Equity awards are a significant part of compensation and are governed by documents most recipients never read carefully.
Stock options. The right to buy at a fixed exercise price. Incentive options carry potential tax advantages subject to strict conditions; non-qualified options are taxed as ordinary income on exercise on the spread.
Restricted stock is owned at grant subject to forfeiture, with an election available within a short window after grant to be taxed at grant value rather than at vesting — a decision that cannot be undone and that should be made deliberately.
Restricted stock units are a promise to deliver shares on vesting, taxed at delivery.
Vesting. Time-based with a cliff, performance-based, or both. What happens on termination — for cause, without cause, resignation, death, disability, retirement — should be checked before resignation, not after.
Post-termination exercise windows are commonly ninety days, which for a private company means an employee must fund the exercise and the tax with no market to sell into. Extended windows exist and are negotiable at hire.
Change of control. Single trigger acceleration on a sale, double trigger requiring a subsequent termination, or none. This is often the most valuable term in the award.
Repurchase rights on termination, and their price, matter enormously in private companies.