Barnes and Noble 2015 Annual Report Download - page 68

surcharges, the Company’s management believes these
additional charges are mitigated by the additional delivery
services that Argix provides. These additional services are
beneficial to store productivity which is not consistently
met by other third-party freight distributors. Prior to
renewal, the Company conducts an internal analysis of
Argix’s rates, fuel surcharges and additional delivery ser-
vices and benchmarks them against the Company’s other
carriers.
Argix provided B&N College with transportation services
under a separate agreement that expired April , .
B&N College paid Argix , , and , for such
services during fiscal , fiscal  and fiscal ,
respectively.
On August , , the Company entered into an invest-
ment agreement between the Company and Liberty GIC,
Inc. (Liberty), a subsidiary of Liberty Media Corporation
(Liberty Media), 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, for an aggregate purchase price of , in
a private placement exempt from the registration require-
ments of the  Act.
On April , , Liberty sold the majority of its shares
to qualified institutional buyers in reliance on Rule A
under the Securities Act and has retained an approximate
 percent stake of its initial investment. As a result,
Liberty will no longer have 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
previously entitled ceased to apply.
The Company purchased trade books, primarily craft and
hobby books, from Leisure Arts, Inc. (Leisure Arts), a
subsidiary of Liberty Media. Total purchases from Leisure
Arts following the date of the Liberty investment were
 and  during fiscal  and fiscal . In fis-
cal , the Company entered into agreements with
Starz Entertainment LLC (Starz Entertainment), then
a subsidiary of Liberty Media, pursuant to which Starz
Entertainment registered for the NOOK® developer
program whereby Starz applications were made available
for consumer download on NOOK® devices. Separately,
the Company entered into a License Agreement with
Starz Media, LLC (Starz Media and, together with Starz
Entertainment, Starz) in fiscal , pursuant to which
Starz granted certain video resale rights to the Company in
exchange for royalty payments to Starz Media on such sales.
Starz was spun-off from Liberty Media on January , .
Total payments to Starz during fiscal  prior to the spin-
off were . In fiscal , the Company entered into an
agreement with Sirius XM Radio, Inc. (Sirius), a subsidiary
of Liberty Media, pursuant to which Sirius registered for
the NOOK® developer program whereby Sirius applications
were made available for consumer download on NOOK®
devices. Total commissions received from Sirius during
fiscal  and fiscal  were  and , respectively.
22. DIVIDENDS
The Company paid a dividend to preferred shareholders in
the amount of , and , in fiscal  and fiscal
, respectively.
The Company paid no dividends to common stockholders
during fiscal  and .
23. SUBSEQUENT EVENTS (UNAUDITED)
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 , .
66 Barnes & Noble, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued