American Public Eduction (APEI)

 

Policies and Procedures for Related Person Transactions

 

Effective as of the date of our initial public offering, our Board adopted the Code of Ethics, pursuant to which our executive officers, directors and principal stockholders, including their immediate family members and affiliates, are not permitted to enter into a related person transaction with us without the prior consent of our nominating and corporate governance committee, or other independent committee of our board of directors. Any request for us to enter into a transaction with an executive officer, director, principal stockholder or any of such persons’ immediate family members or affiliates, in which the amount involved exceeds $120,000 must first be presented to our nominating and corporate governance committee for review, consideration and approval. All of our directors, executive officers and employees are required to report to our nominating and corporate governance committee any such related person transaction. In approving or rejecting the proposed agreement, our nominating and corporate governance committee shall consider the facts and circumstances available and deemed relevant to the nominating and corporate governance committee, including, but not limited to the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. Our nominating and corporate governance committee shall approve only those agreements that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our nominating and corporate governance committee determines in the good faith exercise of its discretion. Under the policy, if we should discover related person transactions that have not been approved, the nominating and corporate governance committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

 

Related Person Transactions

 

Set forth below is a summary of certain transactions since January 1, 2008 among us, our directors, our executive officers, beneficial owners of more than 5% of either our common stock or our Class A common stock, which was outstanding before completion of our initial public offering, and some of the entities with which the foregoing persons are affiliated or associated in which the amount involved exceeds or will exceed $120,000.

 

In February 2008, pursuant to a public offering registered with the SEC by us on a registration statement on Form S-1 we sold 25,000 shares of our common stock and selling stockholders in the offering sold additional shares of our common stock. The selling stockholders in the offering (and the number of shares sold) included, among others: ABS Capital Partners IV, L.P., ABS Capital Partners IV-A, L.P., ABS Capital Partners IV Offshore L.P. and ABS Capital Partners IV Special Offshore L.P., which we refer to collectively as the ABS Entities (2,500,000); Camden Partners Strategic Fund III, L.P. and Camden Partners Strategic Fund III-A, L.P., which we refer to collectively as the Camden Entities (926,460); and the following executive officers: Wallace E. Boston, Jr. (44,000); James H. Herhusky (75,000) and Frank B. McCluskey (25,000). Two of our directors, Philip A. Clough and Timothy T. Weglicki, are managing members of the general partner of the ABS Entities. One of our directors, David L. Warnock, is a managing member of the general partner of the Camden Entities. We did not receive any of the proceeds from the sale of the shares of common stock by the selling stockholders in the offering.

 

In December 2008, pursuant to a public offering registered with the SEC by us on a registration statement on Form S-3 we sold 15,000 shares of our common stock and the ABS Entities sold 4,227,970 shares of our common stock.

 

In connection with the February and December 2008 offerings, we entered into customary underwriting agreements for the offering and incurred total costs of approximately $1.2 million.