SEVERANCE AND MUTUAL RELEASE AGREEMENT
(South Carolina – Comprehensive Template)
[// GUIDANCE: This template is drafted for use by South-Carolina-based employers terminating a single employee. If the exit involves two or more employees within a 90-day period, substitute the 45-day consideration period language in §4.3(a)(ii) and append the disclosure schedules required by 29 U.S.C. § 626(f)(1)(H).]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Severance Pay & Benefits
3.2 Consideration; Adequacy - Release & Waiver
4.1 Mutual Release
4.2 Scope of Claims Released
4.3 ADEA/OWBPA Compliance - Covenants
5.1 Confidentiality
5.2 Non-Disparagement
5.3 Return of Company Property - Representations & Warranties
- Risk Allocation
7.1 Indemnification
7.2 Limitation of Liability
7.3 Insurance (Optional) - Default & Remedies
- Dispute Resolution
9.1 Governing Law & Forum Selection
9.2 Arbitration (Optional)
9.3 Jury Trial Waiver (Optional)
9.4 Injunctive Relief (Limited) - General Provisions
- Execution Block
1. DOCUMENT HEADER
This Severance and Mutual Release Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] [ENTITY TYPE] having its principal place of business at [EMPLOYER ADDRESS] (“Company”), and [EMPLOYEE NAME], an individual residing at [EMPLOYEE ADDRESS] (“Employee,” and together with Company, the “Parties,” and each a “Party”).
WHEREAS, Employee’s employment with Company will terminate effective [TERMINATION DATE] (the “Separation Date”); and
WHEREAS, the Parties desire to resolve all matters between them, including any potential disputes, on the terms set forth herein and in compliance with applicable federal and South Carolina law;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following capitalized terms shall have the meanings assigned below. All singular terms include the plural and vice-versa, where the context so requires.
“ADEA” means the federal Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq.
“Affiliate” means any entity controlling, controlled by, or under common control with Company.
“Confidential Information” has the meaning set forth in §5.1.
“Covered Claims” has the meaning set forth in §4.2.
“Release Period” has the meaning set forth in §4.3(a).
“Severance Benefits” has the meaning set forth in §3.1(a).
“Severance Cap” has the meaning set forth in §7.2.
[// GUIDANCE: Add or delete defined terms as needed to match customized provisions.]
3. OPERATIVE PROVISIONS
3.1 Severance Pay & Benefits.
(a) Cash Severance. Subject to Employee’s timely execution (and non-revocation) of this Agreement, Company shall pay Employee a lump-sum cash severance of $[SEVERANCE AMOUNT] (the “Severance Benefits”) within the first regular payroll cycle occurring on or after the eighth (8th) day following Employee’s execution of this Agreement, consistent with the South Carolina Payment of Wages Act.
(b) COBRA Subsidy. [OPTIONAL] Company shall reimburse Employee for the employer portion of COBRA premiums for [NUMBER] months following the Separation Date, provided Employee timely elects COBRA coverage.
(c) Accrued Amounts. Regardless of signing this Agreement, Company will pay all wages earned through the Separation Date, reimburse properly submitted business expenses, and pay unused vacation/PTO pursuant to Company policy and S.C. Code Ann. §41-10-10 et seq.
(d) Tax Withholding. Company shall make customary payroll deductions; Employee is responsible for all applicable taxes.
3.2 Consideration; Adequacy.
Employee acknowledges that the Severance Benefits exceed anything owed absent this Agreement and constitute adequate consideration for the releases and covenants herein.
4. RELEASE & WAIVER
4.1 Mutual Release.
(a) Company Release. Company, on behalf of itself and its Affiliates, releases and forever discharges Employee from any and all claims, liabilities, and causes of action, known or unknown, arising on or before the Effective Date, except for (i) claims arising from Employee’s fraud, criminal misconduct, or intentional wrongdoing; and (ii) obligations under this Agreement (“Company Reserved Claims”).
(b) Employee Release. Subject to §4.2(b), Employee, for Employee and Employee’s heirs, executors, administrators, and assigns, releases and forever discharges Company, its Affiliates, and their respective officers, directors, employees, and agents (the “Company Released Parties”) from any and all claims, liabilities, and causes of action arising on or before the Effective Date (together with Company Reserved Claims, the “Covered Claims”).
4.2 Scope of Claims Released.
(a) Covered Claims include, without limitation, claims under federal, state, or local law for:
• employment discrimination (race, color, religion, sex, national origin, disability, age, genetic information, etc.);
• retaliation or interference;
• breach of contract (express or implied);
• wrongful discharge;
• tortious conduct (negligence, defamation, invasion of privacy, etc.);
• unpaid wages, bonuses, or benefits (other than as expressly preserved herein); and
• violation of public policy.
(b) Exclusions. Nothing herein releases:
(i) claims arising after Employee signs this Agreement;
(ii) rights to unemployment or workers’ compensation benefits;
(iii) vested benefits under any qualified retirement plan pursuant to ERISA;
(iv) rights to enforce this Agreement;
(v) the ability to file a charge or complaint with, or participate in an investigation conducted by, any governmental agency (e.g., EEOC), provided Employee waives the right to recover personal monetary relief.
4.3 ADEA/OWBPA Compliance.
(a) Consideration & Revocation Periods.
(i) Individual Separation. Employee has twenty-one (21) days after receipt of this Agreement (the “Release Period”) to consider its terms, and may revoke acceptance within seven (7) days after execution by delivering written notice to Company pursuant to §10.3; this Agreement shall not be effective until the eighth (8th) day after Employee executes it without revocation.
(ii) Group Termination. [USE IF APPLICABLE] Replace “twenty-one (21)” with “forty-five (45)” in §4.3(a)(i).
