Document:

apg-ex41_650.htm

 

Exhibit 4.1

 

DESCRIPTION OF CAPITAL STOCK

The following summarizes the material terms of the common stock and preferred stock of APi Group Corporation (“we,” “us,” “our,” and the “Company”) as set forth in our certificate of incorporation and our bylaws. While we believe that the following description covers the material terms of our capital stock, the description may not contain all of the information that is important to you and is subject to and qualified in its entirety by reference to applicable Delaware law and to the certificate of incorporation and bylaws.

Authorized Capital

The Company’s authorized capital stock consists of 500,000,000 shares of common stock, par value $0.0001 per share, and 7,000,000 shares of preferred stock, par value $0.0001 per share, of which 4,000,000 is designated Series A Preferred Stock (the “Series A Preferred Stock”).

Common Stock

Voting. Except as otherwise required by applicable law or as provided by the certificate of incorporation, including matters required to be submitted solely to a vote of the holders of Series A Preferred Stock (or any other series of preferred stock of the Company then outstanding), each holder of common stock is entitled to one vote for each share of common stock owned of record on all matters submitted to a vote of stockholders of the Company. Except as otherwise required by applicable law or as provided by the certificate of incorporation, including matters required to be submitted solely to a vote of the holders of Series A Preferred Stock (or any other series of preferred stock of the Company then outstanding), holders of common stock (as well as holders of any series preferred stock then outstanding and entitled to vote together with the holders of common stock, including the Series A Preferred Stock) vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, including the election of directors. There is no cumulative voting rights with respect to the election of directors or any other matters submitted to a vote of the stockholders of the Company.

Dividends and distributions. Subject to applicable law and the rights of the holders of Series A Preferred Stock and the rights, if any, of the holders of any other series of preferred stock of the Company then outstanding, the holders of common stock have the right to receive dividends and distributions, whether payable in cash or otherwise, as may be declared from time to time by the Company’s board of directors from amounts legally available therefor.

Liquidation, dissolution or winding up. Subject to applicable law and the rights, if any, of the holders of any series of preferred stock of the Company then outstanding, including the Series A Preferred Stock, in the event of the liquidation, dissolution or winding-up of the Company, holders of our common stock will be entitled to share ratably in proportion to the number of shares of common stock held by them in the assets of the Company available for distribution after payment or reasonable provision for the payment of all creditors of the Company.

Redemption, conversion or preemptive rights. Holders of common stock have no redemption rights, conversion rights or preemptive rights to subscribe to any or all additional issues of shares of capital stock the Company or securities convertible into capital stock of the Company.

Other provisions. There are no redemption provisions or sinking fund provisions applicable to the common stock of the Company.

The designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of the holders of our common stock will be subject to, and may be adversely affected by, the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of the holders of any series of preferred stock of the Company then outstanding, including the Series A Preferred Stock.

 

 

Preferred Stock

Blank Check Preferred. Under the certificate of incorporation, without stockholder approval, the Company’s board of directors is authorized by resolution to create and issue one or more series of preferred stock of the Company (in addition to the Series A Preferred Stock), and, with respect to each such series, to determine the number of shares constituting the series and the designations and the powers (including voting powers), preferences and rights, if any, which may include dividend rights, conversion or exchange rights, redemption rights and terms and liquidation preferences, and the qualifications, limitations and restrictions, if any, of the series. The Company’s board of directors may therefore create and issue one or more new series of preferred stock with voting power and preferences and rights that could adversely affect the holders of the Company’s common stock and which could have certain anti-takeover effects. Before the Company may issue any new series of preferred stock, our board of directors will be required to adopt resolutions creating and designating such series of preferred stock and certificate of designations setting forth a copy of such resolutions will be required to be executed, acknowledged and filed with the Secretary of State of the State of Delaware.

Series A Preferred Stock. As of December 31, 2020, the Company had 4,000,000 shares of Series A Preferred Stock issued and outstanding. The designations and the powers, preferences and rights, and the qualifications, limitations and restrictions of the Series A Preferred Stock are set forth in the certificate of incorporation.

