Also known as a golden parachute.
Financial benefits provided to employees (usually senior employees or directors) on leaving their employer. Such provisions may be:
A long fixed-term contract giving rise to damages in the event of early termination
Payment of a fixed sum in the event of employer repudiation or non-renewal of a contract
The option to resign and claim a fixed sum in the event of a change of control of the company because of a takeover.
Such clauses run the risk of being held unenforceable as a penalty if they are payable on breach of contract and do not genuinely pre-estimate the loss that an employee may suffer. Approval of such clauses by directors may also fall foul of their fiduciary duty to act in good faith in the best interests of the company. See also Golden Hello and Golden Handcuffs.