UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------------------------x : THE INTIMATE BOOKSHOP, INC., : 98 Civ. 5564 (WHP) : Plaintiff, : PERSON DECLARATION : VOLUME - V#5 -against- : : BARNES & NOBLE, INC., et al., : NON-CONFIDENTIAL : (except for Attachment) Defendants. : : -----------------------------------------------------x DECLARATION OF CARL E. PERSON IN OPPOSITION TO DEFENDANTS' JOINT SUMMARY JUDGMENT MOTION CARL E. PERSON hereby declares, pursuant to the penalties of perjury under 28 U.S.C. Section 1746, that the following statements are true and correct: 1. I am the attorney for the plaintiff, The Intimate Bookshop, Inc. ("Intimate"), am fully familiar with the facts stated herein, and make this declaration in opposition to defendants' joint summary judgment motion. DISCOUNTS AND OTHER TERMS VOLUME ["Discounts Volume" or "V#2"] 1 2. Exhibit A in the accompanying Discounts/Terms Volume # 2 is a summary of the various documents submitted by Intimate in opposition to defendants' motion which provide information about the discounts, terms and other benefits or effective discounts at which the parties have been purchasing books from the 14 Publishers excluding Abrams (the "Publishers") identified in Paragraph 30-K of the 2nd Amended Complaint. _______________________ 1. Intimate's opposing papers consist of the following: (1) the within Carl E. Person Declaration and exhibits (referred to in the memo of law as "V#5"); (2) Memorandum of Law in Opposition to Defendants' Joint Summary Judgment Motion; (3) Rule 56.1 Statement as to Material Facts in Dispute; (4) Declarations/Experts Volume # 1 ("V#1") consisting of original declarations of Intimate's, experts and former customers as listed on the cover thereof - NON-CONFIDENTIAL; (5) Discounts/Terms Volume # 2 ("V#2") containing ABA Red Book pages and ABA trial transcripts - NON-CONFIDENTIAL; (6) Transcripts Volume # 3 ("V#3") containing transcripts of deposition of defendants' experts - NON CONFIDENTIAL; and (7) Defendants' Highly Confidential Material Volume # 4 ("CV#4") containing numbered exhibits 1-280 cited, e.g., as "(003)", and a Publisher's affidavit - HIGHLY CONFIDENTIAL. 3. Exhibit B in the accompanying Discounts/Terms Volume [V#2] is a true copy of pages from the 1997 ABA Red Book showing the published discounts and other terms of each of the 14 Publishers. 4. Exhibit C in the accompanying Discounts Volume [V#2] is a true copy of pages from the 2000 ABA Red Book showing the published discounts and other terms of each of the 14 Publishers. 5. Exhibit D in the accompanying Discounts Volume [V#2] is a true copy of pages from the 2001 ABA Red Book showing the published discounts and other terms of each of the 14 Publishers. 6. Exhibit E through Exhibit J in the accompanying Discounts Volume [V#2] are true copies of a transcript of the 6 days of trial in the ABA action against defendants held on 4/4/01, 4/10/01, 4/11/01, 4/12/01, 4/16/01 and 4/17/01 containing evidence concerning discounts and terms being received by defendants, Intimate and other independent booksellers from the Publishers, defendants' business practices, and other related matters, including in Day 6 the testimony of ABA's expert witness William Frazier. DEPOSITION TRANSCRIPTS OF DEFENDANTS' EXPERTS VOLUME (V#3) - NON CONFIDENTIAL 7. A true copy of the Robert C. Blattberg 11/7/01 Deposition Transcript is set forth in Intimate's Deposition Transcripts of Defendants' Experts Volume (V#3). 