Exhibit 4.1


 





DESCRIPTION OF CAPITAL STOCK


OF BARRETT BUSINESS SERVICES, INC.


 


The following is a
brief description of the securities of Barrett Business Services, Inc. (the “company,” “we,” “us”
and “our”), registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As of June 26, 2020, our common stock is the only class of our securities registered under Section 12 of the Exchange
Act. This description of the terms of our common stock does not purport to be complete and is subject to and qualified in its entirety
by reference to the applicable provisions of Maryland General Corporation Law (the "MGCL"), and the full text of our
charter and bylaws.


 


Common
Stock


 


Our charter provides
that we may issue up to 20,500,000 shares of common stock, par value $0.01 per share. Under Maryland law, stockholders generally
are not personally liable for corporate debts or obligations solely because of their status as stockholders. Our common stock is
listed on the Global Select Market of The Nasdaq Stock Market under the symbol "BBSI."


 


Subject to the preferential
rights of any other class or series of stock, holders of shares of our common stock are entitled to receive dividends on such stock
if, as and when authorized by our board of directors out of assets legally available therefor and declared by us and to share ratably
in the assets of our company legally available for distribution to our stockholders in the event of our liquidation, dissolution
or winding up after payment of or adequate provision for all debts and liabilities of our company.


 


Each outstanding share
of our common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election
of directors and, except as provided with respect to any other class or series of stock, the holders of such shares of common stock
will possess the exclusive voting power. There is no cumulative voting in the election of our board of directors, which means that
the holders of a majority of the outstanding shares of our common stock are entitled to elect all of the directors then standing
for election and the holders of the remaining shares will not be able to elect any directors.


 


Holders of shares of
our common stock have no preference, conversion, exchange, sinking fund or redemption rights, and have no preemptive rights to
subscribe for any of our securities. In addition, under the MGCL, our stockholders generally have no appraisal rights. Shares of
our common stock have equal dividend, liquidation and other rights.


 


Under the MGCL, a Maryland
corporation generally may not dissolve, amend its charter, merge, convert, sell all or substantially all of its assets, or engage
in a statutory share exchange unless such action is advised by its board of directors and approved by the affirmative vote of holders
of at least two-thirds of the votes entitled to be cast on the matter, unless a lesser percentage (but not less than a majority
of all of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides that
the foregoing items may be approved by a majority of all the votes entitled to be cast on the matter.


 




    - 1 -


     


    

 


Preferred Stock


 


Our charter provides
that we may issue up to 500,000 shares of preferred stock, par value $0.01 per share. As of June 26, 2020, we have no outstanding
shares of preferred stock.


 


Our charter authorizes
our board of directors, without any vote or action of our stockholders, to classify, and reclassify from time to time, any unissued
shares of preferred stock into other classes or series of stock. Prior to issuance of shares of each class or series, our board
of directors is required by the MGCL to establish the number of shares in each class or series and to set the preferences, conversion,
or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms and
conditions of redemption for each such class or series. The issuance of shares of preferred stock could adversely affect the voting
power, dividend rights and other rights of holders of our common stock. Our board of directors could establish a series of preferred
stock that could, depending on the terms of the series, delay, defer, or prevent a transaction or a change in control of us that
might involve a premium price for our common stock or otherwise be in the best interest of the holders thereof. The specific terms
of a particular class or series of preferred stock will be described in a prospectus, prospectus supplement or other offering materials
relating to the sale or issuance of shares of that class or series.


 


Certain Provisions of Maryland Law and
of Our Charter and Bylaws 


 


The following summary
of certain provisions of the MGCL and of our charter and bylaws does not purport to be complete and is subject to and qualified
in its entirety by reference to Maryland law and our charter and bylaws.


