A clause in a hiring contract describing a relatively lucrative severance package once an employee leaves a company, especially after a merger or acquisition. Such a package often includes cash and stock options, as well equity in the company. A silver parachute is not normally as large as a golden parachute, but a greater number of employees are eligible for one.
An agreement for employee severance benefits in the event control of the firm changes hands. A silver parachute is less lucrative and is extended to more employees than is a golden parachute.