Severance Agreement - New Mexico

SEVERANCE AND RELEASE AGREEMENT

(New Mexico)

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Parties.
   This Severance and Release Agreement (the “Agreement”) is made by [EMPLOYER LEGAL NAME], a [STATE OF INCORP.] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Company”), and [EMPLOYEE NAME], an individual residing in [COUNTY, NM] (“Employee”). Company and Employee are each a “Party” and collectively the “Parties.” Its Effective Date is stated below.

2. Recitals.
   A. Employee’s employment with Company will terminate effective [TERMINATION DATE] (“Separation Date”).
   B. Company desires to provide Employee with severance benefits in exchange for Employee’s promises, including a release of claims, as set forth herein.
   C. Employee desires to accept such benefits and enter into this Agreement subject to the terms and conditions below.

3. Consideration.
   The mutual covenants herein and payment of the Severance Benefits (defined below) constitute good and sufficient consideration.

4. Effective Date and Revocation.
   Employee may revoke this Agreement by delivering written notice to [CONTACT NAME, DELIVERY METHOD, AND ADDRESS] within seven calendar days after signing. This Agreement becomes effective on the eighth calendar day after Employee signs, provided Company has also signed and Employee has not revoked (the “Effective Date”).

II. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below:

• “Agreement” – This Severance and Release Agreement, including all exhibits and schedules.
• “COBRA” – Continuation coverage pursuant to 29 U.S.C. § 1161 et seq.
• “Confidential Information” – All non-public business, technical, or proprietary information of Company, whether oral, written, electronic, or graphic.
• “Consideration Period” – The period selected in the ADEA compliance section, starting when Employee receives this Agreement and any required group disclosure.
• “Releasees” – Company and the following specifically identified related entities and persons, if any: [LEGAL NAMES AND CAPACITIES / NONE].
• “Revocation Period” – Seven (7) calendar days following Employee’s execution of this Agreement.
• “Severance Amount” – $[AMOUNT], representing [NUMBER] weeks of Employee’s final base salary, less applicable withholdings.
• “Severance Benefits” – The Severance Amount plus any additional benefits listed in Section III.2.

III. OPERATIVE PROVISIONS

1. Separation of Employment.
   Employment terminates on the Separation Date. If Company discharges Employee, fixed and definite unpaid wages become due immediately upon demand and must be paid within five days of discharge; other compensation must be settled and paid within ten days. NMSA 1978, § 50-4-4(A)-(B). If Employee resigns without a written contract for a definite period, wages are due on the next succeeding payday under NMSA 1978, § 50-4-5. The Healthy Workplaces Act does not itself require cash reimbursement for unused earned sick leave at separation. NMSA 1978, § 50-17-3(B)(4). Other PTO, benefits, bonuses, commissions, reimbursements, and equity will be handled under the governing plan or agreement and applicable law. Complete the payment ledger below; amounts already owed do not depend on this Agreement.

2. Severance Benefits.
   Subject to Employee’s timely execution and non-revocation of this Agreement:

2.1 Payment. Company shall pay the Severance Amount in a lump sum within ten (10) business days after the later of (i) the Separation Date or (ii) expiration of the Revocation Period.

2.2 COBRA Subsidy [optional]. Company will pay the employer-portion of COBRA premiums for [NUMBER] months following the Separation Date, provided Employee validly elects COBRA.

2.3 Outplacement [optional]. Company will reimburse up to $[CAP] for outplacement services incurred within six (6) months post-Separation Date.

2.4 Additional Benefits [optional]. ☐ Reference letter: [SIGNER AND TERMS]. ☐ Additional equity treatment: [AWARD AND PLAN TERMS]. ☐ Other: [DESCRIPTION].

3. Conditions Precedent.
   Delivery, execution, and non-revocation of this Agreement are conditions precedent only to the Severance Benefits, not to final wages or other amounts already owed.

4. Taxes.
   Company shall treat employee severance as wages, make applicable payroll withholdings, and report it on Form W-2. Employee is responsible for taxes due beyond withholdings made by Company.

