If I remember right you are now "locked in" to buy 200 shares of stock from your company at xxx a piece. Vesting means that those options are yours no matter what. Now you actually get 25% of those options in 12 months, and the rest in 36 months. At those times you are allowed to sell your stock at whatever price they are currently at even though you only "paid" xxx. You do not have to pay for your options not rather you pay for them when you "sell" them so if xxx was $10 and 36 months from now the market price on your companies stock is $15. You can essentially sell a share of stock at $5 a piece profit. Now I am sure there are probably some fees for doing so but not sure. You don't really ever buy it, the company more or less holds on to them for you until you choose to sell them.