SEVERANCE AND RELEASE AGREEMENT
(Delaware – Single‐Employee Termination)
[// GUIDANCE: This template is designed for use when terminating a single employee in Delaware. For “group terminations” (20+ employees or other OWBPA triggers), expand the Consideration Period to 45 days and attach the required decisional‐unit disclosures.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties.
This Severance and Release Agreement (the “Agreement”) is made and entered into as of [Effective Date] (the “Effective Date”) by and between [Company Legal Name], a [Delaware corporation/other entity] (“Employer”), and [Employee Legal Name] (“Employee”) (each a “Party,” and collectively, the “Parties”).
1.2 Recitals.
A. Employee’s employment with Employer will terminate effective [Termination Date] (the “Separation Date”).
B. Employer desires to provide Employee with severance benefits conditioned upon Employee’s execution and non-revocation of this Agreement.
C. The Parties intend this Agreement to constitute a knowing and voluntary waiver of claims, including under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. (“ADEA”), and the Delaware Discrimination in Employment Act, 19 Del. C. §§ 710 et seq.
NOW, THEREFORE, in consideration of the mutual covenants herein and other 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 capitalized terms have the meanings set forth below. Terms defined in a Section shall have the same meaning when used elsewhere herein.
“Agreement” has the meaning set forth in Section 1.
“Applicable Law” means all federal, state, and local statutes, regulations, and ordinances governing the Parties’ rights and obligations, including without limitation the ADEA, the Older Workers Benefit Protection Act (“OWBPA”), the Fair Labor Standards Act, ERISA, and the Delaware Wage Payment and Collection Act.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Consideration Period” has the meaning set forth in Section 3.6(a).
“Dispute” has the meaning set forth in Section 8.1.
“Employer Property” means all files, records, equipment, keys, access cards, and confidential information belonging to Employer.
“Released Claims” has the meaning set forth in Section 7.1(a).
“Severance Payment” means the amount identified in Section 3.2(a).
3. OPERATIVE PROVISIONS
3.1 Separation of Employment.
Employee’s employment will terminate on the Separation Date. As of the Separation Date, Employee shall resign from all offices, directorships, and fiduciary positions with Employer and its affiliates.
3.2 Severance Consideration.
(a) Severance Payment. Employer shall pay Employee a lump-sum cash payment equal to [SeverancePaymentAmount] (less applicable withholdings) within ten (10) business days after the Revocation Period (defined in Section 3.6(b)) expires without revocation.
(b) Benefits Continuation. Subject to COBRA eligibility, Employer shall reimburse Employee for the employer-portion of group health premiums for [Number] months following the Separation Date.
(c) Outplacement Services. Employer shall provide outplacement assistance through a provider of Employer’s choosing for up to [DollarAmount/Months].
(d) No Other Payments. Except as expressly provided herein or required by Applicable Law, Employee shall not be entitled to any further compensation or benefits after the Separation Date.
3.3 Taxes. Employee acknowledges that Employer will withhold all required federal, state, and local taxes. Employee shall be solely responsible for any additional tax liabilities.
3.4 Conditions Precedent. Employer’s obligations in Section 3.2 are conditioned upon:
(i) Employee’s timely execution and delivery of this Agreement;
(ii) expiration of the Revocation Period without revocation; and
(iii) Employee’s return of all Employer Property by the Separation Date.
3.5 No Re-employment. Employee waives any right to future employment with Employer, and Employer has no obligation to hire Employee in the future.
3.6 Statutory ADEA/OWBPA Requirements.
(a) Consideration Period. Employee is hereby advised to consult an attorney before signing and is given twenty-one (21) days to consider this Agreement (the “Consideration Period”). Employee may execute this Agreement before the end of the Consideration Period, acknowledging that such execution is knowing and voluntary.
(b) Revocation Period. Employee may revoke this Agreement within seven (7) calendar days after execution (the “Revocation Period”) by delivering written notice to [Designated Employer Contact]. This Agreement shall not become effective until the Revocation Period expires without revocation.
(c) Knowing and Voluntary Waiver. Employee acknowledges that the release of ADEA claims is knowing and voluntary in accordance with 29 U.S.C. § 626(f).
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Representations. Each Party represents and warrants that:
(a) it has full power and authority to enter into this Agreement;
(b) the execution and performance of this Agreement do not violate any other agreement to which it is a party; and
(c) it has not assigned any claim released herein.
4.2 Employee Representations. Employee further represents that:
(a) Employee has reported all hours worked and has been paid all wages, salary, overtime, accrued vacation, and other compensation owed through the Separation Date, except as expressly provided in this Agreement;
(b) Employee has not filed, caused to be filed, or presently is a party to any claim, complaint, or action against Employer, except as disclosed in writing to Employer; and
(c) Employee is not aware of any facts that would establish or support a claim of wrongdoing by Employer not already disclosed to Employer.
4.3 Survival. The representations and warranties in this Section shall survive execution of this Agreement.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality of Agreement. Employee shall keep the terms of this Agreement strictly confidential, except (i) to immediate family, legal counsel, and tax advisors who agree to be bound by similar confidentiality, (ii) as required by law, or (iii) to the extent Employer publicly discloses the Agreement.
5.2 Non-Disparagement. Employee shall not make any statement, orally or in writing, that disparages or is reasonably likely to damage Employer’s reputation. Employer shall instruct its executive officers not to disparage Employee.
5.3 Cooperation. Employee shall reasonably cooperate with Employer in any investigation, litigation, or administrative proceeding relating to matters within Employee’s knowledge, provided Employer reimburses reasonable out-of-pocket expenses.