 


Board of Directors; Election of Directors;
Quorum


 


Our charter provides
that the number of directors shall be set pursuant to our bylaws. Our bylaws provide that a majority of our entire board shall
fix the number of directors; provided that the number of directors may not be decreased to fewer than three, nor increased to more
than nine; and provided further that, if there are fewer than three stockholders, the number of directors may be fixed at fewer
than three but not fewer than the number of stockholders. Any and all vacancies on our board of directors may be filled by the
affirmative vote of a majority of the remaining directors, even if fewer than a quorum, except that a vacancy resulting from an
increase in the size of the board of directors must be filled by a majority vote of the entire board of directors, and any individual
elected to fill such vacancy will serve until the next annual meeting of stockholders and until a successor is duly elected and
qualifies.


 


Under our bylaws,
each of our directors will be elected by our stockholders to serve until the next annual meeting of stockholders and until
his or her successor is duly elected and qualifies. Our bylaws provide that in uncontested elections, a director will be
elected by the affirmative vote of a majority of the total votes cast for and votes cast against each director nominee. In
contested elections, directors will be elected by a plurality of the shares represented at the meeting and entitled to vote
on the election of directors. An election will be considered to be contested if the number of nominees exceeds the number of
directors to be elected. Under our bylaws, if in an uncontested election an incumbent director does not receive the
affirmative vote of a majority of the total votes cast for and votes cast against such director, the director is required to
submit his or her resignation to the board of directors. In that event, pursuant to our bylaws, the Nominating and Governance
Committee (the "Nominating Committee") of the board of directors would recommend to the board of directors whether
to accept or reject the resignation. Under our bylaws, the board of directors would then consider and act on the Nominating
Committee's recommendation, publicly disclosing its decision and the reasons supporting it within 90 days following the date
of receipt of the resignation.


 






    - 2 -


     


    

 


Our bylaws provide
that the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at a stockholders
meeting constitutes a quorum.


 


Removal of Directors


 


Under the MGCL, a director
may be removed, with or without cause, only by the affirmative vote of a majority of the votes entitled to be cast generally in
the election of directors.


 


Business Combinations


 


We are subject to the
business combination provisions of the MGCL. Under the MGCL, business combinations between a Maryland corporation and an interested
stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the
interested stockholder becomes an interested stockholder. These business combinations include, among other things, a merger, consolidation,
statutory share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity
securities.


 


An interested stockholder
is defined as:


 


		·	any person who beneficially owns ten percent or more of the voting power of the corporation’s
outstanding voting stock; or



 


		·	an affiliate or associate of the corporation who, at any time within the two-year period prior
to the date in question, was the beneficial owner of ten percent or more of the voting power of the then outstanding voting stock
of the corporation.



 


A person is not an
interested stockholder under the statute if the board of directors approved in advance the transaction by which such person otherwise
would have become an interested stockholder. However, in approving a transaction, the board of directors may make its approval
subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.


 


After the five-year
prohibition, the completion of any business combination between the Maryland corporation and an interested stockholder generally
requires that the transaction be recommended by the board of directors of the corporation and approved by the affirmative vote
of at least:


 




    - 3 -


     


    

 


		·	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation;
and



 


		·	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation, other
than shares (1) held by the interested stockholder with whom or with whose affiliate the business combination is to be effected
or (2) held by an affiliate or associate of the interested stockholder.



 


These super-majority
voting requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined in the MGCL,
for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for
its shares.


 


Control Share Acquisitions


 


We are subject to the
provisions of the MGCL's control share acquisition statute. The control share acquisition statute provides that a holder of control
shares of a Maryland corporation acquired in a control share acquisition has no voting rights with respect to such shares, except
to the extent approved by at least two-thirds of the votes entitled to be cast by stockholders entitled to vote generally in the
election of directors, but excluding the acquiring person, officers of the corporation, and employees who are also directors of
the corporation. Control shares are voting shares of stock that, if aggregated with all other shares of stock owned by the acquiring
person or in respect of which the acquiring person is able to exercise or direct the exercise of voting power (except solely by
virtue of a revocable proxy), would entitle the acquiring person to exercise voting power in electing directors within one of the
following ranges of voting power:


 


		·	one-tenth or more but less than one-third;



 


		·	one-third or more but less than a majority; or



 


		·	a majority or more of all voting power.



