SEVERANCE AND MUTUAL RELEASE AGREEMENT

(Texas – Single Employee)

[// GUIDANCE: This template is drafted for the severance of a single employee in Texas. For “group terminations” involving two or more employees age 40+, additional OWBPA disclosures (e.g., decisional-unit information) are required. Customize all bracketed items and remove guidance notes before final execution.]

TABLE OF CONTENTS

1. Document Header……………………………………1
2. Definitions………………………………………………2
3. Operative Provisions…………………………………4
4. Representations & Warranties……………………7
5. Covenants & Restrictions…………………………8
6. Default & Remedies…………………………………10
7. Risk Allocation………………………………………11
8. Dispute Resolution…………………………………12
9. General Provisions…………………………………13
10. Execution Block……………………………………15

1. DOCUMENT HEADER

1.1 Title and Parties

This Severance and Mutual Release Agreement (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] [corporation/limited liability company] (“Employer”), and [EMPLOYEE NAME], an individual resident of Texas (“Employee,” and together with Employer, the “Parties,” and each, a “Party”).

1.2 Effective Date

The “Effective Date” shall be the eighth (8th) calendar day after Employee signs this Agreement, provided Employee has not revoked acceptance in accordance with Section 3.5.

1.3 Recitals

A. Employee’s employment with Employer will terminate effective [TERMINATION DATE] (“Termination Date”).
B. Employer desires to provide Employee with severance benefits in exchange for Employee’s promises, releases, and covenants herein.
C. The Parties intend this Agreement to resolve fully and finally any and all disputes between them, including those arising out of Employee’s employment and separation therefrom.

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following capitalized terms have the meanings set forth below. All defined terms appear alphabetically.

“Agreement” – has the meaning set forth in Section 1.1.
“Applicable Law” – all federal, state, and local statutes, regulations, and ordinances, including but not limited to the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (“ADEA”), the Older Workers Benefit Protection Act (29 U.S.C. § 626(f)) (“OWBPA”), the Americans with Disabilities Act, the Family and Medical Leave Act, the Texas Labor Code, and any amendments thereto.
“Awarded Equity” – any stock, option, RSU, or other equity award previously granted to Employee, whether vested or unvested.
“Claims” – any and all charges, complaints, demands, causes of action, obligations, damages, or liabilities of every kind, known or unknown, suspected or unsuspected, arising on or before the Effective Date.
“Confidential Information” – non-public information concerning Employer or its affiliates, including trade secrets, business plans, financials, and personnel data, whether in tangible or intangible form.
“Consideration Period” – the twenty-one (21) calendar days during which Employee may review and consider this Agreement before signing.
“Severance Benefits” – the consideration described in Section 3.1.
“Termination Date” – has the meaning set forth in Recital A.

3. OPERATIVE PROVISIONS

3.1 Severance Benefits

Subject to Employee’s timely execution, non-revocation, and ongoing compliance with this Agreement, Employer shall provide:
a. Cash Severance: A lump-sum payment of $[SEVERANCE AMOUNT] less applicable withholdings, payable within ten (10) business days after the Effective Date.
b. COBRA Subsidy: Employer shall pay [PERCENTAGE]% of Employee’s COBRA premiums for [NUMBER] months following the Termination Date or until Employee becomes eligible for other group health coverage, whichever occurs first.
c. Outplacement: [DESCRIPTION OF SERVICES] for up to [DOLLAR CAP OR MONTHS].
[// GUIDANCE: Delete or revise outplacement if not offered.]

3.2 Accrued Amounts

Regardless of execution of this Agreement, Employer will pay (i) all earned but unpaid base salary through the Termination Date, (ii) accrued but unused PTO, and (iii) any unreimbursed business expenses properly submitted under Employer policy.

3.3 Conditions Precedent

Employer’s obligations under Section 3.1 are conditioned upon:
a. Employee’s return of all Employer property per Section 5.3;
b. Employee’s compliance with Sections 4, 5, and 6; and
c. Employee’s non-revocation of this Agreement under Section 3.5.

3.4 Acknowledgment of Consideration

Employee acknowledges that the Severance Benefits exceed any wages, benefits, or other amounts otherwise owed and constitute adequate consideration for the release and covenants herein.

3.5 Revocation Right

Employee may revoke this Agreement within seven (7) calendar days after signing by delivering written notice to [CONTACT NAME/TITLE] at [ADDRESS/EMAIL]. If revoked, this Agreement shall be null and void, and Employer shall have no obligation to provide the Severance Benefits.

4. REPRESENTATIONS & WARRANTIES

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

4.2 Employee Representations. Employee represents that:
a. Employee has reported all hours worked and has been paid all wages, overtime, bonuses, commissions, and PTO due through the Termination Date;
b. Employee has not filed any lawsuit or administrative charge against Employer that remains pending;
c. Employee is the sole owner of the Claims released herein and has not assigned or transferred any interest therein; and
d. Employee has had sufficient time to consult, and has been advised in writing to consult, with an attorney of Employee’s choosing.

4.3 Employer Representations. Employer represents that the individual executing this Agreement on its behalf is duly authorized.

