<PAGE>

                                                                   Exhibit 10(m)

                              AMENDED AND RESTATED

                        MARKETING AND SERVICES AGREEMENT

                                  By and Among

                        PHYSICIANS HEALTH SERVICES, INC.

                               and its affiliate,

                 PHYSICIANS HEALTH SERVICES OF CONNECTICUT, INC.

                                       and

                 THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
<PAGE>

AMENDED AND RESTATED MARKETING AND SERVICES AGREEMENT

     Reference is hereby made to the Marketing and Services Agreement (the
"Marketing and Services Agreement") made and entered into as of December 2, 1994
(the "Inception Date") by and among PHYSICIANS HEALTH SERVICES, INC., a
corporation organized under the laws of the State of Delaware, and its
affiliate, PHYSICIANS HEALTH SERVICES OF CONNECTICUT, INC., a corporation
organized under the laws of the State of Connecticut as a health care center
(collectively, "PHS," unless the context indicates reference to Physicians
Health Services. Inc. or Physicians Health Services of Connecticut, Inc. as
separate corporate entities), and THE GUARDIAN LIFE INSURANCE COMPANY OF
AMERICA, a mutual life insurance company organized under the laws of the State
of New York ("Guardian"). This Amended and Restated Marketing and Services
Agreement is dated as of October 1, 1996, and when executed by the parties
hereto, shall supersede and replace the Marketing and Services Agreement and
shall constitute a binding and enforceable amendment to the Marketing and
Services Agreement in its entirety.

     THE MARKETING AND SERVICES AGREEMENT IS AMENDED AND RESTATED IT ITS
ENTIRETY AS FOLLOWS:

     This Amended and Restated Marketing and Services Agreement (this
"Agreements) is made and entered into as of this 1st day of October, 1996 by and
among PHYSICIANS HEALTH SERVICES, INC., PHYSICIANS HEALTH SERVICES OF
CONNECTICUT, INC. and GUARDIAN.
<PAGE>

                                    RECITALS

     WHEREAS, PHS, which is licensed to operate a health care center in the
State of Connecticut, maintains a network of health care providers in the State
of Connecticut, and is authorized to offer for sale plans providing managed care
health care benefits in such State;

     WHEREAS, Guardian desires to make different types of managed care health
coverage plans available for sale by the Guardian Marketing Force (as defined
herein) in the State of Connecticut;

     WHEREAS, PHS is willing to make its managed care health coverage plans
available for sale by the Guardian Marketing Force;

     WHEREAS, Guardian is authorized to offer for sale preferred provider
organization plans and indemnity insurance contracts (collectively, "Health
Insurance Contracts," as defined herein) to individuals and groups in the State
of Connecticut and to offer certain other insurance plans in such State,
including group life, disability and dental insurance plans ("Ancillary
Products," as defined herein);


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<PAGE>

     WHEREAS. PHS desires to make Health Insurance Contracts and Ancillary
Products available for sale by PHS in the State of Connecticut;

     WHEREAS, PHS and Guardian each desire to market "multi-choice" plans, which
give employees the option of choosing benefits under pre-selected combinations
of health coverage plans; and

     WHEREAS, PHS and Guardian desire to enter into a reinsurance transaction,
pursuant to which Guardian will reinsure PHS with respect to risks under HMO
Plans (as defined herein);

     NOW THEREFORE, in consideration of the mutual agreements contained herein,
the sufficiency of which is hereby acknowledged, and in consideration of the
performance by the parties of their obligations under this Agreement, the
parties agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     As used in this Agreement, the following terms shall have the following
meanings (definitions are applicable to both the singular and the plural form of
each term defined herein):


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<PAGE>

     "Ancillary Products" means the life insurance, short- and long-term
disability insurance, accidental death and dismemberment insurance, and dental
insurance products offered by Guardian as designated by the parties from time to
time.

     "Business Day" means any day except Saturday or Sunday or any legal Federal
or Connecticut holiday.

     "Change of Control" means the acquisition, in a single transaction or in a
series of related transactions, by a person, an entity, or a group of persons or
entities acting in concert of: (i) twenty-five percent (25 %) or more (a) of the
voting common stock of Physicians Health Services, Inc. or Physicians Health
Services of Connecticut, Inc. (excluding any acquisition of stock by a party
currently owning twenty-five percent (25 %) or more of such common stock), or
(b) fifty-one percent (51 %) or more of the aggregate value of the assets of
Physicians Health Services, Inc. or Physicians Health Services of Connecticut,
Inc.; or (ii) twenty-five percent (25 %) or more of any ownership interest in
Guardian.

     "Continuation Plan" has the meaning given such term in the HMO Reinsurance
Agreement

     "Contractholder" means an employer in the Service Area who or which
executes an enrollment agreement with respect to any Managed Care Contract
subject to this Agreement.


                                       4
<PAGE>

     Contract Termination Date" means the effective date upon which the
Agreement terminates pursuant to the applicable Section in Article X below.

     "Eligible Employee" means an employee who is eligible to enroll in the
Contractholder's Plan.

     "Effective Date" shall have the meaning set forth in Section 10.1.

     "Guardian Marketing Force" means employees of Guardian, and any agents
under contract with Guardian who or which are licensed in the State of
Connecticut to sell individual and/or group health insurance contracts and who
or which are acting on behalf of Guardian, but not including employees or agents
of PHS, or independent brokers.

     "Health Insurance Contracts" means contracts for health insurance offered
on a fee for service or indemnity basis by Guardian in the Service Area when
such contracts are marketed and sold under the tradename "The Guardian & PHS
Healthcare Solutions," or such other tradename as the parties may mutually agree
to from time to time. Health Insurance Contracts include preferred provider
plans using the PHS Network or PHCS' network of providers offered by Guardian in
the Service Area.

     "HMO Plans" means commercial contracts for health care services provided by
PHS to Contractholders in the Service Area utilizing the PHS Network to provide
health care services


                                       5
<PAGE>

when such contracts are marketed and sold under the tradename "The Guardian &
PHS Healthcare Solutions," or such other tradename as the parties may mutually
agree to from time to time. HMO Plans include HMO Plans with a
"point-of-service" feature.

     "HMO Reinsurance Agreement" means the form of Reinsurance Agreement
described in Section 9.1 and attached hereto as Exhibit A-1.

     "Managed Care Contracts" means any HMO Plan or Health Insurance Contract
purchased by a Contractholder pursuant to Article II below.

     "Marketing Materials" shall have the meaning set forth in Section 2.6.

     "Material Change" shall have the meaning set forth in Section 6.3.

     "PHCS" means Private Healthcare Systems, Incorporated, a Delaware
corporation with its headquarters in Waltham, Massachusetts, that organizes
managed care networks.

     "PHS Network" means the network of health care providers in the Service
Area, including physicians and other individual practitioners and health care
facilities or individual practice associations, who or which are under direct or
indirect contract with PHS to provide services to Subscribers under a HMO Plan.


                                       6
<PAGE>

     "Plans" means the HMO Plans, Health Insurance Contracts and Ancillary
Products sold pursuant to this Agreement.

     "Quarter" means each of the four consecutive three-month periods in a
calendar year.

     "Quarterly Accounting Report" shall have the meaning set forth in Section
8.1.

     "Service Area" means the State of Connecticut.

     "Subscriber" means the persons, including, but not limited to, Eligible
Employees, who have enrolled in a Managed Care Contract and who meet the
Contractholder's and the Managed Care Contract's eligibility requirements.

