SEVERANCE AND RELEASE AGREEMENT

(Alabama – Single‐Employee Separation)

[// GUIDANCE: This template is designed for a single-employee separation. For a “group termination” or “exit incentive program,” substitute the 45-day consideration period and include the OWBPA disclosure attachment required by 29 U.S.C. § 626(f)(1)(H).]

TABLE OF CONTENTS

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

1. DOCUMENT HEADER

SEVERANCE AND RELEASE AGREEMENT (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], an [STATE OF INCORPORATION] [corporation/LLC] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE LEGAL NAME], residing at [ADDRESS] (“Employee”).

A. Employee’s employment with Employer ended effective [TERMINATION DATE] (the “Termination Date”).
B. Employer desires to provide severance benefits conditioned on Employee’s execution of, and non-revocation of, this Agreement, and Employee desires to accept such benefits.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

2. DEFINITIONS

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

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

“Claim” means any charge, complaint, grievance, arbitration demand, cause of action, obligation, liability, judgment, or damages of any kind, whether known or unknown, suspected or unsuspected, in law or in equity.

“Consideration Period” has the meaning given in Section 3.5(a).

“Effective Date” has the meaning given in Section 3.5(c).

“Released Parties” means Employer, its parents, subsidiaries, affiliates, predecessors, successors, assigns, and all current and former officers, directors, managers, employees, agents, benefit plans, and fiduciaries.

“Revocation Period” has the meaning given in Section 3.5(b).

“Severance Benefits” has the meaning given in Section 3.1.

“Termination Date” has the meaning set forth in the Recitals.

[// GUIDANCE: Add or delete defined terms as needed for deal-specific provisions.]

3. OPERATIVE PROVISIONS

3.1 Severance Benefits. Conditioned upon Employee’s timely execution of this Agreement, non-revocation during the Revocation Period, and continued compliance with its terms, Employer shall provide the following (collectively, the “Severance Benefits”):
(a) Cash Severance: A lump–sum payment of $[SEVERANCE AMOUNT], less applicable withholdings, payable on the first regular payroll date following the Effective Date.
(b) COBRA Subsidy: Employer will pay [__]% of Employee’s COBRA premiums for [__] months following the Termination Date.
(c) Outplacement: [Describe services or “None.”]

3.2 No Other Compensation. Except for (i) vested benefits under Employer’s qualified retirement plans, and (ii) accrued but unused vacation payable under Employer policy and Alabama law, Employee acknowledges receipt of all wages, bonuses, commissions, and other compensation due through the Termination Date.

3.3 Taxes; Code § 409A. Payments are intended to be exempt from, or compliant with, Internal Revenue Code § 409A. Employee is solely responsible for any federal, state, or local taxes owed on the Severance Benefits.

3.4 Conditions Precedent. Employer’s obligations are subject to (a) Employee’s return of all Employer property (see Section 5.3) and (b) Employee’s continuing compliance with Sections 5.1-5.4.

3.5 ADEA/OWBPA Procedures.
(a) Consideration Period. Employee has 21 days (“Consideration Period”) to consider this Agreement before signing. Employee may sign sooner but is not required to do so.
(b) Revocation Period. After signing, Employee may revoke this Agreement within 7 calendar days by delivering written notice to [CONTACT NAME/ADDRESS] (“Revocation Period”).
(c) Effective Date. This Agreement becomes effective on the first business day after the Revocation Period expires without revocation (the “Effective Date”).

3.6 No Rehire. Employer is not obligated to rehire Employee; Employee may not apply for or accept future employment with Employer absent prior written consent.

4. REPRESENTATIONS & WARRANTIES

4.1 Employee’s Representations. Employee represents and warrants that:
(a) Employee has not filed, and is not aware of, any pending Claim against any Released Party, except [list if any];
(b) Employee has had an opportunity to consult with counsel of Employee’s choice;
(c) Employee enters into this Agreement knowingly and voluntarily, without duress or coercion; and
(d) Employee is age [__], understands the ADEA, and acknowledges that this release complies with 29 U.S.C. § 626(f).

4.2 Employer’s Representations. Employer represents that the individual signing on its behalf has full authority to bind Employer.

4.3 Survival. Sections 4, 5, 6, 7, 8, and 9 survive termination or expiration of this Agreement.

5. COVENANTS & RESTRICTIONS

5.1 Mutual Non-Disparagement. Neither party shall knowingly make statements that disparage or harm the reputation of the other or any Released Party. This Section does not restrict truthful testimony under oath or disclosures required by law.

