A guide to stock option plans (SOPs)

Receiving stock options (SOPs) from your company is a big deal—congratulations! SOPs let you buy company shares at a set price (the grant price), after a specified vesting (or waiting) period. If the stock price goes up, you could benefit financially.

Accepting your award and opening your account
To accept the award and make it officially yours, go to Fidelity NetBenefits^®Log In Required. If you're new to Fidelity, you'll be asked to create a username and password and then open a Fidelity brokerage account (the Fidelity Account^®) when you accept your award. If you already have an eligible account with us, we'll link your award to that account.

Tracking your award value
The value of your award is based on the difference between the share price of your company's stock and the grant price of the award. Go to NetBenefitsLog In Required to see how much your award could be worth.

Receiving your payout
After a waiting period that your company sets, your award vests and the options become yours to exercise. Once vested, you can convert the options to shares by buying them at the grant price. Go to NetBenefitsLog In Required to find out when that happens. Remember that your stock options will expire, so be sure to exercise them in time.

Exercising stock options
When the market price of the shares is higher than your grant price, your options are "in the money." (If the market price is lower than the grant price, the options are "underwater" or "out of the money" and you can't exercise them.) When you exercise, you only have to pay the grant price for the shares (plus applicable commissions, fees, and taxes). You can then keep all the shares, sell them for cash, or choose a mixture of shares and cash.

Managing your payout
When you exercise your options, the shares or cash will pay out, after taxes, to your brokerage account. You'll need this account to exercise your stock options. To protect your assets, consider adding a beneficiary to your account. Easily sell some or all of your sharesLog In Required and link your bank accountLog In Required to access cash.

Understanding your taxes
How much you'll pay in taxes depends on the type of stock option plan you have. Check your plan documents to find out, and use Fidelity's tax-planning resources to learn more about taxes, when they're paid, and how to file your tax return.

Getting help
We'll stay in touch through the full life cycle of your award and let you know when there's action to take. Head to your Profile pageLog In Required to confirm your contact information is correct, so you never miss an update or time-sensitive communications.