                                   ARTICLE 11

                              MARKETING AND SALES

     2.1 Marketing and Sale of the HMO Plans by Guardian. (a) During the term of
this Agreement, Guardian shall have the right to market HMO Plans to its
existing and prospective customers through the Guardian Marketing Force,
pursuant to the terms of Section 2.3 below.


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<PAGE>

     (b) Except as permitted by 2.1(c) below, Guardian shall not enter into any
marketing agreements or similar agreements with any managed care organization
other than PHS for purpose of offering managed care products for sale in the
Service Area.

     (c) Nothing contained in this Agreement shall limit Guardian's right to
contract with PHCS for the purpose of developing managed care networks in the
Service Area or elsewhere; provided, however, that during the term of this
Agreement, Guardian shall not, without consulting with PHS, replace a HMO Plan
with a similar type of plan utilizing a PHCS network.

     (d) Nothing contained in this Agreement shall limit Guardian's right to
market Health Insurance Contracts and Ancillary Products not subject to this
Agreement directly to employers with whom Guardian contracts.

     2.2 Marketing and Sale of Health Insurance Contracts by PHS: Ancillary
Products. (a) During the term of this Agreement, PHS shall have the right to
market Health Insurance Contracts and Ancillary Products to its existing and
prospective customers in the Service Area, pursuant to the terms of Section 2.3
below.

     (b) Except with Guardian's prior written consent and except as permitted by
Section 2.2(c) below,  PHS shall not enter into marketing or similar  agreements
with any entity  other than  Guardian  with  respect to marketing in the Service
Area of HMO Plans, Health Insurance


                                       8
<PAGE>

Contracts or Ancillary Products or insurance products substantially similar to
the Health Insurance Contracts or Ancillary Products.

     (c) PHS expressly acknowledges and agrees that notwithstanding anything to
the contrary stated in this Section 2.2(c), that it has not, and that it will
not, enter into any joint marketing or similar agreement with any entity other
than Guardian with respect to marketing in the Service Area of any commercial,
fully insured HMO Plan, Health Insurance Contract or Ancillary Product. Guardian
acknowledges and agrees that PHS may enter into arrangements in the Service Area
with respect to marketing Ancillary Products in connection with PHS' Medicare
and Medicaid health maintenance organization plans ("Government Plans") Guardian
also acknowledges and agrees that prior to the Effective Date that PHS entered
into an arrangement with Dental Benefit Providers to market dental products (the
"DBP Plans") in the Service Area. PHS agrees that from and after 12/31/97 that
it will not market the DBP Plans other than in connection with the marketing of
the Government Plans. Guardian further acknowledges and agrees that prior to the
Effective Date that PHS entered into arrangements with All America Financial
Services, Inc. ("AAFS"), International Netherlands Group and its subsidiaries
(collectively, "ING") and Lincoln National Life Insurance Company of America
("LNLICA") to market specific and aggregate stop-loss premium health maintenance
organization plans ("Stop-Loss Plans") and that PHS marketed the life insurance
products of AAFS, ING and LNLICA in connection with such arrangements. PHS
agrees that from and after the Effective Date that it will not market Stop-Loss
Plans or life insurance products in connection with such Stop-Loss Plans unless
it gives Guardian the opportunity to provide such stop-loss coverage to PHS. If


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<PAGE>

Guardian is able to provide such stop-loss coverage at a rate which does not
exceed by more than five percent (5 %) the average of the rates provided by
AAFS, ING and LNLICA, then PHS will utilize Guardian to provide such stop-loss
coverage. In the event there is a Change of Control and PHS is acquired by, or
PHS is merged with, any entity, the limitations set forth in Section 2.2(b) of
this Agreement shall apply to the surviving entity.

     (d) Nothing contained in this Agreement shall limit PHS's right to market
HMO plans not subject to this Agreement directly to employers with whom PHS
contracts.

     2.3 Multi-Choice and Stand-Alone Arrangements. (a) Guardian shall have the
right to market HMO Plans after regulatory approval has been obtained, (i) under
multi-choice arrangements with Contractholders, pursuant to which Eligible
Employees will be offered health care coverage options consisting of HMO Plans
or Health Insurance Contracts, and (ii) under stand-alone arrangements, pursuant
to which Eligible Employees will be provided with only the HMO Plan purchased by
the Contractholder.

     (b) PHS shall have the right to market Health Insurance Contracts after
regulatory approval has been obtained (i), under multi-choice arrangements with
Contractholders, pursuant to which Eligible Employees will be offered health
care coverage options consisting of HMO Plans or Health Insurance Contracts,
and (ii) under stand-alone arrangements, pursuant to which Eligible Employees
will be provided with only the Health Insurance Contract purchased by the
Contractholder.


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<PAGE>

     (c) PHS agrees to use its best efforts to market Ancillary Products to its
existing and prospective customers; provided, however, that, the failure of PHS
to use its best efforts to market such Ancillary Products shall not entitle
Guardian to terminate this Agreement pursuant to Article X below.

     2.4 Priority. Neither party shall solicit any employer group with which the
other party had an existing contractual relationship as of the Inception Date
for the provision of health care services or health insurance (or with which, as
of the Inception Date. such other party was engaged in negotiating or
renegotiating a contract for such services) without the prior consent of such
other party.

     2.5 Identification of Managed Care Contracts. The Managed Care Contracts
shall be marketed under the collective designation "The Guardian & PHS
Healthcare Solutions." Each Managed Care Contract shall be assigned a specific
trade name, to be agreed to by the parties.

     2.6 Marketing Materials. PHS and Guardian shall jointly develop handbooks,
enrollment forms, identification cards and all other marketing materials
relating to the Managed Care Contracts (collectively, "Marketing Materials").
The parties agree that the cost of the initial development and production of
such Marketing Materials shall be shared equally by the parties pursuant to
Section 7.4 below. Thereafter, the party responsible for reproducing such
Marketing Materials shall include the cost of such reproduction in Schedule B as
a reimbursable expense. To the extent consistent with administrative
requirements, and to the


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<PAGE>

extent permitted by law or regulations, all Marketing Materials will consist of
each party's existing Marketing Materials, modified to reflect the terms of this
Agreement. Neither party will use Marketing Materials reflecting this Agreement
or using the name of the other party, without the other party's prior approval.

     2.7 Training. PHS and Guardian shall jointly develop training programs
regarding marketing and administering the Managed Care Contracts for all members
of the Guardian Marketing Force and for Guardian and PHS personnel engaging in
marketing or administrative functions.

                                   ARTICLE III

                     UNDERWRITING. RATES AND ADMINISTRATION

     3.1 Underwriting and Administration of HMO Plans. (a) PHS shall be
responsible for developing and filing with the appropriate regulatory
authorities the rates for the HMO Plans. Guardian shall utilize such filed rates
and shall be responsible for calculating premiums according to established
underwriting guidelines for the HMO Plans subject to the requirements of
applicable law; provided, however, that, the parties agree that they will
mutually develop the premiums for any HMO Plan marketed to a group of more than
five hundred (500) employees. PHS shall provide Guardian with all information
reasonably relating


                                       12
<PAGE>

to rating methodology, including, without limitation, cost assumptions,
anticipated loss ratios and other actuarial assumptions, and provider and
facility agreements. Underwriting guidelines for HMO Plans that are to be
marketed pursuant to this Agreement will be mutually developed by the parties.

