I agree with Damion below, cashless or net-issue exercise options and notes can be used, but you have to determine fair market value of the stock. One of the biggest issues for the employee also has to do with their own tax consequences. I don't want to get into all the specifics as those depend upon all kinds of variables, but employees often feel they are being cheated by not being able to actually get the stock and the option expiring. If they do exercise, there can often be tax consequences to them that they don't realize and may not want to exercise if they company doesn't have a way for them to liquidate the stock they end up with.
There are alternatives to the traditional stock option plans, such as SAR, phantom stock, ESOP, restricted stock purchase plans, and other plans that may provide incentives, but there are usually restrictions built in to those as well.
Unless you have cash to pay bonuses or other comp in place of options or you give a direct stock grant, those 90 day restrictions are pretty common and the employees need to understand that going in. Once the employee realizes the tax issues to them and their likelihood of being able to sell the stock down the road, they may reconsider just how valuable those options may be. I have seen clients go public with former employees holding stock options or warrants allowing several years to exercise their option and never doing so because even with a public company, the tax implications and low stock price do not make it worth doing so.