PROPOSAL 2: APPROVAL OF THE AMENDMENT TO OUR AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
PROPOSAL 2:
APPROVAL OF THE AMENDMENT TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED NUMBER OF
SHARES OF COMMON STOCK
General Information
Our authorized capital stock consists of 600,000,000 shares of common stock and 10,000,000 shares of preferred stock, $0.01 par value per
share. On January 25, 2018, the Board of Directors approved, and recommended that the stockholders adopt, an amendment to Article IV of our Certificate of Incorporation that would increase the authorized number of shares of our common stock
from 600,000,000 to 900,000,000. If approved, Section 4.1 of the Certificate of Incorporation would read in its entirety as follows:
Section 4.1. Total Number of Shares of Capital Stock. The total number of shares of capital stock of all classes that the
Corporation shall have authority to issue is 910,000,000 shares. The authorized stock is divided into 10,000,000 shares of preferred stock, with the par value of $0.01 each (the Preferred Stock), and 900,000,000 shares of common stock,
with the par value of $0.01 each (the Common Stock). The Board of Directors of the Corporation (the Board of Directors) may classify any unissued shares of stock and reclassify any previously classified but unissued shares of
stock from time to time, in one or more classes or series, of stock.
Assuming approval of this Proposal to amend our Certificate of
Incorporation, the aggregate number of shares of common stock that we will have the authority to issue, at our discretion, will be 900,000,000.
Background and Reasons
The Board of Directors believes that the increased authorized number of shares of common stock contemplated
by the proposed amendment to our Certificate of Incorporation is desirable to make additional unreserved shares of common stock available for issuance or reservation without further stockholder authorization, except as may be required by law or by
the rules of The Nasdaq Global Select Market. The Board of Directors believes that having such additional shares authorized and available for issuance or reservation will provide greater flexibility to pursue potential future actions involving the
issuance of stock to provide capital for general corporate purposes, investment activity, mergers and acquisitions, and/or stock dividends or splits. As of February 26, 2018, we had 391,316,840 shares of issued and outstanding common stock and
102,074,678 shares of common stock reserved for future issuance, including shares reserved for future issuance under our
At-The-Market
issuance program
(ATM), in the event of conversion of shares of our outstanding preferred stock in accordance with their terms, and under the 2016 Plan. To the extent that our capital markets activity is consistent in 2018 with 2017 levels, when we
completed two
follow-on
common stock offerings, one preferred stock issuance, and issuance of stock under our ATM, virtually all of our remaining authorized shares would be issued or reserved for issuance.
We believe that increasing our authorized number of shares of common stock to facilitate additional capital raising activity is in our
stockholders best interests. First and foremost, we would generally intend to issue additional shares of common stock in follow on offerings primarily when our net issuance price exceeds our tangible net book value or in other circumstances
that are believed to be accretive to our stockholders. Further, as an internally-managed REIT, we do not pay a management fee based upon our equity, so an offering of additional common stock does not result in a proportional increase in our
expenses. Our current infrastructure allows us to scale our operations with incremental equity capital without the increased cost associated with an
AGNC
INVESTMENT CORP.
Proxy Statement
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