4.4 Survival. The representations, warranties, and covenants of this Section shall survive the Effective Date.

5. COVENANTS & RESTRICTIONS

5.1 Mutual Release of Claims

a. Employee Release. In exchange for the Severance Benefits, Employee, on behalf of Employee and Employee’s heirs, executors, administrators, and assigns, irrevocably releases Employer, its parents, subsidiaries, affiliates, predecessors, successors, and their respective employees, officers, and agents (“Employer Releasees”) from any and all Claims, including but not limited to those arising under Applicable Law, contract, tort, or equity, through the Effective Date.

b. Employer Release. Employer, on behalf of itself and Employer Releasees, releases Employee from any and all Claims known to Employer as of the Effective Date, excluding (i) claims arising from fraud, embezzlement, or willful misconduct, and (ii) claims under this Agreement.

c. Scope Limitations. Nothing in this Agreement waives (i) rights or claims arising after the Effective Date, (ii) vested retirement benefits, (iii) rights to unemployment or workers’ compensation (if eligible), or (iv) Employee’s right to file a charge with or participate in an investigation by a government agency (though Employee waives monetary recovery to the fullest extent permitted).

5.2 Confidentiality

Employee shall keep the terms of this Agreement and all Confidential Information strictly confidential, except as required by law or to Employee’s spouse, legal counsel, tax advisor, or as necessary to enforce this Agreement.

5.3 Return of Property

No later than the Termination Date, Employee shall return all Employer property, including keys, devices, documents, and Confidential Information, and shall permanently delete any electronic copies within Employee’s control.

5.4 Non-Disparagement

Employee shall not disparage Employer Releasees. Employer shall instruct its executive officers not to disparage Employee. This clause does not limit truthful testimony under subpoena or lawful order.

5.5 Restrictive Covenants

[OPTIONAL – Non-Competition / Non-Solicitation. Insert if enforceable and applicable under Tex. Bus. & Com. Code § 15.50 et seq.]

6. DEFAULT & REMEDIES

6.1 Events of Default
a. Employee materially breaches Sections 5.2–5.5.
b. Employer fails to deliver any Severance Benefits when due.

6.2 Notice and Cure
The non-breaching Party must give written notice specifying the default. The breaching Party has ten (10) business days to cure (if curable) before the non-breaching Party may seek remedies.

6.3 Graduated Remedies
a. Monetary Damages equal to actual damages incurred;
b. Equitable Relief limited to enforcement of Sections 5.2–5.5;
c. Claw-Back: Upon Employee’s uncured breach, Employer may cease unpaid Severance Benefits and demand repayment of Severance Benefits already paid.

6.4 Attorney Fees
The prevailing Party in any action to enforce this Agreement is entitled to reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Indemnification / Mutual Release

The mutual releases in Section 5.1 are intended to serve as the Parties’ sole indemnification obligations, except for claims arising from a Party’s fraud, gross negligence, or willful misconduct.

7.2 Limitation of Liability

Each Party’s aggregate liability arising out of or relating to this Agreement shall not exceed the Severance Benefits actually paid or payable hereunder, except for (i) breach of Section 5.2 (Confidentiality) or (ii) fraud, gross negligence, or willful misconduct.

7.3 Force Majeure

Neither Party shall be liable for delay or failure in performance caused by events beyond its reasonable control, including acts of God, war, terrorism, or governmental action, provided the affected Party gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas and, where applicable, federal law, without regard to conflict-of-law principles.

8.2 Forum Selection

Subject to Section 8.3, the state and federal courts located in [COUNTY], Texas shall have exclusive jurisdiction, and each Party consents to personal jurisdiction and venue therein.

8.3 Arbitration (Optional)

[OPTIONAL] Any dispute arising out of or relating to this Agreement shall be finally resolved by confidential arbitration administered by [ARBITRATION PROVIDER] in accordance with its employment arbitration rules. Judgment on the award may be entered in any court of competent jurisdiction. The arbitrator shall have authority to award all remedies available at law or equity.

[// GUIDANCE: Delete Section 8.3 if arbitration not selected.]

8.4 Jury Trial Waiver (Optional)

[OPTIONAL] TO THE EXTENT NOT PRECLUDED BY SECTION 8.3, EACH PARTY KNOWINGLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING FROM 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 preserve the status quo pending arbitration or litigation, but only to enforce Sections 5.2–5.5.

9. GENERAL PROVISIONS

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

9.2 Assignment
Employee may not assign or delegate any rights or obligations under this Agreement. Employer may assign to a successor in interest by merger, consolidation, or asset sale, provided the successor assumes Employer’s obligations herein.

9.3 Successors & Assigns
This Agreement binds and benefits the Parties and their respective heirs, executors, administrators, successors, and permitted assigns.

9.4 Severability & Reformation
If any provision is held invalid or unenforceable, the remaining provisions continue in full force. A court of competent jurisdiction may reform any unenforceable covenant to the minimum extent necessary to render it enforceable.

9.5 Entire Agreement
This Agreement constitutes the final, complete, and exclusive statement of the agreement between the Parties and supersedes all prior negotiations, understandings, or agreements, whether oral or written, relating to the subject matter herein.

9.6 Counterparts & Electronic Signatures
This Agreement may be executed in counterparts, each of which is deemed an original, but all of which constitute one instrument. Signatures delivered by PDF or other electronic means have the same force and effect as original signatures under the Texas Uniform Electronic Transactions Act.

9.7 Headings
Headings are for convenience only and do not affect interpretation.

10. EXECUTION BLOCK

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

[NOTARY BLOCK – optional under Texas law; insert if required by company policy]

[// GUIDANCE:
1. Replace bracketed placeholders with deal-specific terms.
2. Verify Adea/Owbpa language is highlighted to the employee in a manner that is “written in a manner calculated to be understood,” as required by 29 U.S.C. § 626(f)(1)(A).
3. Provide the final agreement to the employee at least 21 days before the signature deadline, and do not counter-sign until the revocation period expires.
4. Retain proof of delivery and execution for records compliance.
5. For employees under 40, Section 7 may be abbreviated; for employees 40+, maintain full ADEA/OWBPA disclosures.]