Exhibit 10(a)

EMPLOYMENT AGREEMENT

         AGREEMENT (“Agreement”) dated as of September 30, 2002 (the “Effective
Date”), by and between OXFORD HEALTH PLANS, INC. (the “Corporation”), having a
principal office in Trumbull, Connecticut, and Charles G. Berg (the “Employee”).

         WHEREAS, the Corporation entered into an Employment Agreement with the
Employee dated March 12, 2001; and

         WHEREAS, the Corporation and the Employee now wish to enter into a new
employment agreement to reflect expected changes in the Employee’s duties;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Corporation and the Employee agree as follows:

         1.     Employment.

           (i) From the Promotion Date and during the balance of the Term (as
both terms are hereinafter defined), the Employee shall be employed as the Chief
Executive Officer of the Corporation and shall serve as a director of the
Corporation for so long as he is so elected. As Chief Executive Officer of the
Corporation the Employee shall have those powers and duties consistent with his
position as chief executive officer, which powers shall in all cases include,
without limitation, the power of supervision and control over and responsibility
for the general management and operation of the Corporation, subject to the
powers by law vested in the Board of Directors of the Corporation (the “Board”)
and in the Corporation’s stockholders. The Employee shall report directly to the
Board, and shall perform such other related duties as the Board may from time to
time reasonably direct or request. The Employee shall be a full time employee of
the Corporation, and shall devote substantially all his working time to the
performance of his duties hereunder.

 

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           (ii) Notwithstanding any provision in the Employee’s employment
agreement with the Corporation dated March 13, 2001, as it may have been amended
from time to time (the “Former Agreement”), such Former Agreement shall continue
to govern all of the terms and conditions of the Employee’s employment with the
Corporation until the Promotion Date, and from and after the Promotion Date, if
the Employee is still employed by the Corporation, this Agreement shall
supersede the Former Agreement and any other employment or severance agreement
or arrangements between the parties.

         For purposes of this Agreement, “Promotion Date” shall mean the date on
which Norman C. Payson, M.D. ceases to be employed as Chief Executive Officer of
the Corporation.

         The Employee shall perform his duties and responsibilities under this
Agreement faithfully, diligently and to the best of the Employee’s ability, and
in compliance with all applicable laws and the Corporation’s Certificate of
Incorporation and Bylaws, as they may be amended from time to time.

         2.     Term. The initial term of employment under this Agreement shall
be for a period of two (2) years commencing on the Promotion Date (the “Term”)
and the Employee hereby agrees to work in the employ of the Corporation, subject
to the terms and conditions of this Agreement. This Agreement shall be extended
automatically for two (2) additional years on the second anniversary date of the
Promotion Date and on each second anniversary of the Promotion Date thereafter,
unless either the Corporation or the Employee gives contrary written notice to
the other not less than three (3) months in advance of such anniversary of the
Promotion Date. References herein to the Term shall refer both to such initial
term and such successive terms. Upon a “Change in Control” (as defined in
Section 7(a)) of the Corporation, the Term shall be extended to two (2) years
from the date of such Change in Control, unless notice to terminate the Term has
been properly provided prior to the date of such Change in Control, and such
Change in Control date shall be treated as the Promotion Date for purposes of
renewals of

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this Agreement. The Term shall end upon the termination of the Employee’s
employment under this Agreement.

         3.     Compensation. Base Salary. The Corporation agrees to pay the
Employee during the Term an annual base salary (“Base Salary”) of $700,000. The
Base Salary shall be reviewed at least annually during the Term by the Board,
and the Employee shall receive such increases in Base Salary, if any, as the
Compensation Committee of the Board (the “Committee”) in its absolute discretion
may determine, together with such performance or merit increases, if any, as the
Committee in its absolute discretion may determine. Base Salary shall refer to
Base Salary as increased from time to time pursuant to the previous sentence.
Base Salary shall not be decreased. Participation with respect to discretionary
bonuses, retirement and other employee benefit plans and fringe benefits shall
not reduce the Base Salary payable to the Employee under this Section 3. The
Base Salary shall be payable to the Employee in equal installments in conformity
with the Corporation’s normal payroll periods.

                  (b) Bonus. During the Term, the Employee shall be eligible for
an annual performance bonus as determined by the Committee with a target amount
of 100% of Base Salary, based on annual performance targets to be determined by
the Committee.

