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                              EMPLOYMENT AGREEMENT

         AGREEMENT dated as of February 16, 1998, (the "Effective Date"), by and
between OXFORD HEALTH PLANS, INC. (the "Corporation"), having a principal office
in Norwalk, Connecticut, and Kevin Hickey (the "Employee").

         WHEREAS, the Board of Directors of the Corporation (the "Board") has
approved and authorized the Corporation's entry into this Agreement with the
Employee; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the continued employment relationship of the
Corporation and the Employee;

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

         1. Employment. The Employee is employed as Executive Vice President of
Operations & Technology of the Corporation. As Executive Vice President of
Operations & Technology the Employee shall render executive, policy and other
management services to the Corporation of the type customarily performed by
persons serving in a similar executive officer capacity, subject to the powers
by law vested in the Board and in the Corporation's stockholders. The Employee
shall report to the Chief Executive Officer of the Corporation, and shall
perform such other related duties as the Chief Executive Officer of the
Corporation may from time to time reasonably direct or request. The Employee
shall be a full time employee of the Corporation.

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

         2. Term. The initial term of employment under this Agreement shall be
for a period of two (2) years commencing on the Effective Date (the "Term").
This Agreement shall be extended automatically for two (2) additional years on
the second anniversary date of the Effective Date and on each second anniversary
of the Effective Date thereafter, unless either the Corporation or the Employee
gives contrary written notice to the other not less than three (3) months in
advance of such anniversary of the Effective Date. References herein to the Term
shall refer both to such initial term and such successive terms. Upon a "Change
in Control" (as defined in Section 7(a)) of the


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Corporation, the Term shall be extended to two (2) years from the date of such
Change in Control, unless notice to terminate the Term has been properly
provided prior to the date of such Change in Control, and such Change in Control
date shall be treated as the Effective Date for purposes of renewals of this
Agreement. The Term shall end upon the termination of the Employee's employment
under this Agreement.

         3. Compensation. (a) Base Salary. The Corporation agrees to pay the
Employee during the Term an annual base salary ("Base Salary") of $300,000. The
Base Salary shall be reviewed at least annually during the Term by the Board,
and the Employee shall receive such increases in Base Salary, if any, as the
Compensation Committee of the Board (the "Committee") in its absolute discretion
may determine, together with such performance or merit increases, if any, as the
Committee in its absolute discretion may determine. Participation with respect
to discretionary bonuses, retirement and other employee benefit plans and fringe
benefits shall not reduce the Base Salary payable to the Employee under this
Section 3. The Base Salary shall be payable to the Employee in equal
installments in conformity with the Corporation's normal payroll periods.

         (b) Bonus. The Employee shall be eligible to receive an annual
performance bonus (up to 100% of the Base Salary for the year in which such
performance is measured) consistent with the Corporation's management incentive
program, as recommended by the Chief Executive Officer of the Corporation and
approved by the Compensation Committee of the Board and the Chairman of the
Corporation.

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

         5. Fringe Benefits.

                  (a) Vacations and Leave. During the Term, the Employee shall
be entitled to an annual paid vacation of four (4) weeks per year or such longer
period as the Committee may approve. The Employee shall schedule the timing of
paid vacations in a reasonable manner. Any unused vacation shall not carry over
to a subsequent year, without prior written consent of the Board. The Employee
shall also be entitled to such other leave, with or without compensation, as
shall be mutually agreed upon by the Committee and the Employee.


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                  (b) Participation in Retirement and Employee Benefit Plans.
During the Term, the Employee shall be entitled to participate in the
Corporation's 1991 Stock Option Plan, annual incentive compensation plan, the
Oxford Specialty Holdings, Inc. 1996 Equity Incentive Compensation Plan and any
other plan of the Corporation or its subsidiaries relating to stock options,
stock appreciation, stock purchases, pension, thrift, deferred compensation,
profit sharing, group life insurance, medical coverage, education or other
retirement or employee benefits that the Corporation may adopt for the benefit
of its executive employees. Upon commencement of employment with the
Corporation, and subject to execution by the Employee of the Corporation's
standard non-disclosure and non-competition agreement, the Employee shall
receive an initial grant of 75,000 options under the Corporation's 1991 Stock
and Incentive Plan. Such options shall vest in four equal annual installments
over the four years from date of grant.

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

                  (d) Death. If the Employee shall die during the Term, the
Corporation shall pay to such person as the Employee has designated in a notice
filed with the Corporation, or, if no such notice is filed, to his estate, in
substantially equal monthly installments, from the date of his death for a
period of three (3) months, an amount equal to the Employee's Base Salary as of
his date of death.

                  (e) Other Benefits. During the Term, the Employee shall be
entitled to participate in any other fringe benefits which are or may become
applicable to the Corporation's executive employees, including the use of an
automobile, a reasonable expense account, the payment of reasonable expenses for
attending annual and periodic meetings of trade associations, and any other
benefits which are commensurate with the duties and responsibilities to be
performed by the Employee under this Agreement.

