You should definitely negotiate and consider your strike price as well. For Engineer #2 you should probably be getting at least 0.5%, especially if you have proven yourself. Make the argument that if the company were to exit for 10M in a couple years you would only net ~20K for about 3 years of work, which is less than a regular salary else where.

But why do you think your options would be worth nothing? That in itself is a problem.