5.4 Restrictive Covenants. Any prior confidentiality, invention assignment, non-competition, or non-solicitation agreements remain in full force according to their terms. Nothing herein enlarges or limits such obligations.
6. DEFAULT & REMEDIES
6.1 Events of Default. Employee shall be in default if Employee breaches Sections 5.1–5.4 or the representations in Section 4.
6.2 Notice and Cure. Employer shall provide written notice specifying the breach. Employee shall have ten (10) days to cure, if curable.
6.3 Remedies. Upon uncured default, Employer may:
(a) cease unpaid Severance Payments;
(b) seek repayment of Severance Payment already made, not to exceed the Severance Payment amount; and
(c) pursue all other remedies at law or in equity, subject to the limitations in Section 7.2.
6.4 Attorneys’ Fees. The prevailing Party in any action to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Mutual Release of Claims.
(a) Scope of Release. Subject to Section 7.1(c), each Party irrevocably and unconditionally releases, acquits, and forever discharges the other Party and its affiliates, officers, directors, employees, agents, and successors from any and all claims, liabilities, actions, and causes of action of every kind, whether known or unknown, arising out of any act or omission occurring on or before the Effective Date (“Released Claims”).
(b) Specific Statutory Waivers. Without limiting the foregoing, Employee specifically waives claims under: Title VII of the Civil Rights Act of 1964, the ADA, the ADEA, the FMLA, the FLSA, the WARN Act, ERISA (exclusive of vested benefits), the Delaware Discrimination in Employment Act, the Delaware Whistleblowers’ Protection Act, and any other federal, state, or local employment law.
(c) Exclusions. The Release does not waive (i) claims arising after the Revocation Period, (ii) rights to vested retirement benefits, (iii) claims for workers’ compensation or unemployment benefits, (iv) rights to enforce this Agreement, or (v) claims that cannot be waived by law.
7.2 Limitation of Liability. Except for willful misconduct or claims excluded from the Release, each Party’s aggregate liability under this Agreement shall not exceed the Severance Payment.
7.3 Indemnification. Each Party (the “Indemnifying Party”) shall indemnify, defend, and hold harmless the other Party from any third-party claims arising from the Indemnifying Party’s breach of this Agreement, subject to the liability cap in Section 7.2.
7.4 Force Majeure. Neither Party shall be liable for failure to perform any obligation (other than payment obligations) due to causes beyond its reasonable control, including natural disasters, acts of war, or governmental actions.
8. DISPUTE RESOLUTION
8.1 Definition of Dispute. “Dispute” means any controversy, claim, or dispute arising out of or relating to this Agreement or the breach thereof.
8.2 Negotiation. The Parties shall first attempt in good faith to resolve any Dispute through informal discussions for at least thirty (30) days.
8.3 Optional Arbitration.
[PLACEHOLDER – INITIAL IF ELECTED: ___ Employer ___ Employee]
If both Parties initial above, any unresolved Dispute shall be finally resolved by binding arbitration administered by the American Arbitration Association under its Employment Arbitration Rules. The arbitration shall be held in [County], Delaware, before a single arbitrator. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Forum Selection. Absent mutual election of arbitration, the state and federal courts located in [County], Delaware shall have exclusive jurisdiction. Each Party irrevocably submits to such jurisdiction and waives any objection to venue or forum non conveniens.
8.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and applicable federal law, without regard to conflict-of-laws principles.
8.6 Jury Trial Waiver (Optional).
[PLACEHOLDER – INITIAL IF WAIVED: ___ Employer ___ Employee]
If both Parties initial above, they knowingly and voluntarily waive trial by jury in any Dispute.
8.7 Injunctive Relief. Notwithstanding the foregoing, either Party may seek temporary or preliminary injunctive relief in a court of competent jurisdiction to enforce Sections 5.1–5.4, provided that any other relief shall remain subject to this Article 8.
9. GENERAL PROVISIONS
9.1 Amendments; Waivers. No amendment or waiver of any provision shall be effective unless in writing signed by both Parties. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.
9.2 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Employer may assign this Agreement to a successor by merger, consolidation, or sale of substantially all assets.
9.3 Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the Parties and their respective successors and permitted assigns.
9.4 Severability. If any provision is held invalid or unenforceable, that provision shall be reformed to the minimum extent necessary to make it enforceable, and the remaining provisions shall remain in full force.
9.5 Entire Agreement. This Agreement constitutes the entire understanding of the Parties and supersedes all prior agreements, oral or written, regarding the subject matter.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures delivered electronically or by PDF shall be deemed effective.
9.7 Headings. Section headings are for convenience only and shall not affect interpretation.
9.8 Construction. The Parties have jointly participated in drafting; no presumption against the drafter shall apply.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.
| Employer | Employee |
|---|---|
| [Company Legal Name] | [Employee Legal Name] |
| By: _________ | ______ |
| Name: [Printed Name] | |
| Title: [Title] | |
| Date: ________ | Date: ______ |
[OPTIONAL NOTARY BLOCK – include if required by internal policy or local practice]
[// GUIDANCE:
1. Replace all [PLACEHOLDER] text with deal-specific terms.
2. Confirm that the Severance Payment meets or exceeds any contractual, policy-based, or statutory obligations.
3. Verify COBRA subsidy compliance if federal or Delaware relief programs are in effect.
4. For employees age 40+, retain the ADEA language; for under 40, delete Sections 3.6(a)–(c) and modify the release accordingly.
5. Review existing restrictive-covenant agreements to ensure consistency with Section 5.4.
6. Ensure delivery of a duplicate signed copy to Employee and retain proof of delivery.
]