Document:

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of May   , 2007, by and between The Phone Card Warehouse Inc., a Florida corporation, with an office located at 10376 E. Colonial Drive #135, Orlando, FL 32817 (the " Company"), and Pradip Patel, an individual and resident of New York ("Executive").

WHEREAS, the Company is in the business of distributing prepaid telephone service products; and

WHEREAS, Executive has had experience in the operations of businesses distributing prepaid telephone service products; and 

WHEREAS, the Company desires to retain the services of Executive; and

WHEREAS, Executive is willing to be employed by the Company; and

WHEREAS, the Company is a wholly-owned subsidiary of Reliablecom, Inc., a Delaware corporation (“Parent”);

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Employment.  Executive is hereby employed and engaged to serve the Company as the Chief Executive Officer of the Company, or such additional titles as the Board of Directors of the Company shall specify from time to time, and Executive does hereby accept, and Executive hereby agrees to such engagement and employment.   

2. Duties.  Executive shall be responsible for the overall development and operations of the Company. In addition, Executive’s duties shall be such duties and responsibilities as the Company shall specify from time to time, and shall entail those duties customarily performed by the President of a corporate business unit with a sales volume and number of employees commensurate with those of the Company.  Executive shall diligently and faithfully execute and perform such duties and responsibilities, subject to the general supervision and control of the Company’s board of directors. Executive shall be responsible and report only to the Company’s board of directors.  The Company’s board of directors, in its sole and absolute discretion, shall determine Executive’s duties and responsibilities and may assign or reassign Executive to such duties and responsibilities as it deems in the Company's best interest.  Executive shall devote his full-time attention, energy, and skill during normal business hours to the business and affairs of the Company and shall not, during the Employment Term, as that term is defined below, be actively engaged in any other business activity, except with the prior written consent of the Company’s board of directors. Notwithstanding the foregoing, Executive shall have the following duties for the Company, subject to the supervision of the Company’s Board of Directors and the participation of the Company’s Chief Financial Officer and other appropriate officers:

a.

Collection and expenditure of revenues of the Company, in conjunction with the Company’s Chief Financial Officer and controller.

b.

Determination and provision of compensation and benefits to the employees of Company so long as such compensation and benefits are consistent with the prior business practices of the Company for the twelve month period prior to the date hereof.  In no event shall Executive be required to utilize the revenues of the Company for the payment of salaries of employees who are off-site from the business location of Company at 10376 E. Colonial Drive, #135, Orlando, Florida 32817, or such other location as the Company shall occupy.

c.

Hiring, management and termination of employees of the Company, other that executive officers of the Company which shall be made solely with the written consent of the Board of Directors of the Company.

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d.

Day to Day management of all business of the Company in the same manner as Executive provided for the Company prior to the date of this Agreement, subject to the supervision of the Board of Directors.

During the term of this Agreement, Company shall continue its business activities in substantially the same manner as had existed during the twelve month period immediately preceding the date of this Agreement.  Company shall not transfer its business operations to any affiliate or nonaffiliate of Company during the term of the Agreement.  Executive shall devote Executive’s full-time attention, energy, and skill during normal business hours to the business and affairs of the Company and shall not, during the Employment Term, as that term is defined below, be actively engaged in any other business activity, except with the prior written consent of the Company’s board of directors.

Nothing in this Agreement shall preclude Executive from devoting reasonable periods required for:

(a)

serving as a director or member of a committee of any organization or corporation involving no conflict of interest with the interests of the Company;

(b)

serving as a consultant in his area of expertise (in areas other than in connection with the business of the Company), to government, industrial, and academic panels where it does not conflict with the interests of the Company; and

(c)

managing his personal investments or engaging in any other non-competing business;

provided that such activities do not interfere with the regular performance of his duties and responsibilities under this Agreement as determined by the Company.

3. Best Efforts of Executive.  During his employment hereunder, Executive shall, subject to the direction and supervision of the Company’s board of directors, devote his full business time, best efforts, business judgment, skill, and knowledge to the advancement of the Company's interests and to the discharge of his duties and responsibilities hereunder.  

4. Employment Term. This Agreement shall have a term of three (3) years, beginning on the date of this Agreement (the "Employment Term"). Upon the initial expiration of the Employment Term or any renewal thereof (a “Term”), this Agreement shall automatically be extended for one additional year, unless a written notice of termination shall be provided at least 90 days prior to the expiration of the Term or unless terminated by either party pursuant to Section 12.

