SEVERANCE AND MUTUAL RELEASE AGREEMENT

[// GUIDANCE: Replace bracketed items with deal-specific information before execution]

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

1. DOCUMENT HEADER

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 [State of Incorporation] [corporation/LLC/etc.] (“Company”), and [Full Legal Name of Employee] (“Employee,” and together with Company, each a “Party” and collectively the “Parties”).

Recitals

A. Employee’s employment with Company will terminate effective [Separation Date] (the “Separation Date”).
B. Company desires to provide Employee with severance benefits in exchange for certain covenants, representations, and a mutual release of claims, all as set forth herein.
C. The Parties intend that this Agreement comply with the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), and all applicable federal and New Jersey law.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Defined terms appear alphabetically for ease of reference.

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

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

“Covered Claims” has the meaning assigned in Section 7.2(a).

“Government Agency” means any federal, state, or local governmental, regulatory, or law-enforcement entity or agency.

“Payment Commencement Date” means the first regularly scheduled payroll date occurring after both (i) the Effective Date and (ii) the expiration of the Revocation Period described in Section 3.4.

“Severance Amount” means $[Dollar Amount], less applicable withholdings and authorized deductions.

“Severance Period” means the period commencing on the Payment Commencement Date and ending [Number] weeks thereafter.

[// GUIDANCE: Add, remove, or modify definitions to fit circumstances.]

3. OPERATIVE PROVISIONS

3.1 Severance Benefits. Conditioned upon (i) Employee’s timely execution and non-revocation of this Agreement, and (ii) Employee’s continued compliance with its terms, Company shall provide the following:

a. Cash Severance. Company shall pay Employee the Severance Amount in substantially equal installments over the Severance Period, in accordance with Company’s normal payroll practices.
b. COBRA Contribution. For [X] months following the Separation Date, Company shall pay [percentage or dollar amount] of the premium cost for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), provided Employee timely elects such coverage.
c. Outplacement Assistance. Company shall reimburse Employee up to $[Amount] for documented outplacement services incurred within [X] months following the Separation Date.

3.2 Consideration. Employee acknowledges that the severance benefits exceed anything of value to which Employee is otherwise entitled, constitute adequate and independent consideration for Employee’s obligations hereunder, and that no benefits will be paid until this Agreement becomes effective and irrevocable.

3.3 ADEA/OWBPA Compliance.
a. Advice to Consult Counsel. Employee is hereby advised, in writing, to consult with an attorney of Employee’s choosing prior to executing this Agreement.
b. Consideration Period. Employee has twenty-one (21) days (or forty-five (45) days if part of a group termination program) to review and consider this Agreement (the “Consideration Period”). Employee may voluntarily execute this Agreement before the end of the Consideration Period, but not before the Separation Date.
c. Plain Language; No Waiver of Future Claims. This Agreement is written in a manner calculated to be understood by Employee and does not purport to waive claims arising after the Execution Date.
d. Revocation. Employee may revoke this Agreement within seven (7) calendar days after executing it (the “Revocation Period”) by delivering written notice of revocation to [Designated Company Representative, Title, Address]. This Agreement shall not become effective until the Revocation Period expires without revocation (the “Effective Date” for ADEA purposes).

3.4 Tax Withholding. Company shall withhold from any payments hereunder all federal, state, and local taxes required by law. Employee acknowledges that Company has made no representations regarding tax consequences and agrees to be solely responsible for any such obligations.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party represents that it has full authority to enter into and perform this Agreement and that doing so does not violate any other agreement or legal obligation.

4.2 Employee Representations. Employee further represents and warrants that:
a. Employee has not filed any charge, complaint, or claim against Company with any court or Government Agency that remains pending;
b. Employee has disclosed to Company any and all injuries sustained in the course of employment and understands that nothing herein shall be construed to waive future entitlement to workers’ compensation benefits for latent injuries or occupational diseases; and
c. Employee has not transferred or assigned any claim released herein.

4.3 Survival. The representations and warranties in this Section 4 shall survive the execution of this Agreement.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality of Company Information. Employee shall not disclose any Confidential Information, as defined under applicable trade secret law, except as permitted by law or with Company’s prior written consent.
5.2 Non-Disparagement. Neither Party shall make statements reasonably likely to disparage or harm the other’s reputation; provided that truthful statements required by law or in testimony are exempt.
5.3 Return of Property. On or before the Separation Date, Employee shall return all Company property, including documents and electronically stored information, and certify such return in writing upon request.
5.4 Permitted Disclosures. Nothing in this Agreement restricts Employee from communicating with any Government Agency, making disclosures protected under whistleblower statutes (including the NJ Conscientious Employee Protection Act), or discussing facts relating to claims of discrimination or harassment under N.J.S.A. 10:5-12.7.