Dividends. Subject to applicable law and the rights, if any, of any series of preferred stock of the Company then outstanding ranking senior to the Series A Preferred Stock as to dividends and on parity with the rights, if any, of any series of the Company’s preferred stock then outstanding ranking on parity with the Series A Preferred Stock and, if the Average Price (as defined in the certificate of incorporation) per share of the Company’s common stock (subject to adjustment in accordance with the certificate of incorporation) is $11.50 or more for any ten consecutive trading days, the holders of the Series A Preferred Stock will be entitled to receive, in respect of each Dividend Year (as defined below), in the aggregate, the “Annual Dividend Amount,” which is calculated as follows (the “Annual Dividend Amount”):

A X B, where:

A = an amount equal to 20% of the increase (if any) in the value of a share of the Company’s common stock, such increase calculated as being the difference between (i) the Average Price (as defined in the certificate of incorporation) per share of common stock over the last ten consecutive trading days of the Dividend Year for such Dividend Year (the “Dividend Price”) and (ii) (x) if no Annual Dividend Amount has previously been paid, a price of $10.00 per share of common stock, or (y) if an Annual Dividend Amount has previously been paid, the highest Dividend Price for any prior Dividend Year (subject to adjustment in accordance with the certificate of incorporation); and

B = 141,194,638 shares, being a number of shares of the Company’s common stock equal to the number of ordinary shares of the Company’s predecessor outstanding immediately following the acquisition of APi Group, Inc. by the Company (the “APi Acquisition”), including any ordinary shares issued pursuant to the exercise of warrants of the Company, but excluding any ordinary shares issued to shareholders or other beneficial owners of APi Group, Inc. in connection with the APi Acquisition, which such number of shares is subject to adjustment as provided in the certificate of incorporation (the “Series A Preferred Dividend Equivalent”).

“Dividend Year” means the Company’s financial year (which may be twelve months or any longer or shorter period) as determined by the Company’s board of directors, except that (i) in the event of the Company’s dissolution, the relevant Dividend Year will end on the trading day immediately prior to the date of dissolution and (ii) in the event of the automatic conversion of shares of Series A Preferred Stock into shares of common stock of the Company, the relevant Dividend Year will end on the trading day immediately prior to the date of such automatic conversion.

The Annual Dividend Amount is payable in shares of the Company’s common stock or cash, as determined by the Company’s board of directors. Each Annual Dividend Amount will be divided between the holders of Series A Preferred Stock pro rata to the number of Series A Preferred Stock held by them on the last day of the relevant Dividend Year (the “Dividend Date”). If the Company’s board of directors determines to pay the Annual Dividend 

 

 

Amount in shares of common stock, then each holder of a share of Series A Preferred Stock will be entitled to receive such number of whole shares of common stock as is determined by dividing the pro rata amount of the Annual Dividend Amount to which such holders is entitled, by the relevant Dividend Price (provided that any fractional shares of common stock due pursuant to such calculation shall not be paid and instead the nearest lower whole number of shares of common stock will be paid).

Subject to applicable law and the rights, if any, of any series of preferred stock of the Company then outstanding ranking senior to the Series A Preferred Stock as to dividends and on parity with the common stock of the Company and any series of preferred stock of the Company ranking on parity with such common stock, (i) a dividend per share of Series A Preferred Stock equal to the product obtained by multiplying the number of shares of common stock into which such shares of Series A Preferred Stock could then be converted, by the dividend payable on each such share of common stock, and (ii) a dividend per share of Series A Preferred Stock equal to the amount determined by dividing an amount equal to 20% of the dividend which would be distributable on such number of shares of common stock equal to the Series A Preferred Dividend Equivalent, by the number of shares of Series A Preferred Stock outstanding.

Automatic Conversion. The Series A Preferred Stock will be automatically converted into shares of the Company’s common stock on a one-for-one basis (subject to adjustment in accordance with the certificate of incorporation) on the last day of the seventh full financial year of the Company following October 1, 2019 (or if such date is not a trading day, the first trading day immediately following such date) (the “Automatic Conversion”).

