Employee Severance Package Agreement - Template Form Pro · US-law
✓ Valid in United States · drafted to comply with local law
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SEVERANCE AGREEMENT AND GENERAL RELEASE OF CLAIMS
State of ________
RECITALS:
A. This Severance Agreement and General Release of Claims (this "Agreement") is made effective as of ________ (the "Effective Date"), by and between the following employer (the "Company"):
________
________
and the following employee whose employment with the Company is ending (the "Employee"; together with the Company, the "Parties" and each a "Party"):
________
________
B. WHEREAS, the Employee's employment with the Company is ending, with a final separation date of ________ (the "Separation Date");
C. WHEREAS, the reason for the cessation of employment is as follows:
________
D. WHEREAS, the Parties intend by this Agreement to establish the terms and conditions governing the separation of the Employee from employment with the Company and to set forth the severance benefits provided in connection with that separation, in exchange for the releases and covenants set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, and other good and valuable consideration to which the Employee is not otherwise entitled, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
§ I. SEVERANCE COMPENSATION.
1. In consideration of the Employee's execution (and non-revocation) of this Agreement, the Company shall pay to the Employee severance in the gross amount of $________ (________) (the "Severance"), less all applicable federal, state, and local payroll taxes and lawful withholdings.
2. The Severance shall be paid in one lump sum, payable within ________ after the later of (i) the Separation Date and (ii) the expiration of the revocation period described in § XI below, provided this Agreement has become effective and irrevocable. The Employee acknowledges that the Severance constitutes consideration to which the Employee would not otherwise be entitled absent this Agreement.
3. The Company shall pay to the Employee the gross amount of $________ (________) as payment for ________ days of accrued but unused vacation and paid time off (PTO), to the extent required by law or Company policy.
4. To the extent the Employee earned commissions prior to the Separation Date, the severance package shall include a prorated commission payment, based on applicable sales or performance metrics, in the gross amount of $________ (________).
5. The Parties acknowledge that the Employee shall receive all earned wages and accrued, unused PTO required to be paid under applicable law on or about the Separation Date regardless of whether the Employee executes this Agreement, and that such amounts do not constitute consideration for the releases set forth herein.
§ II. ADDITIONAL SEVERANCE PACKAGE BENEFITS.
6. Subject to the Employee's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1161 et seq., and any applicable state continuation laws, the Company shall pay or reimburse the cost of the Employee's group health insurance continuation coverage for the following period following the Separation Date: ________. Thereafter, the Employee may continue COBRA coverage at the Employee's own expense to the extent permitted by law.
7. To support the Employee's transition to new employment, the Company shall provide outplacement services, which may include career counseling, resume preparation assistance, and job search support, for the following period: ________.
8. If applicable under the terms of the governing plan, the Company shall make a contribution to the Employee's retirement account (such as a 401(k) or pension plan) in the amount of $________ (________), subject to applicable limits under the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 ("ERISA").
9. In addition to group health coverage, the Company shall provide the following additional health and welfare benefits:
________
Such benefits shall be provided for the following period following the Separation Date: ________.
10. To the extent the Employee holds vested stock options or equity awards in the Company, the treatment of such awards shall be governed solely by the applicable equity incentive plan and award agreements. The Company shall provide the Employee with reasonable guidance and information regarding the exercise or settlement of any vested awards.
11. If the Employee participates in a tuition reimbursement or loan assistance program, the Company shall provide the following continued support during the severance period:
________
§ III. RECOMMENDATION LETTER AND REFERENCE.
12. Upon the Employee's reasonable request following the Separation Date, the Company agrees to provide a truthful reference, which may include the Employee's dates of employment, job responsibilities, and, at the Company's discretion, the Employee's skills and contributions during employment.
13. Upon the Employee's request, the Company may, in its sole discretion, provide a formal recommendation letter outlining the Employee's professional qualities, achievements, and contributions, drafted in a professional manner.
§ IV. MUTUAL NON-DISPARAGEMENT.
14. The Employee agrees not to make any false, disparaging, or defamatory statements, whether oral or written, concerning the Company or its parents, subsidiaries, affiliates, officers, directors, employees, products, or services. The Company agrees to instruct its officers and directors with knowledge of this Agreement not to make any false, disparaging, or defamatory statements concerning the Employee. Nothing in this Section shall prohibit either Party from making truthful statements (a) when required by law, subpoena, or legal process; (b) to a government agency; or (c) in connection with the enforcement of this Agreement.
§ V. RESTRICTIVE COVENANT (NON-COMPETITION).
