Option plan compliance check

This section describes the option compliance check under 701 rule and $100K limit in Diligent Equity. As you enter each individual option plan grant, Diligent Equity runs 3 compliance tests simultaneously and displays the results on the screen:

  • Annual $100,000 limit for incentive stock options

  • SEC Rule 701

  • Fair market value

If the grant meets all 3 compliance requirements, the message reads Compliance checks passed. If one of the tests is failed, the message reads Compliance checks failed.

To see the complete compliance analysis for the grant select Show details.

Important

In order for the compliance tests to be accurate, you must maintain the Fair Market Value in the Company tab.

Generate a 701 Compliance report

  1. Go to the Report tab on the navigation bar.

  2. Select General>Rule 701 Compliance>Generate Report.

    This will generate and download an excel file for you to review.