5. Compensation of Executive.  During the first three years of the Term of this Agreement, the Executive shall be paid a salary of $14,583.33 per month, payable in accordance with the Company’s regular payroll practices.  Commencing after three years, as preliminary compensation for the services provided by Executive under this Agreement, the Company shall pay Executive a monthly draw of $14,583.33 as an advance on actual compensation, to be paid in accordance with the Company's usual payroll procedures. Within fifty (50) days after the end of each of the first three fiscal quarters of the Company, the Company’s Chief Financial Officer shall prepare quarterly financial statements in accordance with generally accepted accounting principals (“GAAP”).  Such financial statement shall include a calculation of the Company’s net profit for quarter in accordance with GAAP and after deduction for accounts receivable which have been outstanding for more than 45 days (“Quarterly Net Profit”).  The Executive shall be paid an amount, if any, by which 25% of the Quarterly Net Profit exceeds $62,500 (each, a “Quarterly Payout”).  Notwithstanding the foregoing, in the event 25% of the Quarterly Net Profit shall be less than $62,500 (the “Quarterly Shortfall Amount”), the monthly draw for the following quarter shall be reduced by an amount equal to the Quarterly Shortfall Amount, divided by three. Within one hundred five (105) days after the end of the Company’s fourth fiscal quarter, the Company shall prepare an annual financial statement in accordance with GAAP. Such financial statement shall include a calculation of the Company’s net profit for year in accordance with GAAP and after deduction for accounts receivable which have been outstanding for more than 45 days (“Annual Net Profit”).

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The Executive shall be paid an amount, if any, by which 25% of the Annual Net Profit exceeds $250,000, plus all Quarterly Payouts for such fiscal year.  In the event the Company does not have a net profit based on the Quarterly Net Profits and Annual Net Profit, the aggregate loss for such period shall be carried forward to the following fiscal year.  All payments shall be made within fifteen (15) days of delivery of the quarterly financial statements and profit calculation to the Executive.

6. Benefits.  Executive shall also be entitled to participate in any and all Company benefit plans, from time to time, in effect for executives of the Company.  Such participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies.

7. Vacation, Sick Leave and Holidays.  Executive shall be entitled paid vacation in accordance with Company policies established and in effect from time to time , with such vacation to be scheduled and taken in accordance with the Company's standard vacation policies with a minimum of three weeks. In addition, Executive shall be entitled to such sick leave and holidays at full pay in accordance with the Company's policies established and in effect from time to time.

8. Business Expenses.  The Company shall promptly reimburse Executive for all reasonable out-of-pocket business expenses incurred in performing Executive’s duties and responsibilities hereunder in accordance with the Company's policies, provided Executive promptly furnishes to the Company adequate records of each such business expense.

9.  Location of Executive's Activities.  Executive’s principal place of business in the performance of his duties and obligations under this Agreement shall be in the New York area.  Notwithstanding the preceding sentence, Executive will engage in such travel and spend such time in other places as may be necessary or appropriate in furtherance of his duties hereunder.

10. Confidentiality.  Executive recognizes that the Company has and will have business affairs, products, future plans, trade secrets, customer lists, and other vital information (collectively "Confidential Information") that are valuable assets of the Company.  Executive agrees that he shall not at any time or in any manner, either directly or indirectly, divulge, disclose, or communicate in any manner any Confidential Information to any third party without the prior written consent of the Company’s board of directors.  Executive will protect the Confidential Information and treat it as strictly confidential.

12. Termination.   Notwithstanding any other provisions hereof to the contrary, Executive’s employment hereunder shall terminate under the following circumstances:

(a)

Termination for Cause.  The Company shall have the right to terminate this Agreement and Executive’s employment hereunder at any time for cause. As used in this Agreement, "cause" shall mean refusal by Executive to implement or adhere to lawful policies or directives of the Company’s board of directors, breach of this Agreement, Executive’s conviction of a felony, other conduct of a criminal nature that may have a material adverse impact on the Company's reputation, breach of fiduciary duty or the criminal misappropriation by Executive of funds from or resources of the Company. Cause shall not be deemed to exist unless the Company shall have first given Executive a written notice thereof specifying in reasonable detail the facts and circumstances alleged to constitute "cause" and thirty (30) days after such notice such conduct has, or such circumstances have, as the case may be, not entirely ceased and not been entirely remedied.

