Exhibit 19.1
SOTHERLY HOTELS INC. INSIDER TRADING POLICY
In order to comply with federal and state securities laws governing (a) trading in securities of Sotherly Hotels Inc. or its operating partnership, Sotherly Hotels LP, (together, “Sotherly” or the “Company”) on the basis of “material nonpublic information” concerning the Company and (b) tipping or disclosing material nonpublic information to outsiders, and in order to prevent even the appearance of improper insider trading or tipping, the Company has adopted this Insider Trading Policy (the “Policy”) for all of its directors, officers and employees, their family members and specially designated outsiders who have access to the Company’s material nonpublic information.
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The Company has designated Robert E. Kirkland IV, General Counsel of the Company, as Sotherly’s Insider Trading Officer (the “Insider Trading Officer”). The Insider Trading Officer may seek guidance from outside legal counsel and outside accountants. The Insider Trading Officer will review and either approve or prohibit all proposed trades by Insiders in accordance with the procedures set forth in Section VI.C below. In addition to the trading approval duties described in Section VI.C below, the duties of the Insider Trading Officer will include the following:
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The Insider Trading Officer may designate one or more individuals who may perform the Insider Trading Officer’s duties in the event that the Insider Trading Officer is unable or unavailable to perform such duties.
DEFINITION OF “MATERIAL NONPUBLIC INFORMATION”
Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable shareholder or investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company. In simple terms, “material” information is any type of information which could reasonably be expected to materially affect the price of Company securities. While it is not possible to identify all information that would be deemed “material” to the Company, the following types of information ordinarily would be considered as such:
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Material information is “nonpublic” if it has not been widely disseminated to the public through major newswire services, national news services and financial news services. For the purposes of the Policy, information will be considered public, i.e., no longer “nonpublic”, after the close of trading on the second (2nd) full trading day following the Company’s widespread public release of the information.
Any Insiders who are unsure whether the information they possess is material or nonpublic must consult with the Insider Trading Officer for guidance before trading in any Company securities.
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No Insider may trade in Company securities during any blackout period that the Insider Trading Officer may designate. A customary blackout period exists beginning at the pre-opening of the NASDAQ Stock Market, or 7:00 a.m. Eastern Time, on the last full trading day of the final month of each fiscal quarter and extends through the second (2nd) full trading day following the Company’s widespread public release of quarterly or year-end earnings, as the case may be. The Insider Trading Officer may impose special blackout periods in connection with pending acquisition transactions or other material unannounced events. No Insiders may disclose to any outside third party that a special blackout period has been designated.
If an Insider has an unexpected and urgent need to sell Company securities in order to generate cash during a blackout period, the Insider may request that the Insider Trading Officer consider granting a hardship exception. This type of exception will only be granted if the Insider Trading Officer concludes that the Company operating results or financial condition for the applicable quarter does not constitute material nonpublic information. No hardship exception will be granted during a special blackout period described in the paragraph above.
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The trading prohibitions and restrictions set forth in the Policy will be superseded by any greater prohibitions or restrictions prescribed by federal or state securities laws and regulations, e.g., short-swing trading by Section 16 Individuals or restrictions on the sale of securities subject to Rule 144 under the Securities Act. Any Insider who is uncertain whether other prohibitions or restrictions apply should consult with the Insider Trading Officer.
E. APPLICATION TO FORMER, TEMPORARY OR RETIRED INSIDERS
The Policy applies, and will continue to apply, to a former, temporary or retired Insider until the later of: (i) the second (2nd) full trading day following the public release of earnings for the fiscal quarter in which such person leaves or is no longer associated with the Company or (ii) the second (2nd) full trading day after any material nonpublic information known by the Insider has become public or no longer material.
A Form 4 must be completed and filed within two (2) business days of the execution of a reportable transaction. If the Section 16 Individual has completed an acceptable power of attorney, the Insider Trading Officer may complete the Form 4 on such individual’s behalf provided that such Section 16 Individual has supplied the Insider Trading Officer all necessary transaction detail.
Any late or delinquent Section 16 filing must be reported under separate caption, in the Company’s proxy statement and Form 10-K.
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The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may (i) be required to surrender the profit made or the loss avoided by the trading, (ii) pay the loss suffered by the person who purchased securities from or sold securities to the insider tippee, (iii) face significant civil and/or criminal penalties and face incarceration for such illegal actions. The Company and/or the supervisors of the person violating any such rules may also face significant civil and/or criminal penalties.
Violation of the Policy or federal or state insider trading or tipping laws by any director, officer or employee, or their family members, may subject the director to dismissal proceedings and the officer or employee to disciplinary action by the Company up to and including termination for cause.
Any Insider who violates the Policy or any federal or state laws governing insider trading or tipping, or knows of any such violation by any other Insiders, must report the violation immediately to the Insider Trading Officer. Upon learning of any such violation, the Insider Trading Officer, in consultation with the Company’s legal counsel, will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC or other appropriate governmental authority.
Approved by the Board of Directors in April 2005
Revised and approved by the Board of Directors in March 2007
Approved by the Board of Directors in January 2008
Revised and approved by the Board of Directors in March 2009
Revised and approved by the Board of Directors in October 2011
Revised and approved by the Board of Directors in October 2013
Revised and approved by the Board of Directors in October 2014
Revised and approved by the Board of Directors in October 2015
Revised and approved by the Board of Directors in October 2016
Revised and approved by the Board of Directors in October 2017
Revised and approved by the Board of Directors in October 2018
Revised and approved by the Board of Directors in October 2019
Revised and approved by the Board of Directors in October 2020
Revised and approved by the Board of Directors in October 2021
Revised and approved by the Board of Directors in October 2022
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Revised and approved by the Board of Directors in October 2023
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EXHIBIT A
Section 16 Individuals:
Andrew M. Sims, Chairman of the Board
David R. Folsom, President, Chief Executive Officer and Director
Scott M. Kucinski, Executive Vice President & Chief Operating Officer
Anthony E. Domalski, Vice President and Chief Financial Officer
Maria L. Caldwell, Director
Herschel J. Walker, Director
G. Scott Gibson IV, Director
Edward S. Stein, Director
General Anthony C. Zinni, Director
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EXHIBIT B
Key Employees:
Andrea Goalder, Corporate Executive Administrator
Robert E. Kirkland IV, General Counsel
David J. Surette, Corporate Controller
Andrew M. Sims, Jr., Vice President – Operations & Investor Relations
Teresa Moran, Accounting Manager
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