It's a breakdown of the ownership of the company

  Op - 40%
  Co-Founder - 40%
  Option Pool - 10%
  Angel Investor - 10%

- The option pool for new hires means that if you're one of the first employees, your equity will come from that option pool. You may get 1% as an early engineer or 3% as an early executive for example.

- The investor owning 10% of the company means that they think the company is worth $1,000,000 right now. ($100,000 x 10)

- The 4yr vesting with 1 year cliff means the Op gets 1/48th ownership of the company every month over the course of 4 years. BUT BUT BUT they only get the first 1/4 (12/48th) until they have been at the company for at least 1 year. If the Op leave before 1 year, they get nothing.