Severance Policy - Template Form to Create Word and PDF Pro · US-law
✓ Valid in United States · drafted to comply with local law
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SEVERANCE PLAN AND POLICY
________
State of ________
RECITALS:
A. This Severance Plan and Policy (the “Policy”) is established and made effective as of ________ by ________, a ________ organized under the laws of the State of ________, with its principal place of business at ________ (the “Employer” or “Company”).
B. This Policy sets forth the terms, conditions, procedures, and expectations governing the payment of severance benefits to eligible employees of the Company upon a qualifying termination of employment.
C. The Company recognizes that organizational changes, economic conditions, and various business factors may necessitate the involuntary separation of employees, and seeks to provide a structured framework for managing such separations consistent with the values of fairness, transparency, and respect.
D. This Policy is intended to constitute, and shall be administered as, a welfare benefit plan that is exempt from the substantive provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to the maximum extent permitted under 29 C.F.R. § 2510.3-2(b), or, to the extent it is determined to be subject to ERISA, as a plan administered in accordance with the applicable provisions thereof.
E. Nothing in this Policy shall reduce or limit any benefit, payment, or notice to which an employee is entitled under applicable federal, state, or local law. This Policy is supplemental to, and not in lieu of, any minimum benefits mandated by law.
F. This Policy does not constitute a contract of employment, does not alter the at-will nature of employment with the Company, and does not guarantee continued employment for any period.
§ I. DEFINITIONS AND PLAN ADMINISTRATION.
1. Plan Administrator. The Company, or such person or committee as the Company may designate in writing, shall serve as the Plan Administrator and named fiduciary within the meaning of ERISA (to the extent applicable). The Plan Administrator shall have full discretionary authority to interpret this Policy, determine eligibility, and resolve all questions arising in its administration. The Plan Administrator’s contact information is: ________.
2. Claims and Appeals. Any claim for benefits under this Policy, and any appeal of an adverse benefit determination, shall be made and decided in accordance with the claims procedures set forth in 29 C.F.R. § 2560.503-1, to the extent applicable.
§ II. ELIGIBILITY CRITERIA.
3. This Policy applies to all regular employees of the Employer who satisfy the requirements set forth herein.
4. Subject to the exclusions below, employees may be eligible for severance benefits where their employment is involuntarily terminated by the Company for one or more of the following reasons:
- Job elimination;
- Position restructuring;
- Technological advancements leading to role redundancy;
- Business reorganization, merger, acquisition, or reduction in force.
5. To be eligible, an employee must have completed a minimum of ________ of continuous, uninterrupted service with the Employer as of the effective date of termination.
6. Eligibility may also depend on the employee’s position and role within the organization. The following roles are eligible for severance benefits: ________.
7. Notwithstanding the foregoing, the following employees are excluded from severance eligibility:
- Employees terminated for cause, including gross misconduct, dishonesty, or material violation of Company policies;
- Individuals holding contract, temporary, seasonal, or independent contractor positions;
- Employees who voluntarily resign or retire, except as otherwise provided by law or written agreement;
- Employees who decline a bona fide offer of comparable continued employment with the Company or a successor employer.
8. As a condition precedent to the receipt of any severance benefits hereunder, an eligible employee must execute, and not revoke, a separation agreement and general release of claims in a form satisfactory to the Company (the “Release”). Where required by law, the Release shall comply with the Older Workers Benefit Protection Act (29 U.S.C. § 626(f)), affording the employee the applicable consideration period (twenty-one (21) or forty-five (45) days, as applicable) and a seven (7) day revocation period.
§ III. SEVERANCE COMPENSATION.
9. Eligible employees shall receive a lump-sum severance payment calculated based on years of service, position, and any applicable legal requirements, in an amount determined as follows: ________.
10. The severance package shall include payment for accrued but unused vacation and paid time off (PTO) to the extent required by applicable state law. Where state law does not mandate payout, the amount of accrued time eligible for payout is limited to ________ days of accrued vacation and PTO.
11. For employees who earn commissions, the severance package may include prorated commission payments based on sales or performance metrics earned through the effective date of termination, in accordance with applicable state wage payment laws.
12. All severance payments shall be subject to applicable federal, state, and local tax withholding and shall be administered in compliance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder, or an applicable exemption.
§ IV. ADDITIONAL SEVERANCE PACKAGE BENEFITS.
13. Eligible employees may elect to continue group health insurance coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), 29 U.S.C. § 1161 et seq., and any applicable state continuation law. Where provided under this Policy, the Company shall subsidize the cost of such continuation coverage for the following period following termination: ________.
