Exhibit 10.2

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EMPLOYMENT AGREEMENT

        This Agreement, made the 15th of November, 2004, is effective as of
January 1, 2005, by and between Coventry Health Care, Inc., a Delaware
corporation (the “Company”), and Francis S. Soistman (the “Executive”).

        WHEREAS, the Company employs the Executive as its Senior Vice President,
pursuant to an Employment Agreement dated April 1, 1998, and the parties wish to
amend the terms of such employment as set forth herein.

        NOW, THEREFORE, in consideration of the mutual covenants contained in
this Employment Agreement (“Agreement”), the parties hereby agree as follows:

1.     TERM AND DUTIES

        1.1 The term of this Agreement commenced as of January 1, 2005, shall
continue through December 31, 2007 (the “Initial Term”), and will continue on a
year-to-year basis thereafter (the “Renewal Term”), until the Executive’s
employment terminates as outlined in Section 4 herein.

        1.2 Executive shall serve as Executive Vice President, Health Plan
Operations, and shall report to the Chief Executive Officer and shall be
responsible for broad executive responsibilities in the general management area,
including, but not limited to, the establishment and implementation of policies
and directives, formulation of company goals and objectives, effective
management of employees, and such other powers and duties normally associated
with such position or as may be delegated or assigned to the Executive by the
Company’s Chief Executive Officer. During the Initial or Renewal Term of the
Agreement, the Executive shall also serve without additional compensation in
such other offices of the Company or its subsidiaries or affiliates to which he
may be elected or appointed.

2.     COMPENSATION AND BENEFITS

        2.1 The Company shall pay the Executive a base salary (“Base Salary”) of
not less than Five Hundred Thousand Dollars ($500,000) per annum, subject to
applicable withholdings. The Base Salary shall be payable according to the
customary payroll practices of the Company. The Base Salary shall be reviewed
annually and shall be subject to increase from time to time.

        2.2 The Executive shall be eligible for an annual bonus (“Bonus”) in
accordance with the Company’s Performance Based 162(m) Plan.

        2.3 The terms and conditions of all stock options and restricted share
awards previously granted to Executive shall remain in full force and effect.

        2.4 The Executive will be entitled to participate in all employee
benefit plans or programs and receive all benefits and perquisites to which any
salaried employee is eligible under any existing or future plan or program for
salaried employees, including, without limitation, all plans developed for
executive officers of the Company. These plans or programs may include group
hospitalization, health care, dental care, vision care, life or other insurance,
tax qualified pension, car allowance, savings, thrift and profit sharing plans,
sick leave plans, travel or accident insurance, disability insurance, and
contingent compensation plans, including capital accumulation programs, deferred
compensation plans, restricted stock programs, stock purchase programs and stock
option plans. Nothing in this Agreement will preclude the Company from amending
or terminating any of the plans or programs applicable to salaried employees or
executive officers.

        2.5 The Executive will be entitled to four (4) weeks of annual paid
vacation.

        2.6 The Company will reimburse the Executive for all reasonable travel
and other expenses incurred by the Executive in connection with the performance
of his duties upon proper documentation in accordance with Company policies. In
addition, Executive shall be entitled to a discretionary monthly car allowance,
payable on a grossed-up basis.

3.        DEATH AND DISABILITY COMPENSATION

        3.1 In the event of the Executive’s death during the Initial or Renewal
Term, the Agreement terminates and all payments under the Agreement shall cease
as of the date of death, except for the following benefits to be paid to the
Executive’s beneficiaries:

               (a)     any earned but unpaid base salary and a lump sum payment
equal to the average annual bonus compensation for the two (2) calendar years
immediately preceding the death of Executive;

               (b)     for twenty-four (24) months following the date of the
Executive’s death, the Company shall pay the cost of medical, dental, and vision
insurance premiums as in effect at the date of the Executive’s death, to the
Executive’s designated beneficiary, subject to a formal election by the
beneficiary;

               (c)     the exercisability of stock options granted to the
Executive shall be governed by any applicable stock option agreements and the
terms of the respective stock option plans; and

               (d)     the Executive’s designated beneficiary will be entitled
to receive the proceeds of any life or other insurance or other death benefit
programs provided or referred to in this Employment Agreement.

