SEVERANCE AND MUTUAL RELEASE AGREEMENT

(Vermont – Single‐Employee Separation)

[// GUIDANCE: Replace all bracketed text and verify all cross-references before circulation.]

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

This Severance and Mutual Release Agreement (the “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between:

1. [EMPLOYER LEGAL NAME], a [State of Incorporation] [corporation/LLC] with its principal place of business at [Address] (“Employer”); and
2. [EMPLOYEE NAME], an individual residing at [Address] (“Employee”).

Recitals

A. Employee’s employment with Employer will terminate effective [Separation Date] (the “Separation Date”).
B. Employer desires to provide Employee with severance benefits conditioned upon Employee’s execution of and compliance with this Agreement.
C. The parties intend this Agreement to settle fully and finally any and all matters between them, including any claims arising out of Employee’s employment or separation therefrom.

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

II. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below. Any term used but not defined herein shall have its common-law meaning in the context of Vermont and federal employment law.

“Agreement” – This Severance and Mutual Release Agreement, including all exhibits and schedules.

“COBRA” – Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and any state-law analog.

“Confidential Information” – All non-public information or material belonging to Employer or its affiliates, whether written, oral, electronic, or otherwise, including but not limited to trade secrets, client data, financial information, business plans, and proprietary software.

“Consideration Period” – The [21-day] / [45-day] period provided to Employee under Section IV(B) to consider this Agreement.
[// GUIDANCE: Use 21 days for individual layoffs; 45 days for group layoffs per 29 U.S.C. § 626(f)(1)(F)(ii).]*

“Claims” – Any and all actions, causes of action, complaints, charges, claims, demands, debts, obligations, damages, or liabilities of any kind whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, accrued or unaccrued, direct or derivative, in law or equity.

“Release Period” – The period commencing on the later of the Effective Date or the Separation Date and ending at 11:59 p.m. Eastern Time on the last day of the Consideration Period.

“Revocation Period” – The seven (7) calendar-day period immediately following Employee’s execution of this Agreement, during which Employee may revoke the Agreement in accordance with Section IV(D).

“Severance Amount” – The gross amount of $[Dollar Amount] payable to Employee under Section III(A)(1).

“Severance Benefits” – Collectively, the Severance Amount, COBRA subsidy (if any), and any other benefits described in Section III(A).

III. OPERATIVE PROVISIONS

A. Severance Benefits.
1. Severance Payment. Employer shall pay Employee the Severance Amount in a single lump sum (less applicable withholdings) on the first regular payroll date following expiration of the Revocation Period, provided this Agreement has become irrevocable.
2. COBRA Subsidy. If Employee timely elects continuation coverage, Employer will pay []% of the COBRA premium for [] months following the Separation Date.
3. Outplacement Assistance. [Optional – describe program or stipend].
4. No Other Compensation. Except for (i) accrued but unpaid salary through the Separation Date, (ii) vested benefits under Employer’s qualified retirement plans, and (iii) Severance Benefits, Employee acknowledges receipt of all compensation owed.

B. Conditions Precedent. Employer’s obligations are contingent upon:
1. Employee’s timely execution and non-revocation of this Agreement;
2. Employee’s continued compliance with Section V (Covenants & Restrictions); and
3. Return of all Company Property under Section V(D).

C. Tax Matters. Employee shall be solely responsible for any taxes on the Severance Benefits other than Employer’s share of payroll taxes. Employer makes no representations regarding tax treatment.

IV. REPRESENTATIONS & WARRANTIES

A. Mutual Authority. Each party represents that it has full authority to enter into and perform this Agreement.

B. Employee’s Knowing and Voluntary Waiver of ADEA Claims. Pursuant to the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f):
1. This Agreement is written in clear, understandable language;
2. It specifically refers to rights or claims under the Age Discrimination in Employment Act of 1967 (“ADEA”);
3. Rights or claims arising after the Effective Date are not waived;
4. Employee is advised in writing to consult with an attorney prior to signing;
5. Employee is given the Consideration Period to review; and
6. Employee may revoke this Agreement within the Revocation Period, after which it becomes enforceable.

C. No Unreported Work-Related Injury. Employee affirms no undisclosed workplace injury exists entitling Employee to workers’ compensation benefits.

D. No Prior Assignment. Employee has not assigned any Claim released herein.

E. Employer Solvency. Employer represents that it is not insolvent and has legal capacity to perform its payment obligations hereunder.

V. COVENANTS & RESTRICTIONS

A. Mutual Release of Claims.
1. Employee Release. Subject to the carve-outs in Section V(A)(3), Employee hereby irrevocably releases Employer, its parents, subsidiaries, affiliates, officers, directors, employees, agents, successors, and assigns from any and all Claims arising on or before the Execution Date, including but not limited to:
a. Federal, state, or local statutes (e.g., Title VII, ADA, FMLA, Vermont Fair Employment Practices Act, 21 V.S.A. § 495 et seq., and ADEA);
b. Common-law claims (e.g., breach of contract, tort, defamation, wrongful discharge); and
c. Compensation or benefits claims (except vested retirement benefits).

