Definition:
A clawback provision in an agreement is a provision that requires something to be given back, depending on the circumstances.
Examples of clawback provisions:
- In executive pay agreements, a clawback provision might require the executive to reimburse the company specified amounts if the executive breaches a non-compete agreementand goes to work for a competitor within a certain number of months after leaving the company.
- Executives of a company may also be required to return stock options exercised or bonuses if the corporation's earnings do not meet specified levels.