Optional Conversion. By notice in writing and surrender of the relevant certificate or certificates to the Company, a holder of Series A Preferred Stock will be able to convert some or all of such holder’s Series A Preferred Stock into an equal number of shares of the Company’s common stock (subject to adjustment in accordance with the certificate of incorporation) and, in such circumstances, the shares of Series A Preferred Stock that were subject to such notice will be converted into shares of common stock on the fifth trading day after receipt by the Company of such written notice (the “Optional Conversion”). In the event of an Optional Conversion, no relevant portion of the Annual Dividend Amount will be payable in respect of those shares of Series A Preferred Stock that are converted into shares of common stock for the Dividend Year in which the date of the Optional Conversion occurs.

Voting Rights. Each holder of Series A Preferred Stock is entitled to one vote per share of Series A Preferred Stock on all matters submitted to a vote of stockholders of the Company generally, voting together with holders of the Company’s common stock as a single class. The holders of Series A Preferred Stock also have the right to vote separately as a single class on any amendment to the certificate of incorporation, whether by merger, consolidation or otherwise, that would alter or change the powers, preferences or rights or the qualifications, limitations or restrictions of the Series A Preferred Stock so as to affect them adversely and as provided by applicable Delaware law.

Exclusive Forum

The Company’s certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Delaware Court of Chancery will be the sole and exclusive forum for: (1) derivative actions or proceedings brought on behalf of us; (2) actions asserting a claim of fiduciary duty owed by any of our directors, officers or employees to us or our stockholder; (3) civil actions to interpret, apply, enforce or determine the validity of the certificate of incorporation or bylaws; or (4) actions asserting a claim governed by the internal affairs doctrine. If the Delaware Court of Chancery lacks jurisdiction over any of the foregoing actions or proceedings, the certificate of incorporation provides that the sole and exclusive forum for such actions or proceedings will be another state or federal court located in the State of Delaware, as long as such court has personal jurisdiction over the parties. In addition, the certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any action asserting a claim arising under the Securities Act.

 

 

Indemnification of Directors and Officers

Under the General Corporation Law of the State of Delaware (the “DGCL”), a Delaware corporation may include in its certificate of incorporation a provision that, subject to the limitations described below, eliminates or limits the personal liability of a director to the corporation or its stockholders for monetary damages for breaches of fiduciary duty as a director. Such a provision may not eliminate or limit the liability of a director for (i) any breach of the duty of loyalty to the corporation or its stockholders, (ii) acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) the willful or negligent payment of unlawful dividends or purchases or redemptions of shares of stock, or (iv) transactions from which such director derived an improper personal benefit. The Company’s certificate of incorporation includes a provision providing that directors of the Company shall not be liable to the Company or our stockholders for monetary damages for breach of fiduciary duty, except to the extent such exemption or limitation is not permitted by the DGCL.

The DGCL also provides that a Delaware corporation has the power to indemnify any person who is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee of another entity, against reasonable expenses (including attorneys’ fees) and, in actions not brought by or in the right of the corporation, judgments, fines and amounts paid in settlement, in each case, actually and reasonably incurred in connection with such action, suit or proceeding, but only if such person acted in a manner reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful, except that in any action brought by or in the right of the corporation, such indemnification may not be made if such person is adjudged liable to the corporation (unless otherwise determined by the court in which such action, suit or proceeding was brought or the Delaware Court of Chancery). In addition, under Delaware law, to the extent that a present or former director or officer of a Delaware corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above or any claim, issue or matter therein, he or she must be indemnified by the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by him or her. Furthermore, under Delaware law, a Delaware corporation is permitted to maintain directors’ and officers’ insurance.

The Company’s bylaws require the Company to indemnify any person who is or was a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding described above by reason of the fact that such person is or was a director of the Company or, while a director or officer of the Company, is or was serving at the request of the Company as a director, officer, employee or agent of another entity, to the fullest extent permitted by law. The Company’s bylaws also require the Company to pay the legal expenses (including attorneys’ fees) of any such person in defending any such action, suit or proceeding in advance of its final disposition subject, in the case of present directors and officers, to the provision by such director or officer of an undertaking to repay the amounts advanced if it is ultimately determined that such director or officer is not entitled to be indemnified under the bylaws or otherwise.

