---
title: "Record the Rule 701 ceiling for a compensatory offer"
url: "https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/prepare-the-employee-incentive-offer-document-and-its-cap-record/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A4-X20260927-9-US"
practice_area: "Capital Markets & Securities — ECM/DCM and Disclosure"
tier: "red"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Record the Rule 701 ceiling for a compensatory offer

> From figures already in the file, list the aggregate sales price under Rule 701 for the consecutive 12-month period the file identifies, and the three ceilings in Rule 701(d)(2).…

Canonical page: https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/prepare-the-employee-incentive-offer-document-and-its-cap-record/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Capital Markets & Securities — ECM/DCM and Disclosure](https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure.md) |
| Human involvement | Red: Lawyer writes; AI may check, clarify or collect data |
| How AI is used | From figures already in the file, list the aggregate sales price under Rule 701 for the consecutive 12-month period the file identifies, and the three ceilings in Rule 701(d)(2). Flag whether the file's figure exceeds $10 million. Do not write the offer document, and do not value property that the file has not already valued. |
| What the lawyer must review | You write the offer document. Rule 701 (17 CFR § 230.701) exempts offers and sales under a written compensatory benefit plan or written compensation contract of the issuer, its parents, its majority-owned subsidiaries, or majority-owned subsidiaries of the issuer's parent, to the employees, directors, general partners, trustees where the issuer is a business trust, officers, consultants and advisors, and family members who acquire from those persons through gifts or domestic relations orders. It is available only to the issuer. It does not cover resales, and it is not available for a plan or scheme to raise capital. Consultants and advisors must be natural persons, provide bona fide services, and those services must not be in connection with the offer or sale of securities in a capital-raising transaction or promote or maintain a market for the securities. Any amount may be offered. Sales in any consecutive 12-month period must not exceed the greatest of $1,000,000, 15 percent of the total assets of the issuer measured at the most recent balance sheet date if no older than the last fiscal year end, or 15 percent of the outstanding amount of the class being offered and sold, measured the same way. The aggregate sales price includes cash, property, notes, cancellation of debt, or other consideration. Options are valued at the exercise price, and the sales price of an option is determined when the grant is made. If the aggregate sales price or amount sold in any consecutive 12-month period exceeds $10 million, the issuer must also deliver, a reasonable period of time before sale, the disclosure paragraph (e) names, including financial statements required by Part F/S of Form 1-A as of a date no more than 180 days before the sale. The line items of Part F/S were not opened. Securities issued under the section are restricted securities under Rule 144. |
| Written for | United States |
| Applies to | [Prepare the employee incentive offer document and its cap record](https://ailawframework.com/practice/capital-markets-and-securities-ecm-dcm-and-disclosure/prepare-the-employee-incentive-offer-document-and-its-cap-record.md) |

## Checking plan

- What the AI does: From figures already in the file, list the aggregate sales price under Rule 701 for the consecutive 12-month period the file identifies, and the three ceilings in Rule 701(d)(2). Flag whether the file's figure exceeds $10 million. Do not write the offer document, and do not value property that the file has not already valued.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Offers are not capped. The ceiling applies to sales during any consecutive 12-month period, taking the greatest of the three amounts.
- Count an option at grant, at the exercise price. Paragraph (e)(6) is a separate disclosure time, before exercise or conversion, and only if the $10 million disclosure has been reached.
- Part F/S of Form 1-A was not opened. Name the requirement. Do not invent the line items.

## Sources

- [17 CFR § 230.701, exemption for offers and sales under compensatory benefit plans](https://www.law.cornell.edu/cfr/text/17/230.701) (checked 2026-10-22)
- [17 CFR § 230.144, persons deemed not to be underwriters](https://www.law.cornell.edu/cfr/text/17/230.144) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*