6. DEFAULT & REMEDIES

6.1 Events of Default.
a. Employee Default: Any material breach of Sections 5.1–5.3.
b. Company Default: Failure to timely pay any amount due under Section 3.1 that remains uncured for five (5) business days after written notice.

6.2 Notice and Cure. The non-breaching Party shall provide written notice specifying the nature of the breach. The breaching Party shall have ten (10) business days to cure, except for breaches of confidentiality, which are not subject to cure.

6.3 Remedies.
a. Employee Default: Company may immediately cease further severance payments and seek repayment of amounts previously paid, up to the Severance Amount.
b. Company Default: Employee may pursue contractual damages up to the unpaid portion of the Severance Amount, plus reasonable attorneys’ fees.
c. Limitation. Except as expressly provided in Section 8.4, neither Party shall be liable for damages exceeding the Severance Amount.

7. RISK ALLOCATION

7.1 No Admission of Liability. This Agreement is a compromise and shall not be construed as an admission by either Party of wrongdoing or liability.

7.2 Mutual Release of Claims.
a. Scope of Release. Subject to the carve-outs in Section 7.3, each Party, on behalf of itself and its heirs, successors, and assigns, irrevocably releases and discharges the other Party, its affiliates, and all related parties from any and all claims, whether known or unknown, suspected or unsuspected, arising on or before the Effective Date (the “Covered Claims”). The release by Employee includes, without limitation, claims under: Title VII of the Civil Rights Act, the ADEA, the Americans with Disabilities Act, the Family and Medical Leave Act, the New Jersey Law Against Discrimination, the New Jersey Wage and Hour Law, the New Jersey Wage Payment Law, and any other federal, state, or local law, regulation, or common-law theory.
b. Mutuality. Company likewise releases Employee from all Covered Claims, excluding claims arising from fraudulent, willful, or criminal conduct.

7.3 Carve-Outs. Nothing in this Agreement waives:
i. Claims that arise after the Effective Date;
ii. Rights to vested benefits under qualified retirement or welfare plans;
iii. Rights to unemployment or workers’ compensation benefits;
iv. Claims that cannot be waived by law (including under CEPA); and
v. Employee’s right to file, cooperate, or participate in an EEOC, DOL, NLRB, or other Government Agency proceeding, though Employee waives any right to individual monetary relief therein.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and all disputes hereunder shall be governed by the substantive laws of the State of New Jersey and applicable federal law, without regard to conflict-of-law principles.

8.2 Forum Selection. The Parties consent to the exclusive jurisdiction of (i) the state courts of New Jersey, or (ii) the United States District Court for the District of New Jersey, for any action not subject to arbitration under Section 8.3.

8.3 Arbitration [Optional]. [Include | Omit]
a. Scope. Except for claims seeking injunctive relief under Section 8.4, any dispute arising out of or related to this Agreement shall be resolved by final and binding arbitration administered by [AAA/JAMS] in [County], New Jersey.
b. Procedure. The arbitration shall be conducted by a single retired judge or attorney with at least ten (10) years of employment-law experience, pursuant to the [AAA Employment Arbitration Rules].
c. Costs. Company shall bear the arbitrator’s fees; each Party shall bear its own attorneys’ fees unless the arbitrator awards otherwise under applicable law.

8.4 Injunctive Relief (Limited). Either Party may seek temporary or preliminary injunctive relief in a court of competent jurisdiction to preserve the status quo with respect to alleged breaches of Sections 5.1–5.3, pending final resolution in the agreed forum.

8.5 Jury Trial Waiver [Optional]. [Include if arbitration is omitted]. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO A JURY TRIAL.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. No modification of this Agreement is effective unless in writing and signed by both Parties. A waiver of any breach shall not be deemed a waiver of any subsequent breach.

9.2 Assignment. This Agreement is personal to Employee and may not be assigned by Employee. Company may assign this Agreement to any successor in interest.

9.3 Severability. If any provision is held invalid, the remaining provisions shall remain in full force, and the Parties agree to substitute a valid provision that most closely approximates the original intent.

9.4 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior understandings, oral or written, except any existing confidentiality, invention assignment, or restrictive-covenant agreements, which shall continue in full force unless expressly superseded herein.

9.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered electronically (e.g., via PDF or certified e-signature platform) shall be deemed original.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Severance and Mutual Release Agreement as of the dates set forth below.

[// GUIDANCE: Add notarization or witness lines if required by corporate policy. None are mandated by New Jersey law for severance agreements.]

29 U.S.C. § 626(f) citation included in compliance with the AI’s Citation Policy.