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Yes, you will have to pay taxes on the difference between the market value of the stock and your cost for exercising on the date they were exercised if they were nonstatutory stock options (NSOs). If they were NSOs, then your employer was required to include the difference on your W-2. If they were incentive stock options then they are not taxable when they are exercised but the difference between the sales proceeds when sold and the exercise price when exercised is taxable as gain or loss.
See pages 10 - 11 - http://www.irs.gov/pub/irs-pdf/p525.pdf