<PAGE>

                                                                   Exhibit 10.1

                  AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT


     This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT, dated as of September 17,
1996 (the "Amendment"), is made by and between FHP International Corporation, a
Delaware corporation (the "Company") and ________________ (the "Executive"), for
the purpose of amending the EMPLOYMENT AGREEMENT between them dated as of the
_____ day of ________________, 1996 (the "Employment Agreement").  Defined terms
not defined herein shall have the meanings assigned to them in the Employment
Agreement.

     WHEREAS, the Company has entered into the Agreement and Plan of
Reorganization dated as of August 4, 1996 among the Company, PacifiCare Health
Systems, Inc., a Delaware corporation, N-T Holdings, Inc., a Delaware 
corporation ("PacifiCare Holding"), and certain other persons, as amended and
restated by the Amended and Restated Agreement and Plan of Reorganization among
them dated as of September 17, 1996 (as so amended, the "Reorganization
Agreement"); and

     WHEREAS, the Company desires the benefits of the continued services of the
Executive before and after the Effective Date, and the Executive is willing to
render such services, pursuant and subject to the terms and conditions of the
Employment Agreement as amended hereby; and

     WHEREAS, Section 4.8(b) of the Reorganization Agreement permits the
Employment Agreement to be amended as provided herein.

     NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:

     1.   AMENDMENT TO EMPLOYMENT AGREEMENT.  The Employment Agreement is hereby
amended by revising Section 11(c) of the Employment Agreement to read as
follows:

          "(c) PROVIDED THAT (i) on or before the Effective Date the Executive
     shall have executed and delivered to the Company a Covenant Not to Compete
     during the Employment Period in the form of EXHIBIT "A" hereto, (ii) within
     30 days after the Date of Termination the Executive shall have executed and
     delivered to the Company a Settlement and Release Agreement in the form of
     EXHIBIT "B" hereto in the manner specified therein, and (iii) if and for so
     long as he or she may have been requested to do so (but not beyond the end 
     of the Employment Period), the Executive shall have served as a director of
     the Company or any corporation controlling, controlled by or under common 
     control with the Company, on terms and conditions no less favorable than 
     apply to other directors of such corporation except that such service shall
     be without compensation, THEN: If the Executive's employment is terminated 
     other than voluntarily or for Cause, Death or Disability prior to the end 
     of the Employment 

                                      1

<PAGE>

     Period, each of the Executive's outstanding Option Rights which shall not 
     otherwise have become exercisable shall become exercisable in such manner 
     and at such times as the Option Right would have become exercisable if the 
     Executive had not terminated employment and shall remain exercisable until 
     the earlier of the date which is 90 days following the date on which the 
     Option Right first becomes exercisable or the original expiration date of 
     the Option Right.  Calculation of the number of Options Rights that become 
     immediately exercisable under Section 11(a) shall be made independently of 
     this Section 11(c)."

     2.   GOVERNING LAW.  This Amendment shall be governed by and construed in
accordance with the internal laws of the State of Delaware.

     3.   NO OTHER AMENDMENTS.  The Agreement, as amended by this Amendment, is
and shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed.  Except as expressly provided herein, nothing in this
Amendment shall waive or be deemed to waive or modify any rights or obligations
of any of the parties under the Agreement.

     4.   COUNTERPARTS.  This Amendment may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one instrument.

     IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the
date first above mentioned.

                              FHP International Corporation,
                              a Delaware corporation


                              By:____________________________________________
                              Name:  Westcott W. Price III
                              Title:    President and Chief Executive Officer


                              _______________________________________________
                              Executive


                                      2

<PAGE>

                         COVENANT NOT TO COMPETE


     This COVENANT NOT TO COMPETE, dated as of September 17, 1996 (the
"Agreement"), is made by and between FHP International Corporation, a Delaware
corporation (the "Company"), and ________________ ("Executive").  Defined terms
not defined herein shall have the meanings assigned to them in the Employment
Agreement or the Reorganization Agreement (as defined below).

     WHEREAS, as of the Effective Time, the Company shall have merged pursuant
to the Amended and Restated Agreement and Plan of Reorganization dated as of
September 17, 1996 (the "Reorganization Agreement") among the Company,
PacifiCare Health Systems, Inc., a Delaware corporation, N-T Holdings, Inc., a
Delaware corporation ("PacifiCare Holding"); and

     WHEREAS, as of the Effective Time and pursuant to the Company Merger, all
stock of the Company held by Executive has been converted into stock of
PacifiCare Holding and  certain other consideration, and all Company Options
held by Executive have been replaced by Exchange Options, in accordance with the
provisions of the Reorganization Agreement; and

     WHEREAS, the Company desires the benefits of the continued services of the
Executive after the Effective Time, and the Executive is willing to render such
services, pursuant and subject to the terms and conditions of the Employment
Agreement; and

     WHEREAS, Executive desires the benefits of Section 11(c) of the Employment
Agreement and in consideration thereof desires to execute and deliver this
Agreement in accordance therewith.

     NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:

1.   COVENANT NOT TO COMPETE.  Until the earlier of the expiration of the
     Employment Period or the expiration of 30 days following Executive's Date 
     of Termination without execution and delivery by Executive of a Settlement 
     and Release Agreement as provided in Section 11(c) of the Employment 
     Agreement, Executive shall not, directly or indirectly, as principal, 
     employee, agent, independent contractor, proprietor, partner, or otherwise,
     operate, own, manage, control, or participate in conducting the same 
     business in the same cities and counties as carried on by the Company in 
     the State of California at the Effective Time, if in so doing Executive 
     personally carries on activities substantially the same in all material 
     respects as the activities carried on by Executive as an officer and 
     employee of the Company at the Effective Time.

2.   REASONABLENESS OF COVENANT.  Executive has carefully considered the nature
     and extent of the restrictions upon Executive and the rights and remedies
     conferred upon Company under this Agreement, and hereby acknowledges and 
     agrees that such 

                                      3

<PAGE>

     covenants are reasonable, are designed to prevent irreparable damage to 
     Company, are required to protect Company's legitimate interests, and do 
     not confer a benefit upon Company disproportionate to the detriment of 
     Executive.

3.   NO WAIVER.  No waiver of any of the provisions herein shall be valid unless
     in writing signed by the party against whom such claimed waiver is sought 
     to be enforced, nor shall a failure to enforce any right hereunder 
     constitute a continuing waiver of the notice or a waiver of any other right
     hereunder.  The failure of the Company at any time or from time to time to 
     require performance of any of Executive's obligations hereunder shall in no
     manner affect the Company's right to enforce any provision of this 
     Agreement at a subsequent time.

4.   SEVERABILITY.  In the event that any provision or portion of this Agreement
     be found by a court of competent jurisdiction to be invalid or 
     unenforceable, this Agreement shall be deemed to be amended so as to delete
     only the invalid or unenforceable provision, or the invalid or 
     unenforceable portion thereof, and the remaining provisions hereof shall 
     remain in full force and effect.

5.   SUCCESSORS.  This Agreement shall inure to the benefit of, and be binding
     upon the parties, their heirs, executors, administrators, successors and
     assigns.

6.   GOVERNING LAW.  This Amendment shall be governed by and construed in
     accordance with the law of the State of California, without reference to
     principles of conflicts of laws.

7.   COUNTERPARTS.  This Amendment may be executed in any number of
     counterparts, each of which will be deemed to be an original but all of 
     which together will constitute but one instrument.


          IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above mentioned.

                              FHP INTERNATIONAL CORPORATION


                              By:_______________________________________
                                   Westcott W. Price III
                                   President and Chief Executive Officer


                              __________________________________________
                                   Executive


                                      4

<PAGE>

                     SETTLEMENT AGREEMENT AND RELEASE


     This SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is entered into by and
between ________________ ("Executive") and FHP International Corporation, a
Delaware corporation (the "Company"), pursuant to the EMPLOYMENT AGREEMENT
between them dated as of the _____ day of __________, 1996, as amended (the
"Employment Agreement").

     WHEREAS, the employment of Executive by the Company terminated
__________________ (the "Termination Date"); and

     WHEREAS, Executive desires the benefits of Section 11(c) of the Employment
Agreement and in consideration thereof desires to execute and deliver this
Agreement in accordance therewith.

     NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:

     1.   RELEASE.  In consideration of the above, the sufficiency of which
Executive hereby acknowledges, and subject to the proviso hereinafter set forth,
Executive hereby agrees not to sue and fully, finally, completely and generally
releases, absolves and discharges the Company, its predecessors, successors,
subsidiaries, parents, related companies and business concerns, affiliates,
partners, trustees, directors, officers, agents, attorneys, servants,
representatives and employees, past and present, and each of them (hereinafter
collectively referred to as "Releasees") from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action,
grievances, arbitrations, unfair labor practice charges, wages, vacation
payments, severance payments, obligations, commissions, overtime payments,
Workers' Compensation claims, debts, profit sharing or bonus claims, expenses,
damages, judgments, orders and/or liabilities of whatever kind or nature in law,
equity or otherwise, whether known or unknown to Executive, which Executive now
owns or holds or has at any time owned or held as against Releasees, or any of
them ("Claims"), including specifically but not exclusively and without limiting
the generality of the foregoing, any and all Claims arising out of or in any way
connected to Executive's employment with or separation of employment from
Executive including any Claims based on contract, tort, wrongful discharge,
fraud, breach of fiduciary duty, attorneys' fees and costs, discrimination in
employment, any and all acts or omissions in contravention of any federal or
state laws or statutes (including but not limited to federal or state securities
laws and the Racketeer Influenced and Corrupt Organizations Act), and any right
to recovery based on state or federal age, sex, pregnancy, race, color, national
origin, marital status, religion, veteran status, disability, sexual
orientation, medical condition, union affiliation or other anti-discrimination
laws, including, without limitation, Title VII, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the National Labor
Relations Act, and the California Fair Employment and Housing Act, all as
amended, whether such claim be based upon an action 

