SEPARATION AND SEVERANCE AGREEMENT
(Indiana – Single‐Employee Termination)
[// GUIDANCE: This template is designed for use when terminating a single employee in the State of Indiana. If the separation involves two or more employees within a 90-day period, replace the 21-day consideration period with 45 days and insert the OWBPA group-termination disclosures required by 29 U.S.C. § 626(f)(1)(H).]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Separation Date
3.2 Severance Benefits
3.3 COBRA & Welfare Benefits
3.4 Accrued Compensation & PTO
3.5 Taxes & Withholding - Representations & Warranties
- Covenants & Restrictions
5.1 Confidentiality
5.2 Non-Disparagement
5.3 Return of Property - Default & Remedies
- Risk Allocation
7.1 Mutual Release of Claims
7.2 Limitation of Liability - Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This Separation and Severance Agreement and Mutual Release (this “Agreement”) is entered into as of [DATE] (the “Effective Date”) by and between:
• [COMPANY NAME], a [STATE] [corporation / limited liability company / other] with its principal place of business at [ADDRESS] (the “Company”); and
• [EMPLOYEE NAME], an individual residing at [ADDRESS] (the “Employee”).
Recitals
A. Employee’s employment with the Company will terminate on the Separation Date (as defined below).
B. The Company desires to provide Employee with severance benefits in exchange for Employee’s promises, including a release of claims, under the terms set forth herein.
C. Both parties intend this Agreement to comply with all applicable federal, state, and local laws, including the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 626(f).
NOW, THEREFORE, in consideration of the mutual covenants herein, the adequacy and receipt of which are hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below; capitalized terms used but not defined herein shall have their ordinary legal meaning.
“ADEA” means the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621–634.
“Agreement” has the meaning set forth in the preamble.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Company” has the meaning set forth in the Document Header.
“Effective Date” has the meaning set forth in the Document Header.
“Employee” has the meaning set forth in the Document Header.
“Parties” means, collectively, the Company and the Employee, and “Party” means either of them.
“Separation Date” means [DATE OF TERMINATION], the date Employee’s employment terminates for all purposes.
“Severance Amount” means the gross sum of US $[AMOUNT], representing [NUMBER] weeks of base salary at Employee’s final rate of pay.
“Severance Benefits” has the meaning given in Section 3.2.
3. OPERATIVE PROVISIONS
3.1 Separation Date
Employee’s employment with the Company shall terminate effective as of the Separation Date. Employee hereby resigns, effective on the Separation Date, from all offices, directorships, and other positions with the Company and any of its affiliates.
3.2 Severance Benefits
(a) Subject to (i) Employee’s timely execution and non-revocation of this Agreement, and (ii) Employee’s continued compliance with its terms, the Company shall provide the following severance benefits (collectively, the “Severance Benefits”):
- Severance Pay: A lump-sum cash payment in the amount of the Severance Amount, payable on the first regular payroll date following the “Payment Effective Date” (defined below).
- COBRA Subsidy: Reimbursement of the employer-share of COBRA premiums for Employee and eligible dependents for [NUMBER] months following the Separation Date or until Employee becomes eligible for other group health coverage, whichever occurs first.
- Outplacement Assistance: [Insert details / monetary cap, if any].
(b) “Payment Effective Date” means the first business day after the later of (i) expiration of the revocation period described in Section 7.1(f) and (ii) the Separation Date.
[// GUIDANCE: If deferred or installment payments are intended, replace lump-sum language accordingly and confirm compliance with I.R.C. § 409A.]
3.3 COBRA & Welfare Benefits
Employee’s eligibility for Company-sponsored benefit plans shall cease on the Separation Date, except as otherwise provided by COBRA or other applicable law.
3.4 Accrued Compensation & PTO
Regardless of whether Employee signs this Agreement, the Company will pay Employee all wages earned through the Separation Date, including accrued but unused paid time off, in accordance with Ind. Code § 22-2-5-1. No other compensation is due except as expressly provided in this Agreement.
3.5 Taxes & Withholding
All Severance Benefits shall be subject to applicable tax withholdings. Employee is solely responsible for any further tax liability arising from payments under this Agreement.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents that it has full authority to enter into and perform this Agreement.
4.2 Consideration. Employee acknowledges that the Severance Benefits constitute consideration to which Employee would not otherwise be entitled.
4.3 No Pending Claims. Employee represents that, as of the Effective Date, Employee has not filed any lawsuit, charge, or complaint against the Company in any court or administrative forum.
4.4 Reliance. Employee acknowledges that Employee has not relied on any representation not expressly set forth in this Agreement.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality
Employee shall keep the terms of this Agreement and all non-public Company information strictly confidential, except as (a) required by law, (b) necessary for tax or legal advice, or (c) permitted under Section 5.4 (Protected Disclosures).
5.2 Non-Disparagement
Employee shall not make any statement, written or oral, that disparages the Company, its products, or personnel. The Company shall instruct its executive officers to refrain from making any public statement materially disparaging Employee.
5.3 Return of Property
No later than the Separation Date, Employee shall return all Company property, including keys, devices, documents, and electronically stored information.