         4.     Withholding Obligation. The Corporation shall have the ability
to withhold from the compensation otherwise due to the Employee under this
Agreement any federal income tax, Federal Insurance Contribution Act tax,
Federal Unemployment Act tax, or other amounts required to be withheld from
compensation from time to time under the Internal Revenue Code of 1986, as
amended (the “Code”), or under any state or municipal laws or regulations.

         5.     Fringe Benefits.

                  (a) Time Off and Leave. During the Term, the Employee shall be
entitled to the greater of twenty-three (23) select days per year and the
maximum allowed under the Corporation’s select time program. Select days are
used for vacation, personal time and sick time. In addition, the Employee will
receive paid company holidays each year

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in accordance with the Corporation’s standard policy (seven holidays as of the
Effective Date). The employee shall also be eligible for such other leave, with
or without compensation, as shall be mutually agreed upon by the Employee and
the Committee.

                  (b) Participation in Retirement and Employee Benefit Plans.
During the Term, the Employee shall be eligible to participate in the
Corporation’s 1991 Stock Option Plan, annual incentive compensation plan, and
any other plan of the Corporation or its subsidiaries relating to stock options,
stock appreciation, stock purchases, pension, thrift, profit sharing, group life
insurance, medical coverage, education or other retirement or employee benefits
that the Corporation may adopt for the benefit of its executive employees.

                  (c) Disability. If the Employee shall become disabled or
incapacitated during the Term to the extent that he is unable to perform his
duties and responsibilities hereunder, he shall be eligible to receive
disability benefits of the type provided to him as of the Effective Date, or, if
more favorable to the Employee, benefits of the type provided for other
executive employees of the Corporation.

                  (d) Death. If the Employee shall die during the Term, the
Corporation shall pay to such person as the Employee has designated in a notice
filed with the Corporation, or, if no such notice is filed, to his estate, the
Employee’s Base Salary at the date of his death plus an amount equal to the
Bonus as defined in Section 3(b), which Bonus, for this purpose, shall be deemed
to be no less than $700,000, amortized in 26 equal bi-weekly payments.

                  (e) Other Benefits. During the Term, the Employee shall be
entitled to participate in any other fringe benefits which are or may become
applicable to the Corporation’s executive employees, including a reasonable
expense account and any other benefits which are commensurate with the duties
and responsibilities to be performed by the Employee under this Agreement. In
addition, the Corporation agrees, during the Term, to reimburse the Employee for
the cost of the Employee’s personal disability and life insurance policies as in
effect on April 15, 1998.

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         6.     Termination of Employment. The Employee’s employment hereunder
may be terminated under the circumstances set forth in paragraphs (a) through
(e) below:

                  (a) Death. The Employee’s employment hereunder shall terminate
upon his death.

                  (b) Disability. If, as a result of the Employee’s incapacity
due to physical or mental illness, the Employee shall have been absent from his
duties hereunder (i.e., has been unable to perform such duties) on a full-time
basis for the entire period of six (6) consecutive months, and within thirty
(30) days after written Notice of Termination is given (which may occur before
or after the end of such six (6) month period) shall not have returned to the
performance of his duties hereunder on a full-time basis, the Corporation may
terminate the Employee’s employment hereunder for “Disability.”

                  (c) Cause. The Corporation may terminate the Employee’s
employment hereunder for Cause or without Cause. Except as provided in
Section 7(b) hereof following a Change in Control, termination for Cause shall
mean termination because the Employee (i) engages in the following conduct in
connection with his employment with the Corporation: personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit, breach
of a restrictive covenant against competition, [intentional] disclosure of
confidential information of the Corporation, consistent intentional failure to
perform stated duties after notice and the failure to cure, or (ii) willfully
violates any law, rule, or regulation (other than traffic violations or similar
offenses), which willful violation materially impacts the Employee’s ability to
perform his duties to the Corporation.