     (b) Except as otherwise expressly provided for herein, PHS shall be solely
responsible for administration of the HMO Plans, including the payment of
claims, withholds, taxes and all other amounts (other than commissions) payable
to any person with respect to HMO Plans.

     3.2 Underwriting and Administration of Health Insurance Contracts and
Ancillary Products. (a) Guardian shall be responsible for developing and filing
with the appropriate regulatory authorities the rates for the Health Insurance
Contracts and Ancillary Products. Guardian shall utilize such filed rates and
shall be responsible for calculating premiums for the Health Insurance Contracts
and Ancillary Products, subject to the requirements of applicable law.

     (b) Guardian shall be solely responsible for administration of Health
Insurance Contracts and Ancillary Products, including the payment of claims,
taxes and all other amounts payable with respect to such contracts.


                                       13
<PAGE>

     3.3 Discounts. Any discount of manual rates for any HMO Plan which exceeds
a mutually agreed upon amount (as set forth in the underwriting guidelines
mutually agreed upon by the parties), must be jointly authorized by 9the
underwriting departments of each of the parties, subject to the laws and
regulations of the State of Connecticut applicable to such Plans.

                                   ARTICLE IV

           BILLING AND COLLECTION OF PREMIUMS: PAYMENT OF COMMISSIONS

     4.1 Billing and Collection of Premiums. (a) Guardian shall be responsible
for billing and collection of premiums for all Plans, regardless of how such
Plans are marketed.

     (b) Premiums received by Guardian from Contractholders with respect to HMO
Plans will be held for the benefit of PHS during the Quarter in which such
premiums are received. Interest shall be credited on the cash balances held by
Guardian, as set forth in Article VII of the HMO Reinsurance Agreement.

     (c) The amount of net premiums held by Guardian at the end of each Quarter
with respect to HMO Plans (i.e., premiums received, plus interest credited in
accordance with Section 4.1(b) above, less commissions paid to agents or brokers
pursuant to Section 4.2 below), reduced by any claims reimbursed to PHS
(including withholds) and other amounts as agreed to by the parties shall be
paid to PHS in accordance with Section 7.3 of the HMO Reinsurance Agreement.


                                       14
<PAGE>

     4.2 Commissions. (a) Commissions with respect to Plans sold pursuant to
this Agreement shall be paid according to the schedule of commissions set forth
in Schedule B. The commission rates to be paid with respect to Plans may be
changed from time to time, as agreed to jointly by PHS and Guardian, provided
that the party not proposing the change shall not unreasonably withhold its
consent to a change by the proposing party. All Managed Care Contracts shall be
priced to include expense factors for appropriate commission payments.

     (b) Guardian shall make payment of all commissions to members of the
Guardian Marketing Force, to independent brokers and to Physicians Health
Insurance Services, Inc., an insurance agency ("PHIS"), to the extent that such
commissions become due as a result of the sale of Plans subject to this
Agreement. Guardian shall act as PHS's agent in the payment of commissions for
HMO Plans. PHS shall have responsibility for any other compensation with respect
to Plans sold by PHIS.

     (c) Each party shall be responsible for ensuring that its employees or
agents are appropriately licensed and appointed, as necessary, to sell Plans and
to receive commissions. All payments of commissions to agents, brokers or
employees shall comply with applicable laws, rules, ordinances and regulations.


                                       15
<PAGE>

     (d) Limitations on Commission and Marketing Fees. Notwithstanding any other
provision of this contract, the total of commissions and marketing fees payable
by Guardian under this Agreement shall not exceed any limitations set forth in
Section 4228 of the New York State Insurance Law.

                                    ARTICLE V

                        ENROLLMENT: MEMBERSHIP SERVICES

     5.1 Enrollment. (a) Guardian and PHS shall jointly enroll new
Contractholders and Subscribers purchasing Managed Care Contracts.

     (b) Each party shall be responsible for obtaining enrollment information
from Contractholders and Subscribers with respect to those Managed Care
Contracts sold by such party's Marketing Force and shall transmit such
information to the other party on a timely basis in a format that is acceptable
to the other party.

     5.2 Meetings with Contractholders and Subscribers. Guardian and PHS shall
cooperate in conducting employee on-site enrollment meetings.

     5.3 Enrollment Materials. All enrollment agreements, forms and other
materials, including Subscriber handbooks and identification cards, used for
Contractholders and


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<PAGE>

Subscribers shall be either PHS's or Guardian's existing approved forms,
modified as necessary to reflect the terms of this Agreement. and the
administrative requirements of PHS and Guardian, respectively. All such
materials shall specify that PHS is the underwriter of HMO Plans, and that
Guardian is the underwriter of Health Insurance Contracts and Ancillary
Products. Neither party will use enrollment materials reflecting this Agreement,
or using the name of the other party, without the other party's approval.

     5.4 Enrollment Reports. (a) PHS and Guardian shall prepare periodic and
timely reports as set forth in Schedule C showing all Managed Care Contracts
sold, renewed or terminated, and other enrollment information required by either
party in order to perform its duties with respect to such Contracts. Such
reports shall be made by each party on a periodic and timely basis on the
Business Day following the date of transactions or other matters reported, and
shall be transmitted by electronic transmission in a form reasonably acceptable
to the receiving party.

     (b) PHS and Guardian shall prepare periodic reconcilations of the
enrollment information in the possession of each party.

     5.5 Membership Services. All membership services with respect to
Subscribers under HMO Plans shall be provided by PHS.


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<PAGE>

                                   ARTICLE Vl
                             PHS NETWORK MANAGEMENT

     6.1 PHS Network Management. (a) PHS shall be solely responsible for
development and maintenance (including, without limitation, quality assurance,
utilization management and credentialing protocols) of the PHS Network. PHS
shall provide Guardian with an accurate listing of the composition of the PHS
Network at the Effective Date, and thereafter shall update the listing
periodically, showing additions and deletions to the composition of the PHS
Network.

     (b) PHS shall be solely responsible for any loss or liability arising from
any inaccuracy in such listings.

     (c) Guardian may recommend additions to, or deletions from, the PHS
Network, and PHS shall endeavor to be responsive to accommodate Guardian's
recommendation. PHS shall have the sole authority to enter into contracts with
providers.

     6.2 Medical Management. PHS shall be solely responsible for all claims
processing and auditing, health services (including hospital pre-certification,
outpatient pre-certification, large claim case management and utilization
review) and all risk accounting for the provider bonus arrangements under the
HMO Plans.


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<PAGE>

     6.3 Material Change in PHS Network.

     PHS acknowledges that maintenance of an adequate network of health care
providers is of primary concern to Guardian, and agrees to notify Guardian if
the PHS Network fails to meet the criteria set forth below. PHS further
acknowledges and agrees that any failure to meet the following criteria
constitutes material change in PHS Network.

          (i) The PHS Network will contain that number of physicians as
     determined by the parties, from time to time, equaling 70% or more of the
     number of physicians (practicing as individuals or in practice groups or
     clinics) determined by averaging the number of such physicians under
     contract with the three largest health maintenance organizations operating
     in the Service Area (measured by the number of persons eligible to receive
     benefits under such plans, but not including any plans offered by Blue
     Cross/Blue Shield of Connecticut).

          (ii) The PHS network will contain a number of acute care institutions
     equaling 80% or more of the number of such institutions determined as in
     (i) above.

          (iii) The PHS Network will further contain a number of tertiary care
     institutions (as defined by the Connecticut Hospital Association) equaling
     67 % or more of all such institutions determined as in (i) above.

