Evergreen Option

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Evergreen Option

1. An employee stock option with no expiration date where the employee is granted a certain percentage of the company's shares outstanding automatically each year. The evergreen option requires no approval and the employee does not need to do anything extra to acquire the new shares. This allows the employee to gradually increase his/her holding in the company for which he/she works every year.

2. An option contract that is renewed automatically after a short-term period unless it is terminated. For example, an evergreen contract may last five years with an option to terminate at the end of one year. Unless one party or the other terminates the contract by the end of the first year, it is renewed for an additional five years after the end of the first five years.