form S-4, as amended
(File No. 333-48225), is incorporated herein by reference.
  117




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10.42
    *
    
    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 NBC Acquisition Corp. Form 10-Q for the
quarter ended December 31, 2002, is incorporated herein by reference.10.43
    *
    
    NBC Acquisition Corp. 401(k) Savings Plan, filed as Exhibit 10.8 to NBC Acquisition
Corp. Registration Statement on Form S-4, as amended (File No. 333-48225), is
incorporated herein by reference.12.1
    
    
    Statements regarding computation of ratios, filed as Exhibit 12.1 to NBC
Acquisition Corp. Registration Statement on Form S-4 (File No. 333-114889), 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 NBC Acquisition Corp., filed as
Exhibit 14.1 to NBC Acquisition Corp. Form 10-K for the fiscal year ended March 31,
2004, is incorporated herein by reference.21.1
    
    
    Subsidiaries of NBC Acquisition Corp., filed as Exhibit 21.1 to NBC Acquisition
Corp. Registration Statement on Form S-4 (File No. 333-114889), 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 Principal Financial and Accounting 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 Principal Financial and Accounting 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 NBC Acquisition Corp. 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 NBC Acquisition Corp.
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.   118