     6.4 Professional Liability Insurance. (a) PHS shall require each physician
member of the PHS Network to maintain professional liability insurance, with
limits of at least $1,000,000 per occurrence, and $3,000,000 in the aggregate
for individual practitioners and practice groups, and $1,000,000 per occurrence
and $3,000,000 aggregate for hospitals,


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<PAGE>

clinics and other institutional providers. Guardian accepts that hospitals and
other institutional providers may self-insure or self-retain with respect to
such liability limits, as permitted by applicable Connecticut law and
regulations. Guardian also recognizes that liability limits for the following
individual non-physician members of the PHS Network may be $1,000,000 per
occurrence and $1,000,000 in the aggregate: chiropractors, social workers,
audiologists, speech pathologists, optometrists, physical therapists and
occupational therapists.

                                   ARTICLE VII

             MARKETING AND ADMINISTRATIVE SERVICES FEE AND EXPENSES

     7.1 Guardian's Marketing and Administrative Services Fee. PHS shall pay
Guardian a Marketing and Administrative Services Fee for the duties assigned to
Guardian under this Marketing and Services Agreement equal to the amount shown
on Schedule B, as it may be amended from time to time, for each Quarter, or
portion thereof, during which this Agreement is in effect.

     7.2 PHS's Administrative Services Fee. PHS shall be entitled to an
Administrative Services Fee for the administrative duties assigned to PHS under
this Marketing and Services Agreement equal to the amount shown on Schedule B,
as it may be amended from time to time, for each Quarter, or portion thereof,
during which this Agreement is in effect.

     7.3 Adjustments of Fee. The Fees set forth in Schedule B shall remain in
effect for four Quarters, or portion thereof, beginning with the Quarter that
includes the Effective Date.


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<PAGE>

Each party shall have the right to adjust the Fees payable hereunder for any
subsequent period of four Quarters by providing notice to the other party of an
amendment of Schedule B no less than forty-five (45) calendar days prior to the
beginning of the next such period. Such adjustment will be limited to an amount
necessary to cover changes in that party's costs of providing services
hereunder, without provision of profit.

     7.4 Expenses. Each party shall be responsible for its expenses incurred in
connection with this Agreement; provided, however, that expenses attributable to
the development and initial production of Marketing Materials shall be shared
equally. Each party shall calculate such expenses (including, without
limitation, a reasonable allocation of internal expenses, production and
printing expenses and legal expenses incurred in connection with obtaining
regulatory approval of any forms) on a Quarterly basis, and shall provide the
other party with a schedule of such expenses in connection with each Quarterly
Accounting Report. A party whose expenses under this Section 7.4 exceed one-half
of the aggregate of the expenses incurred by both parties for the Quarter shall
be entitled to reimbursement for such excess within forty-five (45) days from
the end of such Quarter.

     7.5 Reinsurance Agreement. At the option of the parties, the fees and
expenses hereunder may be incorporated in any Reinsurance Agreement entered into
between the parties (or affiliates of the parties) to the extent that such fees
relate to reinsured Managed Care Contracts.


                                       21
<PAGE>

                                  ARTICLE V111

                            ACCOUNTING AND REPORTING

     8.1 Ouarterly Accounting Reports. Within forty-five (45) calendar days of
the end of each Quarter, each party shall supply the other with a Quarterly
Accounting Report as defined in Section 7.3 of the Reinsurance Agreement.
Quarterly Accounting Reports shall be made for the Quarter that includes the
Effective Date, and shall be made for each Quarter following the Contract
Termination Date if any amount is due any party under this Agreement.

     8.2 Settlements. Settlement of all amounts due pursuant to this Agreement
shall be made on a net basis in connection with the Quarterly Accounting Report.
If one party owes a net amount to the other, such amount shall be paid in
accordance with Section 7.3 of the HMO Reinsurance Agreement.

     8.3 Reconciliation. Each party shall have the right to review all
individual components of transactions entered into each Quarterly Accounting
Report. The parties shall have twenty (20) Business Days from the day the
Quarterly Accounting Report is submitted to report any deficiency in such report
and to request an adjustment of any payment made to or received by either party.
Any amount due either party in connection with such reconciliation shall be paid
within twenty (20) calendar days of the receipt of notice that additional
amounts are due.

     8.4 Best Efforts to Supply Actual Data. In preparing all reports required
in this Agreement, Guardian or the PHS, as the case may be, shall make its best
efforts to supply the


                                       22
<PAGE>

actual data. If the actual data cannot be supplied with the appropriate report,
Guardian or PHS, as the case may be, shall produce best estimates, and shall
provide amended reports based on actual data no more than thirty (30) calendar
days after such report was originally due.

     8.5 Statement of Actuarial Opinion. (a) Within forty-five (45) calendar
days after the end of the calendar year, each party shall provide the other with
a Statement of Actuarial Opinion certifying the adequacy of the reserve for
products covered under this Agreement. The Actuarial Opinion must state whether
or not the reserve for products covered under this Agreement meet the minimum
standards of all states where each party is licensed, and if not, the Actuarial
Opinion must state the difference between reserves and state minimums

     (b) The Actuarial Opinion shall meet the requirements set forth in the
NAIC's Actuarial Opinion and Memorandum Regulation and shall be signed by each
party's "Appointed Actuary." The Appointed Actuary may or may not be an employee
of such party.

                                   ARTICLE IX

                             REINSURANCE AGREEMENTS

     9.1 HMO Reinsurance Agreement. The parties each hereby acknowledge that.
simultaneously with the execution of this Agreement, they intend to enter into a
reinsurance agreement in the form attached hereto as Exhibit A-1 (the "HMO
Reinsurance Agreement"). The parties intend, under the terms of the HMO
Reinsurance Agreement, that PHS will cede


                                       23
<PAGE>

to Guardian certain specified percentages of the risks under the HMO Plans,
including those HMO Plans with a point-of-service feature, as more fully
described in the HMO Reinsurance Agreement. In return, Guardian shall be
allocated specified percentages of premiums received by PHS with respect to the
HMO Plans, all as more fully described in the HMO Reinsurance Agreement.


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<PAGE>

                                    ARTICLE X
                              TERM AND TERMINATION

     10.1 Effective Date. This Agreement shall become effective on October 1,
1996 (the "Effective Date"), and shall continue in effect unless terminated
pursuant to the terms of this Article X. Nothwithstanding anything to the
contrary stated in this Article X, this Agreement shall continue in effect,
solely with respect to the provision of administrative services, for any Managed
Care Contract in effect on the Contract Termination Date until 180 days
subsequent to the next succeeding renewal date of any Managed Care Contract
following such Contract Termination Date; and provided, further however, that in
the event of a termination pursuant to Section 8.6 of the HMO Reinsurance
Agreement, this Agreement shall remain in effect solely with respect to the
provision of administrative services with respect to any Continuation Plan for
the period stated in Section 8.6 of the HMO Reinsurance Agreement.

     10.2 Termination Due to Change of Control. In the event of a Change of
Control in one party, the other party shall have the right to terminate this
Agreement as set forth in Section 8.6 of the HMO Reinsurance Agreement. The
Contract Termination Date under this Section 10.2 shall be the effective date of
the Change of Control.

     10.3 Termination Without Cause. (a) Either party shall have the right to
terminate this Agreement without cause upon 180 days prior written notice to the
other party. The


                                       25
<PAGE>

Contract Termination Date under this Section 10.3 shall be the 180th day
following the giving of notice required by this Section 10.3.