Anti-Takeover Effects of Delaware Law and the Certificate of Incorporation and Bylaws

Delaware law and the Company’s certificate of incorporation and bylaws contain provisions that may prevent or discourage a third party from acquiring the Company, even if the acquisition would be beneficial to our stockholders.

Pursuant to the certificate of incorporation, our board of directors have the authority to create one or more series of preferred stock of the Company (in addition to the Series A Preferred Stock) and to fix the designations and the powers, preferences and rights, if any, and the qualifications, limitations and restrictions, if any, of shares of such new series of preferred stock of the Company and to issue shares of such series without a stockholder vote, which could be used to dilute the ownership of a hostile acquiror.

Pursuant to the certificate of incorporation, our board of directors have the power to amend the bylaws of the Company, which may allow our board of directors to take certain actions to prevent an unsolicited takeover.

 

 

The Company is also subject to Delaware law prohibiting the Company from engaging in any “business combination” with an “interested stockholder” for a period of three years subsequent to the time that the stockholder became an interested stockholder unless:

	
 
	
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prior to such time, our board of directors approved either the business combination or the transaction in which the stockholder became an interested stockholder;

 

	
 
	
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upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owns at least 85% of the outstanding voting stock (with certain exclusions); or

 

	
 
	
•
	
at or after the person becomes an interested stockholder, the business combination is approved by our board of directors and authorized by a vote of at least 66 2/3% of the outstanding voting stock of the Company not owned by the interested stockholder.

For purposes of Delaware law, an “interested stockholder” generally is defined as an entity or person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) directly or indirectly beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated or associated with such entity or person.

For purposes of Delaware law, a “business combination” includes mergers, asset sales and other transactions resulting in financial benefit to a stockholder. This Delaware law could prohibit or delay mergers or other takeover or change of control attempts with respect to the Company and, accordingly, may discourage attempts that might result in a premium over the market price for the shares held by stockholders of the Company.

Listing

The Company’s common stock is currently listed on the New York Stock Exchange (“NYSE”) under the symbol “APG.”

Transfer Agent and Registrar

The transfer agent and registrar for the Company’s common stock is Computershare Trust Company, N.A.apg-ex1017_141.htm

  Exhibit 10.17

 

 

 

 

 

January 10th, 2020

 

Ms. Andrea Fike 4740 Aldrich Ave S

Minneapolis, MN 55419

 

Re:Offer of Employment

 

 

Dear Andrea,

 

Thank you for your interest in joining APi Group. I am very excited about this opportunity. I believe your talents will add greatly to our current senior leadership team.

 

Our offer of employment is as follows:

 

GENERAL

 

Position

General Counsel and Secretary

 

This is a corporate leadership and executive management position and carries both the authority and the responsibility for the operations assigned to you. We also anticipate you will be designated an "executive officer' for SEC reporting purposes (requiring certain public disclosures about yourself and your compensation).

 

Reports To

Company CEO - Russ Becker

 

Position Overview

 

Provide expert, timely legal services to the executive leadership team and all internal and external stakeholders. This role serves as the primary point of contact for APi Group and its subsidiaries (the "Company") and affiliates on all manner of legal and strategic issues, including SEC reporting and filing, mergers and acquisitions, contract review, negotiation and drafting, risk-mitigation, real estate transactions, leasing, banking transactions, corporate governance and corporate records management, compliance 

issues, and litigation, while managing and overseeing outside counsel as necessary.

 

 

 

 

 

 

ACTIVE 47924318v6

BUILDING GREAT LEADERSTM

 

 

 

 

 

 

Essential Duties and Responsibilities Include:

	
 
	
•
	
Possess a knowledge of construction industry and construction contracts. Draft documents as needed 
	
 

to protect the Company's interests and ensure risk is mitigated. Assist the Company with achieving consistency of process and documentation in its contracts.

	
 
	
•
	
Manage government contract compliance and other compliance issues affecting the Company,
	
 

providing training as appropriate. Review, draft and provide advice regarding contracts and 

agreements, including all manner of contracts common to the construction industry and/or a general transactional practice (e.g., purchase orders, change orders, indemnity agreements, confidentiality agreements, master service agreements, purchase agreements, employment agreements, leases, loan agreements, etc.).

