He forced all Pixar employees to give up their options as part of his agreement to add another round of personal funding in 1991.
What does "options" in this sentence mean?
It sounds like as part of their employment benefits, Pixar employees had stock options (a contractual right, i.e., "option", to buy company stock at a pre-agreed price, regardless of its price on the open market).
Somebody (owner, CEO, major investor?), was contemplating pumping money into the company by buying a lot of stock, which would be expected to cause the market value of the stock to go up, rewarding that investor.
If Pixar employees were to exercise their options, that could have a contrary effect. For example, if the Pixar employees were to then buy stock at a guaranteed cheap price, they could turn around and sell it at the new high market price for some quick profits. That stock dumping would drive the stock price back down, hurting that investor.
So a condition of his agreement to invest in the company was that the Pixar employees give up their stock options.
This sentence refers to Steve Jobs, and is taken from the biography written by Walter Isaacson. The context is this. Steve Jobs had invested quite a lot of his own money in Pixar, and before investing more, he wanted existing employees to give up their options (pre-existing rights to purchase shares in the company). By forcing employees to give up their options, Steve Jobs would be able to maintain closer control of the company, and reduce dilution of ownership across the employee group.