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                                                                 EXHIBIT 10.4


                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT, made this 18th of October, 1999, is between AMERICAN
PSYCH SYSTEMS, INC. ("APS") and CLIFFORD G. LARSEN ("Employee").

                                    RECITALS:

      A.    APS is a for-profit managed care corporation providing workers'
compensation, medical management services and mental health services including
employee assistance services through its employees and agents.

      B.    APS desires to employ Employee upon the following terms and
conditions and Employee desires to accept such employment.

      NOW, THEREFORE, it is agreed as follows:

      1)    EMPLOYMENT: APS employs Employee and Employee accepts employment
with APS for a term effective from the date of signing, and ending October 17th,
2000 (3 years after start date), subject to the termination provisions of
paragraph 7 herein.

      2)    MANAGEMENT DUTIES: Employee is hereby designated as CEO of APS'
Employer Division and has the essential duties that are designated as agreed
upon by Employee and APS management. APS may from time to time change Employee's
duties and responsibilities to other similar, reasonably related duties and
responsibilities as in its reasonable discretion are necessary based upon the
needs of APS.

      3)    COMPENSATION: As his/her entire compensation for all services
rendered to APS during the term of this Agreement in whatever capacity rendered,
Employee shall have and receive:

            a)    A Base Salary of $5,384.62 biweekly (annualized, $140,000).
                  Biweekly amount based on a twenty-six (26) payroll cycle.
                  Employee shall be eligible for yearly increases as approved by
                  APS.

            b)    An Annual Bonus prorated for each year or part year hereunder
                  equal to twenty-five percent (25%) of Employee's then current
                  annual Base Salary, payable by the 30th day of the first
                  calendar month following the end of each calendar year, for
                  satisfying reasonably and mutually agreeable performance
                  goals, provided however that the final bonus would be payable
                  by the 30th day of the first calendar month following the end
                  of the employment agreement. Entitlement to the Annual Bonus
                  shall vest as of the end of each calendar year. For the last
                  year, it shall vest at the end of the employment term.
                  However, if APS terminates employment pursuant to the
                  termination provisions of paragraph 7, subsection (ii) or (v)
                  herein, Employee shall be fully vested for a full twenty-five
                  percent (25%) Annual Bonus.

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            c)    A Stock Grant hereby granted for the total amount of One
                  Hundred Nineteen and Seventy Four Thousand (119,074) shares of
                  APS Class A Common Stock with a valuation rate of $2.85 per
                  share. The Stock Grant is based upon the following vesting
                  schedule:

                        25%   (29,768 shares) vested immediately
                        50%   (59,536 cumulative shares) vested after one (1)
                              year of service
                        75%   (89,304 cumulative shares) vested after two (2)
                              years of service
                        100%  (119,074 cumulative shares) vested after three
                              (3) years of service.

                  If APS terminates employment subject to the provisions of
                  paragraph 7, sections (ii) or (v) herein, Employee shall be
                  fully vested for the Stock Grant.

            d)    An Incentive Stock Option ("ISO") Stock Option Grant for One
                  Hundred Twenty-Five Thousand (125,000) shares of APS Class A
                  Common Stock with a valuation rate of $2.85 per share, based
                  on a five year vesting schedule at twenty percent (20%) per
                  year. All stock options shall be in accordance with the rules
                  and regulations of the APS 1993 Stock Option Plan, as amended.

      4)    EMPLOYEE BENEFITS AND PERQUISITES: Employee shall be entitled to the
highest level and most advantageous employee benefits and perquisites otherwise
available to APS employees and such other benefits and perquisites as are
approved by the APS Board of Directors.

      5)    FACILITIES: APS shall provide and maintain or cause to be provided
and maintained such facilities, equipment supplies and assistance as deemed
necessary by APS management for Employee's performance of his/her duties under
this Agreement

      6)    LOYALTY: Employee shall devote his/her full time and best efforts to
the performance of his/her employment under this Agreement. Employee will not
engage in any other business activity during the term of this agreement without
the prior consent of APS management. Employee shall perform his/her duties under
this agreement in accordance with such standards of professional ethics and
practice and APS policies as may from time to time be applicable during the term
of his/her employment. Employee shall notify APS in writing of any facts of
which Employee becomes aware that could impair the professional ethics, practice
and/or policies of APS and/or Employee.