IV. REPRESENTATIONS & WARRANTIES

1. Mutual Authority. Each Party has full legal power and authority to enter into and perform this Agreement.

2. Employee Representations.
   a. Voluntary Execution; Legal Counsel. Employee has read this Agreement, understands it, and has been advised in writing to consult legal counsel.
   b. No Assignment of Claims. Employee has not assigned or transferred any claim released herein.
   c. ADEA selection: ☐ Employee is at least 40 years old; the ADEA waiver section applies. ☐ Employee is younger than 40; no ADEA claim is released.

3. Compensation and Pending Matters. Employee has identified any known unpaid-compensation or benefit issue here: [________________________________]. Identify any pending agency charge, court case, workers' compensation claim, or benefit appeal that needs separate treatment: [MATTER AND CASE NUMBER / NONE]. This disclosure does not waive protected agency rights or delay payment of amounts already owed.

4. Survival. The representations and warranties in this Article IV survive execution and delivery of this Agreement.

V. COVENANTS & RESTRICTIONS

1. Confidentiality. Employee shall protect legitimate trade secrets and non-public proprietary information. This Section does not restrict truthful testimony, government reports, protected communications, discussions of wages or working conditions protected by law, or other protected conduct. The Agreement itself is not designated categorically confidential.

Trade secret immunity notice. Under 18 U.S.C. § 1833(b), an individual is not criminally or civilly liable under federal or state trade secret law for disclosing a trade secret (a) in confidence to a federal, state, or local government official, directly or indirectly, or to an attorney, solely to report or investigate a suspected violation of law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal. An individual suing for retaliation for reporting a suspected violation of law may disclose the trade secret to counsel and use it in the proceeding if any document containing it is filed under seal and the individual does not otherwise disclose it except by court order.

2. Non-Disparagement. During [TIME 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, government communications, whistleblower reports, testimony, discussions of wages or working conditions protected by law, or other protected conduct.

3. Cooperation. Upon reasonable notice, Employee shall cooperate with Company in any pending or future investigations or proceedings related to Employee’s employment.

4. Return of Property. On or before the Separation Date, or another date the Parties state below, Employee shall return the Company property listed here. The Parties shall record the delivery method and receipt without requiring destruction or surrender of material Employee may lawfully retain.

5. Post-Termination Restrictive Covenants. No noncompetition or non-solicitation covenant is included. Identify any existing agreement that the Parties intend to preserve or terminate: [TITLE, DATE, AND TREATMENT / NONE]. Any separate covenant must be reviewed under current New Mexico law for the employee’s occupation and the covenant’s scope.

VI. DEFAULT & REMEDIES

1. Events of Default.
   a. Employee materially breaches Article V;
   b. Either Party materially breaches Article IV representations.

2. Notice & Cure. The non-breaching Party must provide written notice specifying the default. The breaching Party has ten (10) business days to cure, if curable.

3. Lawful 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, delays amounts already owed, or creates a prevailing-party fee shift.

VII. RISK ALLOCATION

1. Mutual Release & Waiver.

1.1 Employee Release. In exchange for the additional Severance Benefits, and subject to the revocation right and exclusions below, Employee releases the identified Releasees from lawfully waivable claims, whether known or unknown, based on acts occurring on or before the date Employee signs this Agreement, including claims under the New Mexico Human Rights Act, other applicable discrimination laws, contract, tort, and common law. If the ADEA route below is selected and completed, this release specifically includes claims under the Age Discrimination in Employment Act, 29 U.S.C. § 626(f), through the signing date.

1.2 Company Release. Company releases Employee from claims Company has based on acts occurring on or before Employee signs this Agreement, excluding fraud, embezzlement, willful misconduct, and claims that cannot legally be waived.

