SEVERANCE AND RELEASE AGREEMENT

(Virginia – Comprehensive Template)

[// GUIDANCE: This template is designed for private-sector, non-unionized employment relationships in the Commonwealth of Virginia. It satisfies both federal requirements (including the Older Workers Benefit Protection Act (“OWBPA”) at 29 U.S.C. § 626(f)) and Virginia contract law. Customize bracketed fields, verify factual accuracy, and review for client-specific regulatory obligations (e.g., securities issuers, financial institutions, government contractors).]

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
11. Exhibits & Schedules

1. DOCUMENT HEADER

1.1 Title

SEVERANCE AND MUTUAL RELEASE AGREEMENT

1.2 Parties

This Severance and Mutual Release Agreement (this “Agreement”) is entered into by and between [EMPLOYER LEGAL NAME], a [STATE OF ORGANIZATION] [entity type] with its principal place of business at [ADDRESS] (“Employer”), and [EMPLOYEE NAME], a resident of the Commonwealth of Virginia (“Employee”). Employer and Employee may be referred to individually as a “Party” and collectively as the “Parties.”

1.3 Effective Date

This Agreement shall become effective on the eighth (8th) calendar day after Employee executes it (the “Effective Date”), provided Employee has not timely revoked acceptance pursuant to Section 3.7(c).

1.4 Recitals

A. Employee’s employment with Employer will terminate effective [TERMINATION DATE] (the “Separation Date”).
B. Employer desires to provide Employee with severance benefits in exchange for a global release of claims and other covenants set forth herein.
C. The Parties intend this Agreement to be binding and enforceable under applicable federal law and the laws of the Commonwealth of Virginia.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

[// GUIDANCE: Definitions appear in alphabetical order and are cross-referenced by capitalized terms throughout.]

“Agreement” has the meaning set forth in Section 1.4.
“COBRA” means Part 6 of Subtitle B of Title I of ERISA, 29 U.S.C. §§ 1161–1169.
“Confidential Information” has the meaning assigned in Section 5.1.
“Effective Date” has the meaning set forth in Section 1.3.
“Employee” means [EMPLOYEE NAME].
“Employer” means [EMPLOYER LEGAL NAME].
“Release” means the mutual release of claims described in Section 7.1.
“Separation Date” has the meaning set forth in Recital A.
“Severance Amount” means the total cash consideration described in Section 3.2.

3. OPERATIVE PROVISIONS

3.1 Separation of Employment

(a) Employment Termination. Employee’s employment with Employer will terminate as of the Separation Date.
(b) Final Wages and Accrued PTO. Regardless of execution of this Agreement, Employer shall pay all earned but unpaid wages and accrued, unused paid time off (“PTO”) through the Separation Date in accordance with Va. Code Ann. § 40.1-29.

3.2 Severance Benefits (Consideration)

In exchange for the Release and the covenants herein, Employer shall provide:
1. Cash Severance. A lump-sum payment of [DOLLAR AMOUNT] (the “Severance Amount”) less all required withholdings, payable within ten (10) business days after the Effective Date.
2. COBRA Subsidy. Employer will pay [PERCENTAGE]% of Employee’s COBRA premiums for [NUMBER] months following the Separation Date, provided Employee timely elects COBRA.
3. Outplacement Assistance. Employer shall provide professional outplacement services valued at [DOLLAR AMOUNT] for a period of up to [NUMBER] months.

[// GUIDANCE: Confirm Section 409A compliance if payments could extend beyond the “short-term deferral” period.]

3.3 Taxes

Employee shall be solely responsible for all federal, state, and local taxes on the Severance Amount, except Employer will withhold payroll taxes as required by law.

3.4 Consideration/Revocation Periods (OWBPA Compliance)

(a) Advice to Consult Counsel. Employee is hereby advised in writing to consult with an attorney prior to executing this Agreement.
(b) Consideration Period. Employee has twenty-one (21) calendar days to consider this Agreement. [// GUIDANCE: Substitute forty-five (45) days for group reductions and attach the disclosure required by 29 U.S.C. § 626(f)(1)(H).]
(c) Revocation Period. Employee may revoke acceptance within seven (7) calendar days after signing by delivering written notice to [Company representative/title & address].
(d) Effect of Revocation. If Employee timely revokes, this Agreement is void ab initio and Employer shall have no obligation to pay the Severance Amount.

3.5 Conditions Precedent

Employer’s obligation to provide the Severance Amount is conditioned on:
1. Timely execution and non-revocation of this Agreement;
2. Return of all Employer Property per Section 5.4; and
3. Continued compliance with all covenants herein, including non-disparagement and confidentiality.

3.6 No Re-employment

Employee waives any right to reinstatement or re-employment with Employer or its affiliates.

3.7 Acknowledgments

Employee acknowledges that:
1. The Severance Amount exceeds anything otherwise owed;
2. Employee has read and understands the Agreement; and
3. Execution is knowing and voluntary within the meaning of 29 U.S.C. § 626(f).

4. REPRESENTATIONS & WARRANTIES

4.1 Mutual Representations

Each Party represents and warrants that:
(a) It has full authority to enter into and perform under this Agreement;
(b) Its execution does not violate any other agreement or court order; and
(c) It has not assigned or transferred any claim released herein.

4.2 Employer Representations

Employer further represents that all payments due through the Separation Date (salary, commissions, PTO) have been or will be paid in full.