(b)

Termination Upon Death or for Disability.  This Agreement and Executive’s employment hereunder, shall automatically terminate upon Executive’s death or upon written notice to Executive and certification of Executive’s disability by a qualified physician or a panel of qualified physicians if Executive becomes disabled beyond a period of twelve (12) months and is unable to perform the duties contain in this Agreement. 

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(c)

Effect of Termination In the event that this Agreement and Executive’s employment is terminated for cause pursuant to Section 12(a), all obligations of the Company and all duties, responsibilities and obligations of Executive under this Agreement shall cease. Upon such termination, Executive shall be entitled to receive only the compensation, benefits, and reimbursement earned by or accrued to Executive under the terms of this Agreement prior to the date of termination, but shall not be entitled to any further compensation, benefits, or reimbursement after such date. Upon death or disability of Executive pursuant to Section 12(b) during the first three years of the Term, Executive shall be entitled to all compensation pursuant to Section 5 for the period between the effective termination date to the end of the Employment Term pursuant to Section 4. Payment will be made to Executive or Executive’s appointed trustee. Upon death or disability of Executive pursuant to Section 12(b) after the first three years of the Term, Executive shall be entitled to all compensation pursuant to Section 5 for the period through the effective termination date. Other than as set forth above, Executive shall not be entitled to any further compensation, benefits, or reimbursement after the date of his termination. In the event of a merger, consolidation, sale, or change of control, the Company's rights hereunder shall be assigned to the surviving or resulting company, which company shall then honor this Agreement with Executive.  In the that this Agreement is terminated without cause during the first three years of this Agreement, Executive shall remain entitled to all Quarterly Payouts due for the first three years of this Agreement. 

(d)

Termination by Executive.  This Agreement and Executive’s employment hereunder, may be terminated upon ninety (90) days advance written notice by Executive to Company.  Upon any such termination, Executive shall be entitled to receive only the compensation, benefits, and reimbursement earned by or accrued to Executive under the terms of this Agreement prior to the date of termination.

13. Resignation as Officer.  In the event that Executive’s employment with the Company is terminated for any reason whatsoever, Executive agrees to immediately resign as an Officer and/or Director of the Company and any related entities. For the purposes of this Section 13, the term the "Company" shall be deemed to include subsidiaries, parents, and affiliates of the Company. 

14. Governing Law, Jurisdiction and Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any applicable conflicts of law provisions.

15. Business Opportunities.  During the Employment Term Executive agrees to bring to the attention of the Company’s board of directors all written business proposals that come to Executive’s attention and all business or investment opportunities of whatever nature that are created or devised by Executive and that relate to areas in which the Company conducts business and might reasonably be expected to be of interest to the Company or any of its subsidiaries.

16. Executive’s Representations and Warranties. Executive hereby represents and warrants that he is not under any contractual obligation to any other company, entity or individual that would prohibit or impede Executive from performing his duties and responsibilities under this Agreement and that he is free to enter into and perform the duties and responsibilities required by this Agreement. Executive hereby agrees to indemnify and hold the Company and its officers, directors, employees, shareholders and agents harmless in connection with the representations and warranties made by Executive in this Section 16.

17.  Executive’s Covenant.  The Executive covenants and agrees to use his best efforts to cooperate with the Company and companies affiliated with the Company in the preparation of audited consolidated financial statements of Parent for the two year period ended December 31, 2006, or any subsequent period thereafter, as such may be required pursuant to Regulation S-K under the Securities Exchange Act of 1934.

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18. Notices.  All demands, notices, and other communications to be given hereunder, if any, shall be in writing and shall be sufficient for all purposes if personally delivered, sent by facsimile or sent by United States mail to the address below or such other address or addresses as such party may hereafter designate in writing to the other party as herein provided.

Company:

Executive:

The Phonecard Warehouse, Inc.

Pradip Patel

10376 E. Colonial Drive #135

Orlando, Florida 32817

19. Entire Agreement.  This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement, whether oral or written.  This Agreement supersedes any prior written or oral agreements between the parties. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties. This Agreement is for the unique personal services of Executive and is not assignable or delegable, in whole or in part, by Executive. This Agreement may be assigned or delegated, in whole or in part, by the Company and, in such case, shall be assumed by and become binding upon the person, firm, company, corporation or business organization or entity to which this Agreement is assigned. The headings contained in this Agreement are for reference only and shall not in any way affect the meaning or interpretation of this Agreement. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and, in pleading or proving any provision of this Agreement, it shall not be necessary to produce more than one of such counterparts.  In the event of any dispute, the prevailing party shall be entitled to recover its reasonable attorney’s fees and court costs on the trial and appellate levels.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

THE PHONECARD WAREHOUSE, INC.