                  (d) Good Reason. The Employee may terminate his employment
hereunder with or without Good Reason; provided, however, that the Employee
agrees not to terminate his employment hereunder (other than for Good Reason or
for Retirement) during the ninety-day period following a Change in Control.
Except as provided in Section 7(c) hereof during the two-year period following a
Change in Control, for purposes of this Agreement “Good Reason” shall mean any
(i) removal of the Employee from, or failure to re-appoint the Employee to, his
position as Chief

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Executive Officer, or failure to nominate him for election to the Board (unless
in the reasonable judgment of the Board such nomination would violate applicable
law or a requirement of a stock exchange on which the Corporation’s securities
are listed), except, in each case, in connection with termination of the
Employee for Cause, (ii) failure by the Corporation to comply with Section 3 or
Section 5 hereof in any material respect, (iii) material diminution in the
Employee’s duties and responsibilities, or (iv) requirement of the Corporation
that the Employee be based in an office that increases the Employee’s commute
thirty (30) or more miles from the Employee’s commute at the Promotion Date
(Westport, CT home to Trumbull, CT office), except that relocation to the
Corporation’s New York City, NY office shall not give rise to Good Reason under
this clause. This paragraph is applicable only to a termination which occurs
prior to a Change in Control or following the two-year period immediately
subsequent to a Change in Control as provided in Section 6(h) hereof. For
purposes of this Agreement, “Good Reason” shall not exist until after the
Employee has given the Corporation notice of the applicable event within 90 days
of such event and which is not remedied within 30 days after receipt of written
notice from the Employee specifically delineating such claimed event and setting
forth Employee’s intention to terminate employment if not remedied; provided,
that if the specified event cannot reasonably be remedied within such 30-day
period and the Corporation commences reasonable steps within such 30-day period
to remedy such event and diligently continues such steps thereafter until a
remedy is effected, such event shall not constitute “Good Reason” provided that
such event is remedied within 60 days after receipt of such written notice.

                  (e) Retirement. For purposes of this Agreement, “Retirement”
shall mean termination of the Employee’s employment by either the Employee
(other than for Good Reason) or the Corporation (other than for Cause) on or
after the Employee’s normal retirement age under the terms of the Corporation’s
pension plan (or, any other tax-qualified plan, if no pension plan exists);
provided, that, following a Change in Control such normal retirement age may not
be reduced for purposes of this Agreement without the consent of the Employee.

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                  (f) Date of Termination. For purposes of this Agreement, “Date
of Termination” means (1) the effective date on which the Employee’s employment
by the Corporation terminates as specified in a Notice of Termination by the
Corporation or the Employee, as the case may be, or (2) if the Employee’s
employment terminates by reason of death, the date of death of the Employee.
Notwithstanding the previous sentence, (i) if the Employee’s employment is
terminated for Disability (as defined in Section 6(b)), then such Date of
Termination shall be no earlier than thirty (30) days following the date on
which a Notice of Termination is received.

                  (g) Payment Upon Termination. Upon any termination of
employment hereunder, the Corporation shall pay the Employee, within ten
(10) days following his Date of Termination, a lump sum cash amount equal to the
sum of (i) the Employee’s unpaid Base Salary through the Date of Termination,
(ii) any bonus payments which have become payable (other than deferred amounts),
to the extent not theretofore paid, (iii) any reimbursable expenses, accrued or
owing the Employee hereunder and (iv) any accrued, unused select time up to
eighty (80) hours.

                  (h) Termination Without Cause, For Good Reason or Upon Failure
to Renew. In addition to the payments set forth in Section 6(g) hereof, in the
event that the Employee’s employment with the Corporation terminates either
prior to a Change in Control or following the two-year period immediately
subsequent to a Change in Control (including as a result of a notice of
non-renewal of the Term by the Corporation provided during such two-year
period), in each case as a result of (i) a termination by the Employee for Good
Reason (as defined in Section 6(d) hereof), (ii) a termination by the
Corporation without Cause (other than for Retirement or Disability) or
(iii) notice by the Corporation of non-renewal of the Term (other than for
Retirement), then the Corporation shall pay to the Employee, in twenty-four
(24) equal monthly installments in conformity with the Corporation’s normal
payroll periods, an amount (the “Termination Payment”) equal to the sum of
(i) two (2) times the Employee’s annual Base Salary at the Employee’s Date of
Termination, and (ii) two (2) times the annual performance bonus earned by the
Employee from the Corporation and its subsidiaries in respect of the fiscal year
immediately preceding the Employee’s Date of Termination, which annual

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performance bonus, for this purpose, shall be deemed to be no less than $700,000
(“Bonus Amount”). The Employee will also be eligible for the same level of
medical and dental benefits (as well as reimbursement for the personal life and
disability insurance policies referred to in Section 5(e) hereunder) for twelve
months following the Date of Termination.

