The Coast Distribution System Inc. reported it has been informed by Thomas R. McGuire, the company’s chairman, that he has established a plan, pursuant to Securities Exchange Commission Rule 10b5-1, to sell up to a total of 62,500 of the more than 495,000 shares of Coast common stock that he owns.
According to a news release, it is expected that those 62,500 shares will be sold in brokerage transactions over a period of approximately five quarters.
McGuire is the Morgan Hill, Calif.-based company’s largest stockholder, owning 10.8% of its outstanding shares. This does not include an additional 40,000 shares that he has a right to purchase on exercise of stock options.
Rule 10b5-1 under the Securities Exchange Act of 1934 allows officers and directors to adopt written plans for trading securities in a non-discretionary, pre-scheduled manner in order to avoid concerns about initiating stock transactions when the officer or director may be aware of non-public information. Such plans also allow officers and directors to diversify their holdings and minimize the potential market effect of stock sales by spreading them out over time.
McGuire stated, “I have decided to implement this plan primarily to diversify my investment portfolio. I remain confident about Coast’s future prospects, and I have no plans at this time to sell any additional Coast shares and will continue to own more than 400,000 shares even after completing the sale of the 62,500 shares under this Rule 10b5-1 plan.”