Exhibit 19
Corporate Policy on Insider Trading
Adopted: July 6, 2001
Updated: January 15, 2021
This Corporate Policy on Insider Trading (“Policy”) applies to all officers, directors, and employees (collectively "Diodes Personnel") of Diodes Incorporated and its subsidiaries (collectively "Company"), their Family Members, and any other individuals the Company’s Chief Financial Officer may designate as insiders because they have access to Material Non-public Information of the Company (collectively, “Insiders”). The Company has adopted this Policy to help Diodes Personnel comply with applicable insider trading laws and to prevent the appearance of improper insider trading. The Insiders are individually responsible for compliance with this Policy and the applicable insider trading laws.
Except as otherwise explicitly stated below, this Policy applies to any and all transactions in the Company’s securities, including transactions in common stock, options, preferred stock, restricted stock, restricted stock units, debt or equity securities, and any other type of securities that the Company may issue from time to time. This Policy applies to such securities regardless of whether they are held in a brokerage account, a 401(k) or similar account, through an employee stock purchase plan, or otherwise.
For the purpose of this Policy, the following defined terms have these meanings:
Blackout Period: means
Designated Employee: means each officer and director of the Company, each employee who routinely has access to Material, Non-public Information concerning the Company (including, but not limited to, consolidated financial data) in the ordinary course of their employment and each other Company employee expressly designated as a “Designated Employee” by the Board of Directors or the Chief Executive Officer from time to time.
Family Member: means family member of a person, including a spouse or domestic partner, who resides with such person, anyone else who lives in such person’s household, and any family member who does not live in such person’s household but whose transactions in the Company securities are directed by such
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person or are subject to such person’s influence or control (e.g. parents or children who consult with such person before they transaction in the Company securities).
Material Information: means any information that a reasonable investor either:
In short, any information (whether positive or negative) which could reasonably be expected to affect the price of the Company’s securities is "Material." Determination of whether information is Material depends on the facts and circumstances unique to each situation and cannot be made solely on the basis of the potential financial impact of the information.
There is no bright line test for determining whether particular information is Material and therefore it is not possible to identify every type or category of information that could be deemed “Material.” The following are common examples of information that could be considered “Material”:
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This list is not exclusive. Other information may be considered “Material” depending upon the circumstances.
It is important to note that whether information is Material will be viewed by enforcement authorities and regulators after the fact with the benefit of hindsight. For example, if the price of the Company’s securities changed as a result of the information having been made public, it will likely be considered Material by the enforcement authorities and regulators. Before engaging in any securities transaction involving the Company, Insiders should carefully consider how enforcement authorities and regulators might view the transaction in hindsight.
Non-public Information: means information that is not generally known or available to the public. Information becomes public if it has been announced or disseminated in such a manner as to provide broad, non-exclusionary public access (e.g. through a widely circulated news or wire service). Release of information to the media does not immediately mean the information has become publicly available. In general, only information which has been publicly disclosed through a public filing with the U.S. Securities Exchange Commission (“SEC”) or a press release should be considered publicly disclosed.
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In addition to the restrictions set forth in this Policy, each "Designated Employee" is subject to the following additional restrictions in engaging in transactions in securities of the Company: No Designated Employee should effect or recommend or influence a transaction in a security of the Company (regardless whether he or she has Material, Non-public information) during a "Blackout Period."
Notwithstanding anything to the contrary contained in this Policy, Diodes Personnel, including a Designated Employee, may engage in the following transactions involving Company securities:
1. Rule 10b5-1 Trading Plans:
pursuant to a plan which the Chief Financial Officer of the Company has determined meets the requirements of Rule 10b5-1(c) promulgated by the SEC, and entered into when the Insider is not in possession of Material, Non-public Information. The Company reserves the right to disapprove any submitted 10b5-1(c) plan, and to suspend or instruct the Insider to terminate any plan that has been previously approved.
2. RSU/RSA Lapse Transactions:
pursuant to a "sell-to-cover" transaction related to a Restricted Stock Unit (“RSU”) and/or Restricted Stock Award (“RSA”) as long as the transaction is an automatic transaction effected on the lapse date in order to cover tax withholding requirements.
3. Deferred Compensation Plan Transactions:
pursuant to their participation in the Company's Deferred Compensation Plan related to a RSU and/or RSA as long as the transaction is a predetermined automatic transaction effected on the lapse date.
The Company considers it inappropriate for Insiders to engage in speculative transactions in Company securities or in other transactions involving the Company securities that may lead to inadvertent violations of the applicable insider trading laws or create a conflict of interest for the Insider. Consequently, Insiders may not engage in any of the following transactions involving the Company securities:
1. Hedging; Derivative Transactions
Hedging and monetization transactions allow a stockholder to lock in much of the value of his or her stockholdings, often in exchange for all or part of the potential upside appreciation in the stock. These transactions allow the stockholder to continue to own the covered securities, but without the full risks and rewards of ownership. When an Insider engages in such a transaction, he or she may no longer have the same objectives as the Company’s other stockholders. As a result, Insiders are prohibited from engaging
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in any hedging or monetization transactions involving Company securities, including zero cost collars, forward sale contracts, and trading in options, puts, calls, or other derivative instruments related to the Company’s securities.
2. Pledging
Securities held in margin accounts may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledger is aware of Material, Non-public Information or otherwise is not permitted to trade in the Company’s securities, such transactions by Insiders are prohibited. Acquiring the Company’s securities on margin is also prohibited.
3. Short Sales
Insiders are prohibited from selling the Company’s securities “short” (i.e., the sale of a security that is not owned and must be borrowed to complete the sale) or “selling short against the box” (i.e., the sale of a security that is currently owned but is not delivered against such sale within twenty days thereafter, or is not within five days after such sale deposited in the mails or other usual channels of transportation and the sale is completed with borrowed shares). The Company prohibits Insiders from selling the Company’s stock short because, in addition to legal constraints, these are margin transactions that are inherently speculative in nature, may be perceived as a bet against the Company’s future stock price, and are contrary to the best interests of the Company and its other shareholders.
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EMPLOYEE CERTIFICATION
Each Company employee is required to certify his or her understanding of, and intent to comply with the Company’s Corporate Policy on Insider Trading (the “Policy”).
I certify that I have received, reviewed, and will comply with the conditions as set forth in the Policy, and that any violation of the Policy can subsequently be the cause for my termination of employment from the Company.
I certify that I have read and understand the DIC-901 (Corporate Policy on Insider Trading) | ||
FORMTEXT | FORMTEXT | FORMTEXT |
Employee (Please Print Name) | Employee Signature | Date |
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Revision | Revision History | Request Date |
5 | Policy dated 2/21/17 | 3/6/2018 |
6 | Add footer, no content update. | 4/12/2018 |
7 | Combined DIC-900 into document. | 2/08/19 |
8 | Add Section IX: Policy Prohibiting Short Sales | 2/18/2020 |
9 | Update/refresh as Core Corporate Policy | 10/26/2020 |
10 | Update to Section I definition of “Blackout Period” | 1/15/2021 |
11 | Revised released date on footer, no content update. | 2/2/2021 |
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