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Simple English definitions for legal terms
silver parachute
Read a random definition: High Court of Justiciary
A quick definition of silver parachute:
A silver parachute is a type of employment contract that provides severance benefits to a corporate employee, usually below the executive level, in the event of a takeover. It is not as lucrative as a golden parachute, but still provides some financial security to the employee. It is also known as a tin parachute.
A more thorough explanation:
Definition: A silver parachute is a provision in an employment contract that provides severance benefits to a corporate employee, especially one below the executive level, in the event of a takeover. These benefits are usually less lucrative than those provided under a golden parachute.
Example: If a company is acquired by another company, the employees of the acquired company may be worried about losing their jobs. However, if they have a silver parachute in their employment contract, they will receive some severance benefits if they are laid off. For example, they may receive a certain amount of money or health insurance for a certain period of time.
Explanation: The example illustrates how a silver parachute works in practice. It shows that employees who have this provision in their employment contract can receive some benefits if they lose their jobs due to a takeover. However, the benefits are usually not as generous as those provided under a golden parachute, which is a similar provision for executives.