The following is not meant to be legal advice.
10b5-1 trading plans are not required to be publicly disclosed when they are implemented. However, when an insider does a trade using a 10b5-1 plan, the Form 4s where the trades are reported should note that the sales are made under a 10b5-1 plan.
After the 10b5-1 plans are implemented, there should be minimal modifications to a 10b5-1 trading plan. The protection of the 10b5-1 plan against securities lawsuits decreases when there are many changes to the plan once adopted. If changes are made to a plan, there should be a period of at least 30 days between the adoption of the plan modifications and the first trade made pursuant to the modified plan.
Stanford University School of Business Professor Alan Jagolinzer raises issues on the flexibility for insiders to suspend or terminate 10b5-1 plans. Such flexibility should be allowed infrequently. If an insider is uncomfortable with this restriction, the insider might consider implementing shorter duration plans. Plans may be as short as six months. When an insider terminates a plan, there should be a lag period of at least 30 days between the adoption of the new plan and the first trade made pursuant to that plan to prevent timing allegations.
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