This severance pay agreement template has 7 pages and is a MS Word file type listed under our human resources documents.
Sample of our severance pay agreement template:
SEVERANCE PAY AGREEMENT This Severance Pay Agreement (the "Agreement") is effective [DATE] ("Effective Date"), BETWEEN: [YOUR COMPANY NAME] (the "Company"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE] with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the "Employee"), an individual resident at: [COMPLETE ADDRESS] WHEREAS the Parties have agreed that it is in mutual interest that the Employee separates from the Company as of [DATE]; WHEREAS the Employee acknowledges that the payment made to him under the Agreement is being made for the sole purpose of avoiding uncertainties and expense of litigation; WHEREAS the Parties wish to evidence their contract in writing; WHEREAS the Parties are duly authorized and have the capacity to enter into and perform this Agreement; WHEREAS both the Parties affirm to understand all the provisions contained in this Agreement, and in case either Party requires clarification as to one or more of the provisions contained herein, either Party has requested clarification or otherwise sought legal guidance; The Company and the Employee shall individually be referred to as "Party" and collectively as "Parties." IN CONSIDERATION OF COVENANTS AND AGREEMENTS CONTAINED HEREIN, THE PARTIES HERETO AGREE TO THE FOLLOWING TERMS AND CONDITIONS: DEFINITIONS "Employment Agreement" refers to the Agreement executed between the Employee and the Company outlining the rights, responsibilities, duties, and employment conditions that make up the legal relationship between the Company and the Employee. "Property" refers to all the assets and products provided by the Company to the Employee to facilitate the Employee in furnishing its roles and responsibilities. "Severance Compensation" refers to the total amount paid by the Company to its Employee which exceeds the minimum payments as prescribed by the applicable laws. "Separation Date" is the employment termination date for the Employee for all purposes. SEVERANCE In exchange for the release and covenant not to sue set forth below, the Company will pay the Employee the Severance Compensation, subject to the terms and conditions of this Agreement. COMPENSATION UPON TERMINATION Termination Without Cause; With Good Reason: If the Employee's employment is terminated by the Company without cause or by the Employee with good reason during the employment period, the Company shall provide to the Employee the Accrued Obligations, Severance Compensation, and Other Benefits. Termination for Cause; Without Good Reason: If the Employee's employment is terminated by the Company for cause or by the Employee without good reason during the employment period, the Company shall provide to the Employee the Accrued Obligations and shall have no other severance obligations under this Agreement. Accrued Obligations: "Accrued Obligations" shall mean the sum of the following unpaid benefits as of the Separation Date: payment of any earned but unpaid portion of the 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/she has incurred in performing the 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 the Company. Payment of Accrued Obligations: All Accrued Obligations shall be paid to the Employee in a lump sum in cash within [NUMBER OF DAYS] days of the Payment Date [or Separation Date]. The Company shall pay the Employee an amount of [TOTAL AMOUNT] representing gross payment from [PAY START DATE] to [PAY END DATE]. The payments as mentioned in this section shall be subject to all applicable federal and state tax and shall be made within [NUMBER OF DAYS] days from the Separation Date. Other Benefits: "Other Benefits" shall mean, as of the [or Separation Date]: Equity Awards: The Employee's rights to vesting of any outstanding Stock options, restricted Stock awards and other equity incentive awards ("Equity-Based Awards") and rights to exercise any outstanding Equity-Based Awards, shall continue throughout the Severance Period in the same manner as if the Employee continued to serve as an Employee of the Company during such Severance Period; "Equity Awards" shall consist of (a) shares of the capital Stock of the Company ("Stock"), (b) options and other rights to purchase shares of Stock, (c) Stock units, performance units or phantom shares whose value is measured by the value of shares of Stock, and (d) Stock appreciation rights whose value is measured by increases in the value of shares of Stock. Welfare Benefit Plans: If the Employee elects to continue health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), the Company shall pay the [Company] portion of the monthly premium under COBRA for the Employee, and, if applicable, the Employee's dependents until the earliest of: the close of the Continuation Period, the expiration of the Employee's continuation coverage under COBRA, or the date when the Employee receives substantially equivalent health insurance coverage in connection with new employment or self-employment. Severance Compensation: Immediately following the expiration of the Revocation Period, the Company shall provide the Employee with severance benefits of [TOTAL COMPENSATION] (the "Severance Compensation") provided however, that the Severance Compensation will not be due or made if the Employee revokes this Agreement during the Revocation Period. The payment includes all benefits, as mentioned above, which are or may be claimed to be accrued or due and owing to the Employee under the laws of the [State/Province] of [STATE/PROVINCE], and any and all other applicable countries or locations, and under any employment agreement with or severance or separation pay plan maintained by the Company. The offer of payment of Severance Compensation to the Employee by the Company is contingent on (a) the Employee's first having signed this Agreement, and (b) the Employee receiving any unpaid vacation entitlements for the calendar year [YEAR ] and any vacation entitlements for [YEAR] on a pro-rata basis. LIABILITIES The Employee hereby releases and forever releases the Company, as well as all partners, employees, directors, consultants, insurers from any claims, demands, causes of action, obligations, damages, liabilities and charges which may have arisen during the employment period. The Employee states they have not nor will they file a lawsuit for any of the following prior to or after this Agreement for: all laws in regard to the discovery or claim of wrongful termination; violation of public policy; all compensation claims, including back wages, commission, front pay, pay increases, bonuses, disability benefits, retirement compensation, or reinstatement fees; personal injury claims, including mental, physical, emotional, humiliation, or damage to name. If the Employee files a lawsuit based on legal claims that the Employee has released, the Employee will pay for all costs incurred by the Company, any related companies or the directors or employees of any of them, including reasonable attorneys' fees, in defending against the Employee's claim. Nothing in this clause shall be construed or intended to waive or limit the Employee's rights to enforce any and all terms of this Agreement. Furthermore, the Company has not violated any legal obligations and has made no acceptance of such by entering into these terms.