        3.2 Notwithstanding the short-term disability of the Executive, the
Company will continue to pay the Executive pursuant to Section 2 hereof during
the Initial or Renewal Term, unless the Executive’s employment is earlier
terminated in accordance with this Agreement. In the event the Executive becomes
disabled (as defined by the Company’s long-term disability plan), the
Executive’s employment will be termed and the Company will pay the Executive
amounts equal to the following:

               (a)     any earned but unpaid Base Salary and a lump sum payment
equal to the average annual Bonus for the two (2) calendar years immediately
preceding the year of termination due to disability;

               (b)     for twenty-four (24) months following the date of the
Executive’s termination due to disability, the Company shall pay for the cost of
the Executive’s medical, dental, and vision insurance premiums as in effect at
the date of the Executive’s termination, subject to a formal election by the
Executive; and

               (c)     the Executive will receive a monthly payment equal to 60%
of the Executive’s pre- disability earnings (as defined by the qualified
long-term disability plan) less any monthly benefit paid under the qualified
long-term disability program. Such payments shall continue to cessation of
payments under the Company’s qualified long-term disability program.

               (d)     the Executive will receive twelve (12) months additional
vesting credit for all stock options and restricted stock awards.

        3.3 During the period the Executive is receiving payments following his
disability and as long as he is physically and mentally able to do so, the
Executive will furnish information and assistance to the Company and from time
to time will make himself available to the Company to undertake assignments
consistent with his position or prior position with the Company and his physical
and mental health.

        3.4 For purposes of this Agreement, the term “disabled” or “disability”
will have the same meaning as is attributed to such term, or any substantially
similar term, in the Company’s long-term disability income plan as in effect
from time to time. The Company’s group long-term disability policy in existence
at the time of disability shall be considered to be a part of this Agreement.

    4.        TERMINATION OF EMPLOYMENT

        4.1 The Company may terminate this Agreement with or without cause at
any time during the term of this Agreement with ninety (90) days prior written
notice (“The Notice”). However, except in the case of the two year period
following a Change in Control (as hereinafter defined), if the Executive suffers
a Termination Without Cause (hereinafter defined) or a Constructive Termination
(as hereinafter defined), the Company will continue to pay the Executive the
following:

               (a)     for a period of twelve (12) months after Termination
Without Cause or Constructive Termination, a monthly amount equal to 100% of the
sum of the Executive’s combined (i) Base Salary as in effect at the time of the
termination and (ii) the average Bonus for the two (2) calendar years
immediately preceding the year of termination, divided by twelve (12); and

               (b)     for twelve (12) months following such Termination Without
Cause or Constructive Termination, the Company shall pay the cost of the
Executive’s medical, dental, and vision insurance premiums as in effect at the
date of termination, subject to a formal election by the Executive. However, if
Executive obtains employment with another employer during such twelve (12) month
period, such coverage will cease as of the date Executive, his spouse and family
can be covered under the plans of the new employer without exclusion for
preexisting conditions, if earlier than the end of the 12-month period; and

               (c)        the Executive will receive twelve (12) months
additional vesting credit for all stock options and restricted stock awards.

        4.2 If the Executive suffers a Termination Without Cause or Constructive
Termination within two (2) years following a Change in Control, the Company will
pay to the Executive the following:

               (a)     in a lump sum upon such termination an amount equal to
the sum of (i) 150% of the Executive’s combined (A) Base Salary as in effect at
the time of the termination and (B) average Incentive Bonus for the two (2)
calendar years immediately preceding the year of termination, and (ii) to the
extent that such foregoing amount or any other payment in the nature of
compensation (within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder (“Section 280G”))
to or for the benefit to the Executive (or any part of such amount or other
payment) constitutes an “excess parachute payment” within the meaning of Section
280G, the amount, if any, of (A) such “excess parachute payment” multiplied by a
fraction, the numerator of which is the number one (1.00) and the denominator of
which is (I) the number (1.00) minus (II) the effective tax rate under Section
280G applicable to the Executive expressed as decimal, minus (B) the amount of
such “excess parachute payment”;

               (b)     for twenty-four (24) months following such Termination
Without Cause or Constructive Termination following a Change of Control, the
Company shall pay for the cost of the Executive’s medical, dental, vision
insurance premiums as in effect at the date of termination, subject to a formal
election by the Executive; and

               (c)     all stock options and all restricted stock granted to the
Executive shall vest in full upon a Change of Control.