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

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


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

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

                  (d) Good Reason. The Employee may terminate his employment
hereunder with or without Good Reason; provided, however, that the Employee
agrees not to terminate his employment hereunder (other than for Good Reason or
for Retirement) during the ninety-day period following a Change in Control.
Except as provided in Section 7(c) hereof following a Change in Control, for
purposes of this Agreement "Good Reason" shall mean any (i) removal of the
Employee from, or failure to re-appoint the Employee to, his position as
Executive Vice President of Operations & Technology, except in connection with
termination of the Employee for Cause, or (ii) failure by the Corporation to
comply with Section 3 hereof in any material respect. For purposes of this
Agreement, "Good Reason" shall not exist until after Employee has given the
Company notice of the applicable event within 90 days of such event and which is
not remedied within 30 days after receipt of written notice from Employee
specifically delineating such claimed event and setting forth Employee's
intention to terminate employment if not remedied; provided, that if the
specified event cannot reasonably be remedied within such 30-day period and the
Company commences reasonable steps within such 30-day period to remedy such
event and diligently continues such steps thereafter until a remedy is effected,
such event shall not constitute "Good Reason" provided that such event is
remedied within 60 days after receipt of such written notice.


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

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

                  (g) Payment Upon Termination. Upon any termination of
employment hereunder, the Corporation shall pay the Employee, within ten (10)
days following his Date of Termination, a lump sum cash amount equal to the sum
of (i) the Employee's unpaid Base Salary through the Date of Termination, (ii)
any bonus payments which have become payable (other than deferred amounts), to
the extent not theretofore paid, and (iii) any vacation pay owed with respect to
accrued, but unused, vacation.

                  (h) Termination Without Cause, For Good Reason or Upon Failure
to Renew. In addition to the payments set forth in Section 6(g) hereof, in the
event that the Employee's employment with the Corporation terminates either (1)
prior to a Change in Control or (2) following the two-year period immediately
subsequent to a Change in Control (including as a result of a notice of
non-renewal of the Term by the Corporation provided during such two-year
period), in each case as a result of (i) a termination by the Employee for Good
Reason, (ii) a termination by the Corporation without Cause (other than for
Retirement or Disability) or (iii) notice by the Corporation of non-renewal of
the Term (other than for Retirement), then the Corporation shall pay to the
Employee, in twelve (12) equal monthly installments in conformity with the
Corporation's normal payroll periods, an amount equal to (x) the sum of the Base
Salary earned by the Employee from the Corporation and its subsidiaries during
the twelve-month period immediately preceding the Employee's Date of
Termination, plus the annual bonus earned by the Employee from the Corporation
and its subsidiaries in respect of the fiscal year immediately preceding the
Employee's Date of Termination, divided by (y) twelve (12).


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         7. Termination of Employment Following a Change in Control.

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

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

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

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

             (iv) the stockholders of the Corporation approve (A) a plan of
    complete liquidation of the Corporation or (B) an agreement for the sale or
    disposition by the Corporation of all or substantially all of the
    Corporation's assets. For purposes of paragraph (a)(i), the term "person"
    shall have the same meaning as when used in sections 13(d) and 14(d) of the
    Exchange Act, but shall exclude (1) a trustee or other fiduciary holding
    securities under an employee benefit plan of the Corporation or of a parent
    or subsidiary of the Corporation or (2) a corporation owned directly or
    indirectly by the stockholders of the Corporation in substantially the same
    proportions as their ownership of the common stock of the Corporation. For
    purposes of paragraph (a)(ii), the term "look-back date" shall mean the
    later of (A) the date twenty-four (24) months prior to the change in the
    composition of the Board and (B) the Effective Date.

    Any other provision of this Section 7(a) notwithstanding, the term "Change
    in Control" shall not include either of the following events, if
    undertaken at the election of the Corporation:


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                  (x)      a transaction, the sole purpose of which is to change
                           the state of the Corporation's incorporation; or

                  (y)      a transaction, the result of which is to sell all or
                           substantially all of the assets of the Corporation to
                           another corporation or entity (the "surviving
                           entity"); provided that the voting power represented
                           by the surviving entity's securities (or other equity
                           interests) is owned directly or indirectly by the
                           stockholders of the Corporation immediately following
                           such transaction in substantially the same
                           proportions as their ownership of the voting power
                           represented by the Corporation's common stock
                           immediately preceding such transaction; and provided,
                           further, that the surviving entity expressly assumes
                           this Agreement.

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

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


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Employee a copy of a resolution duly adopted by two-thirds (   ) of the entire
Board at a meeting of the Board called and held for such purpose (after
reasonable notice to the Employee and an opportunity for the Employee, together
with counsel, to be heard before the Board), finding that in the good faith
opinion of the Board an event set forth in clause (i) or (ii) has occurred and
specifying the particulars thereof in detail. Following a Change in Control, the
Corporation must notify the Employee of any event constituting Cause within
ninety (90) days following the Corporation's knowledge of its existence or such
event shall not constitute Cause under this Agreement.