EXECUTIVE

By:______________________________ 

________________________________

 

     Name: _________________________

Pradip Patel

       Title: _________________________

5CHANGE IN CONTROL AGREEMENT

CHANGE IN CONTROL AGREEMENT

 

THIS CHANGE IN CONTROL AGREEMENT (the "Agreement") is entered into as of May 29, 2007, (the "Effective Date"), by and between James W. Howatt (the "Executive") and Molina Healthcare, Inc., a Delaware corporation (the "Company").

1.Definitions.  The following definitions shall apply for all purposes under this Agreement:

(a)Change in Control.  "Change in Control" means the occurrence of any of the following events after the Effective Date:

(i)The acquisition (other than by an Excluded Person), directly or indirectly, in one or more transactions, by any person or by any group of persons, within the meaning of Section 13(d) or 14(d) of the Exchange Act, of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of more than fifty percent (50%) of either the outstanding shares of common stock or the combined voting power of the Company's outstanding voting securities entitled to vote generally, whether or not the acquisition was previously approved by the existing directors, other than an acquisition that complies with clause (x) and (y) of paragraph (ii);

(ii)Consummation of a reorganization, merger, or consolidation of the Company or the sale or other disposition of all or substantially all of the Company's assets unless, immediately following such event, (x) all or substantially all of the stockholders of the Company immediately prior to such event own, directly or indirectly, more than fifty percent (50%) of the then outstanding voting securities of the resulting corporation (including without limitation, a corporation which as a result of such event owns the Company or all or substantially all of the Company's assets either directly or indirectly through one or more subsidiaries) and (y) the securities of the surviving or resulting corporation received or retained by the stockholders of the Company are publicly traded;

(iii)Approval by the stockholders of the complete liquidation or dissolution of the Company; or

(iv)A change in the composition of a majority of the directors on the Company's Board of Directors within 12 months if not approved by a majority of the pre-existing directors.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company's incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

(b)Excluded Person.  "Excluded Person" means:

(i)Any person described in and satisfying the conditions of Rule 13d-1(b)(1) under the Exchange Act;

(ii)The Company; 

(iii)An employee benefit plan (or related trust) sponsored or maintained by the Company or its successor;

(iv)Any person who is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of more than 15% of the Common Stock on the Effective Date (or any affiliate, successor, heir, descendant, or related party of or to such person).

(c)Good Reason.  "Good Reason" shall mean that, on or after the effective date of a Change in Control, the Executive (without Executive's written consent):

(i)Has incurred a material reduction in his or her authority or responsibility in comparison to the Executive's authority or responsibility prior to the public announcement of the Change in Control (the "Announcement");

(ii)Has incurred one or more reductions in his or her "total compensation" which is defined as follows:

(A) any reduction in base salary, or

(B) any reduction in the target annual bonus percentage of base salary; or

(iii)Has been notified that his or her principal place of work will be relocated by a distance of 50 miles or more.

For purposes of this Agreement, "base salary" shall mean the Executive's annualized base salary as of the Effective Date, as may be subsequently adjusted upward for increases.

(d)Just Cause.  "Just Cause" includes but is not limited to any of the following committed by Executive (or omitted to be done by Executive) that occur on or after the Effective Date:

(i)Theft, unethical or unlawful activity, or other dishonesty;

(ii)Neglect of or failure to perform employment duties;

(iii)Inability or unwillingness to perform employment duties;

(iv)Insubordination;

(v)Abuse of alcohol or other drugs or substances;

(vi)Breach of this Agreement;

(vii)A conviction of or plea of "guilty" or "no contest" to a felony under the laws of the United States or any state thereof; or 

(viii)Any violation or breach of any Company policy that has been established to comply with either the Sarbanes-Oxley Act of 2002 (or any regulations or rules or decisions that implement/interpret such act) or any laws, rules, or requirements of the Securities and Exchange Commission or the New York Stock Exchange.

(e)Total Disability.  "Total Disability" shall be deemed to occur on the ninetieth (90th) consecutive or non-consecutive calendar day within any twelve (12) month period that Executive is unable to perform his or her duties because of any physical or mental illness or disability.

2.Severance Payment and Equity Compensation.

