SEVERANCE AND MUTUAL RELEASE AGREEMENT
(Maine – Federal & State Employment Law Compliant)
[// GUIDANCE: This template is intentionally comprehensive. Delete bracketed guidance and fill in all highlighted placeholders prior to circulation.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Separation & Effective Date
3.2 Severance Benefits & Consideration
3.3 Taxes & Withholdings - Representations & Warranties
- Covenants & Restrictions
5.1 Confidentiality
5.2 Non-Disparagement
5.3 Return of Employer Property - Default & Remedies
- Risk Allocation
7.1 Mutual Release of Claims
7.2 Indemnification
7.3 Limitation of Liability
7.4 ADEA-Specific Waiver - Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This Severance and Mutual Release Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [EMPLOYER LEGAL NAME], a [STATE] [corporation/LLC/etc.] with a principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee”). Employer and Employee are each a “Party” and collectively the “Parties.”
Recitals
A. Employee’s employment with Employer will terminate effective [SEPARATION DATE] (“Separation Date”).
B. Employer desires to provide, and Employee desires to accept, certain severance benefits in exchange for Employee’s promises herein.
C. The Parties intend this Agreement to resolve fully and finally all matters between them, subject to the exclusions expressly set forth below.
2. DEFINITIONS
For ease of reference, the following capitalized terms have the meanings set forth below. Defined terms appear alphabetically.
“Agreement” – as defined in the preamble.
“ADEA” – the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq.
“Claims” – any and all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law or in equity.
“Confidential Information” – all non-public information belonging to or regarding Employer or its affiliates, including trade secrets, financial data, personnel information, customer lists, and proprietary technology.
“Consideration Period” – (i) 21 days for an individual termination; or (ii) 45 days if part of an exit incentive or group termination program.
“Employer Property” – all tangible and intangible property (including data) owned by or licensed to Employer.
“Release Effective Date” – the eighth (8th) calendar day following Employee’s execution of this Agreement, provided Employee has not revoked acceptance.
“Severance Amount” – [SEVERANCE AMOUNT IN DOLLARS], payable per Section 3.2.
“Severance Benefits” – the Severance Amount plus any additional benefits specified in Section 3.2.
[// GUIDANCE: Add additional defined terms as needed for your transaction.]
3. OPERATIVE PROVISIONS
3.1 Separation & Effective Date
(a) Employment Termination. Employee’s employment terminates on the Separation Date.
(b) At-Will Status Preserved. Nothing herein shall be construed as an employment contract beyond the Separation Date.
(c) Effective Date. The Agreement becomes effective on the Release Effective Date, provided it has been executed by both Parties and not revoked by Employee pursuant to Section 7.4(e).
3.2 Severance Benefits & Consideration
(a) Severance Payment. Employer shall pay Employee the Severance Amount, less applicable deductions, in [lump-sum OR [NUMBER] equal installments] commencing within [NUMBER] days following the Release Effective Date.
(b) COBRA/State Continuation. Employer shall provide [NUMBER] months of employer-paid COBRA (or Maine continuation) premiums, subject to timely election by Employee.
(c) Outplacement. Employer shall provide outplacement services through [VENDOR] for up to [DURATION] months.
(d) Sole Consideration. Employee acknowledges that the Severance Benefits exceed any amounts otherwise due.
3.3 Taxes & Withholdings
Employee shall be solely responsible for all federal, state, and local taxes on the Severance Benefits. Employer will withhold amounts required by law and will issue appropriate tax reporting forms.
4. REPRESENTATIONS & WARRANTIES
4.1 Employee represents and warrants that:
(a) Employee has not filed or caused to be filed any Claims against Employer except as expressly reserved herein;
(b) Employee has not transferred or assigned any Claim; and
(c) Employee has had the opportunity to consult independent counsel of Employee’s choice.
4.2 Employer represents and warrants that:
(a) The undersigned has full authority to bind Employer; and
(b) Employer is not in material breach of any obligation to Employee as of the Execution Date that would invalidate this Agreement.
4.3 Survival. The representations and warranties in this Section survive the Release Effective Date.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality
Employee shall maintain the confidentiality of (i) this Agreement (except as required by law or to immediate family, tax advisors, or legal counsel) and (ii) all Confidential Information.
5.2 Non-Disparagement
Each Party agrees not to make statements reasonably foreseeable to harm the reputation of the other Party or its affiliates. Nothing herein restricts truthful statements required by law.
5.3 Return of Employer Property
No later than the Separation Date, Employee shall return all Employer Property in Employee’s possession or control, including all electronic files.
6. DEFAULT & REMEDIES
6.1 Breach Notice. A Party alleging breach must provide written notice specifying the nature of the breach and allow a [10–30] day cure period.
6.2 Remedies.
(a) Monetary Damages. The non-breaching Party may recover direct damages, subject to Section 7.3.
(b) Injunctive Relief (Limited). The Parties acknowledge that breaches of Sections 5.1–5.3 may cause irreparable harm; the non-breaching Party may seek temporary or preliminary injunctive relief solely to enforce those Sections. Permanent injunctive relief is expressly waived.
