Barnes and Noble 2015 Annual Report Download - page 59

. In the fourth quarter of fiscal , the Company
recorded an asset impairment charge of , within
selling and administrative expenses related to this relo-
cation since the assignment of lease was being actively
negotiated in fiscal , and was completed prior to the
issuance of the financial statements, the impaired assets
that resulted from the completion of the assignment were
reflected in the financial statements for fiscal  in
accordance with ASC - Subsequent Events. Of the
, asset impairment charge that was recorded in
fiscal , , related to leasehold improvements,
, related to furniture, fixtures, machinery and equip-
ment and , related to assets under construction. The
Company determined the impairment charge by comparing
the estimated fair value to its carrying amount. The fair
value was developed primarily using the cost approach in
evaluating the replacement cost of the asset (Level  fair
value assumptions) and then adjusting any value due to
economic obsolescence, functional obsolescence or physi-
cal deterioration. The amount of the fair value measure-
ment of the assets related to the relocation as of May ,
 was ,. The lease termination was accounted for
in the first quarter of fiscal , which was the period in
which the lease was assigned.
16. SERIES J PREFERRED STOCK
On August , , the Company entered into an invest-
ment agreement between the Company and Liberty GIC,
Inc. (Liberty) pursuant to which the Company issued and
sold to Liberty, and Liberty purchased, , shares of
the Company’s Series J Preferred Stock, par value .
per share (Preferred Stock), for an aggregate purchase
price of , in a private placement exempt from
the registration requirements of the  Act. The shares
of Preferred Stock will be convertible, at the option of
the holders, into shares of Common Stock representing
. of the Common Stock outstanding as of August ,
 (after giving pro forma effect to the issuance of the
Preferred Stock) based on the initial conversion rate. The
initial conversion rate reflects an initial conversion price
of . and is subject to adjustment in certain circum-
stances. The initial dividend rate for the Preferred Stock is
equal to . per annum of the initial liquidation prefer-
ence of the Preferred Stock to be paid quarterly and subject
to adjustment in certain circumstances.
On April , , Liberty sold the majority of its shares
to qualified institutional buyers in reliance on Rule A
under the Securities Act and initially retained an approxi-
mate  percent stake of its initial investment. As a result,
Liberty no longer has the right to elect two preferred stock
directors to the Company’s Board. Additionally, the consent
rights and pre-emptive rights to which Liberty was previ-
ously entitled ceased to apply.
On June , , the Company entered into Conversion
Agreements with five existing beneficial owners (Series J
Holders) of its Preferred Stock, pursuant to which each of
the Series J Holders has agreed to convert (Conversion)
shares of Preferred Stock it beneficially owns into shares
of the Company’s common stock, par value . per
share (Company Common Stock), and will in addition
receive a cash payment from the Company in connection
with the Conversion. The Series J Holders have agreed to
convert an aggregate of , shares of Preferred Stock
into ,, shares of Company Common Stock in the
Conversion, and the Company has agreed to make an
aggregate cash payment to the Series J Holders of ,
plus cash in lieu of fractional shares in connection with
the Conversion, in each case, subject to adjustment under
certain circumstances. The Company expects to issue the
shares of Company Common Stock to be issued in the
Conversion on or about July , .
The number of shares of Company Common Stock to be
issued was determined based on a conversion ratio of
. shares of Company Common Stock per share of
Preferred Stock converted, which is the conversion rate
in the Certificate of the Designations with respect to the
Preferred Stock dated as of August , .
17. SHAREHOLDERS’ EQUITY
On May , , the Company’s Board of Directors
authorized a stock repurchase program for the purchase
of up to , of the Company’s common stock. The
maximum dollar value of common stock that may yet be
purchased under the current program is approximately
, as of May , . Stock repurchases under this
program may be made through open market and privately
negotiated transactions from time to time and in such
amounts as management deems appropriate. As of May ,
, the Company has repurchased ,, shares at a
cost of approximately ,, under its stock repurchase
programs. The repurchased shares are held in treasury.
2015 Annual Report 57