Severance Agreement

SEVERANCE AND RELEASE AGREEMENT

(Alabama – Single‐Employee Separation)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

SEVERANCE AND RELEASE AGREEMENT (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], an [STATE OF INCORPORATION] [corporation/LLC] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE LEGAL NAME], residing at [ADDRESS] (“Employee”).

A. Employee’s employment with Employer ended effective [TERMINATION DATE] (the “Termination Date”).
B. Employer desires to provide severance benefits conditioned on Employee’s execution of, and non-revocation of, this Agreement, and Employee desires to accept such benefits.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

“ADEA” means the federal Age Discrimination in Employment Act, as amended.

“Claim” means any charge, complaint, grievance, arbitration demand, cause of action, obligation, liability, judgment, or damages of any kind, whether known or unknown, suspected or unsuspected, in law or in equity.

“Consideration Period” has the meaning given in Section 3.5(a).

“Effective Date” has the meaning given in Section 3.5(c).

“Released Parties” means Employer, its parents, subsidiaries, affiliates, predecessors, successors, assigns, and all current and former officers, directors, managers, employees, agents, benefit plans, and fiduciaries.

“Revocation Period” has the meaning given in Section 3.5(b).

“Severance Benefits” has the meaning given in Section 3.1.

“Termination Date” has the meaning set forth in the Recitals.

3. OPERATIVE PROVISIONS

3.1 Severance Benefits. Conditioned upon Employee’s timely execution of this Agreement and non-revocation during the Revocation Period, Employer shall provide the following consideration in addition to anything Employee is already entitled to receive (collectively, the “Severance Benefits”):
(a) Cash Severance: A lump–sum payment of $[SEVERANCE AMOUNT], less applicable withholdings, payable on the first regular payroll date following the Effective Date.
(b) Health-Coverage Subsidy: Employer will pay [___]% of Employee’s eligible continuation-coverage premiums for [___] months following the Termination Date, subject to the plan and applicable law.
(c) Outplacement: [Describe services or “None.”]

3.2 Amounts Already Owed. The Severance Benefits do not include wages, commissions, reimbursable expenses, vested benefits, or accrued leave that Employer already owes under a controlling plan, policy, or contract. Employee identifies any known unpaid-compensation issue here: [________________________________].

3.3 Taxes. Employer will make required withholdings. Benefits and tax counsel must review the payment schedule before use; this template makes no tax-compliance representation to Employee.

3.4 Separate Duties. Employee’s duties in Section 5 are enforceable only through the lawful remedies in Section 6 and do not convert amounts already earned or owed into release consideration.

3.5 ADEA/OWBPA Procedures.
(a) Attorney Advice. Employer hereby advises Employee in writing to consult with an attorney of Employee’s choosing before signing this Agreement.
(b) Consideration Period. Employee has at least 21 calendar days (“Consideration Period”) to consider this Agreement. If this waiver is offered in connection with an exit incentive or other employment termination program offered to a group or class of employees, replace 21 days with 45 calendar days and provide the written disclosures described below at the beginning of that period. Employee may sign sooner only by a knowing and voluntary choice not induced by Employer.
(c) Group Disclosures. For a group or class program, Employer must identify in writing the decisional unit, eligibility factors, applicable time limits, job titles and ages of all individuals eligible or selected, and the ages of all individuals in the same job classifications or organizational unit who were not eligible or selected.
(d) Revocation Period. After signing, Employee may revoke this Agreement within 7 calendar days by delivering written notice to [CONTACT NAME/ADDRESS] (“Revocation Period”).
(e) Effective Date. This Agreement becomes effective only after the Revocation Period expires without revocation (the “Effective Date”).

3.6 Future Employment. This Agreement does not promise future employment. It does not bar Employee from applying for work or permit retaliation for protected activity.

4. REPRESENTATIONS & WARRANTIES

4.1 Employee’s Representations. Employee represents and warrants that:
(a) Employee has disclosed any pending Claim against a Released Party here: [list if any];
(b) Employer advised Employee in writing to consult with counsel of Employee’s choice;
(c) Employee enters into this Agreement knowingly and voluntarily, without duress or coercion; and
(d) Employee is age [___], understands that Section 7.1 expressly includes ADEA claims, and has reviewed the procedures in Section 3.5.

4.2 Employer’s Representations. Employer represents that the individual signing on its behalf has full authority to bind Employer.

4.3 Survival. Sections 4, 5, 6, 7, 8, and 9 survive termination or expiration of this Agreement.

5. COVENANTS & RESTRICTIONS

5.1 Mutual Non-Disparagement. During the [SEVERANCE PERIOD], neither party shall knowingly make a false statement of fact intended to harm the other party’s reputation. This Section does not restrict truthful statements, government communications, protected concerted activity, whistleblower reports, testimony, or other conduct protected by law.

