Unfortunately, this is still going around a lot these days, despite the fact that the economy is getting better. Not sure what your specific questions are, but perhaps this guidance will help a bit. For tax purposes, you're probably better off taking continued checks rather than a lump sum. You can ask to make sure, but there are times when lump sum payments are taxed at a higher rate than your traditional bracket. This is definitely true of bonus income, but may not be the case with your lump sum. That said, there's no risk in spreading the payments out. Also, the cost of benefits bought on the open market is quite expensive, even though you will have the option to continue benefits through COBRA at a reduced cost. Still, I'd keep continued payments to stay on the benefits.

As far as the other issues, this is standard legalese. Courts have consistently ruled that no matter what's on these papers, non-compete clauses can't be overbroad. In other words, saying that you can't go to work for a competitor is tantamount to saying you don't have the legal right to earn a living in the future. If you went to work for a competitor and your soon-to-be former employer sued, there's very little doubt that it would stand up in court. Giving up the right to sue is enforceable, but you probably weren't looking to do that anyway.