10b5-1 Plans Best Practices Checklist

Summary

This checklist outlines steps to develop and implement a Rule 10b5-1 trading plan that defensibly meets the requirements of Rule 10b5-1 (17 C.F.R. § 240.10b5-1), promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act) and related SEC disclosure requirements under Item 402(x) of Regulation S-K (17 C.F.R. § 229.402(x)), Item 408 of Regulation S-K (17 C.F.R. § 229.408), and Exchange Act Rule 16a-3 and Forms 4 and 5 (17 C.F.R. § 240.16a-3 and SEC Forms 4 and 5). When properly implemented, a 10b5-1 plan enables the execution of trades on behalf of insiders, even when they know material, nonpublic information (MNPI) about the company whose stock is traded, so long as the plan was established when the insider was not in possession of MNPI and the trades were executed pursuant to the plan.