5.2 Confidentiality of Employer Information. Employee shall protect legitimate trade secrets and non-public proprietary information. This Section does not restrict discussion of wages or working conditions, government communications, whistleblower reports, testimony, or other conduct protected by law. Employee may disclose the payment amount to Employee’s attorney, tax advisor, spouse, or as required by law.

5.3 Return of Property. No later than the Effective Date, Employee shall return Employer property, including documents, devices, keys, and access credentials, and delete Employer data from personal devices except material that must be preserved by law, litigation hold, or written instruction.

5.4 Cooperation. Upon reasonable advance notice, Employee will provide reasonable factual cooperation concerning matters within Employee’s personal knowledge. Cooperation may not unreasonably interfere with other work, require protected or privileged disclosure, or restrict truthful testimony or government communications. Employer will reimburse reasonable out-of-pocket expenses and compensate substantial time at $[RATE] per hour.

5.5 Continuing Obligations. No prior restrictive covenant is automatically reaffirmed by this Agreement. Any proposed noncompetition, customer nonsolicitation, or similar post-employment restraint requires separate Alabama legal review and must be identified expressly here: [________________________________].

6. DEFAULT & REMEDIES

6.1 Events of Default. A party is in default if it materially breaches a lawful obligation and fails to cure within 10 business days after written notice, if the breach can be cured.

6.2 Remedies. A party may pursue lawful contract remedies for a proven material breach. No remedy creates a release-challenge penalty, requires repayment merely for filing or participating in an agency matter, or restricts a protected communication.

6.3 Attorneys’ Fees. This template creates no prevailing-party fee shift.

7. RELEASE AND RISK ALLOCATION

7.1 Mutual Release.
(a) Employee’s Release. In exchange for the Severance Benefits, Employee irrevocably releases and discharges the Released Parties from any and all Claims based on acts occurring on or before the date Employee signs this Agreement, including claims under the Age Discrimination in Employment Act and Alabama’s age-discrimination provisions, Ala. Code §§ 25-1-20, 25-1-21, and 25-1-29, and other federal, state, or local employment laws, except:
(i) Claims to enforce this Agreement;
(ii) Claims for unemployment, workers’ compensation, or vested benefits;
(iii) Claims that cannot be waived as a matter of law.
(b) Employer’s Release. Employer releases Employee from any Claim it may have based on acts occurring on or before the date Employee signs this Agreement, excluding Claims based on fraud, embezzlement, or intentional misconduct.

7.2 Protected Rights. Nothing in this Agreement prevents Employee from filing a charge, communicating with, providing information to, or participating in an investigation or proceeding before a government agency. Nothing waives rights arising after Employee signs, interferes with agency enforcement authority, or waives claims that cannot lawfully be released. Any effect of the release on individual monetary recovery is governed by applicable law.

7.3 No Employee Risk-Shifting. This Agreement does not impose employee indemnity, a liability cap, a force-majeure excuse for payment, a severance clawback, or a penalty for a good-faith challenge to the release. The rules governing ADEA waiver challenges remain controlled by 29 C.F.R. § 1625.22.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the laws of the State of Alabama and applicable federal employment laws, without regard to conflict-of-law rules.

8.2 Forum. An action concerning this Agreement may be filed in an Alabama state or federal court with subject-matter and personal jurisdiction and proper venue.

8.3 Arbitration. No arbitration clause is included. If selected, use a separately reviewed addendum addressing formation, costs, discovery, remedies, and governing law.

8.4 Jury Trial Waiver. No predispute jury waiver is included in this template.

8.5 Protected Rights. Nothing in this Article restricts agency access, protected communications, or claims and remedies that cannot be waived privately.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by both parties. No waiver shall be effective unless in writing and signed by the waiving party.

9.2 Assignment. Employee may not assign or delegate any rights or obligations hereunder. Employer may assign this Agreement to a successor in interest.

9.3 Successors & Assigns. This Agreement binds and benefits the parties and their respective successors and permitted assigns.

9.4 Severability. If any provision is held invalid, the remaining provisions remain enforceable to the extent permitted by law. This clause does not authorize expansion of a release or restraint.

9.5 Integration. This Agreement constitutes the entire agreement between the parties concerning its subject matter and supersedes all prior understandings.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures delivered electronically (e.g., via PDF or DocuSign) are effective.

9.7 Headings. Headings are for convenience only and do not affect interpretation.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Severance and Release Agreement as of the dates set forth below.

[Optional acknowledgment block if required by internal policy.]

Sources and References

• 29 U.S.C. § 626(f)
• 29 C.F.R. § 1625.22
• Ala. Code § 25-1-20 (2025 mirror; official Legislature page was inaccessible through the required fetch tool)
• Ala. Code § 25-1-21 (2025 mirror; official Legislature page was inaccessible through the required fetch tool)
• Ala. Code § 25-1-29 (2025 mirror; official Legislature page was inaccessible through the required fetch tool)