SEVERANCE AND MUTUAL RELEASE AGREEMENT

(California – Single Employee Termination)

[// GUIDANCE: This template is drafted to comply with California and federal employment laws, including the Older Workers Benefit Protection Act (“OWBPA”) at 29 U.S.C. § 626(f), Cal. Civ. Code § 1542, and Cal. Lab. Code § 206.5. Bracketed text must be customized. Remove all guidance comments and unused bracketed options before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Termination of Employment
   3.2 Severance Benefits
   3.3 Acknowledgment of Adequate Consideration
   3.4 Tax Matters
   3.5 Return of Company Property & Transition
4. Mutual Representations & Warranties
5. Covenants & Restrictions
   5.1 Confidentiality
   5.2 Nondisparagement
   5.3 [Optional] Non-Solicitation
6. Release; Waiver of Claims; Indemnification
   6.1 General Mutual Release
   6.2 OWBPA / ADEA Waiver Requirements
   6.3 California Civil Code § 1542 Waiver
   6.4 Carve-Outs (Non-Waivable Claims)
   6.5 Mutual Indemnification; Liability Cap
7. Default & Remedies
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

This Severance and Mutual Release Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [FULL LEGAL NAME OF EMPLOYER], a [FORM OF ENTITY] organized under the laws of [STATE] (“Company”), and [EMPLOYEE LEGAL NAME] (“Employee,” and together with Company, the “Parties,” and each, a “Party”).

WHEREAS, Employee’s employment with Company will terminate effective [TERMINATION DATE] (the “Termination Date”); and
WHEREAS, Company desires to provide Employee with certain severance benefits in exchange for the releases, covenants, and agreements set forth herein;

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows.

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. Capitalized terms not defined herein shall have their plain English meaning consistent with prevailing California employment law.

“Agreement” means this Severance and Mutual Release Agreement, including all exhibits and schedules.

“ADEA” means the federal Age Discrimination in Employment Act of 1967.

“ADEA Consideration Period” has the meaning provided in Section 6.2(b).

“Claims” means any and all actions, causes of action, charges, complaints, contracts, covenants, agreements, promises, debts, damages, judgments, demands, costs, losses, liabilities, and expenses of any kind or character, known or unknown, suspected or unsuspected, fixed or contingent.

“Confidential Information” has the meaning provided in Section 5.1.

“Release” means the release of Claims described in Section 6.1.

“Severance Benefits” has the meaning provided in Section 3.2(a).

“Severance Cap” has the meaning provided in Section 6.5(b).

“Revocation Period” means the seven (7) calendar-day period after Employee signs this Agreement during which Employee may revoke acceptance as provided in Section 6.2(c).

3. OPERATIVE PROVISIONS

3.1 Termination of Employment

(a) Employment Termination. Employee’s employment with Company shall terminate on the Termination Date.
(b) Final Wages & Accrued Benefits. On or before the Termination Date, Company shall pay Employee all wages earned, accrued and unused PTO, and any business expense reimbursements due, in accordance with Cal. Lab. Code § 201.
(c) No Further Compensation. Except as expressly provided herein, Employee shall not be entitled to any other compensation or benefit from Company following the Termination Date.

3.2 Severance Benefits

(a) Severance Payment. Subject to Employee’s timely execution and non-revocation of this Agreement, Company shall pay Employee a lump sum of $[SEVERANCE AMOUNT] (the “Severance Benefits”) within [NUMBER] days after the Revocation Period expires.
(b) COBRA Subsidy. [OPTIONAL] Company shall pay [__]% of Employee’s COBRA premiums for [NUMBER] months following the Termination Date, subject to Employee’s timely election of COBRA continuation and applicable plan terms.
(c) Outplacement Services. [OPTIONAL] Company will provide outplacement assistance through [VENDOR] for [NUMBER] months.

3.3 Acknowledgment of Adequate Consideration

Employee acknowledges that the Severance Benefits constitute consideration to which Employee is not otherwise entitled absent execution of this Agreement.

3.4 Tax Matters

All payments under this Agreement shall be subject to applicable federal, state, and local withholding taxes. The Parties intend that the Severance Benefits comply with, or be exempt from, Internal Revenue Code § 409A. Employee is solely responsible for any tax consequences arising from receipt of the Severance Benefits.

3.5 Return of Company Property & Transition

(a) Return of Property. No later than the Termination Date, Employee shall return to Company all Company property, including keys, devices, documents, and Confidential Information, whether in tangible or electronic form.
(b) Transition Cooperation. Employee agrees to provide reasonable assistance for [NUMBER] weeks post-Termination Date to transition duties, limited to [SCOPE], with no additional compensation beyond the Severance Benefits.

4. MUTUAL REPRESENTATIONS & WARRANTIES

4.1 Authority. Each Party represents that it has full power and authority to enter into this Agreement and that doing so will not violate any contractual or legal obligations.
4.2 No Reliance. Each Party acknowledges that it has not relied on any statement or representation not set forth in this Agreement.
4.3 Voluntary Execution. Each Party represents that it enters this Agreement voluntarily, without coercion, and after having had the opportunity to consult legal counsel.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality

(a) Definition. “Confidential Information” means all non-public business information of Company, including intellectual property, trade secrets, and proprietary data, whether disclosed before or after the Effective Date.
(b) Non-Disclosure. Employee shall not disclose Confidential Information except as required by law or with Company’s prior written consent.
(c) Exclusions. Nothing herein prohibits disclosures protected by the National Labor Relations Act, 29 U.S.C. §§ 151–169, or legally protected whistleblower activities.

