A severance contract is often included in a severance package, which most companies offer to employees they have chosen to lay off. Specifically, the severance contract stipulates the terms which both parties must mutually agree and then adhere to in order for the severance package to become legally binding. For instance, a severance contract typically spells out how much money the employee will be given, including owed wages and earned but unused vacation time, severance pay, and possibly stock options. It will also specify the employee's obligations, which often includes a confidentiality agreement not to disclose certain information about the company to competitors for a given period of time. The contract may also detail the consequences if either side does not hold up their specific responsibilities.