INTRODUCTION
It is the
policy of MFA Financial, Inc. (the “Company”) that its
business shall be conducted in accordance with the highest moral, legal and
ethical standards. The Company’s reputation for integrity is of the utmost
importance and each officer, director and employee must contribute to the care
and preservation of that asset.
This Code
of Business Conduct and Ethics (the “Code of Conduct”)
sets forth basic principles to guide all officers, directors and employees of
the Company (collectively, “Company Personnel”).
No code of business conduct or ethics can, however, effectively substitute for
the thoughtful behavior of an ethical officer, director or employee. This Code
of Conduct is presented to assist Company Personnel in guiding their conduct to
enhance the reputation of the Company.
This Code
of Conduct has been drafted broadly. In that respect, it is the Company’s intent
to exceed the minimum requirements of the law and industry practice. Mere
compliance with the letter of the law is not sufficient to attain the highest
ethical standards. Good judgment and great care must also be exercised to comply
with the spirit of the law and of this Code of Conduct.
This Code
of Conduct is intended to meet the standards for a code of ethics under the
Sarbanes-Oxley Act of 2002, as amended, and the listing standards of the New
York Stock Exchange (the “NYSE”).
The
Company intends to enforce the provisions of this Code of Conduct vigorously.
Violations could lead to sanctions, including dismissal in the case of an
officer or employee, as well as, in some cases, civil and criminal
liability.
Upholding
this Code of Conduct is the responsibility of every officer, director and
employee of the Company. Executive officers of the Company are responsible for
enforcement of this Code of Conduct among the officers and employees who report
to them.
QUESTIONS
ABOUT THE CODE; REPORTING SUSPECTED VIOLATIONS
Any
questions about how to interpret this Code of Conduct should be raised with the
compliance officer (the “Compliance Officer”)
for this Code of Conduct. Timothy W. Korth,
the Company’s General Counsel and
Senior Vice President, has been designated as the Compliance Officer for
purposes of
enforcing
this Code of Conduct and he may be contacted by telephone at (212) 207-6415 or
by e-mail at tkorth@mfa-reit.com.
If any
Company Personnel knows of or suspects any illegal or unethical conduct, or any
other violation of this Code of Conduct, they should promptly report this to the
Compliance Officer. In dealing with any issues arising under, or relating to,
this Code of Conduct, the Compliance Officer shall, to the extent necessary or
appropriate, report to and/or confer with the members of the Company’s Board of
Directors (the “Board”) and/or any of
its committees. If any Company Personnel are not comfortable in doing so for any
reason, or if they feel appropriate action is not being taken, they should
contact the Company’s
Chief Executive Officer or the Chairman of the Board’s Nominating and Corporate
Governance Committee or Audit Committee, as appropriate. No Company Personnel
shall be required to identify themselves when reporting a
violation.
To the
extent possible, the Company will endeavor to keep confidential the identity of
anyone reporting a violation of this Code of Conduct. The Company will also keep
confidential the identities of Company Personnel about whom allegations of
violations are brought, unless or until it is established that a violation has
occurred. It is the Company’s policy that retaliation against employees who
report actual or suspected violations of this Code of Conduct is prohibited;
anyone who attempts to retaliate will be subject to disciplinary action, up to
and including dismissal.
COMPLIANCE
WITH APPLICABLE LAWS
The
Company is committed to conducting its business in strict compliance with all
applicable governmental, state and local laws, rules and regulations, including,
but not limited to, laws, rules and regulations related to securities, labor,
employment and workplace safety matters. As a public reporting company with its
stock trading on the NYSE, the Company is also subject to regulation by the
Securities and Exchange Commission (“SEC”) and to the
applicable listing standards of the NYSE. All Company Personnel are expected at
all times to conduct their activities on behalf of the Company in accordance
with this principle. Any violation of applicable laws, rules and regulations by
any Company Personnel should be reported to the Compliance Officer. Company
Personnel should seek guidance whenever they are in doubt as to the
applicability of any law, rule or regulation or regarding any contemplated
course of action.
