Severance Agreement Template

This Severance Agreement template below available for free use on UpCounsel. If you are trying to avoid a wrongful termination claim, consider asking a terminated employee to sign this form once you have customized it.

This Severance Agreement (the “Agreement”) is made on this ____ day of __________, 20__, between [ Employer ] with its principal place of business located at [ Employer Place of Business ] (the "Employer") and [ Employee Name ], located at [ Employee Place of Residence ] (the "Employee"), (sometimes collectively referred to as the "Parties").

In consideration of covenants and agreements contained herein, the parties hereto agree to the following terms and conditions.

In exchange for the release and covenant not to sue set forth below, the Employer will pay Employee the Severance Benefit, subject to the terms and conditions of this Agreement.

2. Compensation Upon Termination

(a) Termination Without Cause; With Good Reason. If the Employee's employment is terminated by the Employer Without Cause or by the Employee With Good Reason during the Employment Period, the Employer shall provide to the Employee the Accrued Obligations, Severance Compensation, and Other Benefits.

(b) Termination for Cause; Without Good Reason. If the Employee's employment is terminated by the Employer For Cause or by the Employee Without Good Reason during the Employment Period, the Employer shall provide to the Employee the Accrued Obligations, and shall have no other severance obligations under this agreement.

(c) Accrued Obligations.

(1) Definition of Accrued Obligations. "Accrued Obligations" shall mean the sum of the following unpaid benefits as of the Date of Termination:

• payment of any earned but unpaid portion of Employee's annual base salary as in effect from time to time ("Base Salary") through the effective date of such termination;
• reimbursement for any reasonable, unreimbursed and documented business expense he has incurred in performing Employee's duties hereunder;
• the right to elect continuation coverage of insurance benefits to the extent required by law; and
• payment of any accrued but unpaid benefits (including without limitation, any bonus due by virtue of having met all applicable performance targets prior to the effective date of such termination), and any other rights, as required by the terms of any Employee benefit plan or program of Employer.

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