BOARD AND GOVERNANCE MATTERS
participant, the amount involved exceeds $120,000, and a related person (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person
would need to promptly disclose to our Secretary any related person transaction and all material facts about the transaction. Our Secretary would then assess and promptly communicate that information to the Compensation Committee. Based on its
consideration of all of the relevant facts and circumstances, the Compensation Committee will decide whether or not to approve such transaction and will generally approve only those transactions that do not create a conflict of interest. If we
become aware of an existing related person transaction that has not been
pre-approved
under this policy, the transaction will be referred to the Compensation Committee, which will evaluate all options
available, including ratification, revision, or termination of such transaction. Our policy requires any director who may be interested in a related person transaction to recuse himself or herself from any consideration of such related person
transaction.
Our Code of Ethics, which is reviewed by our Board of Directors and provided to all of our directors, officers, and
employees, requires that all such persons avoid any situations or relationships that involve actual or potential conflicts of interest, or perceived conflicts of interest, between an individuals personal interests and the interests of AGNC.
Pursuant to our Code of Ethics, each of these persons must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to their supervisor or our chief compliance officer. If a conflict is determined to exist,
the person must disengage from the conflict situation or terminate his or her provision of services to us. Our chief executive officer, chief financial officer, principal accounting officer, controller, directors and certain other persons who may be
designated by our Board of Directors or its Audit Committee, whom we collectively refer to as our financial executives, must consult with our chief compliance officer with respect to any proposed actions or arrangements that are not clearly
consistent with our Code of Ethics. In the event that a financial executive wishes to engage in a proposed action or arrangement that is not consistent with our Code of Ethics, the financial executive must obtain a waiver of the relevant provisions
of our Code of Ethics in advance from our Audit Committee. We intend to post amendments to or waivers from the Code of Ethics (to the extent applicable to our financial executives) on our web site at
www.AGNC.com
.
Related Person Transactions
On July 1, 2016, we acquired AGNC Mortgage Management, LLC (AMM) from American Capital, Ltd. (American Capital)
and American Capitals wholly-owned subsidiary, American Capital Asset Management, LLC (ACAM) in the Internalization for a purchase price of $562 million. AMM is the parent company of our former manager and MTGE Management,
LLC, the manager of MTGE Investment Corp. As part of the Internalization, we became internally-managed and ceased paying a management fee to a third-party manager. Certain of our former directors were directors and/or officers of American Capital
and ACAM.
In connection with the Internalization, we entered into a Transition Services Agreement with American Capital, ACAM and AMM
(the Transition Services Agreement). Most services under the Transition Services Agreement ended in 2016. However, American Capitals provision of information technology software, hardware, and support services continued through
June 30, 2017. The Company paid $783,500 to American Capital in 2017 for these
IT-related
services provided under the Transition Services Agreement. Other than these
IT-related
services, the Company received no other services in 2017 under the Transition Services Agreement, and the agreement was terminated on June 30, 2017.
As a result of the Internalization, our subsidiary, MTGE Management, LLC serves as the investment manager of MTGE pursuant to a management
agreement. In 2017, we received $13.7 million in management fees in addition to reimbursements of certain expenses from MTGE. Certain officers of AGNC also serve as
14 AGNC INVESTMENT CORP.
Proxy Statement