14. To support the transition to new employment, eligible employees may be provided with outplacement services, including career counseling, resume preparation assistance, and job search support.
15. Contributions to retirement accounts, such as 401(k) or pension plans, shall be governed by the terms of the applicable plan documents and applicable law. Nothing in this Policy shall be construed to confer benefits inconsistent with such plan documents.
16. In addition to healthcare continuation coverage, the severance package may cover the cost of certain health and welfare benefits, such as gym memberships or dental plans, for the following period: ________.
17. Employees holding stock options or equity awards may receive guidance regarding the exercise, vesting, or treatment of such awards, in all cases subject to and governed by the terms of the applicable equity incentive plan and award agreements.
18. If applicable, employees participating in tuition reimbursement or loan assistance programs may receive continued support during the severance period, subject to the terms of those programs.
§ V. NON-DISPARAGEMENT.
§ VI. CONFIDENTIALITY.
20. Upon acceptance of the severance package, employees shall maintain the confidentiality of the Company’s trade secrets, proprietary information, and other confidential business information, consistent with their continuing obligations under any applicable confidentiality, non-disclosure, or similar agreement and under the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq.
21. The obligation to protect the Company’s trade secrets and proprietary information shall survive the termination of employment for so long as such information remains confidential under applicable law.
22. A breach of the confidentiality obligations may result in legal action and the pursuit of remedies available under applicable law, including the recovery of damages and injunctive relief.
§ VII. RETURN OF COMPANY PROPERTY.
24. As a condition of receiving severance benefits, employees are required to return all Company property in their possession or control on or before the effective date of termination. This includes, but is not limited to, keys, access cards, identification badges, laptops, mobile devices, equipment, documents, files, and any other materials belonging to the Company.
25. Failure to return Company property may result in the delay, reduction, or forfeiture of severance benefits to the extent permitted by applicable law, as well as the pursuit of any other remedies available to the Company.
§ VIII. NOTIFICATION PROCESS.
26. Employees affected by a qualifying termination will be provided with written notice of their termination at least ________ in advance, or such longer period as may be required by applicable law.
27. To the extent any reduction in force, plant closing, or mass layoff triggers the federal Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. § 2101 et seq., or any applicable state mini-WARN statute, the Company shall provide notice in accordance with the requirements of such laws.
28. Communication during the severance process will be handled with sensitivity and respect. Employees will be informed of the reason for their termination, the effective date, and the details of the severance package for which they are eligible.
§ IX. LEGAL COMPLIANCE.
29. This Policy is intended to comply with all applicable federal, state, and local employment laws and regulations, including ERISA, COBRA, the WARN Act, Section 409A of the Internal Revenue Code, and applicable wage payment laws. The Company will monitor and update this Policy as necessary to maintain legal compliance.
§ X. NON-DISCRIMINATION.
30. All severance decisions shall be made without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, genetic information, military or veteran status, or any other characteristic protected under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, or any other applicable federal, state, or local law. The Company is committed to equal employment opportunity.
§ XI. AMENDMENT AND TERMINATION.
31. The Employer reserves the right, in its sole discretion, to amend, modify, suspend, or terminate this Policy in whole or in part at any time, prospectively or retroactively, except that no such action shall reduce benefits already vested or payable in connection with a termination that has occurred prior to the effective date of such action.
32. If substantive changes are made to this Policy, affected employees will be notified in writing in accordance with applicable law.
§ XII. NO CONTRACT OF EMPLOYMENT; AT-WILL STATUS.
33. This Policy is a statement of Company policy and, except for the binding terms of any executed Release, does not create any contractual rights or obligations between the Company and any employee. Nothing herein alters the at-will nature of employment, and either the employee or the Company may terminate the employment relationship at any time, with or without cause or notice, except as otherwise prohibited by law.
34. In the event of any conflict between this Policy and the terms of an individual written employment agreement or collective bargaining agreement, the terms of such agreement shall control.
§ XIII. SEVERABILITY.
35. If any provision of this Policy is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect, and the invalid provision shall be deemed modified to the minimum extent necessary to render it enforceable.
§ XIV. GOVERNING LAW AND VENUE.
36. To the extent not preempted by ERISA or other applicable federal law, this Policy 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 ________ County, State of ________, for the resolution of any dispute arising under or relating to this Policy.
EXECUTION:
IN WITNESS WHEREOF, the undersigned acknowledge their receipt and understanding of this Policy as of the dates set forth below.
EMPLOYER:
_________________________________
Authorized Signature
Name: ________
Title: ________
Date: ________
EMPLOYEE:
_________________________________
Employee Signature
Name: ________
Date: ________
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