         7.     Termination of Employment Following a Change in Control.

                  (a) Change in Control Defined. For purposes of this Agreement,
a “Change in Control” shall be deemed to have taken place if:

           (i) any “person” (as defined below) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the
“Exchange Act”)), directly or indirectly, of securities of the Corporation
representing 30% or more of the total voting power represented by the
Corporation’s then outstanding voting securities;

           (ii) a change in the composition of the Board occurs, as a result of
which fewer than two-thirds (2/3) of the incumbent directors are directors who
either (A) had been directors of the Corporation on the “look-back date” (as
defined below) or (B) were elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the directors who had been
directors of the Corporation on the “look-back date” and who were still in
office at the time of the election or nomination;

           (iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented by the
voting securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation; or

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           (iv) the stockholders of the Corporation approve (A) a plan of
complete liquidation of the Corporation or (B) an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation’s
assets.

      For purposes of paragraph (a)(i), the term “person” shall have the same
meaning as when used in sections 13(d) and 14(d) of the Exchange Act, but shall
exclude (1) a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or of a parent or subsidiary of the Corporation
or (2) a corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership of the
common stock of the Corporation. For purposes of paragraph (a)(ii), the term
“look-back date” shall mean the later of (A) the date twenty-four (24) months
prior to the change in the composition of the Board and (B) the Promotion Date.
Any other provision of this Section 7(a) notwithstanding, the term “Change in
Control” shall not include either of the following events, if undertaken at the
election of the Corporation:

  (x)   a transaction, the sole purpose of which is to change the state of the
Corporation’s incorporation; or     (y)   a transaction, the result of which is
to sell all or substantially all of the assets of the Corporation to another
corporation or entity (the “surviving entity”); provided that the voting power
represented by the surviving entity’s securities (or other equity interests) is
owned directly or indirectly by the stockholders of the Corporation immediately
following such transaction in substantially the same proportions as their
ownership of the voting power represented by the Corporation’s common stock
immediately preceding such transaction; and

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      provided, further, that the surviving entity expressly assumes this
Agreement.

                  Notwithstanding anything in this Agreement to the contrary, if
the Employee’s employment terminates prior to a Change in Control, and the
Employee reasonably demonstrates that such termination was at the request or
suggestion of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a “Third Party”), then for
all purposes of this Agreement, the date of a Change in Control shall mean the
date immediately prior to the date of such termination of employment.

                  (b) Cause. During the two-year period following a Change in
Control, “Cause” shall mean (i) the willful and continued failure of the
Employee to substantially perform his duties with the Corporation (other than
any such failure resulting from the Employee’s incapacity due to physical or
mental illness or any such failure subsequent to the Employee being delivered a
Notice of Termination without Cause by the Corporation or delivering a notice of
termination for Good Reason to the Corporation) after a written demand for
substantial performance is delivered to the Employee by the Board which
specifically identifies the manner in which the Board believes that the Employee
has not substantially performed the Employee’s duties and giving the Employee
such time to cure, as it, in its reasonable business judgment, deems
appropriate, or (ii) the willful engaging by the Employee in illegal conduct or
gross misconduct which is demonstrably and materially injurious to the
Corporation or its subsidiaries. For purposes of this paragraph (b), no act or
failure to act by the Employee shall be considered “willful” unless done or
omitted to be done by the Employee in bad faith and without reasonable belief
that the Employee’s action or omission was in the best interests of the
Corporation or its affiliates. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board, based upon the advice
of counsel for the Corporation, shall be conclusively presumed to be done, or
omitted to be done, by the Employee in good faith and in the best interests of
the Corporation. Cause shall not exist unless and until the Corporation has
delivered to the Employee a copy of a resolution duly adopted by two-thirds
(2/3) of the entire Board at a meeting of the Board called and

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held for such purpose (after reasonable notice to the Employee and an
opportunity for the Employee, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board an event set forth
in clause (i) or (ii) has occurred and specifying the particulars thereof in
detail. For purposes of Board approval with respect thereto, the Employee shall
abstain from acting on matters pertaining to this Section 7(b) and shall not be
counted as a Board member for purposes of the two-thirds (2/3) requirement.
Following a Change in Control, the Corporation must notify the Employee of any
event constituting Cause within ninety (90) days following the Corporation’s
knowledge of its existence or such event shall not constitute Cause under this
Agreement.

