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A sudden departure from Molina Healthcare…

When an executive leaves a company abruptly eight months after he signed a new employment agreement, it catches our attention.

On New Year’s Eve, 2009, Long Beach-based Molina Healthcare, Inc. (MOH), a managed health care company that provides healthcare to recipients of government assistance, entered into Amended and Restated Employment Agreements with three of its top executives and Amended Change in Control Agreements with three others.

One of the NEOs in the first group was Mark L. Andrews, Molina’s Chief Legal Officer, General Counsel, and Corporate Secretary, whose agreement was Exhibit 10.3 to this January 7, 2010 8-K.

But as of July 29, Andrews was out of a job. On that date, Molina gave him a “Notice of Termination Without Cause,” according to this Separation Agreement, which was Exhibit 10.1 to this 8-K filed August 2.

Andrews isn’t leaving empty-handed, at least. In exchange for signing a waiver and release of claims, Andrews is getting $750,000 in severance, a pro-rated bonus of $145,833.33, another $65,000 to pay for 18 months of COBRA insurance premiums, and accelerated vesting of all his equity interests in the company (including the 13,600 shares of restricted stock that the company just awarded him March 1, 2010; without the accelerated vesting clause, the shares would have otherwise vested over four years). He—ll also get $5,000 to defray his attorneys— fees and $10,000 to help pay for outplacement services, and he gets to keep his company-assigned cell phone number. Finally, J. Mario Molina, the company’s Chairman, President, and CEO, agreed to write a letter of recommendation on Andrews— behalf by August 5th.

Given Andrews— 12-year tenure as Molina’s chief legal officer and general counsel (and his service before that as its outside counsel), the sudden departure seems surprising. But regardless of what prompted it, the severance package from Molina should help him get by until he finds his next job.

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