        4.3 Executive may terminate his employment hereunder at any time during
the term of this Agreement with notice (as defined in Section 4.1 herein). If
the Executive suffers a Termination with Cause or the Executive terminates his
employment with the Company not due to a Constructive Termination, death or
disability (as defined in Section 3.4) (a “Voluntary Termination”), then the
Company will not be obligated to pay the Executive any amounts of compensation
or benefits following the date of termination, except earned but unpaid Base
Salary through the date of termination, which will be paid in accordance with
standard company procedures. The exercisability of stock options granted to the
Executive shall be governed by any applicable stock option agreements and plans.

        4.4 For purposes of this Employment Agreement, the following terms have
the following meanings:

               (a)     A “Change in Control” shall occur if at any time,
substantially all of the assets of the Company are sold or transferred by sale,
merger or otherwise, to an entity which is not a direct or indirect subsidiary
of the Company, or if any “person” (as such term is used in Sections 13(d) or 14
(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the then existing
outstanding securities of the Company.

               (b)     “Constructive Termination” means termination by the
Executive which follows (i) a reassignment of duties, responsibilities, title,
or reporting relationships that are not at least the equivalent of his then
current position as set forth in Section 1.2 or a material reduction in the
compensation and benefits provided herein, or (ii) the intentional or material
breach by the Company of this Agreement, or (iii) a reassignment, after a Change
of Control, to a geographic location more than fifty miles from Bethesda,
Maryland. The Executive shall have a period of ninety (90) days after
termination of his employment to assert against the Company that he suffered a
Constructive Termination, and after the expiration of such ninety (90) day
period, the Executive shall be deemed to have irrevocably waived the right to
such assertion.

               (c)     “Termination With Cause” means termination by the
Company, acting in good faith, by written notice to the Executive specifying the
event relied upon for such termination, due to; (i) the Executive’s indictment
or conviction of a felony, (ii) the Executive’s intentional perpetration of a
fraud, theft, embezzlement or other acts of dishonesty, (iii) the Executive’s
intentional breach of a trust or fiduciary duty which materially adversely
affects the Company or its shareholders.

               (d)     “Termination Without Cause” means termination by the
Company other than due to the Executive’s death or disability or Termination
With Cause.

5.     OTHER DUTIES OF THE EXECUTIVE

        5.1 The Executive shall devote substantially all of his working time to
the business of the Company and during the Term shall not take, directly or
indirectly, an active role in any other business without the prior written
consent of the Company; but except as provided in Section 5.3, this Section
shall not prevent the Executive from serving as a director of other entities not
affiliated with the Company, from making real estate or other investments of a
passive nature or from participating in the activities of a charitable
organization where such participation does not adversely affect the Executive’s
ability to perform his duties under this Agreement.

        5.2 The Executive will, upon reasonable notice, during or after the Term
of this Employment Agreement, furnish information as may be in his possession
and cooperate with the Company as may reasonably be requested in connection with
any claims or legal actions in which the Company is or may become a party. The
Executive shall receive reasonable compensation for the time expended by him
pursuant to this Section 5.2 after the Term.