CONFLICTS
OF INTEREST
The
Company relies on the integrity and undivided loyalty of its officers, directors
and employees to maintain the highest level of objectivity in performing their
duties. Company Personnel are expected to avoid any situation in which their
personal interests conflict, or have the appearance of conflicting, with those
of the Company. Company Personnel must not allow personal considerations or
relationships to influence them in any way when representing the Company in
business dealings.
Conflicts
of interest are prohibited as a matter of Company policy, except under
guidelines approved by the Board. A conflict situation can arise when an
officer, director or employee takes actions or has interests that may make it
difficult to perform work on behalf of the Company objectively and effectively.
Conflicts also arise when Company Personnel, or a member of his or her family,
receives improper personal benefits as a result of his or her position with the
Company.
Company
Personnel must exercise great care any time their personal interests might
conflict with those of the Company. The appearance of a conflict often can be as
damaging as an actual conflict. Prompt and full disclosure is always the correct
first step towards identifying and resolving any potential conflict of interest.
Non-employee directors are expected to make appropriate disclosures to the Board
and to take appropriate steps to recuse themselves from Board decisions with
respect to transactions or other matters involving the Company as to which they
are interested parties or with respect to which a real or apparent conflict of
interest exists.
The
following sections review several common problems involving conflicts of
interest. The list is not exhaustive. Company Personnel have a special
responsibility to use their best judgment to assess objectively whether there
might be even the appearance of acting for reasons other than to benefit the
Company and to discuss any conflict openly and candidly with the Company.
Conflicts of interest may not always be evident and Company Personnel should
consult with the Compliance Officer if they are uncertain about any
situation.
Payments
and Gifts
Company
Personnel who deal with the Company’s securities and repurchase agreement
counterparties, financial and other service providers, lenders, suppliers or
other third parties are placed in a special position of trust and must exercise
great care to preserve their independence. As a general rule, no Company
Personnel should ever receive a payment or anything of value in exchange for a
decision involving the Company’s business. Similarly, no Company Personnel
should ever offer anything of value to government officials or others to obtain
a particular result for the Company. Bribery, kickbacks or other improper
payments have no place in the Company’s business.
The
Company recognizes exceptions for token gifts, which are not excessive in value
or are consistent with customary business practices, and customary business
entertainment when a clear business purpose is involved. If you are in doubt
about the policy’s application, the Compliance Officer should be
consulted.
Personal
Financial Interests; Outside Business Interests
Company
Personnel should avoid any outside financial interests that might be in conflict
with the interests of the Company. Except as contemplated by and approved in
accordance with the Company’s Related Party Transaction Policies and Procedures,
no Company Personnel may have any significant direct or indirect financial
interest in, or any business relationship with, a person or entity that does
business with the Company or is a competitor of the Company. A financial
interest includes any interest as an owner, creditor or debtor. Indirect
interests include those through an employee’s immediate family member or other
person acting on his or her behalf. This policy does not apply to an employee’s
arms-length purchases of goods or services for personal or family use or to the
ownership of shares in a publicly-held corporation.
Company
Personnel should not engage in outside jobs or other business activities that
compete with the Company in any way. Further, any outside or secondary
employment (i.e., moonlighting) by employees may interfere with the job being
performed for the Company and is discouraged. Under no circumstances may Company
Personnel have outside business interests that are in any way detrimental or
potentially detrimental to the best interests of the Company.
Company
Personnel must disclose to the Compliance Officer any personal activities or
financial interests that could negatively influence, or give the appearance of
negatively influencing, your judgment or decisions with respect to the Company.
The Compliance Officer will then determine if there is a conflict and, if so,
how to resolve it without compromising the Company’s interests.
Corporate
Boards
The
director of an organization has access to confidential and sensitive information
and charts the course of the entity. If Company Personnel are invited to serve
as a director of an outside organization, the Company must take safeguards to
shield both the Company and such individuals from even the appearance of
impropriety. For that reason, any employee invited to join the board of
directors of another organization (including a nonprofit or other charitable
organization) must obtain the prior approval of the Chief Executive Officer or
the Compliance Officer. Directors who are invited to serve on the board of
directors of another organization should promptly notify the Chairman of the
Board and the Nominating and Corporate Governance Committee.
Corporate
Opportunities
Company
Personnel must not divert for personal gain any business opportunity in which
the Company has an actual interest or a reasonable expectation of an interest.
