Logistics regarding team expansion

I'm currently planning to invite a potential CTO onto the team, but I don't know what legal documents we must have to carry out the process. I'm drafting a contract that outlines the CTO's responsibilities, and the form and amount of compensation (equity). I will also offer a stock certificate. But I don't know if these things are enough for sweat-equity. Would the individual be considered an employee or a contractor? But since he's not receiving any monetary compensation, he wouldn't be considered an employee correct? Any advice would be much appreciated.