Severance Agreement

SEVERANCE AND RELEASE AGREEMENT

(Colorado – Single Employee Termination)

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
11. Colorado POWR Act Addendum

1. DOCUMENT HEADER

1.1 Parties

This Severance and Release Agreement (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE] [corporation/limited liability company] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee,” and together with Employer, the “Parties,” and each, a “Party”).

1.2 Effective Date

The “Effective Date” shall be the eighth (8th) calendar day after Employee signs this Agreement, provided Employee has not revoked it pursuant to Section 3.7.

1.3 Recitals

A. Employer and Employee have mutually agreed to terminate Employee’s employment effective [TERMINATION DATE] (“Separation Date”).
B. Employer wishes to provide Employee with severance benefits conditioned upon Employee’s execution and non-revocation of this Agreement.
C. Employee desires to accept such severance benefits and to release Employer from certain claims, all as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

The following capitalized terms shall have the meanings set forth below. Terms used in the singular include the plural and vice-versa.

“Affiliate” – Any entity controlling, controlled by, or under common control with a Party, directly or indirectly, through one or more intermediaries.

“Covered Claims” – All claims released by Employee under Section 3.4 and by Employer under Section 3.5, subject to the exclusions stated therein.

“Severance Benefits” – The consideration described in Section 3.1.

3. OPERATIVE PROVISIONS

3.1 Severance Benefits

Subject to Employee’s timely execution and non-revocation of this Agreement:

a. Cash Severance: Employer shall pay Employee a lump-sum of $[SEVERANCE AMOUNT] (the “Severance Payment”), less applicable withholdings, within ten (10) business days after the Effective Date.

b. Health-Coverage Subsidy: Employer shall pay [SPECIFY % OR DOLLAR AMOUNT] of Employee’s eligible continuation-coverage premium for [NUMBER] months following the Separation Date, or until Employee becomes eligible for other employer-provided group health coverage, whichever occurs first, subject to timely election, the plan, and applicable law.

c. Amounts Already Owed: The Severance Benefits do not include earned, vested, determinable wages or compensation, reimbursable expenses, or vested benefits already owed. After an employer-initiated discharge, earned, vested, determinable, and unpaid wages are due immediately, subject to the accounting-unit timing rules in C.R.S. § 8-4-109(1)(a); after a resignation, wages are due on the next regular payday under § 8-4-109(1)(b). If Employer provides paid vacation, all vacation pay earned and determinable under the controlling agreement must be paid upon separation under § 8-4-101(14)(a)(III). Employee identifies any known unpaid-compensation issue here: [________________________________].

3.2 Consideration & Acknowledgments

The Severance Benefits are consideration in addition to anything Employee is already entitled to receive.

3.3 Consultation Period – OWBPA Compliance

Employer hereby advises Employee in writing to consult with an attorney of Employee’s choosing before signing this Agreement. Employee has at least twenty-one (21) calendar days to review and consider it. 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 forty-five (45) calendar days and provide at the beginning of that period the written decisional-unit, eligibility, time-limit, job-title, and age information required by 29 U.S.C. § 626(f)(1)(H). Employee may sign sooner only by a knowing and voluntary choice not induced by Employer.

3.4 Employee Release of Claims

a. General Release. In exchange for the Severance Benefits, Employee, on behalf of Employee and Employee’s heirs, assigns, and representatives, irrevocably releases Employer, its Affiliates, and all of their respective officers, directors, employees, insurers, and agents (the “Released Parties”) from claims, causes of action, charges, complaints, liabilities, or obligations of any kind, whether known or unknown, based on acts occurring on or before the date Employee signs this Agreement, including:

i. claims arising out of or relating to Employee’s employment or the termination thereof;
ii. claims under the federal Age Discrimination in Employment Act (“ADEA”), the Colorado Anti-Discrimination Act, and other federal, state, or local employment laws;
iii. claims in contract or tort; and
iv. claims for attorneys’ fees and costs.

b. OWBPA Specific Waiver. The ADEA waiver is written to be understood, expressly names the ADEA, excludes later-arising claims, and is supported by additional consideration. Section 3.3 provides written attorney advice, the applicable 21- or 45-day consideration period, and group disclosures; Section 3.7 provides the seven-day revocation period.

c. Excluded Claims. Notwithstanding the foregoing, Employee does not waive:
i. claims arising after Employee signs this Agreement;
ii. rights to enforce this Agreement;
iii. rights to unemployment or workers’ compensation;
iv. vested benefits under Employer’s qualified retirement plans;
v. rights to file a charge, communicate with, provide information to, or participate in an investigation or proceeding before a government agency. Any effect of the release on individual monetary recovery is governed by applicable law.