8. A true copy of the Anne Coughlan 11/7/01 Deposition Transcript is set forth in Intimate's V#3. 9. A true copy of the Alan Cox 11/6/01 Deposition Transcript is set forth in Intimate's V#3. 10. A true copy of the Philip Johnson 11/9/01 Deposition Transcript is set forth in Intimate's V#3. 11. A true copy of the William D. O'Connell 11/8/01 Deposition Transcript is set forth in Intimate's V#3. 12. A true copy of the Janusz A. Ordover 11/2/01 Deposition Transcript is set forth in Intimate's V#3. 13. A true copy of the Peter R. Peacock 11/6/01 Deposition Transcript is set forth in Intimate's V#3. 14. A true copy of the Stephen W. Shulman 11/9/01 Deposition Transcript is set forth in Intimate's V#3. DEFENDANTS' AND PUBLISHERS' HIGHLY CONFIDENTIAL MATERIALS ("CV#4") - HIGHLY CONFIDENTIAL 15. The following are true copies of documents as described below, all of which are reproduced in the accompanying Defendants' and Publishers' Highly Confidential Materials Volume ("CV#4"): A. Documents (Exhibits 1-280) Produced by Defendants Designated HIGHLY CONFIDENTIAL or CONFIDENTIAL. B. David Naggar 3/9/01 Affidavit (in response to Intimate subpoena), HIGHLY CONFIDENTIAL. C. Highly-confidential description of Exhibits 1-280 set forth in Paragraph 16 below and designated as an HIGHLY-CONFIDENTIAL attachment to this Person Declaration for filing under seal (in CV#4). 16. Note: ˙The description of Exhibits 1-280 described in the preceding sentence is set forth as a HIGHLY-CONFIDENTIAL Attachment hereto (to be filed under seal hereto in CV#4). 17. Omitted. 18. Omitted. 19. Omitted. 20. Omitted. NON-CONFIDENTIAL DOCUMENTS ANNEXED TO THIS PERSON DECLARATION [V#5] 21. Exhibit A hereto is a true copy of the Stipulation and Protective Order Governing Discovery Materials so-ordered on November 18, 2000 (the "Confidentiality Agreement"), providing for various categories, including "HIGHLY CONFIDENTIAL"), which defendants designated virtually all of their produced documents relating to discounts and other business dealings with the Publishers. Documents designated "Highly Confidential" are not allowed to be seen by the clients or in-house attorneys. See Paragraphs 3 and 5 of the Confidentiality Agreement. 22. Exhibit B hereto is a true copy of an article published in the 1/29/02 New York Times relating to Toys-R-Us entitled "Toys 'R' Us Plans to Lay Off 1,900 and Close 64 Stores. 23. Exhibit C hereto is a series of articles, as follows: "Kmart Misery Grows", New York Post 1/21/02 p. 29 (p. 1) (caption language: "now Wal-Mar is six times bigger. Wal-Mart can buy goods cheaper, and when Kmart tries to match, it loses money"); Other Transactions [Lechters, Inc.], Shopping Center World 1/14/02 (p. 2); "Shoppers Pick Wal-Mart, Target over Kmart", USA Today 1/31/02 , Money Section, p. 1B (pp. 3-7); "With image crumbling, Kmart files Chapter 11", USA Today 1/23/02, Money Section 1B (pp. 8-9); "Venerable Kmart tries to hang on; Reeling, retailer shakes up top tier", Chicago Tribune 1/1802, p. 1 (pp. 10-12); "Retailers' post-holiday blues may deepen", The Daily Deal 1/9/02 (pp. 13-17); "Going Out of Business? They Can Help", The New York Times, Section 14LI, p. 2 (pp. 18-20) ("category killers" at p. 19); "Satisfying a hunger for knowledge", Minneapolis-St. Paul CityBusiness 1/02/98, p. 13 (pp. 21-23) (at p. 22: "Category Killers": B&N and Borders). 