        5.3 The Executive acknowledges that certain information pertaining to
the business and operations of the Company such as strategic plans, product
development, financial costs, pricing terms, sales data or new or developing
business opportunities (“Confidential Information”), is confidential and is a
unique and valuable asset of the Company. Access to and knowledge of this
Confidential Information are essential to the performance of the Executive’s
duties under this Agreement. The Executive will not during the term of this
Agreement or following termination of his employment except to the extent
reasonably necessary in the performance of his duties under this Agreement, give
to any person, firm, association, corporation or governmental agency any
Confidential Information except as required by law. The Executive will not make
use of this Confidential Information for his own purposes or for the benefit of
any person or organization other than the Company. The Executive will also use
his best efforts to prevent the disclosure of this Confidential Information by
others. All records, memoranda, etc. relating to the business of the Company
whether made by the Executive or otherwise coming into his possession will
remain the property of the Company.

        5.4 The Executive will not Compete with the Company (as hereinafter
defined) at any time while he is employed by the Company. Except after a Change
in Control or after non-renewal under Section 1.1, in the event of Termination
Without Cause or Constructive Termination pursuant to Section 4.1, the Executive
will not Compete with the Company for a period of one (1) year from the date of
such termination. In the event of a termination after a Change in Control that
gives rise to payments to Executive under Section 4.2, the Executive will not
Compete with the Company for one (1) year from the date of termination. In the
event of a Voluntary Termination in which the Executive only receives payment as
defined under Section 4.3, or which follows a Company non-extension notice under
Section 1.1, there will be no restriction on the Executive’s right to Compete
with the Company after the date his employment terminates. For the purposes of
this Section 5.4, the term “Compete with the Company” means action by the
Executive, direct or indirect, either as an officer, director, stockholder,
owner, partner, employee or in any other capacity, resulting in the Executive
having any legal or equitable ownership or other financial or non-financial
interest in or employment with, any HMO, managed care or health insurance
business within a fifty mile radius of any location where the Company or any
subsidiary or affiliate of the Company conducts such business at the date of a
termination of the Executive’s employment; provided, however, that the term
“Compete with the Company” shall not include ownership (without any more
extensive relationship) of a less than a five percent (5%) interest in any
publicly-held corporation or other business entity. The Executive acknowledges
that the covenants contained herein are reasonable as to geographic and temporal
scope. The Executive acknowledges that his breach or threatened or attempted
breach of any provision of Section 5.4 may cause irreparable harm to the Company
not compensable in monetary damages and that the Company may be entitled, in
addition to all other applicable remedies, to a temporary and permanent
injunction and a decree for specific performance of the terms of Section 5.4.

6.     INDEMNIFICATION OF EXECUTIVE

        6.1 The Company shall indemnify the Executive and shall reimburse the
Executive’s expenses under the circumstances described, and to the maximum
extent provided under the mandatory and the permissive indemnification and
expense reimbursement provisions of Delaware law. The provisions of this Section
6.1 shall continue in full force and effect after Executive ceases to serve as
an officer, director, employee or in any other capacity with the Company or any
of its affiliates, and shall inure to the benefit of his heirs, executors or
administrators.

7.     MISCELLANEOUS

        7.1 This Agreement contains the entire understanding between the Company
and the Executive with respect to the subject matter and, with the exception of
the terms and conditions set forth in Exhibit B to that certain Employment
Agreement between Executive and Principal Health Care, Inc., dated as of October
1, 1997, supersedes any prior employment or severance agreements between the
Company and its affiliates, and the Executive.

        7.2 This Agreement may not be modified or amended except in writing
signed by the parties. No term or condition of this Employment Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver shall operate only as to specific a term or condition waived and will not
constitute a waiver for the future or act on anything other than that which is
specifically waived.

        7.3 Should any part of this Agreement be declared invalid for any
reason, such invalidity shall not affect the validity of any remaining portion
hereof and such remaining portion shall continue in full force and effect as if
this Employment Agreement had been originally executed without including the
invalid part. Should any covenant of this Employment Agreement be unenforceable
because of its geographic scope or term, its geographic scope or term shall be
modified to such extent as may be necessary to render such covenant enforceable.

        7.4 Titles and captions in no way define, limit, extend or describe the
scope of this Agreement nor the intent of any provision thereof.