     (b) If PHS terminates this Agreement pursuant to Section 10.3(a), it agrees
to pay Guardian an amount equal to one half the fair market value of all HMO
Plans in force on the effective date of termination, other than HMO Plans that
(i) resulted from the conversion of pre-existing PHS contracts to Managed Care
Contracts, or (ii) are not continued as PHS plans on or before the first renewal
date for such contracts following the Contract Termination date.

     (c) The parties will agree to a method of valuation of the HMO Plans (using
methods of valuation customarily used in valuing HMO Plans or health insurance
business). If the parties are unable to agree on valuation, the matter will be
referred to arbitration. Payments required under this Section 10.3 shall be made
in connection with the final Annual Accounting Report.

     10.4 Termination For Cause. (a) In the event that either party shall
default in the performance of the duties and obligations imposed on it pursuant
to the terms of this Agreement or the Reinsurance Agreement(s), or breach any of
the provisions contained herein or therein, including the failure to pay any
amount when due, or the failure of either party to maintain a level of services
under this Agreement that is reasonably satisfactory to the other party, the
defaulting party shall be allowed thirty (30) days from written notice of such
default


                                       26
<PAGE>

or breach to present to the non-defaulting party a plan to cure such default or
breach that is reasonably satisfactory to the non-defaulting party. If a
reasonably satisfactory plan to cure the default or breach is not submitted
within that time, or if the plan is not carried out according to its terms, the
non-defaulting party shall have the right to terminate this Agreement and the
Reinsurance Agreement(s) upon delivery of written notice of such termination to
the defaulting party, which shall be effective upon receipt, without prejudice
to any other rights or remedies available to the non defaulting party by reason
of such default or breach.

     (b) In the event that either party shall engage in fraudulent, illegal or
grossly negligent conduct with respect to its duties and obligations under this
Agreement or the Reinsurance Agreement(s), the other party shall have the right
to terminate this Agreement and the Reinsurance Agreement(s) upon delivery of
written notice of such termination to the defaulting party, which shall be
effective upon receipt, without prejudice to any other rights or remedies
available to the non defaulting party by reason of the defaulting party's
conduct.

     (c) In the event that this Agreement is terminated by Guardian pursuant to
this Section 10.4, the provisions of Section 10.3(b) shall apply as if PHS
elected to terminate this Agreement.

     (d) The Contract Termination Date under this Section 10.4 shall be the date
of receipt of notification of termination.

     10.5 Termination Due to Financial Impairment or Loss of Authority. In the
event that either party shall become unable to perform its obligations under the
Managed Care


                                       27
<PAGE>

Contracts because of financial impairment or loss of authority to act under law,
or by action of any regulatory authority, the other party shall have the right,
subject to the requirements of relevant law and receipt of necessary approvals,
to terminate this Agreement and have the Managed Care Contracts assigned to, and
all obligations assumed by, an appropriately licensed organization that provides
substantially similar healthcare services as described in this Agreement. The
Contract Termination Date under this Section 10.5 shall be the date set forth in
Section 8.8 of the HMO Reinsurance Agreement.

     10.6 Termination for Material Change in PHS Network. In the event that the
PHS Network undergoes a material change within the meaning of Section 6.3 of
this Agreement, PHS shall be allowed thirty (30) days to present to Guardian a
plan to cure such Material Change that is reasonably satisfactory to Guardian.
If a reasonably satisfactory plan to cure the Material Change is not submitted
within that time, or if the plan is not carried out according to its terms,
Guardian shall have the right to terminate this Agreement, and the Reinsurance
Agreement, upon delivery of written notice of such termination to PHS, which
shall be effective upon receipt, without prejudice to any other rights or
remedies available to Guardian. The Contract Termination Date under this Section
10.6 shall be the date of receipt of notification to terminate.

     10.7 Buy-Out Provisions. The parties acknowledge and agree that the
"buy-out" provisions set forth in Section 10.3(b) above apply only to
terminations under Sections 10 3(a)


                                       28
<PAGE>

and 10.4 above. Such buy-out provisions do not apply to terminations under any
other section of this Agreement or to terminations under the HMO Reinsurance
Agreement.

                                   ARTICLE XI

                                INDEMNIFICATION

     11.1 PHS's Indemnification. PHS shall indemnify Guardian against all
liabilities, losses, suits, damages, costs, and expenses (including, without
limitation, damages resulting from breach of this Agreement and reasonable fees
of Guardian's attorneys and other expenses of litigation), net of recoveries
from third parties, arising out of or in connection with PHS's obligations under
this Agreement, including acts or omissions to act, or negligent, willful,
reckless or intentional wrongs, fraud, oppression or bad faith.

     11.2 Guardian's Indemnification. Guardian shall indemnify PHS against all
liabilities, losses, suits, damages, costs and expenses (including, without
limitation, damages resulting from breach of this Agreement, reasonable fees of
PHS's attorneys and other expenses of litigation), net of recoveries from third
parties, arising out of or in connection with Guardian's obligations under this
Agreement, including acts or omissions to act, or negligent, willful, reckless
or intentional wrongs, fraud, oppression or bad faith.


                                       29
<PAGE>

     11.3 Liability under PHS's HMO Plans. Except as specifically set forth in
any Reinsurance Agreement(s) to be entered into between the parties, Guardian is
not a guarantor, insurer, or reinsurer of, or joint venturer with, PHS. Guardian
does not accept any risk of loss for, nor provide any indemnification to PHS,
any Contractholder or Subscriber, any provider or any other person with respect
to an HMO Plan. PHS shall indemnify Guardian for all liabilities, losses, suits,
damages, costs and expenses (including reasonable fees of Guardian's attorneys,
and other expenses of litigation), net of recoveries from third parties, arising
in connection with a HMO Plan or the PHS Network, including action or failure to
act by PHS, or its employees or agents (excluding health care providers who or
which are not employees of, or under an agency agreement with, PHS).

     11.4 Liability under Health Insurance Contracts and Ancillary Products. PHS
is not a guarantor, insurer, or reinsurer of, or joint venturer with, Guardian.
PHS does not accept any risk of loss, nor provide any indemnification to
Guardian, any Contractholder or Subscriber, any provider or any other person
with respect to a Health Insurance Contract or Ancillary Product. Guardian shall
indemnify PHS for all liabilities, losses, suits, damages, costs and expenses
(including reasonable fees of PHS's attorneys, and other expenses of
litigation), net of recoveries from third parties, arising in connection with a
Health Insurance Contract or Ancillary Product, including action or failure to
act by Guardian, or its employees or agents.


                                       30
<PAGE>

     11.5 Survival of Article. This Article XI shall survive the termination or
nonrenewal of this Agreement.

                                   ARTICLE Xl1

                                  ARBITRATION

     12.l Appointment of Arbitrators. In the event of any disputes or
differences arising hereafter between the parties with reference to any
transaction under or relating in any way to this Agreement, as to which
agreement between the parties hereto cannot be reached, the dispute or
difference shall be resolved by arbitration. Three arbitrators shall decide any
dispute or difference. The arbitrators must be disinterested officers or retired
officers of life and health insurance or health maintenance organizations other
than the two parties to this Agreement or their affiliates. Each of the parties
agrees to appoint one of the arbitrators with the third, to be chosen by the two
appointed arbitrators. In the event that either party should fail to choose an
arbitrator within thirty (30) calendar days following a written request by the
other party to do so, the requesting party may choose a second arbitrator before
entering upon arbitration. In the event that the two arbitrators shall not be
able to agree on the choice of the third arbitrator within twenty (20) calendar
days following their appointment, each arbitrator shall nominate five (5)
candidates within ten (l0) calendar days thereafter, four (4) of whom the other
party shall decline, and the third arbitrator shall be chosen by the President
of the American Arbitration Association or his designee. Should the chosen third
arbitrator so


                                       31
<PAGE>

selected decline to serve, the candidate who was not chosen by the President
shall be appointed. This process shall continue until a candidate has agreed to
serve.

