SEVERANCE AND RELEASE AGREEMENT

(South Dakota – Compliant with ADEA/OWBPA)

[// GUIDANCE: This template is drafted for private-sector employers headquartered or doing business in South Dakota. It is designed to satisfy the “knowing and voluntary” waiver requirements of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 626(f), as incorporated by the Older Workers Benefit Protection Act (“OWBPA”). Counsel should confirm no additional obligations apply under any collective-bargaining agreement, individual employment contract, or employer policy before use.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
   3.1 Separation of Employment
   3.2 Severance Consideration
   3.3 Benefits & COBRA
   3.4 Taxes & Withholding
   3.5 Return of Property & Confidential Information
4. Representations & Warranties
5. Covenants & Restrictions
   5.1 Confidentiality of Agreement
   5.2 Non-Disparagement
   5.3 Cooperation
6. Default & Remedies
7. Risk Allocation
   7.1 Mutual Release of Claims
   7.2 Indemnification
   7.3 Limitation of Liability
   7.4 Force Majeure
8. Dispute Resolution
9. General Provisions
10. Execution Block
11. Exhibit A – OWBPA/ADEA Notice of Rights

1. DOCUMENT HEADER

SEVERANCE AND RELEASE AGREEMENT (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [EMPLOYER LEGAL NAME], a [STATE] corporation, with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE FULL LEGAL NAME], residing at [ADDRESS] (“Employee”). Employer and Employee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

Recitals
A. Employee’s employment with Employer terminated effective [TERMINATION DATE] (the “Separation Date”).
B. Employer desires to provide Employee with certain severance benefits in exchange for Employee’s promises, including a comprehensive release of claims, as set forth herein.
C. Employee acknowledges receipt of adequate consideration for the covenants and releases contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the sufficiency of which the Parties acknowledge, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Undefined capitalized terms shall have the meaning ascribed in context.

“Agreement” has the meaning set forth in the Document Header.

“ADEA” means the federal Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621-634, as amended.

“Benefits Continuation Period” means the period beginning on the Separation Date and ending [NUMBER] months thereafter.

“Cause” means [DEFINE OR CROSS-REFERENCE EXISTING POLICY/CONTRACT].

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Confidential Information” means all non-public business information of Employer, including trade secrets, customer lists, and proprietary data.

“Release Effective Date” has the meaning provided in Section 7.1(f).

“Severance Amount” means $[DOLLAR AMOUNT], subject to applicable deductions and withholdings.

3. OPERATIVE PROVISIONS

3.1 Separation of Employment

(a) Employment terminated effective on the Separation Date.
(b) Employer has paid or will pay Employee all earned wages, accrued vacation, and other amounts due under South Dakota Codified Laws, on or before the next regular payroll date following the Separation Date.

3.2 Severance Consideration

(a) Subject to (i) Employee’s timely execution and non-revocation of this Agreement and (ii) compliance with its terms, Employer shall pay Employee the Severance Amount in [lump sum/installments] on or before [DATE or SCHEDULE] by direct deposit or check.
(b) The Severance Amount represents the exclusive cap on monetary liability under this Agreement and is in addition to any compensation to which Employee is already entitled.

3.3 Benefits & COBRA

Employer shall (a) subsidize COBRA premiums at the active-employee rate through the Benefits Continuation Period and (b) provide outplacement assistance for up to [NUMBER] months, not to exceed $[CAP] in aggregate cost.

3.4 Taxes & Withholding

All payments are subject to federal, state, and local tax withholding. Employer makes no representation regarding the tax consequences of any payment. Employee shall be solely responsible for any additional taxes, interest, or penalties assessed.

3.5 Return of Property & Confidential Information

On or before the Release Effective Date, Employee shall return all Employer Property and certify destruction of all Confidential Information residing on personal devices.

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party warrants it has full authority to execute and deliver this Agreement.

4.2 Employee Representation. Employee:
(a) has not filed or caused to be filed any complaint, charge, or claim against Employer except as disclosed in writing prior to the Effective Date;
(b) is not aware of any unreported workplace injury; and
(c) acknowledges having been advised to consult independent counsel and tax advisors before signing.

4.3 Survival. The representations and warranties herein survive the Release Effective Date.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality of Agreement

Employee shall keep the existence and terms of this Agreement strictly confidential, except as required by law, to immediate family, or to tax/legal advisors subject to like confidentiality.

5.2 Non-Disparagement

Each Party agrees not to make any statement reasonably expected to disparage the reputation of the other Party or its affiliates; provided, however, nothing herein restricts truthful testimony under subpoena or other legal process.

5.3 Cooperation

Employee agrees to cooperate with Employer in any investigation or proceeding relating to matters that occurred during employment, provided cooperation does not unreasonably interfere with Employee’s subsequent employment.

6. DEFAULT & REMEDIES

6.1 Employee Breach. Upon material breach by Employee, and after written notice and a ten-(10) day opportunity to cure where the breach is curable, Employer may (a) cease any unpaid severance, (b) seek repayment of previously paid severance (up to the Severance Amount), and (c) pursue injunctive relief limited to enforcing confidentiality and non-disparagement obligations.