(b) Written Advice to Consult Counsel. Employee is hereby advised in writing to consult with an attorney before signing this Agreement.
(c) Knowing and Voluntary. Employee represents that Employee (i) has read this Agreement carefully; (ii) understands its terms; (iii) is signing it voluntarily; and (iv) has not relied on any promise or representation not set forth herein.
5. COVENANTS
5.1 Confidentiality.
Employee shall keep confidential and not disclose, use, or permit the use of any confidential or proprietary information of Company (“Confidential Information”), except as required by law or with Company’s prior written consent.
5.2 Non-Disparagement.
Employee shall refrain from making any false or disparaging statements about Company or the Company Released Parties. Company shall instruct its executive leadership to comply with a reciprocal non-disparagement obligation regarding Employee.
5.3 Return of Company Property.
No later than [RETURN DEADLINE DATE], Employee shall return to Company all Company property, including keys, devices, documents (paper or electronic), and Confidential Information.
6. REPRESENTATIONS & WARRANTIES
6.1 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 contract or legal obligation.
6.2 No Pending Claims. Each Party represents that, as of the Effective Date, it has not filed or caused to be filed any lawsuit, claim, or charge against the other Party or its Affiliates that is not already expressly identified in writing to the other Party.
6.3 Survival. The representations and warranties in this §6 shall survive the execution and delivery of this Agreement.
7. RISK ALLOCATION
7.1 Indemnification.
(a) Employee shall indemnify and hold harmless Company Released Parties from any losses arising out of Employee’s material breach of §§5 or 6.
(b) Company shall indemnify and hold harmless Employee from any losses arising out of Company’s material breach of this Agreement.
7.2 Limitation of Liability.
Except for claims based on (i) fraud, (ii) criminal acts, or (iii) willful misconduct, the maximum aggregate liability of either Party under this Agreement shall not exceed the Severance Benefits actually paid or payable hereunder (the “Severance Cap”).
7.3 Insurance. [OPTIONAL] Company shall maintain directors’ and officers’ liability insurance providing tail coverage for Employee for at least [TIME PERIOD] following the Separation Date.
8. DEFAULT & REMEDIES
8.1 Notice & Cure. A Party alleging breach shall give written notice describing the breach in reasonable detail and afford the breaching Party ten (10) days to cure (if curable) before seeking enforcement.
8.2 Graduated Remedies.
(a) Monetary Damages up to the Severance Cap.
(b) Specific Performance or injunctive relief limited to enforcing §§5 and 5.3, consistent with §9.4.
(c) Attorney Fees. The prevailing Party in any action to enforce this Agreement shall be entitled to reasonable attorney fees and costs.
9. DISPUTE RESOLUTION
9.1 Governing Law & Forum Selection.
This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina, without regard to conflict-of-laws principles. Subject to §9.2, the Parties consent to the exclusive jurisdiction of the state and federal courts located in [COUNTY], South Carolina.
9.2 Arbitration (Optional).
[ARBITRATION OPTION – SELECT “Y” OR “N”: [ARBITRATION_CHOSEN_⧫]].
If “Y,” any dispute arising out of or relating to this Agreement shall be resolved by final and binding arbitration administered by the American Arbitration Association (“AAA”) under its Employment Arbitration Rules then in effect. The arbitrator shall have authority to award any remedy available at law or equity, subject to the Severance Cap (§7.2). Judgment on the award may be entered in any court of competent jurisdiction.
9.3 Jury Trial Waiver (Optional).
[// GUIDANCE: South Carolina generally enforces contractual jury waivers when conspicuous and supported by consideration. Retain, delete, or highlight as counsel deems prudent.]
EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
9.4 Limited Injunctive Relief.
Notwithstanding §9.2, either Party may seek temporary or preliminary injunctive relief in a court of competent jurisdiction solely to prevent irreparable harm resulting from a breach or threatened breach of §§5 or 5.3, provided any such relief is narrowly tailored and subject to the Severance Cap for monetary damages.
10. GENERAL PROVISIONS
10.1 Amendment; Waiver. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.
10.2 Assignment. Employee may not assign any rights or delegate any obligations hereunder. Company may assign this Agreement to any successor by merger, consolidation, or sale of substantially all of its assets, provided the successor assumes Company’s obligations.
10.3 Notices. All notices shall be in writing and deemed given when delivered (i) by hand; (ii) by certified mail, return receipt requested; or (iii) by nationally recognized overnight courier, to the addresses below (or such other address as a Party may designate):
Company: [COMPANY NOTICE ADDRESS]
Employee: [EMPLOYEE NOTICE ADDRESS]
10.4 Severability; Reformation. If any provision of this Agreement is held invalid or unenforceable, the remainder shall remain in full force. The Parties authorize a court to reform any overbroad covenant to the minimum extent necessary for enforceability.
10.5 Integration; Merger. This Agreement constitutes the entire agreement between the Parties regarding the subject matter hereof and supersedes all prior discussions, negotiations, or agreements, written or oral.
10.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures delivered by electronic means (e.g., PDF, DocuSign) shall be deemed original and binding.
11. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth below.
| COMPANY | EMPLOYEE |
|---|---|
| [EMPLOYER LEGAL NAME] | [EMPLOYEE NAME] |
| By: ________ | ________ |
| Name: [AUTHORIZED SIGNATORY] | |
| Title: [TITLE] | |
| Date: ______ | Date: ________ |
[OPTIONAL NOTARIZATION – SC law does not require notarization for enforceability, but employers may include for evidentiary certainty.]
[// GUIDANCE: After customization, provide the final form to the employee along with any OWBPA disclosure schedules (if applicable) and a separate notice of COBRA rights. Retain a fully executed copy in the personnel file for at least six (6) years to comply with ADEA record-retention requirements.]