                  (c) Good Reason. During the two-year period following a Change
in Control, “Good Reason” shall mean, without the Employee’s express written
consent, the occurrence of any of the following events:

           (1) the assignment to the Employee of any duties inconsistent with
the Employee’s title, position, status, reporting relationships, authority,
duties or responsibilities as contemplated by Section 1, or any other action by
the Corporation which results in a diminution in such title, position, status,
reporting relationships, authority, duties or responsibilities (including,
without limitation, the Employee not being the Chief Executive Officer of or,
subject to the limitation set forth in Section 6(d)(i), not being nominated to
the board of the surviving entity (as referred to in Sections 7(a)(iii) and
7(a)(y)) or, if the voting securities of the surviving entity are not publicly
traded, then of the ultimate parent corporation whose securities are publicly
traded), other than an isolated, insubstantial and inadvertent action not taken
in bad faith and which is remedied by the Corporation promptly after receipt of
notice thereof given by the Employee;

           (2) a reduction by the Corporation in the Employee’s rate of annual
Base Salary or annual target bonus opportunity (including any adverse change in
the formula for such annual bonus target) as in effect immediately prior to such
Change in Control or as the same may be increased from time to time thereafter;

           (3) any requirement of the Corporation that the Employee (i) be based
in

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  an office that increases the Employee’s commute thirty (30) or more miles from
the Employee’s commute at the Promotion Date (Westport, CT home to Trumbull, CT
office) or (ii) travel on the Corporation’s business to an extent substantially
greater than the travel obligations of the Employee immediately prior to such
Change in Control;

           (4) the failure of the Corporation to (i) continue in effect any
employee benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in which the Employee is participating immediately prior to
such Change in Control, or the taking of any action by the Corporation which
would adversely affect the Employee’s participation in or reduce the Employee’s
benefits under any such plan, unless the Employee is permitted to participate in
other plans providing the Employee with substantially equivalent aggregate
benefits (at substantially comparable cost with respect to welfare benefit
plans), or (ii) provide the Employee with paid vacation in accordance with the
most favorable plans, policies, programs and practices of the Corporation and
its affiliated companies as in effect for the Employee immediately prior to such
Change in Control; or

           (5) the failure of the Corporation to obtain the assumption agreement
from any successor as contemplated in Section 11(a) hereof.

                  Any event or condition described in Section 7(c)(1) through
(4) which occurs prior to a Change in Control, but with respect to which the
Employee is able to reasonably demonstrate was at the request or suggestion of a
Third Party, shall constitute Good Reason following a Change in Control for
purposes of this Agreement (as if a Change in Control had occurred immediately
prior to the occurrence of such event or condition) notwithstanding that it
occurred prior to the Change in Control. An isolated, insubstantial and
inadvertent action taken in good faith and which is remedied by the Corporation
promptly after receipt of notice thereof given by the Employee shall not
constitute Good Reason. The Employee’s right to terminate employment for Good
Reason shall not be affected by the Employee’s incapacity due to mental or
physical

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illness and the Employee’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any event or condition constituting Good
Reason. Following a Change in Control, the Employee must provide Notice of
Termination of employment within ninety (90) days of the Employee’s knowledge of
an event constituting Good Reason or such event shall not constitute Good Reason
under this Agreement, and the provisions of the last sentence of Section 6(d)
will apply.

                  (d) In addition to the payments set forth in Section 6(g)
above, in the event the Employee’s employment with the Corporation terminates
within two (2) years following a Change in Control either (i) by the Corporation
without Cause (other than for Retirement or Disability) or (ii) by the Employee
for Good Reason, then the Corporation shall (1) pay to the Employee, within ten
(10) days following the Employee’s Date of Termination, a lump sum cash amount
equal to two and one-half (2.5) times the sum of (i) the Employee’s Base Salary
at the Employee’s Date of Termination (unless a Good Reason event was a
reduction in the Employee’s Base Salary described in Section 7(c)(2), in which
case Base Salary at Date of Termination shall be deemed to be the Employee’s
Base Salary immediately prior to such reduction) and (ii) the highest annual
performance bonus earned by the Employee during the two (2) year period
immediately preceding the Employee’s Date of Termination, provided, however,
that in no event will the amount determined pursuant to this Clause (1) be less
than the Termination Payment defined in Section 6(h)), (2) cause the options
granted to the Employee prior to and during the Term to become fully vested and
immediately exercisable, and (3) continue to provide, for a period of two and
one-half (2.5) years following the Date of Termination, the Employee (and the
Employee’s dependents if applicable) with the same level of medical and dental
benefits (as well as reimbursement for personal life and disability insurance
policies referred to in Section 5(e) hereunder) upon the substantially same
terms and conditions (including cost of coverage to the Employee) as existed
immediately prior to the Employee’s Date of Termination (or, if more favorable
to the Employee, as such benefits and terms and conditions existed immediately
prior to the Change in Control); provided, that if the Employee cannot continue
to participate in the Corporation’s plans providing such benefits, the
Corporation shall otherwise provide