6.2 Employer Breach. If Employer fails to remit any installment of the Severance Amount within five (5) business days after written notice, unpaid amounts shall accrue interest at the lower of one-percent (1 %) per month or the maximum rate permitted by law.

7. RISK ALLOCATION

7.1 Mutual Release of Claims

(a) Subject to the exclusions in subsection (d), each Party irrevocably releases and discharges the other Party and its affiliates from any and all claims, demands, and causes of action, whether known or unknown, arising on or before the Effective Date.
(b) Employee’s release includes, without limitation, claims under Title VII, ADA, FMLA, ERISA (as to benefits waived), South Dakota Human Relations Act, and the ADEA/OWBPA.
(c) Employer’s release is limited to claims arising out of the employment relationship excluding fraud, embezzlement, or willful misconduct by Employee.
(d) Exclusions. Nothing in this Agreement waives (i) claims that by law cannot be waived (e.g., unemployment or workers’ compensation benefits), (ii) vested pension rights, or (iii) rights arising after the Release Effective Date.
(e) ADEA Compliance. Employee acknowledges:
(i) this Agreement is written in a manner calculated to be understood;
(ii) Employee is advised to consult an attorney;
(iii) Employee is afforded twenty-one (21) days to consider this Agreement;
(iv) Employee may revoke acceptance within seven (7) days after signing by written notice to [CONTACT]; and
(v) the release is not effective or enforceable until the eighth (8th) day after Employee signs this Agreement (the “Release Effective Date”).
(f) If Employee timely revokes, this Agreement shall be null and void, and Employer shall owe no Severance Amount.

7.2 Indemnification

Each Party (“Indemnifying Party”) shall indemnify, defend, and hold harmless the other Party and its affiliates from all losses arising out of a breach of this Agreement by the Indemnifying Party.

7.3 Limitation of Liability

Except for claims based on (i) willful misconduct, (ii) fraud, or (iii) breaches of Sections 5.1 or 5.2, the maximum aggregate liability of either Party under this Agreement shall not exceed the Severance Amount.

7.4 Force Majeure

Neither Party shall be liable for failure to perform caused by events beyond its reasonable control, provided such Party gives prompt notice and uses commercially reasonable efforts to resume performance.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement shall be governed by federal employment law (including the ADEA) and, to the extent not pre-empted, the laws of the State of South Dakota, without regard to conflict-of-laws principles.

8.2 Forum Selection. The Parties consent to exclusive jurisdiction in the state or federal courts located in [COUNTY], South Dakota, for any action not subject to arbitration.

8.3 Arbitration (Optional). [ARBITRATION_PROVISION:YES/NO]
If “YES,” the Parties agree to binding arbitration administered by [AAA/JAMS] under its employment rules. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Waiver (Optional). [JURY_WAIVER:YES/NO]
If “YES,” each Party irrevocably waives any right to a jury trial in any proceeding relating to this Agreement.

8.5 Limited Injunctive Relief. Notwithstanding Section 8.3, either Party may seek temporary or preliminary injunctive relief in a court of competent jurisdiction solely to enforce Sections 5.1 or 5.2.

9. GENERAL PROVISIONS

9.1 Amendment & Waiver. No amendment to this Agreement is effective unless in writing and signed by both Parties. A waiver on one occasion is not a waiver on any subsequent occasion.

9.2 Assignment. Employee may not assign this Agreement. Employer may assign to a successor in interest, provided written notice is given to Employee.

9.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their permitted successors and assigns.

9.4 Severability & Reformation. If any provision is held unenforceable, it shall be reformed to the minimum extent necessary, and the remaining provisions shall remain in full force.

9.5 Integration. This Agreement constitutes the entire understanding of 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 transmitted electronically (e.g., via DocuSign) are binding to the same extent as originals.

10. EXECUTION BLOCK

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

[// GUIDANCE: Notarization is not typically required for a severance agreement under South Dakota law. Include only if your corporate policy mandates it.]

11. EXHIBIT A – OWBPA/ADEA NOTICE OF RIGHTS

Pursuant to the Age Discrimination in Employment Act, as amended:

1. Employee has the right to consult with an attorney prior to signing this Agreement.
2. Employee has twenty-one (21) days to review and consider the Agreement.
3. Employee may sign the Agreement prior to the expiration of the 21-day period if the decision is voluntary and not induced by Employer.
4. After signing, Employee has seven (7) days to revoke the Agreement by delivering written notice to [CONTACT ADDRESS/EMAIL].
5. The Agreement is not effective or enforceable until the seven-day revocation period has expired.

[// GUIDANCE: For group terminations affecting two or more employees within a 90-day window, replace the 21/7-day periods with 45/7 days and include an OWBPA attachment listing job titles and ages of affected and retained employees.]

END OF TEMPLATE