A call option is a derivative.

When a company offers their executives options in their publicly traded company, they are giving this person an “option” to buy with their own money X amount of stock, for X amount of price in an X amount of time period. If the company stock goes up the stock can be purchased for a discount and then held or sold. If the stock goes down and the time period elapses the executive is going to let the option expire because why would they pay more than market rate? They have the option to buy (exercise) or not with their own money.
I believe what AMCND previously referenced was the vesting periods companies can impose on these options.