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August 2020
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Every Executive Employment Agreement Needs Severance Provisions
In my profession, I see many executive employment agreements because I draft and negotiate them to provide security for senior executives and their families. I also see agreements brought in by clients who have a dispute with their former employer. Usually, these agreements include severance provisions. I certainly advocate for their inclusion. These provisions define and outline what the executive officer can expect upon their departure from their current company. In many ways, severance provisions are like a prenup in a marriage. What happens if something goes wrong in your work “marriage”? How is each party protected and how can each party walk away relatively unscathed? When an employee outside of the C-suite is terminated, it’s not uncommon for them to receive two weeks of severance pay and benefits. Executives, on the other hand, often receive severance packages that offer benefits lasting anywhere from six months to a year. The benefits generally go well beyond a simple payout. Many outgoing executives have their health insurance covered, along with the ability to exercise their stock options. In other words, it’s good to be the CEO. Severance provisions benefit the executive just as much as they benefit the company providing the severance. They can prove crucial for the company to remain on good terms with the outgoing executive. The outgoing executive brought value to the company. The company may cross paths with their former executive— or they may end up doing business with the executive’s new employer. A good continued relationship could prove fruitful. Neither the executive nor the company wants to burn bridges. Of course, there are rare occasions where that happens and the
relationship is soured, but by and large, that isn’t going to be the case, and any given company (or CEO, CFO, COO, etc.) doesn’t assume the worst when the time to separate comes. During the Great Recession in 2008, I received a number of calls from CEOs who had been terminated. I looked over their executive employment agreements and was surprised how many of them did not have severance provisions, or how many severance provisions provided very limited benefits, far below what a CEO should expect. Some of these CEOs were only seeing two weeks’ worth of severance pay or benefits. Others received a week of severance for every year with the company. That was adding up to 10-15 weeks of severance for some of these now former executives. It wasn’t until their termination that they realized the “oversight.” Unfortunately, this type of situation has the potential to put the executive in a difficult negotiating position. After all, the executive agreed to the terms of their employment. Even then, the CEOs still had some leverage to renegotiate the terms of their severance after termination. In this type of situation, we negotiated with the knowledge that the former CEO did not really want to sue their former employer and the company did not want to be sued by their former CEO. Litigation tends to put both parties in a bad light. In this type of case, I was usually able to negotiate a post-termination agreement. The end result varied from client to client, but they were seeing anywhere between 3–6 months of severance rather than a few weeks. Ultimately, severance provisions can be a powerful recruiting tool for companies. Who doesn’t want to attract strong leadership?
From the perspective of the executive, a healthy severance package helps mitigate the risk of moving from one company to another. When they see they will be taken care of well, that boosts their confidence in the decision to join your firm. This is particularly true for executives moving from a well-established company to a startup. It can be a risky move. The startup may not have a lot of value right out of the gate, but a seasoned CEO at an established firm might see the potential to increase the value into that startup and walk away a lot wealthier. But that CEO needs assurances, and well thought-out severance provisions can be an influential factor. The bottom line is this: Every executive employment agreement should include severance provisions. The incoming CEO or C-suite executive should know exactly what to expect when they part ways with the company. And if you’re an executive, make certain those severance provisions are in place and that you are happy with them before you sign. Call Mailly Law to review and negotiate your employment agreement.
–Guy Mailly
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THE LASTING IMPACT OF THE DEEPWATER HORIZON OIL SPILL LEGAL IMPLICATIONS WE CAN STILL SEE TODAY
Although not many people realize it, the 2010 Deepwater Horizon oil spill greatly affected many aspects of the legal system we rely on today. The head of litigation for BP at the time, James J. Neath, says the case was a “life- changing event.” For over a year and a half, BP’s large internal and external legal teams worked continuously on the crisis response 16 hours a day, seven days a week. Neath describes the workstream as “devoted to identifying, preserving, and ‘live-streaming’ video footage of the ongoing leak.” On top of the overwhelming data, public actors from every level of government were involved. Furthermore, the case affected international claims ranging, according to Neath, from “class actions in Mexico to U.K. pension fund securities claims to litigation in the Ecuadorian Constitutional Court.” Neath adds that the sheer scale and reaction to this crisis pushed the legal industry in ways we can still see today. For one, the practice of law has rapidly globalized. Because the Deepwater Horizon
oil spill case affected people nationally and internationally, it’s more common for victims outside the U.S. to seek compensation within the U.S. justice system. However, protecting data across borders poses an increasing challenge. Cooperation among international government regulators may be more common for private plaintiffs’ counsel, but globalization and shifting feelings about nationalism can interfere with the strict standards of electronic data privacy and security. This means complex cases must rely on a proactive and professionally managed data strategy plan. Second, due to tremendous political polarization over the past few decades, local relationships are more important than ever. U.S. states, counties, and municipalities have become more independent, and “it’s more common for ills to be litigated independently at all levels of government,” Neath says. The affected U.S. Gulf Coast states and surrounding counties each influenced the outcome of the Deepwater Horizon claims. Since the oil spill, we have recognized the importance of carefully considering the relationships between each party.
