option pool creation / refresh
Companies seeking to grow rapidly (scale), create a novel product or service, or startup operations for the first time will often want or need to incent their employee base to work harder than typical, accept more stressful engagements, and take on more risk than they would in other companies. Generally companies in these scenarios will form some kind of employee incentive program. One of the most common ways to do this is to establish a pool of stock options that the management team can grant to employees. As a company grants these options out, they can run out of options as they hire more and more employees. This requires that the company create more options.
When investors fund a company, they will often stipulate that the company create an options pool if it doesn't already have one. If it does have an options pool, the investors and the mangers will frequently "refresh" the options pool. This means that they will agree on a certain number of new options to create to grant to new employees. Creating a stock option pool dilutes the existing shareholders (often this includes the investors). So investors will exercise caution in deciding how many new options they want to create. Generally, they will want to create new options but they may want to limit the size of the pool to what they feel is a reasonable amount.