Stock Committee . . .

refers to a group of company officers or directors designated by a company’s board of directors with the mandate of determining when and how additional shares of the company’s stock should be issued to employees or others. Stock committees often allocate a pool of shares to employees as part of an incentive plan.

Venture capitalists will usually consent to the reservation of a pool of shares to be issued to employees after closing of a funding even though the issuance of those shares will dilute the percentage interest of the investor. Often, however, the investor will want to participate in the allocation of these shares. One way for an investor to do this is to require representation on the company’s stock committee. See: Board Committees, ISOs (Incentive Stock Options), Qualified Stock Option Plans.