     12.2 Decision. The arbitrators shall consider customary and standard
practices in the health insurance and managed care business. They shall decide
by a majority vote of the arbitrators. There shall be no appeal from their
written decision. Judgment may be entered on the decision of the arbitrators by
any court having jurisdiction. If, in the opinion of the arbitrators, a dispute
cannot be otherwise resolved, this Agreement shall be terminated in accordance
with Section 10.4 hereof.

     12.3 Expenses of Arbitration. Each party shall bear the expense of its own
arbitrator (whether selected by that party, or by the other party pursuant to
the procedures set out in Section 12.1) and related outside attorneys' fees, and
shall jointly and equally bear with the other party the expenses of the third
arbitrator.

     12.4 Applicable Law. Any arbitration instituted pursuant to this Article
shall be held in Connecticut and the laws of the State of Connecticut and, to
the extent applicable, the Federal Arbitration Act, shall govern the
interpretation and application of this Agreement.


                                       32
<PAGE>

     12.5 Survival of Article. This Article shall survive termination of this
Agreement.

                                  ARTICLE XIII

                                  MISCELLANEOUS

          13. l Stop-Loss Coverage. Guardian shall have the right to provide
Contractholders with stop-loss insurance or reinsurance with respect to HMO
Plans that are Managed Care Contracts subject to this Agreement. Guardian shall
have the right to bid on stop-loss reinsurance protection for all other business
of PHS. Nothing herein shall require PHS to reinsure HMO Plans that are not
Managed Care Contracts with Guardian. In addition, Guardian acknowledges that
PHS has certain existing arrangements, and may enter into additional
arrangements in the future, for stop-loss reinsurance coverage for HMO Plans
that are not Managed Care Contracts which shall remain in effect regardless of
this Agreement.

          13.2 Misunderstandings and Oversights. If any delay, omission, error
or failure to perform any act required by this Agreement is unintentional and
caused by misunderstanding or oversight, PHS and Guardian will adjust the
situation to what it would have been had the misunderstanding or oversight not
occurred. The party that first discovers such oversight or incorrect act as a
result of the misunderstanding will notify the other party in writing promptly
upon discovery of the misunderstanding or oversight. The parties shall act to
correct the error, omission or oversight within thirty (30) days of notification
of the problem. This Section 13.2


                                       33
<PAGE>

shall not be construed as a waiver by either party of its right to enforce
strictly the terms of this Agreement.

     13.3 Non-Solicitation. (a) During the term of this Agreement, neither
Guardian nor any entity under Guardian's control shall contact, solicit or
contract for services with any PHS Network health care provider then under
contract with PHS. Nothing in this Agreement shall preclude PHCS from
contracting with any PHS Network health care provider.

     (b) During the term of this Agreement, neither party shall knowingly
solicit for employment an employee of the other party who has been engaged in
activities covered by this Agreement, without written consent of the other
party.

     13.4 Regulatory Approval. Performance of the obligations of either party
under this Agreement shall be subject to the receipt of necessary regulatory
approvals under the laws, regulations and practices of regulatory authorities in
New York and Connecticut. PHS and Guardian shall cooperate in attempting to
obtain expeditiously any necessary regulatory approvals from regulatory
authorities. Each party will bear its own expenses in obtaining such approvals.

     13.5 Audits. Each party shall have the right, upon reasonable notice to the
other party, and at the requesting party's expense, to audit the books and
records of the other party


                                       34
<PAGE>

relating to receipts, enrollment, service standards and other matters relating
to this Agreement during regular business hours at the premises of the audited
party where such records are normally maintained. The audited party shall
reasonably cooperate in any such audit.

     13.6 Headings and Schedules. Headings used herein are not part of this
Agreement. Any Schedules or Exhibits attached hereto are part of this Agreement.

     13.7 Compliance with Applicable Laws and Regulations. It is the intention
of the parties that this Agreement comply with all existing applicable laws and
regulations, as from time to time are in effect, so that the Agreement remains
in full force. Each of the parties agrees to comply with all laws, ordinances,
rules, regulations and orders of regulatory bodies applicable to the
transactions contemplated by this Agreement, including those relating to
maintenance of appropriate licenses and the appointment of agents and payment of
commissions. Either party shall promptly notify the other party of any
complaint, inquiry or lawsuit by any regulatory authority relating to the
Managed Care Contracts or to this Agreement.

     13.8 Successors and Assigns: Binding Effect. Except as otherwise provided
herein and in the HMO Reinsurance Agreement, this Agreement cannot be assigned
by PHS or Guardian without the prior written approval of the other party. The
provisions of this


                                       35
<PAGE>

Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective permitted successors and assigns.

     13.9 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which will be deemed an original, but all of
which will constitute one and the same agreement.

     13.10 Entire Agreement: Amendment. This Agreement and the Reinsurance
Agreement constitute the entire agreement between the parties with respect to
the Managed Care Contracts and Ancillary Products, and supersede any previous
written or oral agreements. This Agreement shall be amended only by written
agreement signed by a duly authorized officer of each of PHS and Guardian, and
any change to this Agreement shall be null and void unless made by such written
agreement; provided, however, that where, under insurance, health or other
applicable laws or regulations, the approval of any such amendment to this
Agreement by one or more federal, state or local governmental or regulatory
authorities is required, the amendment shall not take effect unless and until
all such necessary approvals have been obtained and received by both PHS and
Guardian. In the event that any such approval is required, PHS and Guardian
shall each take all necessary actions in order to obtain such approval.


                                       36
<PAGE>

     13.11 Waivers. The waiver by either of the parties of the other party's
prompt and complete performance, or breach or violation, of any provisions of
this Agreement and related documents shall not operate or be construed as a
waiver of any subsequent breach or violation, and the waiver by any of the
parties to exercise any right or remedy which it may possess hereunder shall not
operate or be construed as a bar to the exercise of such right or remedy by such
party upon the occurrence of any subsequent breach or violation.

     13.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut, without giving effect to
the principles of conflicts of laws thereof.

     13.13 Severability. In the event any section or provision of this Agreement
or related documents is found to be void and unenforceable by a court of
competent jurisdiction, the remaining sections and provisions of this Agreement
or related documents shall nevertheless be binding upon the parties with the
same force and effect as though the void or unenforceable part had not been
severed or deleted.


                                       37
<PAGE>

     13.14 Notices. Any notice to be given pursuant to the terms of this
Agreement shall be given in writing either by personal delivery or by mail,
registered or certified, return receipt requested and postage prepaid. Mail
notices shall be sent to the parties at their respective addresses as shown:

                 If to Guardian:

                 The Guardian Life Insurance Company of America
                 201 Park Avenue South
                 New York, New York 10003
                 Attention: Edward K. Kane, Esq.