The duty of loyalty to the Company is violated if any Company Personnel
personally profits from a business opportunity that rightfully belongs to the
Company. This problem could arise, for example, if any Company Personnel becomes
aware through the use of corporate property, information or position of an
investment opportunity (either a loan or equity transaction) in which the
Company is or may be interested, and then participates in the transaction
personally or informs others of the opportunity before the Company has the
chance to participate in the transaction. Company Personnel also are prohibited
from using corporate property, information or position for personal gain.
Company Personnel owe a duty to the Company to advance its legitimate interests
when the opportunity to do so arises and, in the case of a non-employee
director, such director is aware of the Company’s possible interest through use
of corporate property, information or position.
Loans
to Company Personnel
The
Company will not make any loans to, or guarantee any personal loans of, Company
Personnel.
COMPLIANCE
WITH SECURITIES LAWS
As a
public reporting company with its stock trading on the NYSE, the Company is
subject to regulation by the SEC and to the applicable listing standards of the
NYSE and to compliance with federal, state and local securities laws, rules and
regulations (collectively, “Securities Laws”). As
detailed in the Company’s “Statement of Corporate Policy Regarding Equity
Transactions,” the Company insists on strict compliance with the spirit and
letter of these Securities Laws and Company Personnel must pay particular
attention to potential violations thereof.
PROPER
USE AND PROTECTION OF COMPANY ASSETS
Proper
use and protection of the Company’s assets is the responsibility of all Company
Personnel. Company facilities, materials, equipment, information and other
assets should be used only for conducting the Company’s business and are not to
be used for any unauthorized purpose. Company Personnel should guard against
waste and abuse of Company assets in order to improve the Company’s
productivity.
CONFIDENTIALITY
One of
the Company’s most important assets is its confidential corporate information.
The Company’s legal obligations and its competitive position often mandate that
this information remain confidential.
Confidential
corporate information relating to the Company’s financial performance (e.g.,
quarterly financial results of the Company’s operations) or other transactions
or events can have a significant impact on the value of the Company’s
securities. Premature or improper disclosure of such information may expose the
individual involved to onerous civil and criminal penalties.
Company
Personnel must not disclose confidential corporate information to anyone outside
the Company, except for a legitimate business purpose (such as contacts with the
Company’s accountants or its outside lawyers). Even within the Company,
confidential corporate information should be discussed only with those who have
a need to know the information. The obligation of Company Personnel to safeguard
confidential corporate information continues even after they leave the
Company.
The same
rules apply to confidential information relating to other companies with which
the Company does business. In the course of the many pending or proposed
transactions that this Company has under consideration at any given time, there
is a great deal of non-public information relating to other companies to which
Company Personnel may have access. This could include “material” information
that is likely to affect the value of the securities of the other
companies.
Company
Personnel who learn material information about lenders, customers, venture
partners, acquisition targets or competitors through their work at the Company
must keep it confidential and must not buy or sell stock in such companies until
after the information becomes public. Company Personnel must not give tips about
such companies to others who may buy or sell the stocks of such
companies.
The
Company has issued a detailed “Statement of Corporate Policy Regarding
Equity Transactions” regarding the use of confidential information in
connection with trading in securities. You should become familiar with this
policy and the procedures it requires. If you have any questions regarding
trading in the Company’s securities or on the basis of confidential information,
you should contact the Compliance Officer.
DEALINGS
WITH THE PRESS AND COMMUNICATIONS WITH THE PUBLIC
The
Company’s Chief Executive Officer, President and Chief Financial Officer are the
Company’s principal public spokesmen. If someone outside the Company asks
Company Personnel questions or requests information regarding the Company, its
business or financial results, do not attempt to answer. All requests for
information - from reporters, securities analysts, stockholders or the general
public - should be referred to the Chief Executive Officer, who will handle the
request or delegate it to an appropriate person.
ACCOUNTING
MATTERS
Internal
Accounting Controls
The
Company places the highest priority on “best practices” disclosure. The
Company’s annual reports, quarterly reports and press releases, and other public
disclosure of the Company’s financial results, reflect how seriously it takes
this responsibility.
Company
Personnel share this responsibility with senior management and the Board and
must help maintain the integrity of the Company’s financial records. The Company
trusts that every employee understands that protecting the integrity of its
information gathering, information quality, internal control systems and public
disclosures is one of the highest priorities it has as a corporate
entity.
