I was recently hired to a new company fresh out of college, and as a new employee I was granted an "Incentive Stock Option to purchase 500 shares" of company stock. I am completely ignorant and I have no clue what to do with this. Can someone help me out? Here's a summary of the cover letter I got when I was hired:
Pursuant to the terms and conditions of the company's General Plan (the 'Plan'), you have been granted an Incentive Stock Option to purchase 500 shares (the 'Option') of stock as outlined below.
Granted to: my name
Grant Date: June 5, 2006
Options Granted: 500
Option Price per Share: $7.75000
Total Cost to Exercise: $3,875.00
Expiration Date: June 5, 2011
Vesting Schedule: 4 year vesting
100 on 06/05/2007
125 on 06/05/2008
125 on 06/05/2009
150 on 06/05/2010
By my signature below, I hereby acknowledge receipt of this Option... blah blah blah.
Then there is a 10 page document outlining the conditions of the "stock incentive plan".
Someone please explain wtf is going on with all this! Has this stock been given to me? Do I need to buy it? What's the deal with vesting?
Sorry for the retarded questions, but I was a Physics major in college. :P
Pursuant to the terms and conditions of the company's General Plan (the 'Plan'), you have been granted an Incentive Stock Option to purchase 500 shares (the 'Option') of stock as outlined below.
Granted to: my name
Grant Date: June 5, 2006
Options Granted: 500
Option Price per Share: $7.75000
Total Cost to Exercise: $3,875.00
Expiration Date: June 5, 2011
Vesting Schedule: 4 year vesting
100 on 06/05/2007
125 on 06/05/2008
125 on 06/05/2009
150 on 06/05/2010
By my signature below, I hereby acknowledge receipt of this Option... blah blah blah.
Then there is a 10 page document outlining the conditions of the "stock incentive plan".
Someone please explain wtf is going on with all this! Has this stock been given to me? Do I need to buy it? What's the deal with vesting?
Sorry for the retarded questions, but I was a Physics major in college. :P
posted by:
|
Tucson
|
-
Re: newbie question on employee stock options
Tue, April 10, 2007 - 7:16 PMCongratulations
You have the RIGHT but not the OBLIGATION to purchase shares at $7.50 each.
If the stock goes up a dollar 6/5/07, then you can buy 100 for $750 and sell them for $850 and make $100.
If the stock goes down, you do nothing.
What you have is control of 500 shares of stock with zero risk.
If the stock goes up, you make $
if it goes down... nothing lost.
Good luck, I hope it goes to $100!