                 If to Physicians Health Services, Inc.:

                 Physicians Health Services, Inc.
                 120 Hawley Lane
                 Trumbull, Connecticut 06611
                 Attention: Regina M. Campbell
                 Senior Vice President & Chief Administrative Officer


                 If to Physicians Health Services of Connecticut, Inc.:

                 Physicians Health Services of Connecticut, Inc.
                 120 Hawley Lane
                 Trumbull, Connecticut O6611
                 Attention: Regina M. Campbell
                 Senior Vice President & Chief Administrative Officer


     13.15 Confidentiality. (a) Neither Guardian nor PHS shall disclose any
proprietary or confidential information of the other party to a third party
without the express written consent of the other party to this Agreement. For
purposes of this Agreement, "proprietary and


                                       38
<PAGE>

confidential" information will include, without limitation, all internal
business practices and business records, information concerning products and
pricing, contracts, computer hardware and software or business methods in any
form whatsoever, peer review, quality assurance and grievance procedures, any
aspect of the utilization review program, provider fee schedules, reimbursement
schedules, or discounts, and advertising or marketing information, but not
including information otherwise available to the public. Neither party shall use
any proprietary and confidential information of the other party for its own
benefit. Upon termination of this Agreement, each party will immediately return
to the other party any confidential information, claims files necessary for the
continued administration of any Plan, and other property of the other party.

     (b) Guardian and PHS agree to maintain the confidentiality of any health
care information pertaining to Subscribers including, without limitation, files,
records, reports, and other information prepared and maintained in connection
with this Agreement, in accordance with all applicable laws and regulations.

     (c) Each Party shall obtain any necessary consent from Subscribers with
respect to the release to the other party of any confidential information
relating to such Subscribers, by means of general or specific releases, as
appropriate. Each party shall notify the other if it becomes aware that proper
releases have not been obtained.


                                       39
<PAGE>

     (d) Guardian shall not make any list of PHS providers available to any
person other than appropriate regulatory authorities, Guardian employees who are
engaged in operations relating to this Agreement, and independent brokers and
other persons engaged in marketing of Managed Care Contracts.

     13.16 Press Releases. No public statement or press release regarding the
existence of this Agreement shall be made by either party without obtaining the
prior written consent of the other party, except as required by applicable laws
or regulations.

     13.17 Relationship of Parties. The parties to this Agreement are and shall
remain independent contractors. Neither party is the employee or agent of the
other party, except as set forth herein, and neither party has an express or
implied right to bind the other party. The parties do not intend to form a joint
venture, partnership, or to be governed by laws relating to any relationship
other than that of independent contractors. Neither party is authorized to
modify, alter or waive the terms of any product issued by the other party.

     13.18 Offset. In the event that either party to this Agreement shall fail
to make payment of any amount that is due and owing to the other party under
this Agreement, all mutual debts shall be offset, and only the balance of such
debts shall be paid.


                                       40
<PAGE>

     13.19 Financial Statements. Each party shall furnish financial statements
as filed with the appropriate regulatory authority to the other party upon
request

     13.20 Regulatory Review. The parties acknowledge and agree that this
Agreement is subject to the review and approval of the New York State Department
of Insurance. The parties expressly agree that any revisions to this Agreement
required by the New York State Department of Insurance will be addressed in an
amendment to, or restatement of, the Agreement.


                                       41
<PAGE>

                                   EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

                                                PHYSICIANS HEALTH SERVICES, INC.

                                                By /s/ Regina M. Campbell
                                                   -----------------------------
                                                   Name Regina M. Campbell
                                                   Title Senior Vice President


                                                PHYSICIANS HEALTH SERVICES
                                                 OF CONNECTICUT

                                                By /s/ Regina M. Campbell
                                                   -----------------------------
                                                   Name Regina M. Campbell
                                                   Title Senior Vice President


                                                THE GUARDIAN LIFE INSURANCE
                                                 COMPANY OF AMERICA


                                                By /s/ Joseph D. Sargent
                                                   -----------------------------
                                                   Name Joseph D. Sargent
                                                   Title President and CEO


                                       42
<PAGE>

                                   SCHEDULE A

                     DESCRIPTION OF MANAGED CARE CONTRACTS

[DESCRIBE CT PLANS]





                                      A-1
<PAGE>

<TABLE>
<CAPTION>
CONNECTICUT CHARTER POS - HEALTHCARE SOLUTIONS
====================================================================================================================================

Copay                In             Individual      Family         Coinsurance      Individual     Family Out   Annual      COMMENTS
Schedule             Network        Deductible     Deductible      (pd by PHS)      Out of         of Pocket    Benefit
                     Plans                                                          Pocket Max.    Max.         Limit
------------------------------------------------------------------------------------------------------------------------------------

<S>                  <C>            <C>             <C>            <C>              <C>            <C>            <C>         <C>
C3627G               PHS 5          $200            $500           70% of the       $1,700         $4,250         NA          (1)
5CTC                                                               next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3637G               PHS 5          $300            $750           70% of the       $1,800         $4,500         NA          (1)
6CTC                                                               next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3657G               PHS 5          $500            $1,250         70% of the       $2,000         $5,000         NA          (1)
7CTC                                                               next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3628G               PHS 5          $200            $500           80% of the       $1,200         $3,000         NA          (1)
8CTC                                                               next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3638G               PHS 5          $300            $750           80% of the       $1,300         $3,250         NA          (1)
9CTC                                                               next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3658G               PHS 5          $500            $1,250         80% of the       $1,500         $3,750         NA          (1)
10CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3837G               PHS 5/250      $300            $750           70% of the       $1,800         $4,500         NA          (1)
11CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3857G               PHS 5/250      $500            $1,250         70% of the       $2,000         $5,000         NA          (1)
12CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3838G               PHS 5/250      $300            $750           80% of the       $1,300         $3,250         NA          (1)
13CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3858G               PHS 5/250      $500            $1,250         80% of the       $1,500         $3,750         NA          (1)
14CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3727G               PHS 15         $200            $500           70% of the       $1,700         $4,250         NA          (1)
15CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3737G               PHS 15         $300            $750           70% of the       $1,800         $4,500         NA          (1)
16CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3757G               PHS 15         $500            $1,250         70% of the       $2,000         $5,000         NA          (1)
17CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3728G               PHS 15         $200            $500           80% of the       $1,200         $3,000         NA          (1)
18CTC                                                              next $5,000
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                                                               2
<PAGE>

<TABLE>
<CAPTION>
CONNECTICUT CHARTER POS - HEALTHCARE SOLUTIONS
====================================================================================================================================

Copay            In             Individual      Family         Coinsurance      Individual     Family Out   Annual     COMMENTS
Schedule         Network        Deductible     Deductible      (pd by PHS)      Out of         of Pocket    Benefit
                 Plans                                                          Pocket Max.    Max.         Limit
------------------------------------------------------------------------------------------------------------------------------------

<S>              <C>            <C>             <C>            <C>              <C>            <C>            <C>      <C>
C3738G           PHS 15         $300            $750           80% of the       $1,300         $3,250         NA       (1)
19CTC                                                          next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3758G           PHS 15         $500            $1,250         80% of the       $1,500         $3,750         NA       (1)
20CTC                                                          next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3957G           PHS            $500            $1,250         70% of the       $2,000         $5,000         NA       (1)
21CTC            15/500                                        next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3958G           PHS            $500            $1,250         80% of the       $1,500         $3,750         NA       (1)
22CTC            15/500                                        next $5,000
------------------------------------------------------------------------------------------------------------------------------------

C3917G           PHS            $1,000          $2,500         70% of the       $3,700         $9,250         NA      Available eff.