(a)The Executive shall be entitled to receive a severance payment from the Company as provided herein (the "Severance Payment") if within the first twelve (12) month period after the occurrence of a Change in Control, either:

(i)The Executive voluntarily resigns his or her employment for Good Reason within sixty (60) days after the Executive becomes aware of the occurrence of an event specified in Section 1(c); or

(ii)The Company terminates the Executive's employment for any reason other than Just Cause, death, or Total Disability.

For all purposes under this Agreement, the amount of the Severance Payment shall be equal to two times (2X) the Executive's annual base salary, as in effect on the date of the termination of Executive's employment (or if Executive's salary was greater, on the date of the Announcement), plus a prorata portion of the Executive's target bonus for the fiscal year in which Executive's employment is terminated, based on the number of entire months of such fiscal year that have elapsed through the date of Executive's termination of employment as a fraction of twelve (12).  The Severance Payment shall be made to Executive in a single lump sum cash payment not later than seven (7) business days following the date that Executive becomes entitled to a Severance Payment.

Except as may be provided under Sections 2(b) and 2(c), the Severance Payment shall be in lieu of any other post-termination employment payments.

(b)Incentive, Deferred Compensation, and Retirement Programs.  If the Executive is entitled to a Severance Payment under Section 2(a) and notwithstanding anything to the contrary in any stock option or stock appreciation right (SAR) or deferred compensation plan or retirement plan or agreements, then (i) the Executive shall become immediately fully vested in all of his or her outstanding stock options, SARs, warrants, restricted stock, phantom stock, deferred compensation, retirement or similar plans or agreements of the Company, and (ii) the Executive (or his or her personal representative if applicable) shall be permitted to exercise any of his or her vested stock options/SARs until the earlier of (i) one (1) year after Executive's termination of employment or (ii) the term of such unexercised stock options, warrants, or SARs.

(c)Health Coverage. If the Executive is entitled to a Severance Payment under Section 2(a), the Company shall reimburse Executive for a portion of the cost of any group health continuation coverage that the Company is otherwise required to offer under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) until the earlier of the date that (i) the Executive becomes covered by comparable health coverage, offered by another employer, or (ii) is twelve (12) months after the date upon which the Executive becomes entitled to a Severance Payment under Section 2(a).  The Executive shall continue to be responsible to pay for the cost of the employee portion of COBRA coverage (such employee portion cost shall not be reimbursed by the Company).  

(d)Mitigation.  Except as may be expressly provided elsewhere in this Agreement, the Executive shall not be required to mitigate the amount of any payment or benefit contemplated by this Section 2 (whether by seeking new employment or in any other manner).  No such payment shall be reduced by earnings that the Executive may receive from any other source.

(e)Conditions.  All payments and benefits provided under this Section 2 are conditioned on Executive's continuing compliance with this Agreement and the Company's policies.  All payments and benefits are also conditioned on, and in consideration for, Executive's execution (and effectiveness) of a release of claims and covenant not to sue substantially in the form provided in Exhibit A upon termination of employment, to be delivered by Executive simultaneously upon payment by the Company.

3.Successors.

(a)Company's Successors.  Any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation, or otherwise) to all or substantially all of the Company's business and/or assets, shall be obligated to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it in the absence of a succession.

(b)Executive's Successors.  This Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

4.Miscellaneous Provisions.

(a)Notice.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of the Executive, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.  

(b)Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Whole Agreement.  This Agreement contains all the legally binding understandings and agreements between Executive and the Company pertaining to the subject matter of this Agreement and supersedes all such agreements, whether oral or in writing, previously entered into between the parties.  

(d)Withholding Taxes.  All payments made under this Agreement shall be subject to reduction to reflect taxes required to be withheld by law.

(e)Choice of Law.  The validity, interpretation, construction, and performance of this Agreement shall be governed by the laws of the State of California without regard to the conflicts of laws principles thereof.

(f)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)Arbitration.  Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in Los Angeles County in accordance with the Commercial Arbitration Rules of the American Arbitration Association.  Discovery shall be permitted to the same extent as in a proceeding under the Federal Rules of Civil Procedure, including (without limitation) such discovery as is specifically authorized by section 1283.05 of the California Code of Civil Procedure, without need of prior leave of the arbitrator under section 1283.05(e) of such Code.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  All fees and expenses of the arbitrator and such Association and attorney fees shall be paid as determined by the arbitrator.

(h)No Assignment.  The rights of Executive to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor's process, and any action in violation of this Subsection (h) shall be void.

