Most stock option exercises follow a simple procedure. You must submit an irrevocable election to exercise which can be done by completing an option-exercise form that may be available online. If your company does not make these forms available online, you will have to obtain the form from your human resources department, fill it out and mail it to the designated address prior to the expiration date of the options.
Check your employment contract for stock options provisions. Also check any paperwork you have received from your company regarding the grant of stock options and the procedure for exercising them. Instructions for stock option exercise are usually included with the notice granting you the options. If you are considering leaving your company, or are concerned about a possible future termination of your employment, check your contract and paperwork immediately as the terms often change if you quit or are terminated.
Call the human resources department at your company to ask what your company's procedures are for stock option exercise, where you can obtain the necessary forms, where to turn them in and whether the process can be completed online. If it can be done online, ask for instructions, including the URLs you will need for forms, to be emailed to you. That way you will have a written record of the information.
Open a brokerage account prior to beginning the process of exercising your stock options. Check first with your company to find out whether they use a particular brokerage firm to handle their stock option business. If they do, open your account at that firm. They are likely to have the forms and knowledge of the particular procedures used by your company, and that will make the exercise easier for you, particularly if you use an online broker.
If you have been terminated, ask the human resources department for a full explanation of the company's policy on the exercise of previously granted stock options. There may be a vesting period that will affect your holdings. There is also likely to be a very short window of opportunity for you to exercise your options before they expire. The expiration date is normally changed when you are terminated and, if you are not careful, you may lose those stock options entirely.
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