23CTC            15/500                                        next $10,000                                           1-1-97(1)
------------------------------------------------------------------------------------------------------------------------------------

C3918G           PHS            $1,000          $2,500         80% of the       $2,800         $7,000         NA      Available eff.

24CTC            15/500                                        next $10,000                                           1-1-97(1)
------------------------------------------------------------------------------------------------------------------------------------

C3717G           PHS 15         $1,000          $2,500         70% of the       $3,700         $9,250         NA      Available eff.

25CTC                                                          next $10,000                                           1-1-97(1)
------------------------------------------------------------------------------------------------------------------------------------

C3718G           PHS 15         $1,000          $2,500         80% of the       $2,800         $7,000         NA      Available eff.

26CTC                                                          next $10,000                                           1-1-97(1)
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                                                               3
<PAGE>

<TABLE>
<CAPTION>
CONNECTICUT PASSPORT POS - HEALTHCARE SOLUTIONS
====================================================================================================================================

Copay        In             Individual   Family       Coinsurance      Individual     Family Out     Annual      COMMENTS
Schedule     Network        Deductible   Deductible   (pd by PHS)      Out of         of Pocket      Benefit
             Plans                                                     Pocket Max.    Max.           Limit
------------------------------------------------------------------------------------------------------------------------------------

<S>          <C>            <C>           <C>          <C>              <C>            <C>            <C>         <C>
C3627G       PHS 5          $200          $500         70% of the       $1,700         $4,250         NA          Available for sale

5CTP                                                   next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3637G       PHS 5          $300          $750         70% of the       $1,800         $4,500         NA          Available for sale

6CTP                                                   next $5,000                                                eff. 7/1/95(1)
------------------------------------------------------------------------------------------------------------------------------------

C3657G       PHS 5          $500          $1,250       70% of the       $2,000         $5,000         NA          Available for sale

7CTP                                                   next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3628G       PHS 5          $200          $500         80% of the       $1,200         $3,000         NA          Available for sale

8CTP                                                   next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3638G       PHS 5          $300          $750         80% of the       $1,300         $3,250         NA          Available for sale

9CTP                                                   next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3658G       PHS 5          $500          $1,250       80% of the       $1,500         $3,750         NA          Available for sale

10CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3837G       PHS 5/250      $300          $750         70% of the       $1,800         $4,500         NA          Available for sale

11CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3857G       PHS 5/250      $500          $1,250       70% of the       $2,000         $5,000         NA          Available for sale

12CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3838G       PHS 5/250      $300          $750         80% of the       $1,300         $3,250         NA          Available for sale

13CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3858G       PHS 5/250      $500          $1,250       80% of the       $1,500         $3,750         NA          Available for sale

14CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>
                                                                              4
<PAGE>

<TABLE>
<CAPTION>
CONNECTICUT PASSPORT POS - HEALTHCARE SOLUTIONS
====================================================================================================================================

Copy         In             Individual   Family       Coinsurance      Individual     Family Out     Annual      COMMENTS
Schedule     Network        Deductible   Deductible   (pd by PHS)      Out of         of Pocket      Benefit
             Plans                                                     Pocket Max.    Max.           Limit
------------------------------------------------------------------------------------------------------------------------------------

<S>          <C>            <C>           <C>          <C>              <C>            <C>            <C>         <C>
C3727G       PHS 15         $200          $500         70% of the       $1,700         $4,250         NA          Available for sale

15CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3737G       PHS 15         $300          $750         70% of the       $1,800         $4,500         NA          Available for sale

16CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3757G       PHS 15         $500          $1,250       70% of the       $2,000         $5,000         NA          Available for sale

17CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3728G       PHS 15         $200          $500         80% of the       $1,200         $3,000         NA          Available for sale

18CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3738G       PHS 15         $300          $750         80% of the       $1,300         $3,250         NA          Available for sale

19CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3758G       PHS 15         $500          $1,250       80% of the       $1,500         $3,750         NA          Available for sale

20CTP                                                  next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3957G       PHS            $500          $1,250       70% of the       $2,000         $5,000         NA          Available for sale

21CTP        15/500                                    next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3958G       PHS            $500          $1,250       80% of the       $1,500         $3,750         NA          Available for sale

22CTP        15/500                                    next $5,000                                                eff. 7/1/95 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3917G       PHS            $1,000        $2,500       70% of the       $3,700         $9,250         NA          Available for sale

23CTP        15/500                                    next $10,000                                               eff. 1-1-97 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3918G       PHS            $1,000        $2,500       80% of the       $2,800         $7.000         NA          Available for sale

24CTP        15/500                                    next $10,000                                               eff. 1-1-97 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3717G       PHS 15         $1,000        $2,500       70% of the       $3,700         $9,250         NA          Available for sale

25CTP                                                  next $10,000                                               eff. 1-1-97 (1)
------------------------------------------------------------------------------------------------------------------------------------

C3718G       PHS 15         $1,000        $2,500       80% of the       $2,800         $7,000         NA          Available for sale

26CTP                                                  next $10,000                                               eff. 1-1-97 (1)
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>


                                                                               5
<PAGE>

<TABLE>
<CAPTION>
CONNECTICUT PASSPORT HMO - HEALTHCARE SOLUTIONS
====================================================================================================================================

<S>                                 <C>                                             <C>
C36000 (5-10CTP)                    PHS 5 (Customized)                              Healthcare Solutions, eff. 3/1/95
------------------------------------------------------------------------------------------------------------------------------------

C37000 (15-20, 25 and               PHS 15 (Customized)                             Healthcare Solutions, eff. 3/1/95
26CTP)
------------------------------------------------------------------------------------------------------------------------------------

C38000 (11-14CTP)                   PHS 5/250 (Customized)                          Healthcare Solutions, eff. 3/1/95
------------------------------------------------------------------------------------------------------------------------------------

C39000 (21-24CTP)                   PHS 15/500 (Customized)                         Healthcare Solutions, eff. 3/1/95
------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                                                               6
<PAGE>

                                       CT
                                   Schedule B
                 Contract Allowances Administrative Service Fee

<TABLE>
<CAPTION>
I. Guardian's Administrative Services Fee (as a percentage of premium)

                                                          HMO               POS
                                                          ---               ---
<S>                                                      <C>               <C>
Marketing                                                0.63%             0.63%
Sales                                                    1.38%             1.38%
Administration                                           1.30%             1.30%
Billing/Collections                                      1.69%             1.69%
Advertising                                              0.15%             0.15%
          Total                                          5.15%             5.15%

<CAPTION>
II. PHS' Administrative Services Fee (as a Percentage of premium)

                                                          HMO               POS
                                                          ---               ---
<S>                                                      <C>               <C>
Health Services, UR                                      1.67%             1.67%
Net Mgt, MDD, QA                                         2.43%             2.43%
Operations                                               3.55%             3.58%
Acct Svc., Cust Srv.                                     1.44%             1.44%
Marketing                                                0.63%             0.63%
Sales                                                    0.15%             0.15%
Administration                                           1.30%             1.30%
Advertising                                              0.15%             0.15%
          Total                                         11.35%            11.35%
</TABLE>
<PAGE>

                                   EXHIBIT A-l

                            HMO REINSURANCE AGREEMENT







                                      EX-I