5.4 Protected Disclosures
Nothing in this Agreement prohibits Employee from (i) filing a charge with, communicating with, or participating in any investigation or proceeding before the EEOC, NLRB, SEC, or any other government agency; (ii) engaging in whistleblower activity protected by law; or (iii) discussing wages as permitted by the NLRA.
6. DEFAULT & REMEDIES
6.1 Events of Default. A “Default” occurs if either Party materially breaches this Agreement and fails to cure within ten (10) days after written notice.
6.2 Remedies.
(a) Company’s Remedies: Upon Employee’s Default, the Company may (i) cease any unpaid Severance Benefits, (ii) recover Severance Benefits already paid (to the extent permitted by law), and (iii) seek damages not to exceed the Severance Amount.
(b) Employee’s Remedies: Upon Company’s Default, Employee may pursue contractual damages and reasonable attorney fees.
(c) Injunctive Relief: The Parties agree that monetary damages may be insufficient for a breach of Section 5; therefore, either Party may seek limited injunctive relief to enforce those obligations.
7. RISK ALLOCATION
7.1 Mutual Release of Claims
(a) Release by Employee. Subject to Section 7.1(e) (Excluded Claims), Employee hereby irrevocably releases the Company and its affiliates from all claims, known or unknown, arising on or before the date Employee signs this Agreement, including but not limited to claims under federal, state, or local employment laws, wrongful discharge, tort, contract, wage, benefit, and discrimination statutes— including the ADEA, Title VII, ADA, FMLA, USERRA, and the Indiana Civil Rights Law.
(b) ADEA‐Specific Waiver. Employee acknowledges and agrees that this waiver of ADEA claims is knowing and voluntary as required by 29 U.S.C. § 626(f) and that:
1. Employee has at least twenty-one (21) days to consider this Agreement;
2. Employee is advised in writing to consult an attorney before signing;
3. Employee may revoke this Agreement within seven (7) days after signing by delivering written notice to [CONTACT ADDRESS]; and
4. This Agreement shall not become effective or enforceable until the eighth (8th) day after Employee signs it.
(c) Release by Company. The Company releases Employee from any claims it may have against Employee arising out of Employee’s employment, except for fraud, embezzlement, or acts of gross misconduct discovered after the Effective Date.
(d) No Admission. This Agreement is not an admission of liability by either Party.
(e) Excluded Claims. The releases in this Section do not waive rights (i) to enforce this Agreement, (ii) to vested pension or 401(k) benefits, (iii) to workers’ compensation or unemployment benefits, or (iv) that cannot be waived by law.
(f) Revocation & Effect. If Employee revokes this Agreement within the 7-day period, it shall be null and void, and Employee shall forfeit the Severance Benefits.
7.2 Limitation of Liability
Notwithstanding anything to the contrary, the maximum aggregate liability of either Party for any claim arising out of or related to this Agreement shall not exceed the Severance Amount actually paid (or payable) under Section 3.2.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by the laws of the State of Indiana and applicable federal law, without regard to its conflict-of-laws principles.
8.2 Forum Selection. Subject to Section 8.3, the Parties consent to the exclusive jurisdiction of the state or federal courts located in [COUNTY], Indiana.
8.3 Arbitration (Optional). [OPTION 1 – ELECT:] Any dispute arising from this Agreement shall be resolved by final and binding arbitration administered by the American Arbitration Association under its Employment Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
[OPTION 2 – OMIT:] (Intentionally deleted.)
8.4 Jury Trial Waiver (Optional). [If elected:] THE PARTIES KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
8.5 Attorneys’ Fees. The prevailing Party in any action to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs.
9. GENERAL PROVISIONS
9.1 Amendment & Waiver. No modification of this Agreement is effective unless in a writing signed by both Parties. No waiver of any breach constitutes a waiver of any subsequent breach.
9.2 Assignment. Employee may not assign this Agreement. The Company may assign to any successor by merger, consolidation, or asset sale, provided the assignee assumes all obligations herein.
9.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective heirs, executors, administrators, successors, and permitted assigns.
9.4 Severability. If any provision is held unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to make it enforceable.
9.5 Entire Agreement. This document constitutes the entire agreement between the Parties regarding its subject matter and supersedes all prior agreements, oral or written, relating thereto.
9.6 Counterparts; Electronic Signature. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered by PDF, facsimile, or electronic signature platform shall be effective.
9.7 Headings. Section headings are for convenience only and shall not affect interpretation.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Separation and Severance Agreement as of the dates set forth below.
| COMPANY | EMPLOYEE |
|---|---|
| [COMPANY NAME] | [EMPLOYEE NAME] |
| By: ________ | ______ |
| Name: [AUTHORIZED SIGNATORY] | |
| Title: [TITLE] | |
| Date: ______ | Date: _______ |
[Notary Acknowledgment (if required)]
State of Indiana )
County of ____)
Subscribed and sworn before me on this _ day of _, 20__, by ____.
Notary Public
My Commission Expires: ____
[// GUIDANCE: 1) Confirm whether notarization is necessary under corporate policy; Indiana law does not require notarization for enforceability of a severance agreement, but some employers use it for evidentiary purposes. 2) Review ERISA, WARN, and Section 409A issues if additional benefits (e.g., deferred compensation) are included. 3) Where the employee is under 40, remove ADEA-specific language (replace 21/7 with a shorter acceptance window if desired).]