      7)    TERMINATION: The Employment will continue until the first to occur
of: (i) the end of the term as provided in Section (1) provided, however, that
APS must give Employee advance written notice at least six (6) months prior to
the end of the term of its intention to a)


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continue Employee's employment on an at will basis after the end of the term, b)
negotiate a new employment agreement for the continuation of Employee's
employment, or c) terminate the employment relationship at the end of the term;
(ii) Employee's disability as defined below or death; (iii) Employee's
resignation; (iv) termination by the Board for "cause" as defined below; or (v)
the Board's determination that in its good faith judgment the termination of
Employee's employment is in the best interest of APS, the employee would be
requested to relocate more than 50 miles from Missoula, Montana or the Board's
decision to substantially alter Employee's duties and responsibilities to such
an extent as to render Employee constructively discharged. "DISABILITY" means
Employee's inability, due to physical or mental illness, to perform
substantially all of his/her duties for a continuous period of six (6) months,
in which event either Employee or APS may give notice to terminate Employee's
employment under this Agreement effective as of a date thirty (30) days after
the date such notice is given. Employee's salary while disabled and prior to
such termination shall be reduced by the amount of any disability or similar
benefits to which he/she is entitled, notwithstanding anything contained
elsewhere in this Agreement to the contrary. "CAUSE" means (i) dishonesty of
Employee with respect to APS or any of its affiliates; (ii) willful malfeasance
or nonfeasance or gross negligence of duty intended to injure or having the
effect of injuring the reputation, business or business relationships of APS or
any of its affiliates or any of their respective officers, directors or
employees; (iii) conviction of Employee upon a charge of any crime involving
moral turpitude or which could reflect unfavorable upon APS or any of its
affiliates; (iv) extended absence from work by Employee (other than by reason of
disability due to physical or mental illness) without prior approval from APS
management; (v) neglect or refusal by Employee to perform his/her duties and
responsibilities without the same being corrected upon ten (10) days prior
written notice; or (vi) breach by Employee of any of the covenants contained in
this Agreement. The date on which Employee ceases to be employed by APS for any
reason shall deemed to be the "Termination Date" for all purposes herein.

      8)    SEVERANCE: If Employee is terminated by APS pursuant to the first
subsection (v) of paragraph 7 above then Employee shall be entitled to receive
the following "Severance Benefits" being a payment equal to the prorated salary
that otherwise would have been paid to Employee under this Agreement from the
date of termination through October 17th (DATE 3 YEARS AFTER SIGNED AGREEMENT).
Payments for all severance benefits will be made in accordance to APS' regular
payroll system and schedule on a bi-weekly basis until the total payment amount
is exhausted.

      For a maximum period of eighteen (18) months after such termination, APS
will pay the cost of Employee's health insurance at the same rate as in effect
on the date of termination. The obligation to make such benefit will cease upon
the earlier of eighteen (18) months, or Employee receiving such benefit from an
alternate source. Employee shall report to APS if he/she is receiving such
benefit during the eighteen (18) month period following termination within 14
days of receiving such benefit.

      9)    CONFIDENTIALITY: Employee further acknowledges and warrants that
Employee will not remove from the offices of APS and does not have in Employee
possession any confidential, proprietary or privileged information upon
termination. Employee also agrees that he/she will not under any circumstances
and in any manner disclose, disseminate or use any