4.3 Survival

The representations and warranties contained in this Section 4 shall survive the Effective Date for a period of two (2) years.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality

Employee shall keep confidential and not disclose any non-public proprietary information concerning Employer (collectively, “Confidential Information”), except as required by law or to enforce this Agreement.

5.2 Non-Disparagement

Neither Party shall make statements intended to disparage or harm the reputation of the other Party. Nothing herein prohibits truthful testimony or cooperation with governmental agencies.

5.3 Cooperation

Employee shall reasonably cooperate with Employer in any investigations, audits, or litigation related to matters occurring during employment, provided Employer reimburses reasonable out-of-pocket expenses.

5.4 Return of Property

On or before the Separation Date, Employee shall return all Employer Property, including keys, documents, and electronic equipment.

5.5 Restrictive Covenants from Prior Agreements

Any non-competition, non-solicitation, or confidentiality covenants previously executed by Employee remain in full force unless superseded herein.

6. DEFAULT & REMEDIES

6.1 Events of Default

(a) Employee Default: (i) breach of Section 5 covenants; (ii) misrepresentation in Section 4.
(b) Employer Default: failure to pay the Severance Amount when due.

6.2 Notice and Cure

The non-defaulting Party must give written notice specifying the default. The defaulting Party shall have ten (10) business days to cure monetary defaults and fifteen (15) business days to cure non-monetary defaults (if curable).

6.3 Remedies

(a) Limited Injunctive Relief. Each Party acknowledges that breaches of Section 5 may cause irreparable harm and agrees the non-breaching Party may seek injunctive relief limited solely to enforcing those covenants.
(b) Damages. Monetary damages are limited as set forth in Section 7.3.
(c) Fee-Shifting. In any proceeding to enforce this Agreement, the substantially prevailing Party shall be entitled to recover reasonable attorneys’ fees and costs.

7. RISK ALLOCATION

7.1 Mutual Release of Claims

(a) Released Claims by Employee. Employee hereby irrevocably releases Employer, its parents, subsidiaries, affiliates, officers, directors, employees, and agents (the “Employer Released Parties”) from any and all claims, known or unknown, arising on or before the Effective Date, including but not limited to claims under:
• Title VII of the Civil Rights Act of 1964;
• The Age Discrimination in Employment Act, as amended by the OWBPA;
• The Americans with Disabilities Act;
• The Family and Medical Leave Act;
• The Virginia Human Rights Act;
• Contract, tort, wage, and common-law claims.

(b) Released Claims by Employer. Employer releases Employee from any and all claims arising out of the employment relationship or its termination, excluding (i) claims for fraud, embezzlement, or intentional misconduct discovered after the Effective Date, and (ii) claims arising from Employee’s breach of this Agreement.

(c) Claims Not Released. Nothing herein releases:
1. Rights to enforce this Agreement;
2. Claims for unemployment, workers’ compensation, or vested ERISA benefits;
3. Claims that cannot be waived by law.

7.2 Indemnification

Each Party shall defend, indemnify, and hold harmless the other Party against any third-party claim arising from a breach of the releasing Party’s representations, warranties, or covenants herein.

7.3 Limitation of Liability

Except for (i) breaches of Section 5, (ii) claims for indemnification under Section 7.2, or (iii) claims that cannot be limited by law, the aggregate liability of either Party under this Agreement shall not exceed the Severance Amount.

7.4 Force Majeure

No Party shall be liable for non-performance caused by events beyond its reasonable control, including natural disasters, war, acts of terrorism, or governmental actions, 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 Commonwealth of Virginia and, where applicable, federal law, without regard to conflicts-of-law principles.

8.2 Forum Selection

Subject to Section 8.3, the Parties irrevocably submit to the exclusive jurisdiction of (i) the state courts of the Commonwealth of Virginia sitting in [COUNTY/CITY], and (ii) the United States District Court for the [Eastern/Western] District of Virginia, for any action arising out of this Agreement.

8.3 Arbitration (Optional)

[ARBITRATION OPTION – SELECT ONE]
☐ Arbitration Inapplicable
☐ The Parties agree to final and binding arbitration under the Employment Arbitration Rules of the AAA in [CITY, VA]. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver (Optional)

[INSERT if elected] EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT.

8.5 Limited Injunctive Relief

Nothing in this Article shall prevent either Party from seeking limited injunctive relief in a court of competent jurisdiction to enforce Section 5 pending final resolution of the dispute.

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 any successor by merger, asset sale, or otherwise, provided the successor assumes all obligations herein.

9.3 Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

9.4 Severability

If any provision is held invalid, the remainder shall be enforced to the maximum extent permissible, and the invalid provision shall be reformed to achieve its original intent to the fullest extent allowed.

9.5 Integration

This Agreement constitutes the entire understanding between the Parties regarding the subject matter and supersedes all prior agreements, whether written or oral, except as expressly referenced herein.

9.6 Counterparts; Electronic Signatures

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures delivered electronically or by facsimile shall be deemed original signatures.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have caused this Severance and Mutual Release Agreement to be executed as of the dates set forth below.

[Notary Block – insert if notarization is desired or required]

11. EXHIBITS & SCHEDULES

• Exhibit A – OWBPA Disclosure Statement (for group terminations, if applicable)
• Exhibit B – List of Prior Restrictive Covenant Agreements
• Schedule 1 – Payment Detail & Wire Instructions

[// GUIDANCE: Attach Exhibit A only for “exit incentive” or “other employment termination program” affecting multiple employees per 29 U.S.C. § 626(f)(1)(H).]

END OF TEMPLATE