It is
imperative that any Company Personnel who observes conduct that causes him or
her to question the integrity of the Company’s internal accounting controls
and/or disclosure, or otherwise doubt the accuracy of Company’s financial
reporting, bring such concerns to the Company’s attention immediately. In
accordance with the Company’s “Whistleblowing Procedures for Accounting and
Auditing Matters” policy, Company Personnel should promptly report any concerns
to any member of the Audit Committee of the Board. If any Company Personnel are
not comfortable providing their name, they may report such concerns anonymously.
Any kind of retaliation against Company Personnel for raising such issues is
strictly prohibited and will not be tolerated.
Improper
Influence on the Conduct of Audits
It is
unlawful for Company Personnel, or any other person acting under the direction
of any such persons, to take any action to fraudulently influence, coerce,
manipulate, or mislead the independent accountants engaged in the performance of
an audit of the Company’s financial statements for the purpose of rendering such
financial statements materially misleading. Any such action is a violation of
this Code of Conduct. Any Company Personnel who engages in such conduct will be
subject to sanctions under this Code of Conduct, including dismissal in the case
of an employee, in addition to potential civil and criminal
liability.
RECORDS
RETENTION
Company
Personnel should retain documents and other records in accordance with the
Company’s record retention policy, if any, and otherwise for such period of time
as they and their colleagues will reasonably need such records in connection
with the Company’s business activities. All documents not required to be
retained for business or legal reasons, including draft work product, should not
be retained and should be destroyed in order to reduce the high cost of storing
and handling the vast amounts of material that would otherwise accumulate.
However, under unusual circumstances, such as litigation, governmental
investigation or if required by applicable state and federal law and
regulations, the Compliance Officer may notify Company Personnel if retention of
documents or other records is necessary.
FAIR
DEALING
It is the
Company’s policy to deal fairly with its customers, lenders, suppliers,
competitors and Company Personnel. In the course of business dealings on behalf
of the Company, no Company Personnel should take unfair advantage of another
person or party through manipulation, concealment, abuse of privileged
information, misrepresentation of material facts or any other unfair business
practice.
DISCRIMINATION
AND HARASSMENT
The
Company is firmly committed to providing equal opportunity in all aspects of
employment and will not tolerate illegal discrimination or harassment of any
kind. Company Personnel are encouraged to report any acts of discrimination or
harassment to the Chief Executive Officer, President or Compliance Officer or to
any member of the Nominating and Corporate Governance of the Board. If any
Company Personnel are not comfortable providing their name, they may report
these matters anonymously. Any kind of retaliation against Company Personnel for
raising these issues is strictly prohibited and will not be
tolerated.
HEALTH
AND SAFETY
The
Company strives to provide Company Personnel with a safe and healthy work
environment. Company Personnel have a responsibility for maintaining a safe and
healthy workplace for all other Company Personnel by following safety and health
rules and practices and reporting accidents, injuries and unsafe equipment,
practices and conditions.
Violence
and threatening behavior are not permitted. Company Personnel should report to
work in a condition to perform their duties, free from the influence of illegal
drugs and alcohol. The use of illegal drugs in the workplace will not be
tolerated.
ENFORCEMENT
The
conduct of each Company Personnel matters vitally to the Company. A misstep by a
single Company Personnel can cost the Company dearly; it undermines all of the
reputations of all parties concerned. For these reasons, violations of this Code
of Conduct may lead to significant penalties, including dismissal.
WAIVERS
Any
waiver of this Code of Conduct for executive officers or directors of the
Company may be made only by the Board, or by a Committee of the Board
specifically authorized for this purpose, and must be promptly disclosed to the
Company’s stockholders in accordance with the listing standards of the NYSE.
Waivers of this Code of Conduct for non-officer employees may be made by the
Chief Executive Officer or President, but only upon such employee making full
disclosure in advance of the transaction in question. This Code of Conduct may
be amended or modified at any time by the Board.
ACKNOWLEDGEMENT
Company
Personnel will be asked annually to sign a statement affirming that they have
read and understood this Code of Conduct and that they are in compliance with
this Code of Conduct.
