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To: gzubeck who wrote (155658)4/11/2005 7:00:42 PM
From: BiomavenRespond to of 275872
 
Employee options typically have a 10-year statutory life. But in practice they get exercised much more quickly, both because employees want the cash quickly and because they get terminated. So in practice an expected term of four or five years for a 10-year option has been typical when valuing the options. With a high volatility that does get fairly expensive, but it still makes for more leverage than Restricted Stock, which is the alternative.

Peter