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such benefits on the same after-tax basis as if continued participation had been
permitted. Notwithstanding the foregoing, in the event the Employee becomes
reemployed with another employer and becomes eligible to receive medical and
dental benefits from such employer, the benefits described herein shall be
secondary to such benefits during the period of the Employee’s eligibility, but
only to the extent that the Corporation reimburses the Employee for any
increased cost and provides any additional benefits necessary to give the
Employee the benefit hereunder.

                  (e) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution, or any acceleration of vesting of any benefit or award, by the
Corporation or its affiliated companies to or for the benefit of the Employee
(whether paid or payable, distributed or distributable or accelerated or subject
to acceleration pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 7(e)) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties are incurred by the
Employee with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the
Employee of all taxes imposed upon the Gross-Up Payment and any interest or
penalties imposed with respect to such taxes, the Employee retains an amount of
the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the
Payments and (y) the product of any deductions disallowed because of the
inclusion of the Gross-Up Payment in the Employee’s adjusted gross income and
the highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, the Employee shall be deemed to (A) pay
federal income taxes at the highest marginal rates of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made, (B) pay
applicable state and local income taxes at the highest marginal rate of taxation
for the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be

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obtained from deduction of such state and local taxes and (C) have otherwise
allowable deductions for federal income tax purposes at least equal to those
which could be disallowed because of the inclusion of the Gross-Up Payment in
the Employee’s adjusted gross income. The payment of a Gross-Up Payment under
this Section 7(e) shall in no event be conditioned upon the Employee’s
termination of employment or the receipt of severance benefits under this
Agreement.

                  (ii) Subject to the provisions of Section 7(e)(i), all
determinations required to be made under this Section 7(e), including whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination, shall be
made by the public accounting firm that is retained by the Corporation as of the
date immediately prior to the Change in Control (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Corporation and the
Employee within fifteen (15) business days of the receipt of notice from the
Corporation or the Employee that there has been a Payment, or such earlier time
as is requested by the Corporation (collectively, the “Determination”). In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Employee may
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Corporation and the Corporation shall enter
into any agreement requested by the Accounting Firm in connection with the
performance of its services hereunder. The Gross-Up Payment under this Section
7(e) with respect to any Payment shall be made no later than thirty (30) days
following such Payment. If the Accounting Firm determines that no Excise Tax is
payable by the Employee, it shall furnish the Employee with a written opinion to
such effect, and to the effect that failure to report the Excise Tax, if any, on
the Employee’s applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. The Determination by the
Accounting Firm shall be binding upon the Corporation and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the Determination, it is possible

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that Gross-Up Payments which will not have been made by the Corporation should
have been made (“Underpayment”) or Gross-Up Payments are made by the Corporation
which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. In the event that the Employee
thereafter is required to make payment of any additional Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Corporation to
or for the benefit of the Employee. In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse the Employee for his Excise
Tax, the Accounting Firm shall determine the amount of the Overpayment that has
been made and any such Overpayment (together with interest at the rate provided
in Section 1274(b)(2) of the Code) shall be promptly paid by the Employee to or
for the benefit of the Corporation. The Employee shall cooperate, to the extent
his expenses are reimbursed by the Corporation, with any reasonable requests by
the Corporation in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax.

