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Mutual Severance Agreement Template for Denmark

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Key Requirements PROMPT example:

Mutual Severance Agreement

I need a Mutual Severance Agreement under Danish law for our departing CEO, including provisions for stock options, board resignation effective March 1, 2025, and continued health benefits for 6 months.

What is a Mutual Severance Agreement?

The Mutual Severance Agreement is a critical document used when an employer and employee in Denmark mutually agree to terminate their employment relationship. It's particularly relevant in situations involving amicable separations, corporate restructuring, or negotiated exits of senior executives. The agreement must comply with Danish employment law, including the Danish Salaried Employees Act and relevant tax regulations. It typically includes comprehensive details about severance payments, notice periods, holiday pay calculations, and post-employment obligations. This document serves to protect both parties' interests by clearly defining the termination terms and preventing future disputes. The Mutual Severance Agreement is especially important in the Danish context due to the country's "flexicurity" model, which balances employer flexibility with employee security.

What sections should be included in a Mutual Severance Agreement?

1. Parties: Identification of the employer and employee, including full legal names, addresses, and any relevant registration numbers

2. Background: Context of the employment relationship and mutual decision to terminate

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date of employment termination and last working day

5. Final Salary and Benefits: Details of final regular salary payment and ongoing benefits until termination

6. Severance Payment: Amount, timing, and method of severance payment, including tax treatment

7. Holiday Pay: Calculation and payment of accrued holiday pay under Danish Holiday Act

8. Company Property: Requirements and timeline for returning company property

9. Confidentiality: Ongoing obligations regarding confidential information

10. Full and Final Settlement: Mutual release of claims and waiver of rights

11. Tax Implications: Statement on tax treatment and responsibilities

12. Governing Law: Confirmation of Danish law application and jurisdiction

13. Signatures: Execution provisions and signature blocks

What sections are optional to include in a Mutual Severance Agreement?

1. Garden Leave: Terms of garden leave if applicable during notice period

2. Post-Employment Restrictions: Non-compete and non-solicitation clauses if applicable

3. Equity/Stock Options: Treatment of outstanding equity compensation

4. Outplacement Support: Details of any career transition services provided

5. Reference: Terms of employment references to be provided

6. Insurance Continuation: Details of any continued insurance coverage

7. Board Positions: Resignation from any board or officer positions

8. Public Announcement: Agreed communication regarding the departure

9. Legal Fees: Coverage of legal fees for agreement review

What schedules should be included in a Mutual Severance Agreement?

1. Schedule 1 - Severance Calculation: Detailed breakdown of severance payment calculation

2. Schedule 2 - Company Property List: Itemized list of company property to be returned

3. Schedule 3 - Benefits Summary: Detailed list of benefits and their treatment post-termination

4. Schedule 4 - Outstanding Equity Awards: List of stock options or other equity awards and their treatment

5. Appendix A - Release of Claims: Detailed release of claims language under Danish law

6. Appendix B - Data Protection Terms: Specific provisions regarding personal data handling post-employment

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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