6.3 Attorneys’ Fees. The prevailing Party in any proceeding to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Mutual Release of Claims
(a) Released Parties. “Employer Released Parties” means Employer, its parents, subsidiaries, affiliates, predecessors, successors, assigns, and each of their current and former officers, directors, employees, and agents. “Employee Released Parties” means Employee and Employee’s heirs, executors, administrators, and assigns.
(b) Employee Release. Subject to the exclusions in Section 7.1(d), Employee fully releases and discharges the Employer Released Parties from any and all Claims arising on or before the Release Effective Date, including but not limited to Claims under:
• Title VII of the Civil Rights Act of 1964
• ADEA (29 U.S.C. § 621 et seq.)
• The Maine Human Rights Act (5 M.R.S. § 4551 et seq.)
• The Americans with Disabilities Act, the FMLA, and any state or local equivalents
• Any contract, tort, or common-law theory.
(c) Employer Release. Employer releases the Employee Released Parties from any Claims arising on or before the Release Effective Date, excluding Claims related to fraud, embezzlement, or willful misconduct discovered after the Effective Date.
(d) Exclusions. Nothing herein releases: (i) Claims arising from breach of this Agreement; (ii) Claims for unemployment or workers’ compensation benefits; (iii) vested retirement benefits; (iv) rights to indemnification under Employer’s bylaws or insurance; or (v) rights that cannot be released as a matter of law.
7.2 Indemnification
Each Party shall indemnify and hold harmless the other Party from any third-party Claims arising from the indemnifying Party’s breach of this Agreement.
7.3 Limitation of Liability
IN NO EVENT SHALL EITHER PARTY’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE SEVERANCE AMOUNT, EXCEPT FOR (i) INDEMNIFICATION OBLIGATIONS UNDER SECTION 7.2 OR (ii) DAMAGES CAUSED BY INTENTIONAL MISCONDUCT OR FRAUD.
7.4 ADEA-Specific Waiver
(a) Knowing and Voluntary. Employee expressly acknowledges that this Agreement is written in a manner calculated to be understood and satisfies the “knowing and voluntary” requirements of 29 U.S.C. § 626(f).
(b) Consideration Period. Employee has [21 OR 45] days to consider this Agreement.
(c) Consultation with Counsel. Employer advises Employee to consult an attorney before signing.
(d) Revocation Period. Employee may revoke acceptance within seven (7) calendar days after signing by delivering written notice to [EMPLOYER CONTACT].
(e) Effective Date. The release of ADEA Claims becomes irrevocable on the Release Effective Date.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maine and applicable federal employment law, without regard to conflict-of-law principles.
8.2 Forum Selection. The Parties consent to the exclusive jurisdiction of the state and federal courts located in [COUNTY], Maine for any action arising hereunder, subject to Section 8.3.
8.3 Arbitration (Optional). [SELECT ONE]
☐ Arbitration Elected – Any dispute shall be finally resolved by confidential 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.
☐ Arbitration Declined – Disputes shall be resolved in accordance with Sections 8.1–8.2.
8.4 Jury Waiver (Optional). [SELECT ONE]
☐ The Parties knowingly waive their right to a jury trial.
☐ No jury trial waiver.
8.5 Limited Injunctive Relief. As provided in Section 6.2(b), the Parties may seek temporary or preliminary injunctive relief but waive any right to permanent injunctive relief unrelated to enforcement of Sections 5.1–5.3.
9. GENERAL PROVISIONS
9.1 Amendment; Waiver. No amendment or waiver is effective unless in writing and signed by both Parties. No waiver shall be deemed a continuing waiver.
9.2 Assignment. Employee may not assign any rights or delegate any obligations under this Agreement. Employer may assign to a successor by merger or asset transfer with written notice to Employee.
9.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
9.4 Severability; Reformation. If any provision is held invalid, the remaining provisions will continue in full force. The Parties authorize the court to modify any unenforceable provision to the minimum extent necessary to make it enforceable.
9.5 Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements concerning the subject matter.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures delivered electronically or by PDF are binding.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.
| EMPLOYER | EMPLOYEE |
|---|---|
| [EMPLOYER LEGAL NAME] | [EMPLOYEE NAME] |
| By: ________ | _______ |
| Name: ______ | Date: _______ |
| Title: _____ | |
| Date: ______ |
[// GUIDANCE: Notarization is not generally required for a severance agreement under Maine law, but add a notary block if your internal policy requires it.]
ACKNOWLEDGMENT OF RECEIPT AND REVIEW
Employee acknowledges that Employee has:
1. Received this Agreement on [DELIVERY DATE];
2. Been advised in writing to consult an attorney;
3. Been given at least [21/45] days to consider the Agreement; and
4. Understands the right to revoke within seven (7) days after signing.
Employee’s Initials: ___ Date: _______
[// GUIDANCE: Ensure all bracketed options are selected and placeholders completed. Attach any required disclosure schedules (e.g., OWBPA “decisional unit” disclosure for group terminations) if the 45-day consideration period applies.]