Third, Deepwater Horizon has popularized the creation of internal business functions for investigating internal business safety and integrity. These departments are often established separately from the business to avoid any profit bias. Fourth, speed, professionalism, and expertise when handling data and technology in a legal operation have become more crucial than ever before. While investigations are “growing [in] importance,” even Neath believes that the “greatest challenge is data.” While he acknowledges that data experts often speak different languages, seasoned data professionals with legal backgrounds should still manage the data. With the lessons learned from the Deepwater Horizon oil spill, the U.S. legal system is better prepared to handle future hurdles that may come its way.
HOLD THE SALT Don’t Let Food Seasonings Sabotage Your Health
With so much emphasis on what foods you should eat to be healthy, it’s easy to overlook an important element of the cooking process: seasoning. You can find thousands of premixed seasonings on the market, and although adding dashes to your food seems inconsequential, the seasoning may actually turn your healthy foods into unhealthy foods. And the main culprit, in this case, is salt. Salt is a popular component of many premade seasonings because of its flavor-enhancing abilities. The label on your favorite mix should tell you exactly how much salt it contains. If it’s high on the ingredient list, you’re better off finding a substitute. High-sodium seasonings will promote water retention if used too liberally, which may lead to weight gain. The American Heart Association recommends consuming no more than 2,300 mg of salt a day. Ideally, adults would consume only 1,500 mg of salt daily. Removing salt from your seasoning repertoire may be difficult because it does enhance flavor. But alternative spices, when paired with the right food, can be great substitutes and have numerous health benefits. Here are a few. • For beef: bay leaf, marjoram, nutmeg, pepper, sage, thyme • For chicken: marjoram, oregano, paprika, rosemary, tarragon, chili powder • For pork: garlic, onion, sage, pepper, oregano
• For fish: curry powder, dill, dry mustard, marjoram, paprika, pepper • For vegetables: pepper, parsley, cumin, dill, chives, basil, paprika
Try not to use more than 1/4 teaspoon of dried spice or 3/4 teaspoon of fresh spice per pound of meat or veggies. And for the best flavor, add ground spices to your food about 15 minutes before the end of cooking time. Add whole spices at least one hour before. Remember, salt doesn’t have to be the enemy — in moderation, it helps your body stay properly hydrated and helps deliver nutrients more efficiently. But too much can quickly lead to negative side effects, and with granules that are hard to see, it can be easy to go overboard. Instead, experiment with the hundreds of incredible spices available, and you might just open up a whole new world of great flavors and healthy habits.
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TAKE A BREAK
You see fun quizzes on Facebook all the time. What kind of dog breed matches your personality? What Disney princess are you most like? These can be fun to pass time or learn new things about yourself. However, did you know that social media quizzes aren’t actually safe? The Better Business Bureau (BBB) recently warned people that distractions on social media aren’t all harmless. In order to collect personal information, scammers can’t knock on your door and ask about your mother’s maiden name or the name of the street you grew up on. Intentionally, they design scams to attract your attention so you voluntarily give your information to them. They will ask common security questions that seem to relate to the subject matter, but in actuality, your answers are recorded for scammers to hack and steal your personal information later on. That’s why it pays to be skeptical. If you’re about to take a quiz, first ask yourself who created it. Do you trust them and the website it’s on? Even if the quiz seems outwardly innocent, it’s a risk. To prevent quizzes and potential scams from popping in your newsfeed, adjust your privacy settings and monitor friend requests. Is one of your friends adding you on a second account? Sometimes, scammers make imposter secondary accounts of people just to have access to their friends’ timelines. Not everyone monitors how much they post on Facebook; anyone can amass lots of invasive information just from scrolling down a profile. This brings us to our next point: Remove personal details from your profile. Nobody needs to know your phone number and home address by clicking around on your profile. Let the important people ask! It’s safer that way. Lastly, never give answers to common security questions. Why would a quiz need to know the name of your high school? No matter what, when you volunteer information online, there’s always risk. Best of luck, friends! There are lots of safe, authentic quizzes out there. How else are you supposed to know what Disney princess or dog breed you really are? ARE YOU QUIZ SAVVY? Beware of Social Media Quiz Scams
RESTAURANT-STYLE FETTUCCINE ALFREDO
Inspired by The New York Times
Ingredients
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Salt
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1 lb fresh fettuccine
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2 tbsp butter
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1 cup freshly grated Parmigiano- Reggiano
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1 clove of garlic, finely chopped
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Freshly ground pepper, to taste
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1 1/2 cups heavy cream
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Fresh parsley, chopped, to taste
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1 large egg yolk
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1 lemon wedge
Directions
1.