         8.     Covenants Not to Compete; Confidentiality.

                  (a) The Employee covenants that following his Date of
Termination, unless such termination is within the two-year period following a
Change in Control, he shall not, for a period of one (1) year following such
Date of Termination:

           (1) engage or be interested, whether alone or together with or on
behalf or through any other person, firm, association, trust, venture, or
corporation, whether as sole proprietor, partner, shareholder, agent, officer,
director, employee, adviser, consultant, trustee, beneficiary or otherwise, in
any business principally and directly engaged in by the Corporation and its
subsidiaries, including but not limited to, the operation of health maintenance
organizations or the health insurance business; which business operates in a
geographic area in which, at the time of such termination of employment, the
Corporation is conducting business or plans to conduct business (a “Competing
Business”);

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           (2) assist others in conducting any Competing Business;

           (3) directly or indirectly recruit or induce or hire any person who
is an employee of the Corporation or any of its subsidiaries, or solicit any of
the Corporation’s customers, clients or providers; or

           (4) own any capital stock or any other securities of, or have any
other direct or indirect interest in, any entity which owns or operates a
Competing Business, other than the ownership of (i) less than five percent (5%)
of any such entity whose stock is listed on a national securities exchange or
traded in the over-the-counter market and which is not controlled by the
Employee or any affiliate of the Employee or (ii) any limited partnership
interest in such an entity.

                  (b) The Employee hereby agrees and covenants, as a condition
of the Corporation’s performance of its obligations arising from this Agreement,
that, both during and after the Term, except as may be necessary to perform the
Employee’s duties for the benefit of the Corporation, he will not, directly or
indirectly, use or disclose any material proprietary or confidential
information, whether written or oral, received or gained by him in the course of
his employment by the Corporation or of his duties with the Corporation
(“Confidential Information”). Confidential Information does not include
information that is or becomes widely known outside the Corporation through no
act or failure to act by the Employee. The rights set forth in this Agreement
are in addition to any rights the Corporation may have under the common law or
applicable statutes relating to the protection of trade secrets and confidential
information.

                  (c) In the event that the Employee breaches or threatens to
breach any of the terms of this Section 8, the Employee acknowledges that the
Corporation’s remedy at law would be inadequate and that the Corporation shall
be entitled to an injunction restraining the Employee from committing or
continuing such breach. The Employee therefore consents to the entry of a
restraining order, preliminary injunction or other court order to enforce those
paragraphs and expressly waives any security that might otherwise be required in
connection with such relief. The Employee also agrees that any request for

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such relief by the Corporation shall be in addition and without prejudice to any
claim for monetary damages which the Corporation might seek.

         9.     Payment Obligation Absolute; No Mitigation. Except with respect
to continued welfare benefits under Section 7(d), the Corporation’s obligation
to pay the Employee the compensation and other benefits provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Corporation may have against the Employee. All amounts
payable by the Corporation hereunder shall be paid without notice or demand. The
Employee shall not be required to mitigate amounts payable pursuant to this
Agreement by seeking other employment or otherwise, (other than as provided in
Section 7(d)) with respect to certain welfare benefits.

         10.     Notice.

                  (a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five (5) days after deposit in
the United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:

          If to the Employee:           Charles G. Berg
10 Blind Brook Road
Westport, CT 06880
          If to the Corporation:           Oxford Health Plans, Inc.
48 Monroe Turnpike
Trumbull, CT 06611
Attention: Secretary

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

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                  (b) A written notice (a “Notice of Termination”) of the
Employee’s Date of Termination by the Corporation or the Employee, as the case
may be, to the other, shall (i) indicate the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision so indicated and
(iii) specify the Date of Termination. The failure by the Employee or the
Corporation to set forth in such notice any particular fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Employee or the Corporation hereunder or preclude the Employee or the
Corporation from asserting such fact or circumstance in enforcing the Employee’s
or the Corporation’s rights hereunder.

         11.     General Provisions.

                  (a) No Assignments. This Agreement is personal to each of the
parties hereto. Neither party may assign or delegate any of his or its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Corporation agrees that concurrently with any
merger or sale of assets which would constitute a Change in Control hereunder,
it will cause any successor or transferee unconditionally to assume, by written
instrument delivered to the Employee (or his beneficiary or estate), all of the
obligations of the Corporation hereunder. Failure of the Corporation to obtain
such assumption prior to the effectiveness of any such merger or sale of assets,
shall be a breach of this Agreement and shall constitute Good Reason hereunder
and shall entitle the Employee to compensation and other benefits from the
Corporation in the same amount and on the same terms to which the Employee would
be entitled hereunder if the Employee’s employment were terminated following a
Change in Control under Section 7(d) hereof. For purposes of implementing the
foregoing, the date on which any such merger or sale of assets becomes effective
shall be deemed the date Good Reason occurs, and shall be the Date of
Termination if requested by the Employee. Notwithstanding the foregoing, this
Agreement shall inure to the benefit of and be enforceable by the Employee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee

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shall die while any amounts would be payable to the Employee hereunder had the
Employee continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to such person or
persons appointed in writing by the Employee to receive such amounts or, if no
person is so appointed, to the Employee’s estate.

