This is an agreement that should be used by an employer who intends to terminate the
employment of an employee who is over the age of 40. This particular agreement
provides that the employer will provide a severance payment and in return the employee
will release all claims against the employer. This form agreement should be used by
small businesses or other entities that want to terminate the employment of an
employee over the age of 40 while providing severance payment.
This Separation Agreement (â€œAgreementâ€) is made by and between ____________, a
____________ corporation (â€œCompanyâ€), and ________________ (â€œEmployeeâ€) with respect to
the following facts:
A. Employee is employed by Company as a ____________. Employeeâ€™s
employment with Company will cease effective _____________ (â€œSeparation Dateâ€).
B. Company wishes to reach an amicable separation, and this Agreement assumes that
each party will act in a professional and amicable manner during such separation from
C. The parties desire to settle all claims and issues that have, or could have been raised,
in relation to Employeeâ€™s employment with Company and arising out of or in any way related to
the acts, transactions or occurrences between Employee and Company to date, including, but not
limited to, Employeeâ€™s employment with Company or the termination of that employment, on
the terms set forth below.
THEREFORE, in consideration of the promises and mutual agreements hereinafter set
forth, it is agreed by and between the undersigned as follows:
1. Separation Payment. Company agrees to provide Employee with a payment in
the amount of $____________, subject to applicable withholding requirements (the â€œSeparation
Paymentâ€), to which Employee is not otherwise entitled. Employee acknowledges and agrees
that the Separation Payment constitutes adequate legal consideration for the promises and
representations made by Employee in this Agreement, including the general release. The
Separation Payment will be paid to Employee in a lump sum on or before Companyâ€™s first
regular payroll date following the Effective Date (as defined below). The Separation Payment is
in addition to the payment of you of your final paycheck and accrued vacation/PTO time, if any.
2. Equity Interests. Employee acknowledges and agrees that (a) any unvested
options to purchase shares of common stock of Company held by Employee shall expire
unexercised, (b) any vested options to purchase shares of common stock of Company may be
exercised in accordance with terms and conditions of the applicable plan documents, and (c)
other than such options, Employee has no right, title or interest in or to any shares of capital
stock of Company or options or rights to acquire shares of capital stock of Company, pursuant to
any agreement (oral or written) or plan with Company or otherwise.
3. General Release. Employee unconditionally, irrevocably and absolutely releases
and discharges Company, and any parent and subsidiary corporations, divisions and affiliated
corporations, partnerships or other affiliated entities of Company, past and present, as well as
Companyâ€™s employees, officers, directors, agents, successors and assigns (collectively,
â€œReleased Partiesâ€), from all claims related in any way to the transactions or occurrences
between them to date, to the fullest extent permitted by law, including, but not limited to,
Employeeâ€™s employment with Company, the termination of Employeeâ€™s employment, and all
other losses, liabilities, claims, charges, demands and causes of action, known or unknown,
suspected or unsuspected, arising directly or indirectly out of or in any way connected with
Employeeâ€™s employment with Company. This release is intended to have the broadest possible
application and includes, but is not limited to, any tort, contract, common law, constitutional or
other statutory claims, including, but not limited to alleged violations of the ______________
[Instruction: insert state] Labor Code or the Federal Fair Labor Standards Act, Title VII of the
Civil Rights Act of 1964 and the ______________ [Instruction: insert state] Fair Employment
and Housing Act, the Americans with Disabilities Act, and all claims for attorneysâ€™ fees, costs
and expenses. Employee expressly waives Employeeâ€™s right to recovery of any type, including
damages or reinstatement, in any administrative or court action, whether state or federal, and
whether brought by Employee or on Employeeâ€™s behalf, related in any way to the matters
released herein. However, this general release is not intended to bar any claims that, by statute,
may not be waived, such as claims for workersâ€™ compensation benefits, statutory indemnity or
unemployment insurance benefits.
4. Representation Concerning Filing of Legal Actions. Employee represents that, as
of the date of this Agreement, Employee has not filed any lawsuits, charges, complaints,
petitions, claims or other accusatory pleadings against Company or any of the other Released
Parties in any court or with any governmental agency.
5. Nondisparagement. Employee agrees not to make any voluntary statements,
written or oral, or cause or encourage others to make any such statements that defame, disparage
or in any way criticize the personal and/or business reputations, practices or conduct of Company
or any of the other Released Parties.
6. Confidentiality and Return of Company Property.
6.1 Confidential Separation Information. Employee agrees that the terms and
conditions of this Agreement, as well as the discussions that led to the terms and conditions of
this Agreement (collectively referred to as the â€œConfidential Separation Informationâ€) are
intended to remain confidential between Employee and Company. Employee further agrees not
to disclose the Confidential Separation Information to any other persons, except in confidence to
Employeeâ€™s immediate family members, attorney(s) and accountant(s), if any, to the extent
needed for legal advice or income tax reporting purposes. When releasing this information to
any such person, Employee shall advise the person receiving the information of its confidential
nature. Nothing in this section will preclude Employee from disclosing information when
required by law.
6.2 Confidential or Proprietary In