| Common Stock |
11. Common Stock
We have six classes of common stock: Class A, Class B, Class M-1, Class M-2, Class M-3 and Class M-4. The Class M-1, Class M-2, Class M-3 and Class M-4 shares are collectively referred to as Class M shares.
Class A shares collectively represent 55% of the total voting power of the Company. Class B shares collectively represent the remaining 45% of the total voting power of the Company, and are beneficially owned by shareholders who are members of the Apollo Group, as defined in our bye-laws. Class B shares can be converted to Class A shares on a one-to-one basis at any time upon notice to us. Class M shares are restricted, non-voting shares issued under equity incentive plans. Our bye-laws place certain restrictions on Class A shares such that (1) a holder of Class A shares, including its affiliates, cannot control greater than 9.9% of the total outstanding vote and if a holder of Class A shares were to control greater than 9.9%, then a holder's voting power is automatically reduced to 9.9% and the other holders of Class A shares would vote the remainder on a prorated basis, (2) the total voting power held by members of our management and employees of the Apollo Group is limited to 3% and (3) Class A shares may be deemed non-voting when owned by a shareholder who owns Class B shares, has an equity interest in certain Apollo entities, or is a member of the Apollo Group.
Share Activities
2016 | | • | We issued 3,098,946 Class A shares during the fourth quarter of 2016 from conversion of Class M-1, M-2, M-3 and M-4 shares and settlement of Class M-4 RSUs. All conversions were settled in shares net of the conversion price and, as a result, no proceeds were received from the conversions. |
| | • | On December 14, 2016, we completed the initial public offering (IPO) of our Class A common shares. Shareholders sold 31,050,000 existing Class A shares through the offering. We did not sell any shares in the IPO. A total of 24,158,146 Class B shares were converted into Class A shares on a one-for-one basis in order to participate in the IPO. |
2015 | | • | We received $1,038 million to settle remaining capital commitments executed on April 4, 2014 in connection with a private placement offered to accredited investors. As a result, we issued 31,564,339 Class A shares and 8,369,230 Class B shares at $26.00 per share. |
| | • | We received commitments and issued an additional 2,315,113 Class A shares at $26.02 per share, resulting in proceeds received of $60 million. |
| | • | In satisfaction of our final obligations under the Transaction Advisory Services Agreement (TASA) earned by Apollo in 2014, we issued 2,311,853 Class B shares. See Note 17 – Related Parties for further information on the TASA. |
2014 | | • | We received commitments for 41,201,578 Class A shares and 8,730,769 Class B shares as a result of a private placement offered to accredited investors launched in late 2013. Of that commitment, 8,240,316 Class A shares and 1,746,154 Class B shares were issued at $26.00 per share in April 2014, which represented a drawdown of 20% of the committed capital in the private placement at the time. The commitment for the remaining 39,945,877 shares was settled in 2015 as described above. |
| | • | To encourage significant investment by key employees, we issued 3,693,730 Class A shares at a discounted price of $13.46 pursuant to our equity incentive plan. |
| | • | We issued a total of 11,426,883 Class B shares in satisfaction of certain of our obligations under the TASA. This agreement is further described in Note 17 – Related Parties. |
| | • | We converted a note issued as part of a contribution agreement in 2012 with AAA Guarantor – Athene, L.P. and its subsidiary, Apollo Life Re Ltd., into 3,808,626 Class B shares. |
| | • | We authorized the following additional shares at a par value of $0.001 per share: (1) 87,110,662 Class A shares, (2) 175,000,000 Class B shares, (3) two new classes of incentive compensation shares consisting of 7,500,000 Class M-3 shares and 7,500,000 Class M-4 shares and (4) 149,998,898 shares of capital stock, which remain undesignated. |
The table below shows the changes in each class of shares issued and outstanding: | | | | | | | | | | | Years ended December 31, | | 2016 | | 2015 | | 2014 | Class A | | | | | | Beginning balance | 50,151,265 |
| | 15,752,736 |
| | 494,200 |
| Issued shares | 3,360,471 |
| | 34,498,220 |
| | 11,950,844 |
| Forfeited shares | (37,188 | ) | | — |
| | — |
| Repurchased shares | (313,313 | ) | | (99,691 | ) | | — |
| Converted from Class B shares | 24,158,146 |
| | — |
| | 3,307,692 |
| Ending balance | 77,319,381 |
| | 50,151,265 |
| | 15,752,736 |
| Class B | | | | | | Beginning balance | 135,963,975 |
| | 125,282,892 |
| | 114,605,747 |
| Issued shares | — |
| | 10,681,083 |
| | 16,981,664 |
| Repurchased shares | — |
| | — |
| | (2,996,827 | ) | Converted to Class A shares | (24,158,146 | ) | | — |
| | (3,307,692 | ) | Ending balance | 111,805,829 |
| | 135,963,975 |
| | 125,282,892 |
| Class M-1 | | | | | | Beginning balance | 5,198,273 |
| | 5,198,273 |
| | 5,198,273 |
| Converted to Class A shares | (1,155,303 | ) | | — |
| | — |
| Forfeited shares | (270,543 | ) | | — |
| | — |
| Repurchased shares | (298,222 | ) | | — |
| | — |
| Ending balance | 3,474,205 |
| | 5,198,273 |
| | 5,198,273 |
| Class M-2 | | | | | | Beginning balance | 3,125,869 |
| | 3,125,869 |
| | 3,226,792 |
| Converted to Class A shares | (1,788,998 | ) | | — |
| | — |
| Forfeited shares | (161,474 | ) | | — |
| | (80,738 | ) | Repurchased shares | (107,650 | ) | | — |
| | (20,185 | ) | Ending balance | 1,067,747 |
| | 3,125,869 |
| | 3,125,869 |
| Class M-3 | | | | | | Beginning balance | 3,110,000 |
| | 3,350,000 |
| | — |
| Issued shares | — |
| | — |
| | 3,390,000 |
| Converted to Class A shares | (1,443,700 | ) | | — |
| | — |
| Forfeited shares | (224,000 | ) | | (216,000 | ) | | (32,000 | ) | Repurchased shares | (96,000 | ) | | (24,000 | ) | | (8,000 | ) | Ending balance | 1,346,300 |
| | 3,110,000 |
| | 3,350,000 |
| Class M-4 | | | | | | Beginning balance | 5,038,443 |
| | — |
| | — |
| Issued shares | 990,650 |
| | 5,316,751 |
| | — |
| Converted to Class A shares | (79,031 | ) | | — |
| | — |
| Forfeited shares | (452,528 | ) | | (242,050 | ) | | — |
| Repurchased shares | (99,732 | ) | | (36,258 | ) | | — |
| Ending balance | 5,397,802 |
| | 5,038,443 |
| | — |
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