jcl_cls01

I have no idea how stock options work. I'd rather ask you guys since most of you are pretty good with money. My company gave me 200 shares as an award this year at a locked in price of $50. So after four years vested, and the price of the stock increased by $5, will the total of the shares I have equal to $11,000? Can I sell the shares I have at the given market price? Please correct me if I'm wrong...

stejus

The market value may be $11,000, but you wont see much of that in your pocket. Employees profit if they can sell their stock for more than they paid at exercise. Basically this means in 4 years after vesting, your employer may allow you to exercise a block of stock. This means you can purchase the stock for $50 (your exercise price) and turn around and sell it immediatly at the current price, say $55. This would yeild you $5 per share exercised minus tax on that gain. So in your example, 200 shares at $5.00 = $1000. Uncle Sam will take 1/3 so around $700 bucks in your pocket.