 


Control shares do not
include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval
or shares acquired directly from the corporation. A control share acquisition means the direct or indirect acquisition of issued
and outstanding control shares, subject to certain exceptions.


 


A person who has made
or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand to consider the voting rights of the holder of the shares acquired or proposed
to be acquired. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including
an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may present the question
at any stockholders meeting.


 


If voting rights
are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the
statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting
rights have previously been approved. The right of our company to redeem control shares is subject to certain conditions and
limitations. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date
of the last control share acquisition by the acquiring person or, if a stockholders meeting is held to consider voting rights
for the control shares, as of the date of the meeting. If voting rights for the holder of the control shares are approved at
a stockholders meeting and the acquiring person becomes entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquiring person in the control share acquisition.


 



    - 4 -


     


    




 


The control share acquisition
statute does not apply (1) to shares acquired in a merger, consolidation or statutory share exchange if the corporation is
a party to the transaction, or (2) to acquisitions approved or exempted by the charter or bylaws of the corporation.


  


Amendment of our Charter and Bylaws


 


In general, our charter
may be amended if an amendment is declared advisable by our board of directors and approved by the affirmative vote of stockholders
entitled to cast a majority of the votes entitled to be cast on the matter. Our bylaws may
be amended by our stockholders at any annual or special meeting of stockholders by the affirmative vote of a majority of
all shares of any class of stock entitled to vote at such meeting. Our bylaws may also be amended by our board of directors by
the affirmative vote of a majority of the total number of directors then authorized, including vacancies, and subject to the power
of the stockholders to change or repeal such bylaws.


  


Advance Notice of Director Nominations
and New Business


 


Our bylaws provide
that nominations of individuals for election to our board of directors and proposals of other business to be considered at any
annual meeting of our stockholders (or in the case of election of directors, at a special meeting of stockholders held in lieu
of an annual meeting) may be made (1) pursuant to our proxy materials with respect to such meeting, (2) by or at
the direction of our board of directors, (3) by any stockholder or group of stockholders that has complied with the proxy access
requirements set forth in our bylaws and described under “Proxy Access” below, or (4) by any stockholder that
was a stockholder at the time of notice required by our bylaws, is entitled to vote at the meeting in the election of the individuals
so nominated or on such other proposed business, and has complied with the advance notice requirements of, and provided the information
and certifications required by, our bylaws. The foregoing clauses (3) and (4) are the exclusive means for a stockholder to
make nominations or propose business (other than matters included in our proxy materials pursuant to Rule 14a-8 under the
Exchange Act) at an annual meeting of stockholders.


  


Proxy Access


 


Our bylaws
provide that a stockholder or group of up to 20 stockholders that has maintained continuous qualifying ownership of 3% of
more of our outstanding common stock for at least the previous three years is permitted to nominate and include up to a
specified number of proxy access nominees in the company’s proxy materials for its annual meeting of stockholders,
provided that such stockholder or group of stockholders satisfies the applicable proxy access requirements of, and provides
the information and representations required by, our bylaws. Proxy access nominees are also required to submit certain
information, and are subject to certain exclusions and disqualifications, as set forth in our bylaws.


 






    - 5 -


     


    

 


The maximum number
of proxy access nominees that we are required to include in our proxy materials is the greater of (a) two and (b) 20% of the directors
in office at the time of nomination (rounded down to the nearest whole number). Any eligible stockholder that submits more than
one proxy access nominee is required to provide a ranking of its proposed proxy access nominees. If the number of proxy access
nominees exceeds the proxy access nominee limit, the highest ranking qualified individual from the list proposed by each eligible
stockholder, beginning with the eligible stockholder with the largest qualifying ownership and proceeding through the list of eligible
stockholders in descending order of qualifying ownership, will be selected for inclusion in the company’s proxy materials
until the proxy access nominee limit is reached.