24. Exhibit D hereto is a true copy of an article entitled "Aisles Grow Less Cluttered as End Nears for Bookstore", published in The New York Times 1/11/02, Section B, p. 3 (Coliseum Books, Manhattan, after 27 years). 25. Exhibit E hereto is a true copy of an article entitled "Paying for the Sins of Enron", published in Business Week 2/11/02, p. 35 ("accounting malfeasance" and effect upon market - "investors realized they had never understood how the company made its money"). 26. Exhibit F hereto is a true copy of excerpts from Barnes & Noble's 1997 Annual Report. 27. Exhibit G hereto is a true copy of excerpts from Barnes & Noble's 1999 Annual Report. 28. Exhibit H hereto is a true copy of excerpts from Barnes & Noble's 2000 Annual Report. 29. Exhibit I hereto is a true copy of excerpts from Barnes & Noble's 10-K Annual Report, 12/31/98. 30. Exhibit J hereto is a true copy of excerpts from Barnes & Noble's 10-K Annual Report, 12/31/99. 31. Exhibit K hereto is a true copy of excerpts from the ABA's 1998 ABACUS report, "ABA's Financial Survey of Members of Bookstores Based on 1996 Operations". 32. Exhibit L hereto is a true copy of excerpts from "Strategic Audit: Barnes & Noble", by Dr. Pamela Barr, Strategic and International Management, 4/20/00. 33. Exhibit M hereto is a true copy of excerpts from the website of barnesandnoble.com, Inc. 34. Exhibit N hereto is a true copy of a B&N 11/20/96 press release "Barnes & Noble, Inc. Reports Profits for the Third Quarter". 35. Exhibit O hereto is a true copy of a 2/4/02 Forbes article entitled "Tough Guy - Leonard Del Vecchio has built and bullied his way to total domination in the eyeglasses business. Don't mess with him." 36. Exhibit P hereto is a true copy of a 7/12/99 Publishers Weekly article entitled "Co-op on the Edge of a New Millennium". 37. Exhibit Q hereto is a true copy of American Demographics, 5/98 article "Ready Readers, Reluctant Readers". 38. Exhibit R hereto is a true copy of The New York Times 11/26/01 article "Barnes & Noble Will Try to Squeeze Better Deals from Publishers". 39. Exhibit S hereto is a true copy of a Publishers Weekly 12/10/01 article "Riggio Wants a Level Playing Field" and index pages. 40. Exhibit T hereto is a true copy of a U.S. News & World Report 1/12/98 article "Publish and don't perish - To survive, publishing houses embrace new business techniques", pp. 38-40. 41. Exhibit U hereto is a true copy of a New York magazine 7/19/99 article entitled "Barnes & Noble's Jekyll and Hyde", pp. 24-31. 42. Exhibit V hereto is a true copy of a Business Week 2/11/02 article entitled "Enron: How Good an Energy Trader? - Without the accounting tricks, the company is not such a dynamo in its core business." 43. Exhibit W is a true copy of the Intimate invoices referred to in the Brenda Kuralt ("BKuralt") declaration as an Exhibit thereto. CUSTOMER DECLARATIONS 44. Original Declarations from the following former customers of Intimate are included in V#1, the Declarations/Experts Volume: A. Margaret McKean, Chapel Hill NC with letter B. Joan E. Miner, Durham NC C. Helen Buchanan Stone, Greensboro NC D. Philip Heilpern MD, Chapel Hill NC E. Dave Roesh, Raleigh NC F. Jill Paul, Chapel Hill NC G. Marsha Tai, Raleigh NC H. Mrs. Ron Conrad, Chapel Hill NC I. Jean