November 21, 2024
Item 402(x): Precedent and Sample Disclosures
Calendar year-end companies are gearing up to provide new disclosures under Item 402(x) of Regulation S-K in 2025 proxy statements. The new subsection of Item 402 requires:
– Disclosure of policies and practices related to the timing of awards of options, SARs and/or similar option-like instruments in relation to the disclosure of MNPI, and
– New tabular disclosure to the extent that, during the fiscal year, any stock options, SARs or similar instruments were granted to NEOs during the period beginning four business days before and ending one business day after the filing of a 10-Q, 10-K, or 8-K that discloses MNPI.
Over on the Q&A Forum (Topic # 12418) on TheCorporateCounsel.net, a member recently asked, “Have you seen any examples of disclosures containing insider trading and/or equity award disclosures that will be required for the first time in 2025 for calendar year filers?” I suspect many folks are — or will soon be — on the lookout for sample or precedent disclosures under Item 402(x), so here is my response:
Yes, companies with a June 30 fiscal year end have filed proxies with these disclosures already. Per this Gibson Dunn article, that includes about 23 of the S&P 500. Here are some examples from an EDGAR keyword search: Peloton; P&G; H&R Block; Parker-Hannifin Corp. These proxy statements included the tabular disclosure: Vail Resorts; Worthington Enterprises.
Also take a look at this DLA Piper alert that gives an illustrative example of the tabular disclosure. And keep in mind that, like other sections of Item 402 that require tabular disclosure, Item 402(x)(2)(i) includes a blank table.
– Meredith Ervine