5.2 Confidentiality of Employer Information. Employee shall not use or disclose Employer’s confidential, proprietary, or trade secret information, except as permitted under whistleblower laws (e.g., 18 U.S.C. § 1833(b)).

5.3 Return of Property. No later than the Effective Date, Employee shall return all Employer property, including documents, devices, passwords, and keys, and certify in writing that all electronic files have been purged from personal devices and cloud accounts.

5.4 Cooperation. Upon reasonable notice, Employee will cooperate with Employer in any investigation, administrative proceeding, or litigation relating to matters within Employee’s knowledge. Employer will reimburse reasonable out-of-pocket expenses.

6. DEFAULT & REMEDIES

6.1 Events of Default. A party is in default if it materially breaches any obligation and fails to cure within 10 business days after written notice.

6.2 Remedies.
(a) Monetary Relief. The non-defaulting party may recover actual damages, subject to the limitation in Section 7.2.
(b) Limited Injunctive Relief. Notwithstanding Section 8, a party may seek temporary or preliminary injunctive relief in any court of competent jurisdiction solely to enforce Sections 5.1-5.3.

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

7. RISK ALLOCATION

7.1 Mutual Release.
(a) Employee’s Release. Employee irrevocably releases and discharges the Released Parties from any and all Claims arising at any time on or before the Effective Date, including but not limited to Claims under Title VII, the ADEA, the ADA, the FMLA, the FLSA, Alabama Age Discrimination in Employment Act, Alabama Workers’ Compensation Act (to the extent waivable), and any other federal, state, or local law, except:
(i) Claims to enforce this Agreement;
(ii) Claims for unemployment, workers’ compensation, or vested benefits;
(iii) Claims that cannot be waived as a matter of law.
(b) Employer’s Release. Employer releases Employee from any Claim it may have arising on or before the Effective Date, excluding Claims based on fraud, embezzlement, or intentional misconduct.

7.2 Liability Cap. The aggregate liability of either party arising out of or related to this Agreement shall not exceed the Severance Benefits actually paid or payable hereunder.

7.3 Indemnification. Each party shall indemnify and hold harmless the other from third-party Claims arising from the indemnifying party’s breach of this Agreement or gross negligence.

7.4 Force Majeure. Neither party is liable for failure to perform due to causes beyond its reasonable control, provided it uses commercially reasonable efforts to resume performance promptly.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement is governed by the laws of the State of Alabama and applicable federal employment laws, without regard to conflict-of-law rules.

8.2 Forum Selection. Subject to Section 6.2(b), the parties submit to the exclusive jurisdiction of (a) the state courts located in [County, Alabama], and (b) the United States District Court for the [Middle/Northern/Southern] District of Alabama, for any action arising under or relating to this Agreement.

8.3 Optional Arbitration. [OPTIONAL—DELETE IF NOT USED] Any dispute not resolved informally shall be finally settled by binding arbitration administered by the American Arbitration Association (“AAA”) under its Employment Arbitration Rules, before a single arbitrator in [City, Alabama]. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Optional Jury Waiver. [OPTIONAL—DELETE IF NOT USED] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

8.5 Injunctive Relief Carve-Out. Limited injunctive relief under Section 6.2(b) may be sought notwithstanding any arbitration clause.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. This Agreement may be amended only by a written instrument signed by both parties. No waiver shall be effective unless in writing and signed by the waiving party.

9.2 Assignment. Employee may not assign or delegate any rights or obligations hereunder. Employer may assign this Agreement to a successor in interest.

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

9.4 Severability; Reformation. If any provision is held invalid, the remainder shall be enforced. A court may modify overbroad provisions to the minimum extent necessary for enforceability.

9.5 Integration. This Agreement constitutes the entire agreement between the parties concerning its subject matter and supersedes all prior understandings.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures delivered electronically (e.g., via PDF or DocuSign) are effective.

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

10. EXECUTION BLOCK

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

[Notary block if required by internal policy – Alabama law does not require notarization for enforceability of a severance agreement, but notarization may enhance evidentiary value.]

[// GUIDANCE:
1. Replace bracketed text with deal-specific details.
2. Confirm the age of Employee; if under 40, OWBPA procedures (Sections 3.5, 7.1(a) references to ADEA) may be deleted.
3. For group terminations, attach Appendix A containing unit/job-title and age information per 29 U.S.C. § 626(f)(1)(H).
4. Review Company policies and any pre-existing restrictive-covenant agreements to avoid conflict.
5. Verify no state-specific laws (e.g., Alabama wage payment timing) are implicated beyond what is addressed.]