Plan structure and continuity

Can you have multiple 10b5-1 plans? What the rule actually permits.

The short answer is: generally no, not at the same time. The SEC's December 2022 amendments to Rule 10b5-1 (effective February 27, 2023) added an explicit restriction on overlapping plans as a condition of the affirmative defense. An executive who runs two concurrent, independent selling plans will lose the affirmative defense on at least one of them — often both.

The longer answer is that there are two narrow exceptions that matter in practice: the staggered-successor-plan structure, which allows you to adopt a second plan now that will not begin executing until your first plan finishes, and the multi-broker / split-plan structure, which treats contracts with different broker-dealers as a single plan if they collectively meet Rule 10b5-1's conditions. Understanding both is essential for executives planning multi-year diversification programs.

Why the SEC restricted overlapping plans

Before the 2023 amendments, nothing in Rule 10b5-1 expressly prohibited multiple simultaneous plans. Academic research and SEC enforcement actions highlighted a pattern: some insiders adopted overlapping plans and then selectively cancelled one of them — keeping the plan that happened to produce favorable trades while cancelling the one that would have caused losses. A layered or overlapping structure gave insiders optionality that defeated the purpose of a predetermined, non-discretionary trade. The 2023 amendments closed this gap by conditioning the affirmative defense on the absence of overlapping plans.

The restriction applies to all persons, not just officers and directors. If you are a senior employee, beneficial owner, or trustee executing a 10b5-1 plan, the same overlapping-plan restriction applies to you.

The default rule: one plan at a time

Under the amended Rule 10b5-1(c)(1)(ii)(D)(1), the affirmative defense is not available for any contract, instruction, or plan that is entered into while a prior plan covering the same class of securities is still outstanding — unless the contract, instruction, or plan qualifies under one of the two recognized exceptions. Outstanding means the prior plan has not been fully executed, expired, or properly terminated.

This rule applies regardless of how many broker-dealers are involved. Having Plan A at Morgan Stanley and Plan B at Goldman Sachs does not, by itself, solve the overlapping-plan problem. Both plans still need to satisfy the conditions of the rule, and unless they qualify as a single plan under the multi-broker exception (discussed below), only one of them gets the affirmative defense.

Exception 1: the staggered successor plan

The most commonly used structure is the staggered successor plan. The rule permits an executive to adopt a new plan — the "successor plan" — while the prior plan is still outstanding, as long as trading under the successor plan is not authorized to begin until all trades under the prior plan have either executed or expired.¹

The practical benefit is continuity. Without this structure, an executive whose current plan finishes in December would have to wait until some future open window to adopt a new plan, then wait through the cooling-off period again before the first sale under the new plan. A staggered adoption, made well before the prior plan ends, eliminates that gap.

Exception 2: the multi-broker / split-plan structure

The rule also permits a series of separate contracts with different broker-dealers to be treated as a single Rule 10b5-1 plan, provided the contracts collectively satisfy all applicable conditions and are operated as a unified set of instructions.²

This structure is used by executives who legitimately need different brokers to execute different parts of a plan — for example, because one broker holds restricted certificated shares and another broker holds street-name shares, or because an institutional manager runs a separate options-exercise-and-sale program. To qualify:

• The contracts with each broker must collectively represent one predetermined instruction set — not independent, separately modifiable programs.
• The same good-faith, no-MNPI, and certification requirements that apply to a single plan must be met across the combined structure.
• The plans must have been adopted at the same time, under the same adoption conditions, with the intent that they function together.
• Modifications to one sub-plan are treated as modifications to the whole — and may trigger a new cooling-off period.

This exception is narrow and requires careful structuring by counsel. The SEC staff has indicated it will scrutinize multi-broker arrangements to confirm they represent a genuine single instruction set rather than a workaround to the overlapping-plan prohibition.

Single-trade plan limit: one per twelve months

Separate from the overlapping-plan prohibition, the 2023 amendments added a limit on single-trade plans. A "single-trade plan" is a plan designed to execute just one trade — buying or selling a set amount of securities on a fixed date. For all persons (not just officers and directors), only one single-trade plan per twelve-month period qualifies for the affirmative defense.¹

This prevents insiders from stringing together a series of single-trade plans as a way to execute trades at will while maintaining technical 10b5-1 form. A second single-trade plan within the same twelve months does not get the affirmative defense, even if it was otherwise properly adopted.

What the overlapping-plan restriction does not affect

The restriction addresses the affirmative defense — not whether the trades can physically occur. An executive with two overlapping plans can still execute trades under both, and the company can still satisfy its disclosure obligations under Item 408(d). What is lost is the protection that the affirmative defense provides: if the SEC or a plaintiff later alleges the executive had MNPI at the time of a trade, the existence of an overlapping plan means the executive cannot point to the 10b5-1 plan as a complete defense.

As a practical matter, losing the affirmative defense for one plan while maintaining it for the other is also difficult to engineer deliberately. Because both plans are disclosed in company filings, an overlapping structure is visible. Companies increasingly require pre-adoption review by securities counsel and compliance specifically to catch this scenario before it creates enforcement exposure.

How an advisor fits into multi-plan planning

An advisor working with an executive on a multi-year diversification program needs to calendar the staggered-adoption workflow carefully. The financial questions — how much to sell per period, what sale cadence fits within Rule 144 volume limits, what tax year to target for gains recognition — must be resolved separately for each plan. A successor plan adopted too early may overfit to current tax assumptions that will change by the time it executes. A successor plan adopted too late creates a coverage gap.

The advisor's job on a staggered structure is to model the transition: what does the successor plan's start date mean for the executive's expected tax year, portfolio concentration, and equity comp timeline? If the successor plan overlaps with a major RSU vesting cycle or the beginning of a new ESPP enrollment period, those interactions need to be modeled before adoption, not after. See the RSU and stock-option planning guide for how different equity types interact with a 10b5-1 plan's timing.

Worked planning scenarios

Questions to resolve before adopting a successor plan

• When does the current plan's last scheduled trade date fall? This is the backstop — the successor plan cannot execute its first trade before this date.
• What is the applicable cooling-off period for the successor plan? For officers, it is the longer of 90 days or two business days after the next quarterly filing, capped at 120 days. For directors, the same applies. Identify which quarter's filing will govern, and calendar the earliest possible first-trade date.
• Are there any anticipated modifications to the current plan? A modification resets the current plan's cooling-off — which does not affect the successor plan's independent cooling-off, but does affect the current plan's expected completion timeline if trades are delayed.
• Does the successor plan's first trade overlap with a major equity-comp event? RSU vestings, option expirations, PSU settlements, and ESPP purchases happening in the successor plan's first year should be modeled before adoption.
• Does the proposed sell cadence in the successor plan fit within Rule 144 volume limits? Volume limits tighten if the share float shrinks. Model the headroom on the successor plan's proposed schedule now, not at first execution. See the Rule 144 coordination guide for the volume-limit mechanics.