                  (b) Indemnification of Employee. (i) In the event the
employment of the Employee is terminated by the Corporation without Cause or by
the Employee for Good Reason hereof and the Corporation fails to make timely
payment of the amounts then owed to the Employee under this Agreement, the
Employee shall be entitled to indemnification for all reasonable costs (as such
costs are incurred), including attorneys’ fees and disbursements, incurred by
the Employee in taking action to collect such amounts or otherwise to enforce
this Agreement, plus interest on all such amounts at the annual rate of one
percent above the prime rate (defined as the base rate on corporate loans at
large U.S. money center commercial banks as published by The Wall Street
Journal), compounded monthly, for the period from the time payment is due until
payment is made to the Employee. The Employee shall also be entitled to interest
(at the rate described in the immediately preceding sentence) on such reasonable
costs incurred from the date the Employee delivers a receipt to the Corporation
for such costs until the date they are reimbursed to the Employee. Such
indemnification and interest shall be in addition to all rights to which the
Employee is otherwise entitled under this Agreement.

                  (ii) To the extent permitted under applicable law, the
Corporation agrees that if the Employee is made a party, or is threatened to be
made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
“Proceeding”), by reason of the fact that he is or was a director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Employee’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Employee shall be
indemnified and held harmless by the

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Corporation to the fullest extent permitted or authorized by the Corporation’s
certificate of incorporation or bylaws or, if greater, by the laws of the State
of Delaware, against all costs, expenses, liabilities and losses (including,
without limitation, attorney’s fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by the Employee in connection therewith (including, without limitation,
investigating, preparing for and defending any such Proceeding), and such
indemnification shall continue as to the Employee even if he has ceased to be a
director, officer, member, employee or agent of the Corporation or other entity
and shall inure to the benefit of the Employee’s heirs, executors and
administrators. The Corporation shall advance to the Employee all reasonable
costs and expenses incurred by him in connection with a Proceeding within
20 days after receipt by the Corporation of a written request for such advance.
Such request shall include an undertaking by the Employee to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses. Without in any way limiting the
foregoing or the scope or generality thereof, the Corporation agrees to
indemnify and hold harmless the Employee against all costs, expenses,
liabilities and losses reasonably incurred or suffered by the Employee by reason
of, arising from or relating to any written statement of the Employee that
(1) is required to be, and is, filed with the Securities and Exchange Commission
regarding the accuracy of reports or statements filed by the Corporation with
such Commission pursuant to Federal securities laws or (2) is made to another
officer or employee of the Corporation to support such a required filed
statement of such other officer or employee, provided that, in making (and, if
applicable, filing) such written statement, the Employee acted in good faith and
in a manner the Employee reasonably believed to be in and not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that the Employee’s conduct was
unlawful.

                  (c) Entire Agreement; Amendments or Additions; Action by
Board. This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby and supersedes all prior
oral and written agreements,

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memoranda, understandings and undertakings between the parties hereto relating
to the subject matter hereof. No amendments or additions to this Agreement shall
be binding unless in writing and signed by both parties.

                  (d) Governing Law. This Agreement shall be governed by the
laws of the State of Connecticut as to all matters, including, but not limited
to, matters of validity, construction, effect and practice.

                  (e) Arbitration. Except with respect to injunctive relief
under Section 8(b) hereof, any dispute or controversy under this Agreement shall
be settled exclusively by arbitration in Norwalk, Connecticut by three
(3) arbitrators in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitration award in
any court having jurisdiction. The Corporation shall bear all costs and expenses
arising in connection with any arbitration proceeding pursuant to this
Section 11(e).

                  (f) Employment with Subsidiaries. Employment with the
Corporation for purposes of this Agreement shall include employment with any
subsidiary of the Corporation.

                  (g) Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

                  (h) Section Headings. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement.

                  (i) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.

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

              OXFORD HEALTH PLANS, INC.               By:   /s/ ROBERT B.
MILLIGAN, JR.        

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        Robert B. Milligan, Jr.           Dated:  September 30, 2002       /s/
CHARLES G. BERG        

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        Charles G. Berg

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