Severance

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Severance

A settlement received after being released from a corporation. In the context of corporate governance, an agreement that assures high-level executives of their postions or some compensation and are not contingent upon a change in control.

Severance

A payment often (but not always) made in a lump sum that occurs when an employee is laid off or fired. Severance is sometime voluntary; that is, an employee may choose to quit and take a severance that is offered instead of staying and risking a layoff with no severance. The amount of severance is determined by the employee's length of time at the company, previous pay rate, and other factors. Accepting a severance makes one ineligible to collect unemployment insurance or to initiate a wrongful termination lawsuit. A severance exists in order to reduce the risk of the company when layoffs become necessary and to improve employee morale.
References in periodicals archive ?
This does not apply to a liability for one-time termination benefits that are incurred over time, discussed subsequently.
94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity including Certain Costs Incurred in a Restructuring), addresses three issues relating to these costs:
r) One-time termination benefits, asset impairments and rollout of retention termination benefits and accelerated depreciation costs capitalized in inventory related to the phased closure of the Arklow, Ireland breast implant manufacturing facility of $10.
5 million pre-tax charge in 2010 for the payment of related termination benefits.
During the three months ended March 31, 2009, the company recorded employee termination benefits of approximately $0.
Any special or contractual termination benefits offered to employees.
The restructuring charges consist of one-time termination benefits as a result of our recent workforce reductions in these segments, and facility closure costs, as a result of our decision to shut our manufacturing facility in Amerang, Germany and our sales office in the UK.
This charge includes termination benefits of approximately $4.
0 million in cash for termination benefits and other employee costs -- $0.
3 million in the fourth quarter of fiscal 2008 for employee termination benefits.
At this time, the Company is unable to determine the amounts of one-time termination benefits, contract termination costs and other associated costs and expected cash flows associated with its wind-down activities.