You should talk to a lawyer, primarily to find out where you stand. It is very hard for a tiny startup to properly issue options internationally, and you may find that you don't own options in an enforceable way, or have huge tax problems, or any number of other things.
Once you've settled that, have them explain what they're trying to do and have a lawyer interpret it for you. Normally employee option pools (and any kind of dilution) are expanded by issuing more shares. That would dilute everyone equally. To dilute people at different rates, the company would actually need to issue a bunch more shares (diluting everyone even more) and then grant options to the other guys. As far as I know, judges look on that very unfavorably. The startup's lawyers should be advising against that.
Despite what other commenters are saying, this probably isn't a negotiation. It's likely just incompetence on their part. Your first priority should be understanding precisely what position you and the company are in, and then evaluating from there.
Once you've settled that, have them explain what they're trying to do and have a lawyer interpret it for you. Normally employee option pools (and any kind of dilution) are expanded by issuing more shares. That would dilute everyone equally. To dilute people at different rates, the company would actually need to issue a bunch more shares (diluting everyone even more) and then grant options to the other guys. As far as I know, judges look on that very unfavorably. The startup's lawyers should be advising against that.
Despite what other commenters are saying, this probably isn't a negotiation. It's likely just incompetence on their part. Your first priority should be understanding precisely what position you and the company are in, and then evaluating from there.