Practical Law Glossary
PRACTICAL LAW
•
Maintained
Rule 701
A rule under the Securities Act that provides a safe harbor from registration under the Securities Act for grants of equity securities by a non-reporting company to its employees and certain other persons under the terms of a written compensatory benefit plan or written compensation contract. Though securities acquired in Rule 701 transactions are restricted securities, under Rule 701(g)(3), they benefit from favorable treatment under Rule 144 after the issuing company goes public.
For a detailed discussion of Rule 701, including applicable volume limits and disclosure requirements, see Practice Note, Employee Incentive Compensation and the Role of Rule 701. For information on resales of restricted securities under Rule 144, see Practice Note, Resales Under Rule 144.
Rule 701 is not available to reporting companies. Equity securities of reporting companies granted as compensation may be registered on Form S-8. For information on Form S-8, see Practice Note, Registration Statement: Form S-8.
End of Document
Resource ID 4-382-3781Document Type Glossary
Products

PLC US Antitrust, PLC US Bankruptcy & Restructuring, PLC US Capital Markets & Corporate Governance, PLC US Commercial Transactions, PLC US Corporate and M&A, PLC US Corporate and Securities, PLC US Data Privacy & Cybersecurity, PLC US Employee Benefits and Executive Compensation, PLC US Federal Litigation, PLC US Finance, PLC US Glossary, PLC US Intellectual Property and Technology, PLC US Labor and Employment, PLC US Law Department, PLC US Real Estate, PLC US Tax

© 2024 Thomson Reuters. No claim to original U.S. Government Works.