        7.5 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

        7.6 This Employment Agreement has been executed and delivered in the
State of Maryland and its validity, interpretation, performance and enforcement
shall be governed by the laws of that state. Any dispute among the parties
hereto shall be settled by arbitration in Bethesda, Maryland, in accordance with
the rules then obtaining of the American Arbitration Association and judgment
upon the award rendered may be entered in any court having jurisdiction thereof.
All provisions hereof are for the protection and are intended to be for the
benefit of the parties hereto and enforceable directly by the binding upon each
party. Each party hereto agrees that the remedy at law of the other for any
actual or threatened breach of this Employment Agreement would be inadequate and
that the other party shall be entitled to specific performance hereof or
injunctive relief or both, by temporary or permanent injunction or such other
appropriate judicial remedy, writ or orders as may be decided by a court of
competent jurisdiction in addition to any damages which the complaining party
may be legally entitled to recover.

        7.7 All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid by registered mail, return receipt requested,
or when delivered if by hand, overnight delivery service or confirmed facsimile
transmission to the following:

    (i)        If to the Company, at 6705 Rockledge Drive, Suite 900, Bethesda,
Maryland, 20817, Attention: Chairman of the Compensation Committee, or at such
other address as may have been furnished to the Executive by the Company in
writing; or

    (ii)        If to the Executive, at 6705 Rockledge Drive, Suite 900,
Bethesda, Maryland, 20817 or
______________________________________________________ or such other address as
may have been furnished to the Company by the Executive in writing.

        7.8 This Employment Agreement shall be binding on the parties'
successors, heirs and assigns.

        IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first above written.

COVENTRY HEALTH CARE, INC.

EXECUTIVE:

By:  /s/ Allen F. Wise   

  /s/ Francis S. Soistman   

       Allen F. Wise
       President and CEO

  Francis S. Soistman

EXHIBIT B

THE PRINCIPAL HEALTH CARE, INC. DEFERRED COMPENSATION PLAN

FOR CERTAIN SELECT EMPLOYEES

EXHIBIT B
THE PRINCIPAL HEALTH CARE, INC.
DEFERRED COMPENSATION PLANS FOR
CERTAIN SELECT EMPLOYEES

SECTION 1

Any employee of Principal Health Care, Inc. (“Company”), who is part of a select
group of management and is designated as eligible to participate by the Board of
Directors (“Board”) of the Company, will become a participant (“Participant”)
under the plan and will complete a beneficiary designation form with the
Company.

SECTION 2 – DEFERRED COMPENSATION

The Company will establish one-time amounts of compensation as set forth in
Exhibit A, for each Participant which will be deferred as of the date this plan
is adopted by the Company. The compensation deferred pursuant to this section
shall be recorded by the Company in a deferred compensation account (“Account”)
maintained in the name of the Participant. Such deferred compensation is
attributable to future services and shall not be included as compensation in the
benefit program sponsored by the Company. The Company shall furnish each
Participant with an annual statement of his or her Account. The Company shall
credit interest on amounts in the Account from the date received until final
distribution of the Account pursuant to Section 3 of the plan. The Company shall
credit interest quarterly based on the 10-year U.S. Treasury rate.

SECTION 3 – DISTRIBUTION

A) TERMINATION OF EMPLOYMENT.

 

If the Participant is involuntarily terminated not for cause prior to normal
retirement age, as defined in the pension plans sponsored by the Company, the
Participant will become fully vested and will be entitled to receive a
distribution.

 

If the Participant’s employment is terminated by the Company for cause, he or
she will not be entitled to receive a distribution of his or her Account under
this section. “Cause” shall be defined as: (i) indictment or conviction of a
felony; (ii) theft or embezzlement of Company property or commission of similar
acts involving more turpitude; or (iii) the willful failure by a Participant to
substantially perform his or her material duties (excluding nonperformance
resulting from a Participant’s disability) which willful failure is not cured
within thirty (30) days after written notice from the Chairman of the Board of
the Company specifying the act of willful nonperformance or within such longer
period (but no longer than ninety (90) days in any event) as is reasonably
required to cure such willful nonperformance.

