Rule 10b5-1 Plans


This practice note discusses the purpose, drafting, and disclosures that may be made relating to a Rule 10b5-1 plan. A Rule 10b5-1 plan is a written plan for trading securities. When the plan’s terms satisfy certain conditions discussed below and when trading actually follows the terms of the plan, the company insiders who adopted the plan can qualify for an affirmative defense to potential insider trading claims with respect to trades that could otherwise be deemed to have been made on the basis of material nonpublic information in violation of Rule 10b-5.