3.5 Employer Mutual Release

Employer, on behalf of itself and its Affiliates, releases Employee from claims arising out of Employee’s employment based on acts occurring on or before the date Employee signs this Agreement, excluding (i) claims based on fraud, embezzlement, or willful misconduct, and (ii) claims to enforce this Agreement.

3.6 Return of Property

No later than the Separation Date, Employee shall return Employer property and delete Employer data from personal devices except material that must be preserved by law, litigation hold, or written instruction.

3.7 Revocation Right

Employee may revoke this Agreement within seven (7) calendar days after signing by delivering written notice of revocation to [EMPLOYER CONTACT NAME & ADDRESS]. If Employee revokes, this Agreement shall be void ab initio, and Employer shall have no obligation to provide Severance Benefits.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party represents that it has full authority to enter into and perform this Agreement.

4.2 Pending Claims. Employee has disclosed any pending lawsuit, arbitration, charge, or complaint against Employer here: [________________________________].

4.3 Tax Treatment. 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.

4.4 Survival. The representations and warranties in this Article 4 shall survive the Effective Date for the applicable statute-of-limitations period.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality of Legitimate Proprietary Information. The confidentiality obligation applies equally to both Parties: each shall protect the other’s legitimate trade secrets and non-public proprietary information. This Section does not limit Employee’s ability to disclose or discuss the underlying facts of any alleged discriminatory or unfair employment practice. Employee may make such disclosures, including disclosure of the existence and terms of a settlement:

a. to immediate family members, a religious advisor, medical or mental-health provider, mental or behavioral-health therapeutic support group, legal counsel, financial advisor, or tax preparer;
b. to any local, state, or federal government agency for any reason, without first notifying Employer;
c. in response to legal process, including a subpoena or testimony, without first notifying Employer; and
d. for all other purposes required by law.

Disclosures within this Section do not constitute disparagement.

5.2 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, disclosures permitted by Section 5.1, government communications, testimony, or other conduct protected by law. If Employer disparages Employee to a third party, Employer may not enforce Sections 5.1 or 5.2 or seek damages against Employee or another Party for violating those Sections; all other terms remain enforceable.

5.3 Employee 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.

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

6. DEFAULT & REMEDIES

6.1 Events of Default
a. Employee Breach: Any material breach of Article 5.
b. Employer Breach: Failure to pay Severance Benefits within the timeframes set forth in Section 3.1.

6.2 Notice & Cure
The non-breaching Party shall provide written notice and a ten (10) business-day cure period (five (5) business days for payment defaults).

6.3 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. This template creates no prevailing-party fee shift or liquidated-damages remedy.

7. RISK ALLOCATION

7.1 Mutual Release. The releases in Sections 3.4 and 3.5 allocate the risk of past liabilities between the Parties.

7.2 Protected Rights. Nothing in this Agreement interferes with agency enforcement authority, waives rights arising after Employee signs, or waives rights that cannot lawfully be released, including rights protected from waiver by C.R.S. § 8-4-121.

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 and any dispute arising hereunder shall be governed by the laws of the State of Colorado and applicable federal law, without regard to conflicts-of-law principles.

8.2 Forum. An action concerning this Agreement may be filed in a Colorado 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 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements, whether written or oral, concerning the subject matter hereof.

9.2 Amendment & Waiver. Any amendment must be in a writing signed by both Parties. No waiver shall be effective unless in writing and signed by the waiving Party.

9.3 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Employer may assign to any successor by merger, consolidation, or sale of substantially all assets, provided the assignee assumes Employer’s obligations.

9.4 Severability. If any provision is found unenforceable, the remainder remains in effect to the extent permitted by law. This clause does not authorize expansion of a release or restraint.

9.5 Successors & Assigns. This Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures delivered via facsimile, PDF, or electronic signature platform (e.g., DocuSign) shall be deemed original signatures.

9.7 Headings. Section headings are for convenience only and shall not affect interpretation.

9.8 Construction. The Parties acknowledge that this Agreement was jointly drafted and agree that no presumption against the drafter shall apply.

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.]

11. COLORADO POWR ACT ADDENDUM

The Parties attest that Sections 5.1 and 5.2 comply with all requirements of C.R.S. § 24-34-407(1), including equal application, the express disclosure safeguards, the rule that permitted disclosure is not disparagement, the consequence of Employer disparagement, and the absence of punitive liquidated damages. This addendum is attached to and part of the Agreement.

Sources and References

• 29 U.S.C. § 626(f)
• 29 C.F.R. § 1625.22
• Colorado Department of Labor and Employment, Colorado Wage Act (revised Jan. 1, 2023)
• Colorado HB 25-1001, ch. 228 (official 2025 amendments affecting C.R.S. § 8-4-109)
• Colorado SB 23-172, § 5 (official enactment of C.R.S. § 24-34-407)