On October 15, 2010, Dynex Capital, Inc. (the “Company”) redeemed all outstanding shares of the Company’s Series D 9.50% Cumulative Convertible Preferred Stock (the “Series D Preferred Stock”) through its conversion into common stock of the Company on a one-for-one basis (such redemption and conversion, the “Preferred Stock Redemption”). The Company’s Articles of Incorporation provided that the terms of the board representatives of the holders of the Series D Preferred Stock, Leon A. Felman and Barry Igdaloff, would automatically end effective as of the date of the Preferred Stock Redemption. Effective on the date of the redemption, the Board of Directors of the Company resolved to reduce temporarily the size of the Board from five directors to four directors, and to provide for Mr. Igdaloff to continue as a member of the Board of Directors. Mr. Felman's term ended as of that date.
On November 3, 2010, the Board of Directors of the Company resolved to increase the size of the Board from four directors to five directors, and elected Michael R. Hughes as a director of the Company, effective immediately. Mr. Hughes has been appointed as Chairman of the Compensation Committee and as a member of each of the Nominating and Corporate Governance Committee and Investment Committee.
Mr. Hughes will be entitled to the standard compensation provided to non-employee directors, as described in the Company’s Annual Proxy Statement filed with the Securities and Exchange Commission on April 1, 2010.
There are no arrangements or understandings between Mr. Hughes and any other person pursuant to which he was elected as a director. Mr. Hughes is not a party to any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K. Mr. Hughes is a limited partner in the Talkot Fund L.P. of which Mr. Thomas Akin, the Company’s Chairman and Chief Executive Officer, is the managing general partner.
Mr. Hughes is a Chartered Financial Analyst and President of the Board of Trustees of the Bentley School in Oakland, California. Mr. Hughes was a partner and portfolio manager of the financial institution group of Osterweis Capital Management from 2005 through 2008. From 1989 until 2005, Mr. Hughes was First Vice President of Merrill Lynch Financial Institutions Research, with responsibility for equity analysis of mortgage companies, mortgage REITs, consumer and commercial finance companies and government agencies, including Fannie Mae and Freddie Mac.