Overview
Generate Form 4 drafts from insider transaction details for public company reporting under Section 16 of the Securities Exchange Act. The skill maps each transaction to the correct table and transaction code, drafts required footnotes (tax withholding, 10b5-1 plan sales, indirect ownership, net settlement), and validates the draft for Rule 16a-3 completeness and the two-business-day filing deadline.
Section 16 reporting applies to every director, officer, and 10%+ shareholder of a public company. Late or incorrect Form 4 filings result in public SEC delinquency disclosures, reputational damage, and potential enforcement action — getting the codes, tables, and footnotes right the first time matters.
When to use this skill
Use this skill when you are:
- Drafting a Form 4 for an RSU vest — especially when shares are withheld for taxes (code F), which requires a separate table entry and footnote explaining the tax withholding transaction.
- Reporting an option exercise and sale — mapping the derivative transaction (Table II) and the resulting non-derivative acquisition or sale (Table I), with net settlement or same-day sale footnotes.
- Reporting a 10b5-1 plan transaction — confirming the plan adoption date, documenting it in footnote per SEC guidance, and using the correct transaction code (S with 10b5-1 footnote).
- Filing for a director with indirect ownership — shares held through trusts, family limited partnerships, or spousal accounts require specific footnotes describing the nature of indirect ownership.
- Validating a Form 4 draft before submission to EDGAR to catch missing fields, wrong transaction codes, table placement errors, or missing deadline reminders.
- Catching up on delinquent filings — working through multiple pending transactions for an insider and making sure each one is complete and correctly coded.
Typical users include corporate secretaries, general counsel, securities compliance officers, and outside counsel at public companies reporting insider transactions to the SEC.
Getting Started
Activate the SEC Form 4 (Section 16) skill and tell the agent the transaction type (RSU vest, option exercise, open market sale, gift, 10b5-1 plan sale, tax withholding), execution date, security type, number of shares or units, price per share, and whether ownership is direct or indirect. The agent will build Table I (non-derivative securities) and/or Table II (derivative securities), assign transaction codes, draft the required footnotes, and produce a human-readable draft plus a structured data block ready for EDGAR entry.
Tools
- validate_form4 — Checks required fields (reporting person, issuer, execution date, tables), transaction code and table placement coherence, two-business-day filing deadline reminder, and prompts for footnotes when tax withholding, 10b5-1 plans, indirect ownership, or “other” (code J/K) transactions are present.
Example conversation
You: We need a Form 4 for our CFO. She had 5,000 RSUs vest on March 5. The company withheld 1,847 shares for taxes. She kept the rest.
Agent: For an RSU vest with tax withholding we need two entries in Table I: (1) the acquisition of 5,000 shares on vest (code M if converting from derivative, or A for direct grant vesting — which structure applies here?), and (2) the disposition of 1,847 withheld shares at the closing price on March 5 (code F — tax withholding). What is the closing price on March 5 and what is the nature of the RSU grant — was it reported on a Form 4 as a derivative grant originally?
You: It was a derivative grant originally on a Form 4. Closing price was $47.32.
Agent: Table I — Entry 1: code M, 5,000 shares acquired at $0 (vest of derivative), aggregate value $0. Table I — Entry 2: code F, 1,847 shares disposed at $47.32, aggregate value $87,440.04. Footnote 1: “Represents shares withheld by the issuer to satisfy the reporting person’s tax withholding obligation upon vesting.” Post-transaction ownership: 3,153 shares direct.
Agent: Running validate_form4… Filing deadline is March 7 (two business days from March 5). All fields complete. Draft saved to
form4/cfo_rsu_vest_20240305.md.
Output excerpt
Example validation result:
============================================================
Form 4 Validation — Rule 16a-3
Reporting Person: [CFO Name] | Issuer: [Company] | Date: March 5
============================================================
Table I (Non-Derivative Securities):
OK: Entry 1 — Code M (RSU vest / derivative conversion), 5,000 shares
OK: Entry 2 — Code F (tax withholding), 1,847 shares at $47.32
OK: Post-transaction ownership calculated (3,153 shares, direct)
Footnotes:
OK: Footnote 1 — Tax withholding explanation present for Code F entry
REMIND: If CFO has a 10b5-1 plan for future sales, plan adoption date
must be footnoted on those entries (SEC Rule 10b5-1 guidance).
Filing Deadline:
Execution Date: March 5
Due: March 7 (two business days — Rule 16a-3(f))
Status: PENDING — submit to EDGAR by end of day March 7.
Result: Form 4 draft complete. No blocking issues found.
============================================================