P. Meier, Chapel Hill NC J. Gustavo S. Montano, Chapel Hill NC K. T. Spano, Chapel Hill NC L. Roxane W. Isbey, Chapel Hill NC M. Kristine M. O'Keefe, Chapel Hill NC N. Alan B. Marnotr, Chapel Hill NC O. Mark J. Prak, Raleigh NC P. Natalie Ammarell, Chapel Hill NC Q. Nancy Hilliland, Chapel Hill NC R. Elaine M. Willers, Raleigh NC S. Mia Switz Halman, Chapel Hill NC T. Karyn Trant, Chapel Hill NC U. Genie Earnhardt, Raleigh NC V. Judy Winston, Chapel Hill NC W. David Owens, Chapel Hill NC X. Catherine H. Wells, Chapel Hill NC Y. Anita W. Badrock, Chapel Hill NC Z. Shirley A. Harrington, Winston-Salem NC AA. Nancy Ierittle, Chapel Hill BB. Mary L. Hill, Chapel Hill NC CC. Ann H. McLaughlin, Raleigh NC DD. Carol Wenger, Raleigh NC EE. Martha E. Clarke, Chapel Hill NC FF. Moirsfe, Durham NC GG. Patricia N. Whisnant, Winston-Salem NC HH. G. S. Grandy (illegible), 321 Azalea Dr., Chapel Hill, NC 27517 II. Della Roberts (Adele W. Roberts), Winston-Salem NC JJ. Nelson L. Shearouse, Winston-Salem NC KK. Mary Jo Doherty, Chapel Hill NC LL. Stephanie J. Lovett, Winston-Salem NC MM. James Richard Davis, Chapel Hill NC NN. Lin Brown, Winston-Salem NC OO. Carl von Isenburg, Winston-Salem NC PP. Judson J. Van Wyk, Chapel Hill NC QQ. L. L. Robinson, Charlotte NC RR. Lorraine Short, Raleigh NC SS. Mary Mainwaring, Raleigh NC TT. Ann B. Adams, Winston-Salem NC UU. Warnie Marlette, Winston-Salem NC VV. Billie B. Gillian, Winston-Salem NC WW. Tomasue A. Clark, Winston-Salem NC XX. Gray R. Patton, Winston-Salem NC YY. Ley A. Spitz, Chapel Hill NC ZZ. Verla C. Inshe, , Chapel Hill NC AAA. Sarah Ivey DeRamus, Winston-Salem NC BBB. Claudia E. Groeber, Chapel Hill NC CCC. Martha B. Carleseo, Winston-Salem NC DDD. Nancy H. Kelley, Winston-Salem NC EEE. Alfred G. Gash, Chapel Hill NC FFF. Nancy H. Nelson, Winston-Salem NC GGG. Elizabeth Sherertz, Winston-Salem NC HHH. Cathy Abernathy, Chapel Hill NC III. Phyllis Sockwell, Chapel Hill NC JJJ. Dr. David M. Brown, Charlotte NC KKK. Christopher S. Martin, Chapel Hill NC LLL. Januerrer (illegible), 338 Tenney Circle, Chapel Hill NC Executed this 6th day of February, 2002, at New York, New York. ___________________________________ Carl E. Person HIGHLY CONFIDENTIAL ATTACHMENT TO PERSON DECLARATION FOR FILING UNDER SEAL 16. Documents Produced by Defendants Designated HIGHLY CONFIDENTIAL or CONFIDENTIAL Paragraphs 1-280, describing 280 highly confidential documents, were redacted from the original document. [Note: the above subparagraphs 1-280 are included under Paragraph 17 above] [end of HIGHLY-CONFIDENTIAL attachment] Exhibit A, 11/18/00 Stipulation and Protective Order Governing Discovery Materials Exhibit B, article published in the 1/29/02 New York Times entitled "Toys 'R' Us Plans to Lay Off 1,900 and Close 64 Stores Exhibit C, ˙series of articles starting with "Kmart Misery Grows", New York Post 1/21/02 p. 29 (p. 1) Exhibit D, article entitled "Aisles Grow Less Cluttered as End Nears for Bookstore", published in The New York Times 1/11/02, Section B, p. 3 Exhibit E hereto is a true copy of an article entitled "Paying for the Sins of Enron", published in Business Week 2/11/02, p. 35 ("accounting malfeasance" and effect upon market - "investors realized they had never understood how the company made its money"). 26. Exhibit F hereto is a true copy of excerpts from Barnes & Noble's 1997 Annual Report.