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Under our stock option plan, options can be exercised before the normal vesting date, with employees receiving restricted shares with a similar vesting schedule. Will this cause option income to be counted for determining overtime pay?
Probably not. Under recent Fair Labor Standards Act amendments, option gains are excluded from overtime pay calculations if certain requirements are met. One requirement is that options not be exercisable until at least six months after the date of grant. However, most commentators believe that Congress intended only that employees not be entitled to receive vested shares within six months of option grant. We expect an appropriate clarification in the near future.
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