Stock options should not be long term. You should offer them annually based on performance. If the employee started from the beginning, then you give them founder shares at a very low cost, with
reverse-vesting. That minimizes tax burdens for them down the road, but lets you
pull them if they leave early. The details should all be spelled out in the SHA from the beginning though.
Evil. Built into stock options is the idea of vesting over time. If someone’s working for you, they deserve the options that vest during that time. If you don’t feel they are measuring up, you can part ways.