Offer Letter To Current Employee

I received an offer letter on Friday that is to be signed and returned by Monday to continue my employment (I\'ve been with the company for 8 years) by a new VP of Sales & Mkting. They are hiring a new sales person (I am the only sales person) and thought it would be fun to start on the same playing field. (Those are the exact words used). There is no promotion involved. I have been told if I do not sign this letter I am out of a job. Is it HR procedure to give offer letters to current employees? The company is very small, 8 employees and no HR Department.

Hello RBussay,
Strictly speaking, the answer is NO--Offer Letters are given to new joinees.
If you don't find any negative/decreasing differences between the new Offer Letter & what you are presently drawing, I don't see any reason to hesitate--unless there are other issues involved that you didn't mention.
Rgds,
TS

In addition to what TS has correctly mentioned, issuing offer letter to existing employees can happen if the company has just gone through a merger or acquisition or corporatization - where the "old" company ceased operation (therefore your old contract is invalid) and the "new" company has to issue you with new offer letter with new terms & conditions.
Since this is not the case in your situation, there may be more to meeting the eyes. Talk to this new VP, see where is he coming from and where it is leading to. Then made the decision.
Autumn Jane