Rule 144(h) requires filing of Form 144

• Notice of Proposed Sale
• One of the conditions to use of Rule 144

• For other conditions, see Rule 144: Conditions to Use

• After the Feb 2008 changes become effective, 144(h)

• Will only apply to affiliates
• Filing will only be required if the intended sale exceeds either 1,000 shares or $50,000 within a three month period

Rule 144(i) requires that a Form 144 filer have a bona fide intention to sell within a reasonable period of time

• Feb 2008 changes will fold the text of this requirement into Rule 144(h) and rewrite Rule 144(i) for another purpose

Raise filing thresholds for affiliates

• Form 144 filing required only if the intended sale exceeds either 1,000 shares or $50,000 within a three month period

• Old threshold was 500 shares or $10,000
  within a three month period

• Effected by changes to Rule 144(h)

Eliminate filing requirement for non-affiliates

• Persons that have not been affiliates of an issuer for at least three months prior to a sale of securities will
  no longer have any filing requirement under Rule 144

• Effected by changes to Rule 144(b)(1)
  _________

• Final release commentary  II.E
• Proposal release commentary  II.D

Transfer text of Rule 144(i)

• Rule 144(i) required that a Form 144 filer have a
  bona fide intention to sell
• This requirement will be included in Rule 144(h)(2)

• Rule 144(i) has been rewritten for another purpose -
  to make shell companies ineligible for use of Rule 144
  See Rule 144: Conditions to Use

Changes are effective 2.15.08

• See 2008 Changes

SEC is exploring coordinating Form 4 with Form 144

• Because many Rule 144 affiliates are also Section 16 insiders, and are required to file a Form 4 just a few days after they file a Form 144 to report information regarding the same sale of securities
• Several approaches were included in the Proposing Release, including to fold Form 144 into Form 4
• SEC says that it expects to address this at a later time, citing EDGAR re-programming as one of the reasons
  _________

• Final release commentary  II.E
• Proposal release commentary  III

Modifying Form 144

• A selling securityholder who satisfies Rule 10b5-1(c) may modify Form 144 to indicate that he or she had no knowledge of material adverse information about the issuer as of the date on which the holder adopted a written trading plan or gave trading instructions, specifying that date and indicating that the representation speaks as of that date
• Otherwise, Form 144 requires a selling securityholder to represent, as of the date that the form is signed, that he or she "does not know any material adverse information in regard to the current and prospective operations of the issuer of the securities to be sold which has not been publicly disclosed."
• Selling securityholder must satisfy Rule 10b5-1(c)
• Under Rule 10b5-1(c), a persons purchase or sale of securities is deemed not to be made "on the basis of" material nonpublic information about the security or issuer provided that the person demonstrates that (a) prior to becoming aware of the material nonpublic information, he or she had entered into a binding contract to purchase or sell the securities, provided instructions to another person to execute the trade for his or her account, or adopted a written plan for the trading of securities, (b) the contract, instructions, or written plan satisfies the conditions of Rule 10b5- 1(c), and (c) the purchase or sale that occurred was pursuant to the contract, instruction, or plan
  _________

• Final release commentary  II.F.7
• Proposal release commentary   II.E.7

Re: 144(h)

SEC Interpretive Release 33-6099  1979

• II.G     Re: 144(h)
• Complete index at SEC FAQs

SEC FAQs  2007

• 122.01  Form amendment: Sale not executed

• 122.02  Form amendment: Exchange listing; Stock split
• 122.03  Allocation among brokers
• 122.04  De minimis exception
• 122.05  No waiting period required
• 122.06  Form amendment: Change in broker
• 122.07  Form amendment: Correction of inaccuracies
• 222.01  Partnership distributee
• 222.02  Bank holding company securities
• 222.03  Filing to cover additional sales
• 222.04  Power of attorney
• 222.05  Sale of convertible notes and shares
• 222.06  Subsequent stock split

Re: 144(i)

SEC FAQs  2007

• 123.01  Sell orders above market

• Complete index at SEC FAQs

Rule 144 - Rule 145 Index