 

If the Participant voluntarily terminates employment prior to normal retirement
age as defined in the pension plans sponsored by the Company, the Participant
will receive his or her vested amount which is equal to the deferred amount plus
interest credited to the Participant’s Account as of the date of determination,
multiplied by the percentage in the following schedule:

Years Since Deferral Percentage

1–3

0%

4

50%

5

60%

6

70%

7

80%

8

90%

9 and later

100%

If the Participant voluntarily terminates employment prior to normal retirement
age, as defined in the pension plans sponsored by the Company, and the Company
is a party to a change of control as defined in this section, the Participant
will become fully vested and will be entitled to receive a distribution if
termination of employment occurs on or after 366 days after the effective date
of such change of control.

Change of control shall be defined as a transfer or sale of: (i) 50% or more of
the shares and/or voting power in the Company (whether by sale, exchange,
merger, consolidation or otherwise) or (ii) substantially all of the assets of
the Company to an entity not under the control or majority ownership of
Principal Mutual Life Insurance Company.

If the Participant becomes disabled as defined in the long term disability plan
or retires on or after his or her normal retirement date as defined in the
pension plan sponsored by the Company, the Participant will become fully vested
and will be entitled to a distribution.

If the Participant is entitled to receive a distribution under this section, he
or she will receive monthly payments for a period of 36 months beginning at
termination of employment. Payments will cease if the Participant competes with
the Company by directly or indirectly engaging in any of the following actions:

(i)  Owning an interest in, managing, operating, joining, controlling, lending
money or rendering financial or other assistance to, or participating in or
being connected with, as an officer, employee, partner, stockholder, consultant
or otherwise, any entity whose products or services compete directly or
indirectly with those of the Company or any of its subsidiaries or affiliates.
However, nothing in this subsection (i) shall preclude a Participant from
holding less than one percent of the outstanding capital stock of any
corporation required to file periodic reports with the Securities Exchange
Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the securities of which are listed on any securities exchange, quoted
on the National Association of Securities Dealers Automated Quotation System or
traded in the over-the-counter market.

(ii)  Intentionally solicits, endeavors to entice from the Company, or any of
its subsidiaries, or otherwise interferes with the relationship of the Company,
or any of its subsidiaries with, any person who is employed by or otherwise
engaged to perform services for the Company, or any of its subsidiaries
(including, but not limited to, any independent sales representatives or
organizations), or any persons or entity who is, or was within the then most
recent two year period, a customer or client of the Company or any of its
subsidiaries, whether for a Participant’s own account or for the account of any
other individual, partnership, firm, corporation or other business organization.

(iii)  Discloses to any person, other than an employee of the Company, or any of
its subsidiaries, or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by a Participant of his or her
duties as a select group of management of the Company, except where such
disclosure may be required by law, any material confidential information
obtained by him while in the employment of the Company with respect to any of
the Company’s products, technology, know-how or the like, services, customers,
methods or future plans, all of which a Participant acknowledges are valuable,
special and unique assets the disclosure of which a Participant acknowledges may
be materially damaging to the Company.

  Upon the request of a Participant, the Company may in its sole discretion
waive all or any portion of this non-compete clause.

  If the Participant dies during the 36-month payment period, his or her
beneficiary will receive a lump sum of the remaining Account balance.

b)

Death. If the Participant terminates employment by reason of his or her death,
the Participant will become fully vested and the beneficiary designated by the
Participant will receive a lump sum payment of the amount in the Participant’s
Account (including interest) as of the date of death.

SECTION 4 – PARTICIPANT RIGHTS UNSECURED

The right of the Participant or his or her designated beneficiary to receive a
distribution hereunder shall be an unsecured claim against the general assets of
the Company and neither the Participant nor his or her designated beneficiary
shall have any rights in or against any amount credited to his or her Account or
any other specific assets of the Company. All amounts credited to an Account
shall constitute general assets of the Company and may be disposed of by the
Company at such time and for such purposes as it may deem appropriate. An
Account may not be encumbered or assigned by a Participant or any beneficiary.