(i)Nondisparagement; Confidentiality.  On the Effective Date and thereafter, Executive agrees that he/she will not disparage the Company or its directors, officers, employees, affiliates, subsidiaries, predecessors, successors or assigns in any written or oral communications to any third party.  Executive further agrees that he/she will not direct anyone to make any disparaging oral or written remarks to any third parties.  During Executive's employment and following Executive's termination of employment for any reason, Executive agrees to not intentionally use or disclose the confidential information or trade secrets of the Company.

(j)Nonsolicit.  During the Executive's employment with Company and for twelve months after Executive's termination of employment, the Executive shall not, directly or indirectly, either as an individual or as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, stockholder, investor, lender, or in any other capacity whatsoever, of any person, firm, corporation, or partnership: (i) induce or attempt to induce any person who at the time of such inducement is an employee of the Company to perform work or service for any other person or entity other than the Company or (ii) participate or engage in the design, development, manufacture, production, marketing, sale, or servicing of any product, or the provision of any service, that directly or indirectly relates to Company business.

(k)Notice of Employment.  During Executive's employment and for twelve months after Executive's termination of employment, Executive will promptly notify the Company in writing if Executive becomes (or agrees to become) an employee or director of any other employer.  Such notice shall include the name of the other employer and the date of commencement of employment or service as a director.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

EXECUTIVE:

/s/ James W. Howatt

James W. Howatt

 

MOLINA HEALTHCARE, INC.:

/s/ Joseph M. Molina

By:   Joseph M. Molina

Its:   President, CEO, and Chairman of the Board

 

 

 

 

 

 

 

 

EXHIBIT A

Form of Release of Claims and Covenant Not To Sue

In consideration of the payments and other benefits that Molina Healthcare, Inc., a Delaware corporation (the "Company"), is providing to James W. Howatt ("Executive") under the Change in Control Agreement entered into by and between Executive and the Company, dated May 29, 2007, the Executive, on his or her own behalf and on behalf of Employee's representatives, agents, heirs and assigns, waives, releases, discharges and promises never to assert any and all claims, demands, actions, costs, rights, liabilities, damages or obligations of every kind and nature, whether known or unknown, suspected or unsuspected that Executive ever had, now have or might have as of the date of Executive's termination of employment with the Company against the Company or its predecessors, parent, affiliates, subsidiaries, stockholders, owners, directors, officers, employees, agents, attorneys, insurers, successors, or assigns (including all such persons or entities that have a current and/or former relationship with the Company) for any claims arising from or related to Executive's employment with the Company, its parent or any of its affiliates and subsidiaries and the termination of that employment.

These released claims also specifically include, but are not limited to, any claims arising under any federal, state and local statutory or common law, such as (as amended and as applicable) Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Employee Retirement Income Security Act, the Family Medical Leave Act, the Equal Pay Act, the Fair Labor Standards Act, the Industrial Welfare Commission Orders, the California Fair Employment and Housing Act, the California Constitution, the California Government Code, the California Labor Code and any other federal, state or local constitution, law, regulation or ordinance governing the terms and conditions of employment or the termination of employment, and the law of contract and tort and any claim for attorneys fees.

Furthermore, the Executive acknowledges that this waiver and release is knowing and voluntary and that the consideration given for this waiver and release is in addition to anything of value to which Executive was already entitled.  Executive acknowledges that there may exist facts or claims in addition to or different from those which are now known or believed by Executive to exist.  Nonetheless, this Agreement extends to all claims of every nature and kind whatsoever, whether known or unknown, suspected or unsuspected, past or present.  Executive also expressly waives the provisions of California Civil Code section 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him/her must have materially affected his settlement with the debtor.  With respect to the claims released in the preceding sentences, the Executive will not initiate or maintain any legal or administrative action or proceeding of any kind against the Company or its predecessors, parent, affiliates, subsidiaries, stockholders, owners,

directors, officers, employees, agents, successors, or assigns (including all such persons or entities that have a current or former relationship with the Company), for the purpose of obtaining any personal relief, nor assist or participate in any such proceedings, including any proceedings brought by any third parties (except as otherwise required or permitted by law).  The Executive further acknowledges that he has been advised by this writing that:

"he should consult with an attorney prior to executing this release;

"he has at least twenty-one (21) days within which to consider this release; 
"he has up to seven (7) days following the execution of this release by the parties to revoke the release; and 

"this release shall not be effective until such seven (7) day revocation period has expired.

Executive agrees that the release set forth above shall be and remain in effect in all respects as a complete general release as to the matters released.

EXECUTIVE

__________________________________

James W. Howatt

Date:

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