1.3 Scope Limitations. This private agreement does not release Employee's unpaid minimum-wage or overtime claim under the Fair Labor Standards Act, 29 U.S.C. §§ 206–207 and 216. Nothing herein waives (a) claims arising after Employee signs, (b) final wages, vested benefits, unemployment, workers’ compensation, or rights that cannot be waived by law, or (c) Employee’s ability to file a charge, report, or complaint with, or participate in a proceeding before, a government agency. If Employee works for or contracts with a New Mexico public employer, this Agreement does not restrict communications, testimony, objections, or refusals protected by NMSA 1978, §§ 10-16C-2 and 10-16C-3. Any effect of the release on individual monetary recovery is governed by applicable law.

2. 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.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Agreement is governed by the laws of the State of New Mexico and applicable U.S. federal law, without regard to conflict-of-law principles.

2. Forum. An action concerning this Agreement may be filed in a New Mexico state or federal court with subject-matter and personal jurisdiction and proper venue.

3. Arbitration. No arbitration clause is included. If selected, use a separately reviewed addendum addressing formation, costs, discovery, remedies, and governing law.

4. Jury Trial. No predispute jury waiver is included in this template.

IX. GENERAL PROVISIONS

1. Amendment; Waiver. Any amendment or waiver must be in a writing signed by both Parties. A waiver of any breach is not a waiver of subsequent breaches.

2. Assignment. Employee may not assign this Agreement. Company may assign to a successor by merger, consolidation, or asset sale.

3. Successors & Assigns. This Agreement binds and inures to the benefit of the Parties and their respective successors and permitted assigns.

4. Severability; Reformation. If a provision is held invalid, the Parties ask that any lawful remainder be enforced and that the invalid provision be modified only if applicable law permits.

5. Entire Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes all prior agreements concerning the subject matter.

6. Counterparts; Electronic Signatures. The Parties agree to transact electronically and may execute this Agreement in counterparts, including by electronic signature, each of which is deemed an original and together one instrument.

X. EXECUTION BLOCK

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

[OPTIONAL NOTARY/ WITNESS BLOCKS PER NM REQUIREMENTS]

ADEA COMPLIANCE CERTIFICATIONS

If Employee is at least 40 and an ADEA waiver is requested, select one route before delivery:

☐ Individual separation: Employee has at least 21 calendar days after receiving this Agreement to consider it.

☐ Exit incentive or other group or class termination program: Employee has at least 45 calendar days after receiving this Agreement and the completed Schedule A to consider them. Company must give the written disclosures in Schedule A at the start of that period.

☐ Settlement of a filed EEOC charge or court action: Attach a separately reviewed waiver for 29 U.S.C. § 626(f)(2) and state its reasonable consideration period: [ATTACHMENT AND PERIOD].

Employee is advised in writing to consult an attorney before signing. The ADEA release covers no right or claim arising after signing and is exchanged for consideration in addition to anything already owed. Employee may revoke this Agreement, including the ADEA waiver, within seven calendar days after signing by delivering written notice to the recipient and address in Section I.4. The ADEA waiver is not effective or enforceable until that revocation period expires without revocation.

Nothing requires tender back of consideration or imposes a condition precedent, penalty, or another limitation adversely affecting Employee’s right to challenge the ADEA waiver. Attorneys' fees or costs specifically authorized under federal law are unaffected.

SCHEDULE A — GROUP OR CLASS PROGRAM DISCLOSURES

Complete and deliver this schedule with the Agreement if the group or class ADEA route is selected. Otherwise mark Not applicable: [APPLICABLE / NOT APPLICABLE].

Decisional unit or group covered by the program: [SPECIFY UNIT AND BOUNDARIES]

Eligibility factors: [SPECIFY FACTORS]

Program time limits: [SPECIFY START, END, AND ELECTION DEADLINES]

Job titles and individual ages of all employees eligible or selected for the program:

Individual ages of employees in the same job classification or organizational unit who were not eligible or selected:

Attach additional rows as needed. Do not identify employees by name in this disclosure.

Sources and References

• Current NMSA 1978 Chapter 50
• Current NMSA 1978 Chapter 28
• Current NMSA 1978 Chapter 10
• 29 U.S.C. § 626
• 29 U.S.C. § 631
• 29 U.S.C. § 157
• 18 U.S.C. § 1833
• 29 C.F.R. §§ 1625.22–1625.23