15. In consideration of the severance benefits provided under this Agreement, the Employee agrees that, for a period of ________ following the Separation Date, the Employee shall not engage in employment, consulting, ownership, or other business activities that directly compete with the products, services, or business of the Company, to the extent permitted under the law of the governing state.
16. This covenant shall apply only within the following geographic area in which the Company conducts business or has a legitimate, protectable business interest:
________
The Parties acknowledge that the foregoing geographic scope and duration are reasonable and no greater than necessary to protect the Company's legitimate business interests.
17. This covenant does not restrict the Employee from accepting general employment or engaging in activities that do not directly compete with the Company.
18. The Employee acknowledges that the severance benefits constitute adequate and valuable consideration for the covenants in this Section.
19. The Parties acknowledge and agree that the enforceability of this Section is subject to applicable federal and state law, including any limitations or prohibitions on post-employment non-competition covenants (and any wage or notice thresholds) under the law of the governing state, as well as the Federal Trade Commission's rules and any other applicable regulatory restrictions. If any portion of this Section is held to be unenforceable, a court of competent jurisdiction may reform or limit such portion to render it enforceable to the maximum extent permitted by law, and the remaining provisions shall continue in full force and effect.
§ VI. CONFIDENTIALITY.
20. The Employee shall keep confidential the terms, conditions, and financial details of this Agreement, as well as any discussions or negotiations relating to the Employee's separation, except as disclosure may be made to the Employee's spouse, attorney, tax or financial advisor (each of whom shall be bound by this confidentiality obligation), or as otherwise required by law.
21. The Employee shall continue to maintain the confidentiality of the Company's internal information, trade secrets, and proprietary knowledge both during and after employment, consistent with applicable law and any separate confidentiality or proprietary information agreements between the Parties.
22. A breach of the confidentiality obligations in this Section may entitle the Company to pursue all remedies available at law or in equity, including the recovery of damages and injunctive relief.
23. Notwithstanding anything to the contrary in this Agreement, nothing herein shall be construed to prohibit or restrict the Employee from: (a) disclosing information as required by law, subpoena, or legal process; (b) filing a charge or complaint with, providing information to, or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, the National Labor Relations Board, the Securities and Exchange Commission, the Occupational Safety and Health Administration, or any other federal, state, or local government agency; (c) communicating with such agencies without notice to the Company; or (d) discussing the terms, wages, and working conditions of employment as protected by Section 7 of the National Labor Relations Act.
24. The Employee covenants, after the Separation Date, not to disclose or use any Trade Secret Information received in the course of employment. "Trade Secret Information" means any formula, process, method, pattern, design, compilation, program, device, technique, or other information that derives independent economic value from not being generally known or readily ascertainable by proper means, and that is the subject of reasonable efforts to maintain its secrecy, as defined under the Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq., and applicable state trade secret law.
25. Defend Trade Secrets Act Notice. Pursuant to 18 U.S.C. § 1833(b), the Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
26. With respect to Confidential Information not rising to the level of a trade secret, the Employee shall maintain its secrecy for a period of three (3) years after the Separation Date. "Confidential Information" means any information that is confidential and commercially valuable to the Company, in any form, including documents, techniques, methods, practices, tools, specifications, inventions, equipment, algorithms, models, samples, software, drawings, plans, programs, or other written or oral knowledge, pertaining to research and development, forecasting, marketing, personnel, customers, suppliers, intellectual property, finance, or similar matters. Confidential Information shall not include any information which:
a. is or becomes known or available to the public other than through a breach by the Employee;
b. was already known to the Employee through legal means;
c. is disclosed by the Company to third parties without restriction;
d. is disclosed to the Employee by a third party who lawfully possessed the information and had the right to disclose it; or
e. is independently developed by the Employee without use of or reference to the Company's information, as the Employee can demonstrate.
§ VII. INTELLECTUAL PROPERTY.
27. The Employee acknowledges and agrees that all intellectual property, including inventions, designs, patents, trademarks, trade secrets, copyrights, and any work product created or developed in the course of and within the scope of employment with the Company (collectively, "Intellectual Property"), is and shall remain the exclusive property of the Company, and that copyrightable works constitute "works made for hire" under the United States Copyright Act, 17 U.S.C. § 101 et seq., to the maximum extent permitted by law.
28. The Employee agrees to promptly disclose to the Company any such Intellectual Property and to execute any documents reasonably necessary to perfect the Company's ownership thereof.
29. The Employee's obligations regarding the protection and non-disclosure of Intellectual Property shall survive the termination of employment, regardless of the reason for such termination.
30. Nothing in this Section applies to any invention for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on the Employee's own time, except to the extent otherwise required by applicable state law.
§ VIII. RETURN OF COMPANY PROPERTY.