In a large pot, bring 6 quarts of generously salted water to a boil. In a large, deep skillet, while the water heats, melt butter over medium-high heat. Add garlic and sauté until fragrant and sizzling (about 2 minutes). In a bowl, whisk heavy cream and egg yolk until blended and pour into garlic butter. Reduce heat to medium-low. Stir until hot, not boiling. Keep warm on low heat.
5.
In the large pot, cook pasta until al dente. (The pasta will float once it’s done.) Reserve about 1/2 cup pasta water and drain pasta. Pour hot pasta into creammixture and toss to coat on low heat. Add Parmigiano-Reggiano and keep tossing gently until cream is mostly absorbed. If the sauce is absorbed too much, toss with extra pasta water. Season with salt and pepper to taste.
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6.
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4.
7.
Serve with parsley and a squeeze of lemon.
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INSIDE THIS ISSUE
Does Your Executive Employment Agreement Cover Severance? It Should
1
Legal Lessons From the Deepwater Horizon Oil Spill Is Seasoning Sabotaging Your Health?
2
Restaurant-Style Fettuccine Alfredo Don’t Fall for These Social Media Quiz Scams
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Meet the Man Who Stole the ‘Mona Lisa’
THE MOST FAMOUS ART HEIST YOU’VE NEVER HEARD OF Meet the Man Who Stole the ‘Mona Lisa’
One hundred and nine years ago this month, one man — or was it three? — fled from the Louvre Museum in Paris, carrying what would quickly become the world’s most famous painting: Leonardo da Vinci’s “Mona Lisa.” Historical accounts of the theft agree only on who was the ringleader: 30-year-old Louvre handyman Vincenzo Peruggia. He was a house painter, an immigrant, the bearer of a glorious Monopoly Man mustache, and a vehement Italian patriot. At some point on the morning of Aug. 21, 1911, Peruggia lifted the glass case he himself had constructed to house the “Mona Lisa” and smuggled the painting from the building. Some versions of the story say Peruggia was assisted by two brothers, fellow Italian handymen Vincenzo and Michele Lancelotti. NPR reports the trio spent the night preceding the theft huddled in one of the Louvre’s supply closets, lying in wait to steal
the portrait. In his documentary about the theft, director Joe Medeiros claims Peruggia acted alone, driven by an obsession with the work and a dream of returning the painting to Italy. Either way, we know that Peruggia successfully spirited the painting back to his one-bedroom apartment. There it lay concealed in a false-bottomed trunk for more than two years. This period of mysterious absence (during which police grilled and dismissed Peruggia as a suspect in favor of J.P. Morgan, Pablo Picasso, and playwright Guillaume Apollinaire) is what made the “Mona Lisa” world famous. Peruggia was eventually caught attempting to sell the painting in Italy. He pleaded guilty and spent eight months in jail. After his release, he enlisted in the Italian army to fight in World War I, surviving the war only to die of a heart attack on his 44th birthday.
Though Peruggia married after the war, some suspect that the true love of his life was the “Mona Lisa” herself. In a CNN article, author and art history professor Noah Charney speculates that over his two years with her, Peruggia developed romantic feelings for the portrait. Perhaps he fell victim to a kind of “reverse Stockholm syndrome,” Charney suggests, the captor falling in love with his hostage. “In this case,” he says, “the hostage was a work of art.”
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