[lgcoleman]

This assumes your shares are worth more than your exercise price. :)

In order to get long-term capital gain treatment you will need to hold the shares for 1 year + 1 day. And more than 2 years from the grant date (this part usually isn't an issue).

By exercising every month after the 1 year cliff you essentially dollar-cost averaging your purchases. You might also want to use a similar strategy when it comes time to sell.

Also keep in mind that the long term capital gain rate is currently 20% plus 3.8% net investment income tax. (Again this if federal only).

[toomuchtodo]

Thank you for following up. Off to get my 409A valuation docs from HR :-P