                                      5

<PAGE>

filed by Executive or by a governmental agency; PROVIDED, HOWEVER, the 
foregoing release shall not affect or diminish any rights of Executive under 
the Employment Agreement or in respect of vested employee benefits.  "Vested 
employee benefits" means any and all rights of Executive under or in respect 
of (i) any employee benefit plan of the Company or any corporation or other 
entity which controlling, controlled by or under common control with the 
Company or that is a Releasee ("Affiliated Company"), (ii) any option or 
other agreement relating to any right or interest of Executive in any stock 
or other securities of the Company or any Affiliated Company, (iii) salary or 
wages payable for services rendered before the Termination Date, (iv) 
reimbursement for business expenses or other amounts for which Executive is 
entitled to reimbursement by the Company immediately before the Termination 
Date, or (v) indemnification as an agent.

          (a)  Executive acknowledges and agrees that neither anything in this
Agreement or the offer, execution, delivery, or acceptance thereof shall be
construed as an admission of any kind by the Company, and this Agreement shall
not be admissible as evidence in any proceeding except to enforce this
Agreement.

          (b)  It is the intention of Executive in executing this instrument
that it shall be effective as a bar to each and every claim, demand, grievance
and cause of action hereinabove specified as being released.  In furtherance of
this intention, Executive hereby expressly consents that this Agreement shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demand and causes of action hereinabove specified, and elects to assume all
risks for claims that now exist in Executive's favor, known or unknown, that are
released under this Agreement.  Executive acknowledges that Executive may
hereafter discover facts different from, or in addition to, those Executive now
knows or believes to be true with respect to the claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, wages,
obligations, debts, expenses, damages, judgments, orders and liabilities herein
released, and agrees the release herein shall be and remain in effect in all
respects as a complete and general release as to all matters released herein,
notwithstanding any such different or additional facts.

          (c)  If any provision of this Agreement or application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provision or
application.  To this end, the provisions of this Agreement are severable.

          (d)  Executive represents and warrants that Executive has not
heretofore assigned or transferred or purported to assign or transfer to any
person, firm or corporation any claim, demand, right, damage, liability, debt,
account, action, cause of action, or any other matter herein released.


                                      6

<PAGE>

          (e)  NOTICE TO EXECUTIVE:  The law requires that Executive be advised
and the Company hereby advises Executive to consult with an attorney and discuss
this Agreement before executing it.  Executive acknowledges that the Company has
provided to Executive at least 21 days within which to review and consider this
Agreement before signing it.  If Executive decides not to use the full 21 days,
then Executive knowingly and voluntarily waives any claims that Executive was
not in fact given that period of time or did not use the entire 21 days to
consult an attorney and/or consider this Agreement.  Executive acknowledges that
Executive may revoke this Agreement for up to seven calendar days following
Executive's execution of this Agreement and that it shall not become effective
or enforceable until the revocation period has expired.  Executive further
acknowledges and agrees that such revocation must be in writing addressed to the
Company as follows:  FHP International Corporation, P.O. Box 25186, Santa Ana,
California 92799, Attn:  President, and received by the Company as so addressed
not later than midnight on the seventh day following execution of this Agreement
by Executive.  If Executive so revokes this Agreement, the Agreement shall not
be effective or enforceable and Executive will not receive the benefits
described above.  If Executive does not revoke this Agreement in the time frame
specified above, the Agreement shall become effective at 12:00:01 on the eighth
day after it is signed by Executive.

          (f)  Executive represents that Executive has read and understood the
foregoing Agreement, has been advised to and has had the opportunity to discuss
it with anyone he or she desires, including an attorney of his or her own
choice, and Executive accepts and agrees to the terms of this Agreement,
acknowledges receipt of a copy of the same and the sufficiency of the benefits
described above, and hereby executes this Agreement voluntarily and with full
understanding of its consequences. 

     PLEASE READ CAREFULLY.  THIS AGREEMENT CONTAINS A GENERAL RELEASE OF 
     ALL KNOWN AND UNKNOWN CLAIMS.

Date:_____________ , 199__            Executive:


                                      ____________________________


Date:_____________ , 199__            FHP International Corporation



                                      By:_____________________________

                                      Its:____________________________

                                      7