S-K 402(e) requires narrative disclosures of
any material factors necessary to an understanding
of the information contained in

• Summary Compensation Table S-K 402(c)
• Grants of Plan-Based Awards Table  S-K 402(d)

• To provide specific context for the quantitative disclosure contained in these tables
• Compared with CD&A, which focuses on the objectives and implementation of the companys compensation policies

• Examples of items requiring discussion include

• Description of the material terms of employment agreements
• Any repricing or material modifications of outstanding equity-based awards
• Material terms of performance-based awards
• Waiver or modification of any performance target, goal or condition to payout of an award

• SEC urges companies to explain how the disclosures in the various tables relate to one another

• To mitigate "double counting" of some compensation
• Such as where performance compensation is reported in one table when granted and in another table if and when later earned

Final release 33-8732A   Sep 2006

• Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table  II.C.3.a

S-K Item 402 FAQs

• General 402(e) FAQs
• Specific 402(e) Interpretations

• These FAQs were last updated 8.08.07
• Supersede old S-K 402 FAQs in 1997 Telephone Manual
  and its March 1999 Supplement
• See S-K 402 FAQs

Select Proxy and Other 1934 Act Filings

Sara Lee  9.14.07  definitive 

• See preface to Summary Compensation Table
• See preface to Grants of Plan-Based Awards table

H.J. Heinz  7.03.07  definitive

• See disclosure on pages 49 - 53
• Disclosure of performance targets provided as part of narrative discussion following Summary Compensation Table and Grants of Plan-Based Awards table (rather  than rather than CD&A)

Continental Airlines  4.27.07  definitive

Intel  3.27.07  definitive

3M  3.26.07   definitive

Boeing  3.23.07  definitive

• See preface to Summary Compensation Table and narrative that follows Grants of Plan-Based Awards table

AT&T  3.22.07  definitive

Lockheed  3.16.07  definitive

• In lieu of separate narrative section, Lockheed and other companies rely on footnote disclosures and cross-references to financial disclosures

Pfizer  3.15.07  definitive

OfficeMax Inc.  3.15.07  definitive

Johnson & Johnson  3.14.07  definitive

IBM  3.12.07  definitive proxy

Goodyear  3.09.07  definitive proxy  

Sherwin-Williams  3.08.07  definitive proxy

SunTrust Banks  3.02.07   definitive

Allied Waste Indus.  2.23.07    Form 10-K

MetroPCS  2.13.07   S-1/A

Verichip  2.12.07   final prospectus

FGX International  2.07.06   S-1/A

Kaiser Alum  1.26.07   final prospectus

SunPower  1.25.07   Form 8-K

Ligand Pharma  1.24.07  definitive

Kronos  1.19.07   definitive

Executive Compensation Disclosures

S-K 402

S-K Index