2. Employer Release. Employer releases Employee from any and all Claims arising on or before the Execution Date, excluding Claims arising from (i) fraud, (ii) intentional misconduct, or (iii) breach of post-employment covenants under this Agreement.

3. Carve-Outs. Nothing herein waives:
   a. Unemployment insurance benefits;
   b. Claims that cannot be released as a matter of law;
   c. The right to file or participate in an administrative charge with the EEOC, NLRB, USDOL, Vt. Attorney General, or similar agency (Employee waives, to the maximum extent permitted, any monetary recovery arising therefrom).

B. Confidentiality. Employee shall not disclose the terms of this Agreement or Employer’s Confidential Information, except to (i) Employee’s spouse, attorney, or tax advisor (each bound by confidentiality), (ii) taxing authorities, or (iii) as legally required.

C. Non-Disparagement. Neither party shall make statements likely to harm the other’s reputation or business interests; provided that truthful testimony under subpoena is not prohibited.

D. Return of Company Property. By the Separation Date, Employee shall return all Employer property, keys, documents, and equipment, and permanently delete Employer data from personal devices.

E. Restrictive Covenants.
[// GUIDANCE: Insert any continuing non-competition or non-solicitation obligations if supported by adequate consideration and VT law. Vermont imposes strict scrutiny on non-competes.]

VI. DEFAULT & REMEDIES

A. Event of Default. A party’s material breach of this Agreement, if uncured within ten (10) days’ written notice (the “Cure Period”), constitutes a default.

B. Employer Remedies. Upon Employee’s default, Employer may:
1. Cease unpaid Severance Benefits;
2. Seek repayment of Severance Benefits already provided; and
3. Pursue equitable relief under Section VIII(D).

C. Employee Remedies. Upon Employer’s default, Employee may seek monetary damages up to, but not exceeding, the Severance Amount, plus reasonable attorneys’ fees.

D. Attorneys’ Fees. The prevailing party in any action to enforce this Agreement shall be entitled to reasonable attorneys’ fees and costs.

VII. RISK ALLOCATION

A. Mutual Release. See Section V(A).

B. Limitation of Liability. Except for liability arising from (i) breach of confidentiality, (ii) indemnification of third-party claims not released herein, or (iii) fraud or willful misconduct, each party’s aggregate liability under this Agreement shall not exceed the Severance Amount.

C. Indemnification.
1. Employee shall indemnify Employer against third-party claims based on Employee’s material breach of Section V(B)–(D).
2. Employer shall indemnify Employee against third-party claims arising from Employer’s material breach of this Agreement.

D. Force Majeure. Neither party shall be liable for failure to perform obligations (other than payment obligations) due to events beyond reasonable control, including natural disasters, acts of war, or government orders.

VIII. DISPUTE RESOLUTION

A. Governing Law. This Agreement shall be governed by the laws of the United States and the State of Vermont, without regard to conflict-of-laws rules.

B. Forum Selection. Subject to Section VIII(C), each party submits to the exclusive jurisdiction of (i) the United States District Court for the District of Vermont or (ii) the state courts located in Chittenden County, Vermont.

C. Arbitration – Optional.
[CHECK ONE]:
☐ Arbitration Not Elected. Section VIII(B) applies.
☐ Arbitration Elected. Any dispute shall be resolved by final and binding arbitration administered by the American Arbitration Association under its Employment Arbitration Rules in Burlington, Vermont. Judgment on the award may be entered in any court of competent jurisdiction.
[// GUIDANCE: Delete inapplicable clause.]

D. Injunctive Relief (Limited). A party may seek temporary or preliminary injunctive relief solely to prevent breach of Sections V(B)–(C) (Confidentiality & Non-Disparagement) pending final adjudication.

E. Jury Trial Waiver – Optional.
[// GUIDANCE: Insert jury waiver only if enforceable under VT law and mutually agreed.]
☐ Both parties knowingly waive the right to trial by jury in any litigation relating to this Agreement.

IX. GENERAL PROVISIONS

A. Entire Agreement. This Agreement constitutes the complete understanding of the parties and supersedes all prior agreements regarding the subject matter hereof.

B. Amendment; Waiver. No modification or waiver is effective unless in writing and signed by both parties. A waiver of any term is not a waiver of any other term.

C. Assignment. Employee may not assign or delegate any rights or obligations hereunder. Employer may assign to a successor in interest, provided notice is given to Employee.

D. Severability; Reformation. If any provision is held invalid, it shall be limited or reformed to the minimum extent necessary, and the remainder shall remain in full force.

E. Successors & Assigns. This Agreement binds and benefits the parties and their respective successors and permitted assigns.

F. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts (including PDF or electronic signature), each of which is deemed an original and all of which constitute one instrument.

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

X. EXECUTION BLOCK

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

[Notary Acknowledgment – Add if required by internal policy or local law.]

[// GUIDANCE: After execution, provide Employee a fully-signed copy and attach any required disclosure schedules (e.g., group layoff statistical information for 45-day ADEA waivers).]