31. On or before the Separation Date, the Employee shall return to the Company all Company property in the Employee's possession, custody, or control, including but not limited to keys, access cards, identification badges, credit cards, computers, mobile devices, equipment, documents, records, files, manuals, and any other materials containing Confidential Information or Intellectual Property belonging to the Company.
32. The Employee further agrees not to retain any copies, duplicates, reproductions, or excerpts of such property or materials in any form, whether physical or electronic, following the Separation Date.
§ IX. COOPERATION.
33. Following the Separation Date, the Employee agrees to reasonably cooperate with the Company in connection with matters arising out of or related to the Employee's employment, including the transition of duties and the provision of information or assistance in connection with any investigation, litigation, or other proceeding involving the Company. The Company shall reimburse the Employee for any reasonable out-of-pocket expenses incurred in providing such cooperation.
§ X. GENERAL RELEASE OF ALL CLAIMS.
36. Excluded Claims. This release does not waive or release: (a) any rights or claims that arise after the date the Employee signs this Agreement; (b) any rights under this Agreement; (c) any vested rights under any retirement, pension, or employee welfare benefit plan; (d) any right to vested equity awards; (e) any claim for unemployment or workers' compensation benefits; (f) any right to file a charge with or participate in a proceeding before any government agency (although the Employee waives the right to recover monetary damages or individual relief in connection with any such charge, except for any award properly payable to a whistleblower); or (g) any claim that cannot be waived as a matter of law.
§ XI. ADEA/OWBPA ACKNOWLEDGMENT; CONSIDERATION AND REVOCATION PERIODS.
37. With respect to the release of claims under the ADEA, the Employee acknowledges and agrees that: (a) this Agreement is written in a manner the Employee understands; (b) the Employee is hereby advised in writing to consult with an attorney before signing this Agreement; (c) the Employee is releasing claims in exchange for consideration in addition to anything of value to which the Employee is already entitled; (d) the Employee has been given a period of ________ (which shall be at least twenty-one (21) days, or forty-five (45) days in the case of a group termination program) within which to consider this Agreement; and (e) the Employee has a period of seven (7) days following the Employee's execution of this Agreement to revoke it by delivering written notice of revocation to the Company at the address stated above.
38. This Agreement shall not become effective or enforceable, and no payments shall be made hereunder, until the seven (7)-day revocation period has expired without revocation by the Employee (the "Effective Release Date"). If the Employee signs before the expiration of the consideration period, the Employee does so knowingly and voluntarily.
§ XII. ADVICE OF COUNSEL.
39. The Employee acknowledges that the Company has provided the Employee with a reasonable and sufficient opportunity to obtain independent legal advice regarding this Agreement.
40. The Employee covenants that the Employee has either obtained such independent legal advice prior to executing this Agreement or has knowingly and voluntarily chosen not to do so and is executing this Agreement of the Employee's own free will.
§ XIII. NOTICES.
41. Any notice, request, demand, or other communication required or permitted under this Agreement shall be in writing and may be delivered in person, by nationally recognized overnight courier, or by certified mail, return receipt requested, to the address of the respective Party first stated above or to such other address as a Party may designate in writing. Notice shall be deemed given upon actual receipt or refusal of delivery.
§ XIV. ENTIRE AGREEMENT.
42. This Agreement constitutes the entire agreement of the Parties concerning its subject matter and supersedes all prior or contemporaneous agreements, understandings, promises, or conditions, whether oral or written; provided, however, that any prior valid confidentiality, proprietary information, or restrictive covenant agreements shall remain in full force and effect to the extent not inconsistent herewith.
§ XV. SEVERABILITY.
43. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
44. If a court finds any provision invalid or unenforceable but capable of being made valid and enforceable by limitation, such provision shall be deemed written, construed, and enforced as so limited.
§ XVI. AMENDMENT.
45. This Agreement may be modified or amended only by a writing signed by both Parties.
§ XVII. GOVERNING LAW; VENUE.
46. This Agreement shall be governed by and construed in accordance with the laws of the State of ________, without regard to its conflict-of-laws principles. The Parties consent to the exclusive jurisdiction and venue of the state and federal courts located in ________, State of ________. The Parties agree that this choice of law, venue, and jurisdiction provision is mandatory and not permissive.
§ XVIII. WAIVER.
47. The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that Party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
§ XIX. KNOWING AND VOLUNTARY EXECUTION.
48. The Employee acknowledges that the Employee has read and understands this Agreement, has had the opportunity to review it with counsel of the Employee's choosing, and is signing it knowingly and voluntarily.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.
_________________________________
________, Employee
_________________
Date: ________
_________________________________
________
By: ________
Title: ________
Date: ________
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