5.2 Nondisparagement

Each Party agrees not to make any false, misleading, or disparaging statements about the other Party. This Section does not restrict the Parties from truthful statements required by law or legal process.

5.3 [Optional] Non-Solicitation

For a period of [NUMBER] months following the Termination Date, Employee shall not, directly or indirectly, solicit for employment any person employed by Company. [// GUIDANCE: Carefully evaluate enforceability under Cal. Bus. & Prof. Code § 16600.]

6. RELEASE; WAIVER OF CLAIMS; INDEMNIFICATION

6.1 General Mutual Release

(a) Employee Release. Subject to Section 6.4, Employee fully and forever releases Company and its affiliates, officers, directors, employees, and agents (collectively, “Company Released Parties”) from any and all Claims arising on or before the Effective Date, including but not limited to Claims under Title VII, the Fair Labor Standards Act, the California Fair Employment and Housing Act, and any wrongful termination or wage-related Claims.
(b) Company Release. Company releases Employee and Employee’s agents and heirs (collectively, “Employee Released Parties”) from any and all Claims arising on or before the Effective Date, excluding Claims arising from Employee’s fraud, embezzlement, or willful misconduct, if any.

6.2 OWBPA / ADEA Waiver Requirements

(a) Specific Reference. Employee understands that this Release includes a waiver of Claims under the ADEA, as amended by the OWBPA, 29 U.S.C. § 626(f).
(b) Consideration Period. Employee acknowledges receipt of at least twenty-one (21) calendar days (the “ADEA Consideration Period”) to review and consider this Agreement. Employee may sign this Agreement before the end of the ADEA Consideration Period, thereby waiving the balance of such period knowingly and voluntarily.
(c) Revocation Right. Employee may revoke this Agreement within the Revocation Period by delivering written notice to [CONTACT NAME/TITLE] at [ADDRESS/EMAIL] no later than 11:59 p.m. Pacific Time on the seventh (7th) calendar day after signing. This Agreement shall not become effective until the Revocation Period expires without revocation.
(d) Consultation with Counsel. Employee is hereby advised in writing to consult with an attorney prior to executing this Agreement.

6.3 California Civil Code § 1542 Waiver

Employee expressly waives the provisions of California Civil Code § 1542, which reads:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

6.4 Carve-Outs (Non-Waivable Claims)

Nothing in this Agreement shall be construed to waive or limit:
(i) Claims arising after the Effective Date;
(ii) Claims for workers’ compensation, unemployment insurance, or state disability insurance;
(iii) Rights to vested benefits under any employee benefit plan governed by ERISA;
(iv) Rights to file or participate in a charge or investigation with the EEOC, DFEH, NLRB, or other governmental agency (though Employee waives any monetary recovery from such agencies);
(v) Claims that cannot lawfully be waived under applicable law, including Private Attorneys General Act (“PAGA”) representative claims, except that Employee waives recovery of any non-representative PAGA penalties individually available.

6.5 Mutual Indemnification; Liability Cap

(a) Mutual Indemnity. Each Party (“Indemnifying Party”) shall indemnify, defend, and hold harmless the other Party and its Released Parties (“Indemnified Parties”) from third-party Claims arising from the Indemnifying Party’s breach of this Agreement.
(b) Liability Cap. Except for Claims based on fraud, intentional misconduct, or breach of Section 5.1 (Confidentiality), each Party’s aggregate liability under this Agreement shall not exceed the Severance Benefits actually paid (the “Severance Cap”).

7. DEFAULT & REMEDIES

7.1 Events of Default. A Party shall be in default if it breaches any material obligation under this Agreement and fails to cure within ten (10) days after written notice.
7.2 Remedies. Upon default, the non-breaching Party may (i) seek injunctive relief limited to preventing further breach of Sections 5 and 6, (ii) recover damages up to the Severance Cap, and (iii) recover reasonable attorney fees and costs incurred in enforcement.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California and applicable federal law, without regard to conflict-of-laws principles.
8.2 Forum Selection. Subject to Section 8.3, each Party consents to the exclusive jurisdiction of the state and federal courts located in [COUNTY], California for any action arising under this Agreement.
8.3 [Optional] Binding Arbitration. Any dispute arising from this Agreement shall be resolved by final and binding arbitration before JAMS in [CITY], California, pursuant to its Employment Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 [Optional] Jury Trial Waiver. TO THE EXTENT NOT PROHIBITED BY LAW, EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.
8.5 Limited Injunctive Relief. Notwithstanding the foregoing, either Party may seek temporary or preliminary injunctive relief in a court of competent jurisdiction solely to enforce Sections 5 or 6 pending arbitration or court resolution.

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 Party waiving.
9.2 Assignment. This Agreement is personal to Employee and may not be assigned. Company may assign this Agreement to any successor in interest.
9.3 Severability; Reformation. If any provision is held invalid, the remainder shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to be valid and enforceable.
9.4 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements, whether written or oral, with respect to the subject matter hereof.
9.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures transmitted by PDF or electronic signature platform (e.g., DocuSign) shall be deemed originals for all purposes.
9.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the dates set forth below.

[// GUIDANCE: Notarization and witness signatures are generally not required for severance agreements under California law, but you may add if Company policy dictates.]

[END OF DOCUMENT]