SECTION 5 – AMENDMENTS TO THE PLAN

The Board may amend the plan at any time without the consent of the Participants
or their beneficiaries provided, however, that no amendment shall divest any
Participant or beneficiary of the credits to his or her Account or of any rights
to which he or she would have been entitled if the plan had been terminated
immediately prior to the effective date of such amendment.

SECTION 6 – TERMINATION OF THE PLAN

The Board may terminate the plan at any time. Upon termination of the plan,
Participants will become fully vested and will receive a lump sum payment of his
or her Account (including interest) as of the date of termination.

SECTION 7 – EXPENSES

The cost of the administration of the plan will be paid by the Company.

SECTION 8 – NO TRUST

Nothing contained in this plan and no action taken pursuant to the provisions of
this plan shall create or be construed to create a trust of any kind, a
fiduciary relationship or an employment contract between the Company and the
Participant, his or her designated beneficiary or any other person.

SECTION 9 – NONASSIGNABLE

None of the payments provided for by this plan shall be subject to seizure for
payment of any debts or judgements against the Participant or any beneficiary;
nor shall the Participant or any beneficiary have any right to transfer, modify,
anticipate or encumber any rights or benefits hereunder; provided, however, that
the undistributed portion of any benefit payable hereunder shall at all times be
subject to set-off for debts owned by the Participant to the Company.

SECTION 10 – INCAPACITY OF BENEFICIARY

If the Company shall find that any person to whom any payment is payable under
this plan is unable to care for his or her affairs because of illness or
accident or is a minor, any payment due (unless a prior claim therefore shall
have been made by a duly appointed guardian, Board, or other legal
representative) may be paid to the spouse, a child, parent, or brother or
sister, or to any person deemed by the Company to have incurred expense for such
person otherwise entitled to payment, in accordance with the applicable
provisions of this plan. Any such payment shall be a complete discharge of the
Company’s liabilities under this plan.

SECTION 11 – COMPANY’S POWERS AND LIABILITIES

The Board of Directors of the Company, hereafter called the “Board,” shall have
full power and authority to interpret this plan. The Board’s interpretations and
construction of any provisions or action taken under this plan, including any
valuation of the Account, shall be binding and conclusive on all persons for all
purposes. No member of the Board shall be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this plan unless attributable to the member’s willful misconduct or lack of good
faith.

SECTION 12 – SEVERABILITY

If the Internal Revenue Service shall at any time interpret this plan to be
ineffective with regard to deferral of the Participant’s income, and that
interpretation becomes final and is not appealed, then only those amounts in the
Account which would be treated as currently taxable income by the Service at the
time of such final interpretation shall be paid over to the Participant. All
other assets in the Account at the time of a final interpretation shall be
distributed to the Participant according to Section 3 of this plan.

SECTION 13 – ENTIRE PLAN

This plan supersedes all other plans previously made between the parties
relating to its subject matter. There are no other understandings or plans.

SECTION 14 – NON-WAIVER

No delay or failure by either party to exercise any right under this plan, and
no partial or single exercise of that right, shall constitute a waiver of that
or any other right.

SECTION 15 – HEADINGS

Headings in this plan are for convenience only and shall not be used to
interpret or construe its provisions.

SECTION 16 – PAYMENT OF BENEFITS

All payments provided for by this plan shall be made in conformity with the
regular payroll procedures in use by the Company at the time of payment.

SECTION 17 – WITHHOLDING

Not withstanding any of the foregoing provisions hereof, the Company may
withhold from any payment to be made hereunder such amount as it may be required
to withhold under any applicable taxing authority.

SECTION 18 – GOVERNING LAW

This plan shall be governed and construed in accordance with the laws of the
State of Iowa.

SECTION 19 – BINDING EFFECT OF PLAN

This plan shall be binding upon the parties hereto, their heirs, assigns,
successors, executors and administrators.

      PRINCIPAL HEALTH CARE, INC.

      By:   /s/ Thomas J. Graf   
            Thomas J. Graf
            Executive Vice President

      By:   /s/ Joyce N. Hoffman   
            Joyce N. Hoffman
            Vice President and Corporate Secretary

October 27, 1997