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confidential, proprietary or privilege information of APS at any time. For
purposes of this agreement, confidential, proprietary or privileged information
shall include patient lists, referral physician lists, contracts and terms of
contracts, documents concerning prospective business opportunities, financial
information concerning APS and any of its affiliates, owners, executives,
patients, or employees, any other files and matters in any way related to the
operations of APS including forms, processes, or computer records/disks.
Employee understands and agrees that the foregoing provisions concerning
confidential, proprietary or privilege information are a material element of
this Agreement and any breach of these provisions shall cause material harm to
APS. Employee further agrees that he/she, or anyone acting on his/her behalf,
will not in any way make, verbally, in writing, or any other form, any
derogatory statements about APS, its affiliates, owners, executives, patients,
or employees for a period of three (3) years after termination of employment.
Employee agrees that in the event of a breach by him/her or any of the terms of
this Agreement, as one of its non-exclusive remedies, APS may terminate any
continuing relationship with Employee and shall be relieved of all obligations
to make further wage payments and continue to provide benefits to Employee.

      10)   NON-COMPETITION AND CONFIDENTIALITY AGREEMENT: Employee will be
required to sign the attached Non-Competition and Confidentiality Agreement,
pages 1 through 3 to validate this Employment Agreement.

      11)   EXPENSE ACCOUNT: Employee shall be reimbursed for reasonable and
necessary expenses in accordance with APS' policies and in a manner as agreed
upon by the Board of Directors of APS. The current automobile used by this
Employee will be provided for use for the term of this contract by APS,
including insurance, gas, taxes and repairs. Employee will be responsible to
determine the mileage that is attributable to personal use of the vehicle by the
employee in the same manner that has been historically utilized with VRI in
previous years. Said mileage will be reimbursed by Employee to APS in accordance
with standard Federal mileage allowance within 30 days of the end of each
calendar year or termination of this contract which ever is earlier. Employee
agrees to provide all documents required by APS in advance of reimbursement of
expenses.

      12)   NO ASSIGNMENTS: This Agreement is personal to each party and neither
party may assign or delegate any of its rights or obligations hereunder without
first obtaining the written consent of the other party.

      13)   AMENDMENTS: No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties except as herein otherwise
provided.

      14)   SEVERABILITY: If any provision of this Agreement shall be declared
invalid or unenforceable by a court of competent jurisdiction or becomes invalid
or unenforceable by passage or operation of any law such actions shall not
invalidate or render unenforceable the remaining provision of this Agreement.

      15)   APPLICABLE LAW: This Agreement shall be governed in all respects
whether relative to validity, construction, capacity and performance or
otherwise by the laws of the state of operations of APS and Employee.


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      16)   PARAGRAPH HEADINGS: Paragraph headings used in this Agreement are
included solely for convenience and shall not effect or be used in connection
with the interpretation of this Agreement.

      17)   EXCLUSIVITY: This Employment Agreement, as supplemented by actions
of the APS Board of Directors as contemplated herein, expresses exclusively all
terms of the employment of Employee by APS.

      18)   ARBITRATION OF DISPUTES: If any dispute arises with respect to any
of the terms or provision of this Agreement, the parties agree that such dispute
will be settled in accordance with the arbitration procedures established by the
laws of the state of operations of APS and Employee.

      19)   NON-RAID: Employee acknowledges that he/she has had and will have
extensive contacts with employees and customers of APS. Accordingly, Employee
covenants and agrees that during the term of his/her employment and during the
two (2) year period immediately thereafter he/she will not (i) solicit any of
the employees of APS who were employed by APS during the time when Employee was
employed by APS to leave APS, or (ii) interfere with relationship of APS with
any such employees.

      21)   VOLUNTARY EXECUTION: Employee and APS hereby acknowledge that this
Agreement is entered into voluntarily and that Employee understands the
consequences of signing this Agreement.

EMPLOYEE                                  EMPLOYER

                                          AMERICAN PSYCH SYSTEMS, INC.
/s/ Clifford G. Larsen
---------------------------------
Clifford G. Larsen

Date: 10/18/99                            By: /s/ Kenneth Kessler
    -----------------------------            --------------------------------
                                             Ken Kessler, MD President

Witness:-------------------------

                                          Date: 10/18/99
                                               ------------------------------
                                          Witness:---------------------------


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