	
 
	
•
	
Possess an understanding of corporate structuring, corporate governance and corporate compliance issues. Assist with building “best practice” compliance approach in all legal matters. Prepare and 
	
 

manage corporate records on behalf of the Company.

	
 
	
•
	
Advise the Company and its management on a myriad of other issues affecting its businesses.

	
 
	
•
	
Coordinate legal aspects of SEC compliance reporting and filing.

	
 
	
•
	
Retain and collaborate with outside counsel.

	
 
	
•
	
Manage legal budget.

COMPENSATION & BENEFITS

 

During 2020 it is our intention to standardize our employment related documentation. Once these 

documents have been finalized, we will provide you with a formal executive employment agreement (the 'Employment Agreement”) and other related documents in a form consistent with other executives at your 

level in the Company. The Employment Agreement will include the economic terms outlined in this letter, 

along with customary restrictive covenants, including non-competition and non-disclosure requirements.

Compensation

$350,000.00 Base Salary

Compensation Track

We have a “Pay for Performance" mentality at the Company, so our compensation philosophy relies heavily

on our management incentive plans. Base salary increases in the future at this level are intended to be moderate with the idea that the incentive side of the equation is the most influential in increasing total compensation. Base salary increases in the future depend on performance, attitude, work ethic and management's judgment of contribution to the goals of the Company.

Incentive Bonus Plan

You will be eligible to receive an annual target bonus of 40% of your base salary based on the satisfaction 

of certain preestablished performance goals set by the Company's Compensation Committee. For the 2020 fiscal year, the payment of your annual bonus will be based on the same goals as the other senior 

leadership team, i.e. achievement of the Company's 2020 Adjusted EBITDA budget.

 

2

ACTIVE 47924318v6

 

 

 

Restricted Stock Units (RSUs)

Upon starting work at the Company, you will receive an initial equity award in the form of restricted stock 

units ('RSUs”) with an initial value of $250,000 (which equates to 24,390 RSUs based on the recent 

transaction price of $10.25 per share). The RSUs will be awarded under the Company's 2019 Equity 

Incentive Plan and will vest equally over a 3-year period. The material terms of the RSUs will be set forth in 

a Restricted Stock Unit Agreement to be entered into between you and the Company after the standardized paperwork has been developed.

Severance

As will be further outlined in your Employment Agreement, in the event that the Company terminates your employment without “Cause” (to be defined in your Employment Agreement), provided you execute, and do 

not revoke, a general release in favor of the Company within thirty (30) days of the date of your termination, 

in addition to your accrued but unpaid base salary, bonuses and/or other benefits, the Company shall 

continue to pay you the base salary you were receiving immediately prior to such termination for a period of twelve (12) months thereafter, payable in installments through payroll subject to applicable withholding and 

other taxes (the "Severance Payments").

Fringe Benefits

Per the APi Group Plan documents that you have previously received.

OTHER

Proposed Start Date

January 20, 2020

Support – APi Group and Corporate

We feel we have an excellent support group at the corporate level to assist you in carrying out your duties

and responsibilities. All of us at APi Group are incentivized to make this work for you and the Company and 

we will do everything possible to help facilitate your success.

 

This position should challenge your skills and allow you to deploy your management and leadership

experience across our organization. You have the abilities to bring to bear on this position and we think 

you are an excellent fit for the Company. There is certainly an opportunity to make a great impact on the Company in future years. We are also confident that there is already a level of acceptance to help set the 

stage for success in this position.

 

Thank you again for the opportunity to discuss this position and present you with the offer. Please let me know If there are points in this offer that need further discussion or clarification.

 

If you desire to accept this offer of employment upon the terms and conditions set forth herein, please execute the acknowledgement below and return a copy of this letter to me by no later than January 13, 

2020.

 

We look forward to you joining our team and are awaiting your reply.

 

3

ACTIVE 47924318v6

 

 

Sincerely,

APi Group Corporation

Russ Becker

CEO and President

 

 

Accepted:

 

Andrea FikeDate 

 

 

 

 

 

 

 

 

RB/gg

 

 

 

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ACTIVE 447924318v6

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