 


Requests to include
proxy access nominees in the company’s proxy materials must be receive no earlier than 120 days and no later than 90 days
before the anniversary of the date that the company first mailed its proxy materials for the preceding year’s annual meeting
of stockholders, subject to adjustment in the event the annual meeting is held more than 30 days before or after the anniversary
of the date of the prior year’s annual meeting.


 


Special Meetings of Stockholders


 


Our president or board
of directors may call special meetings of our stockholders. Additionally, our bylaws provide that a special meeting of our stockholders
must also be called by our secretary upon the written request of the stockholders entitled to cast not less than 25% of all the
votes entitled to be cast on such matter at the meeting. Our secretary will inform the requesting stockholders of the reasonably
estimated cost of preparing and mailing the notice of meeting, and the requesting stockholders must pay such estimated cost before
our secretary is required to prepare and mail the notice of the special meeting. A special meeting need not be called by our secretary
to consider any matter that is substantially the same as a matter voted on at any special meeting of our stockholders held during
the preceding 12 months unless requested by stockholders entitled to cast a majority of all votes entitled to be cast at the meeting.


 


Subtitle 8


 


Subtitle 8 of Title
3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three
independent directors, to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors,
and notwithstanding any contrary provision in such charter or bylaws, to any or all of five provisions of Subtitle 8, which provide
for:


 


		·	a classified board;



 


		·	a requirement that removal of a director be approved by the affirmative vote of two-thirds of all the votes entitled
to be cast by stockholders generally in the election of directors;






 






    - 6 -


     


    

 


		·	a requirement that the number of directors be fixed only by vote of the directors;



 


		·	a requirement that a vacancy on the board be filled only by the remaining directors and for the
remainder of the full term of the class of directors in which the vacancy occurred; and



 


		·	a requirement that a written request by stockholders for the calling of a special meeting of stockholders
be submitted by stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting.



 


Through provisions
in our charter and bylaws unrelated to Subtitle 8, we already vest in our board of directors the exclusive power, subject to the
limitations described above, to fix the number of directors, by vote of a majority of the entire board of directors. In the future,
our board of directors may elect, without stockholder approval, to be subject to any of the other provisions of Subtitle 8.


 


Limitation
of Liability and Indemnification of Directors and Officers


 


Maryland
law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to
the corporation and its stockholders for money damages except for liability resulting from (1) actual receipt of an improper
benefit or profit in money, property or services or (2) active and deliberate dishonesty which is established by a final judgment
and which is material to the cause of action. Our charter contains such a provision eliminating directors’ and officers’
liability to the maximum extent permitted by Maryland law.


 


Our
charter obligates us, to the maximum extent permitted by Maryland law, to indemnify any present or former director or officer or
any individual who, while a director or officer of our company and at our request, serves or has served another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, trustee, employee or agent, from
and against any claim or liability to which that individual may become subject or which that individual may incur by reason of
his or her service in such capacity. Our charter also permits us to indemnify any employee or agent of the company.


 


The
MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or
officer who has been successful in the defense of any proceeding to which he or she is made or threatened to be made a party
by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually
incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of
their service in those or other capacities unless it is established that (1) the act or omission of the director or
officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active
and deliberate dishonesty, (2) the director or officer actually received an improper personal benefit in money, property
or services, or (3) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that
the act or omission was unlawful. However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment
in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was
improperly received, unless in either case a court orders indemnification, and then only for expenses.


 






    - 7 -


     


    

 


In
addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt
of (1) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard
of conduct necessary for indemnification by the corporation and (2) a written undertaking by him or her or on his or her behalf
to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.


 


We
have entered into indemnification agreements with each of our directors who is not also an employee. These agreements require us
to indemnify these individuals to the fullest extent permitted under Maryland law against liabilities that may arise by reason
of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors
or executive officers, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy and is therefore unenforceable.


 






    - 8 -