How do I interpret the above statement? It doesn't seem to say anything about my agreed on equity stake in the company as part of my compensation.
You are right. The written clause is inconsistent with the verbal agreement.
If you sign the written contract, it would supersede the verbal agreement because a contract typically replaces and supersedes any prior [overlapping] agreements between the parties. Also, it is easier to prove the formation of a written contract than the terms of a verbal and unrecorded agreement.
The written clause provides that your compensation (or part thereof) will be in the form of call options, which has nothing to do with the equity percentage per the verbal agreement. You will need a clause that clearly reflects the verbal agreement: x% to be delivered in y years.
If you decide to go for the stock options plan, you need to be aware of some vulnerabilities that the written clause entails.
The clause is unclear as to when the Board would approve the Plan. The problem with that uncertainty is that the strike price is made dependent on the date of approval ("fair market value at the time of Board approval"). The Board could deliberately render your compensation negligible by approving the plan with a timing that minimizes the difference between fair_market_value_at_expiry_date and strike_price (that is, the max(S-K,0) expression).
That vulnerability can be preempted by determining the strike price beforehand and independently of the fair market value on an undefined date of approval.
The clause or the "separate option agreement" should include language to the effect of addressing stock splits, since the clause is in terms of number of stocks rather than percentage of equity. Stock splits would dilute the value of each one of the 72,000 shares the plan would entitle you to purchase. Absent a contractual protection against that dilution of shares, the startup could split stocks so as to deliver the plan stocks without actually giving up much of its equity.
I haven't really searched for case law regarding compensation in the context of stock splits. But, although you might be entitled to relief in case the company indulges in manipulation/fraud of the stock price, it is in your best interest to avoid litigation risks by ensuring that the language of the contract reflects your understanding and your expectations.