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

                  (1)      (i) the assignment to the Employee of any duties or
                           responsibilities (including reporting
                           responsibilities) inconsistent in any material and
                           adverse respect with the Employee's duties and
                           responsibilities with the Corporation immediately
                           prior to such Change in Control (including any
                           diminution of such duties or responsibilities);
                           provided, however, that Good Reason shall not be
                           deemed to occur upon a change in duties or
                           responsibilities that is solely and directly a result
                           of the Corporation no longer being a publicly traded
                           entity, and does not involve any other event set
                           forth in this paragraph (c), or (ii) a material and
                           adverse change in the Employee's reporting
                           responsibilities, titles or offices (other than
                           membership on the Board) with the Corporation as in
                           effect immediately prior to such Change in Control;

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

                  (3)      any requirement of the Corporation that the Employee
                           (i) be based anywhere more than thirty (30) miles
                           from the office where the Employee is located at the
                           time of the Change in Control or (ii) travel on the
                           Corporation's business to an extent substantially
                           greater than the travel obligations of the Employee
                           immediately prior to such Change in Control;

                  (4)      the failure of the Corporation to (i) continue in
                           effect any employee benefit plan, compensation plan,
                           welfare benefit plan or material


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

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

                  Any event or condition described in Section 7(c)(1) through
(4) which occurs prior to a Change in Control, but with respect to which the
Employee is able to reasonably demonstrate was at the request or suggestion of a
Third Party, shall constitute Good Reason following a Change in Control for
purposes of this Agreement (as if a Change in Control had occurred immediately
prior to the occurrence of such event or condition) notwithstanding that it
occurred prior to the Change in Control. An isolated, insubstantial and
inadvertent action taken in good faith and which is remedied by the Corporation
promptly after receipt of notice thereof given by the Employee shall not
constitute Good Reason. The Employee's right to terminate employment for Good
Reason shall not be affected by the Employee's incapacity due to mental or
physical illness and the Employee's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any event or condition
constituting Good Reason. Following a Change in Control, the Employee must
provide notice of termination of employment within ninety (90) days of the
Employee's knowledge of an event constituting Good Reason or such event shall
not constitute Good Reason under this Agreement.

                  (d) In addition to the payments set forth in Section 6(g)
above, in the event the Employee's employment with the Corporation terminates
within two (2) years following a Change in Control either (i) by the Corporation
without Cause (other than for Retirement or Disability) or (ii) by the Employee
for Good Reason, then the Corporation shall (1) pay to the Employee, within ten
(10) days following the Employee's Date of Termination, a lump sum cash amount
equal to two (2) times the sum of (i) the highest annual rate of Base Salary of
the Employee during the 3-year period immediately preceding the Employee's Date
of Termination and (ii) the average annual bonus earned by Employee in respect
of the three (3) fiscal years of the Corporation immediately preceding the year
in which the Employee's Date of Termination occurs (provided, that if the
Employee has not been employed by the Corporation for such three-fiscal-year
period, the greater of (x) the target annual bonus


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(without regard to any reduction that would give rise to Good Reason) for the
year in which the Employee's Date of Termination occurs and (y) the amount
otherwise determined under this clause (ii) without regard to this
parenthetical) and (2) continue to provide, for a period of two (2) years
following the Date of Termination, the Employee (and the Employee's dependents
if applicable) with the same level of medical, dental, accident, disability and
life insurance benefits upon substantially the same terms and conditions
(including cost of coverage to the Employee) as existed immediately prior to the
Employee's Date of Termination (or, if more favorable to the Employee, as such
benefits and terms and conditions existed immediately prior to the Change in
Control); provided, that, if the Employee cannot continue to participate in the
Corporation plans providing such benefits, the Corporation shall otherwise
provide such benefits on the same after-tax basis as if continued participation
had been permitted. Notwithstanding the foregoing, in the event the Employee
becomes reemployed with another employer and becomes eligible to receive welfare
benefits from such employer, the welfare benefits described herein shall be
secondary to such benefits during the period of the Employee's eligibility, but
only to the extent that the Corporation reimburses the Employee for any
increased cost and provides any additional benefits necessary to give the
Employee the benefits hereunder.

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


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

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


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<PAGE>   12
                           made ("Overpayment"), consistent with the
                           calculations required to be made hereunder. In the
                           event that the Employee thereafter is required to
                           make payment of any additional Excise Tax, the
                           Accounting Firm shall determine the amount of the
                           Underpayment that has occurred and any such
                           Underpayment (together with interest at the rate
                           provided in Section 1274(b)(2)(B) of the Code) shall
                           be promptly paid by the Corporation to or for the
                           benefit of the Employee. In the event the amount of
                           the Gross-Up Payment exceeds the amount necessary to
                           reimburse the Employee for his Excise Tax, the
                           Accounting Firm shall determine the amount of the
                           Overpayment that has been made and any such
                           Overpayment (together with interest at the rate
                           provided in Section 1274(b)(2) of the Code) shall be
                           promptly paid by the Employee to or for the benefit
                           of the Corporation. The Employee shall cooperate, to
                           the extent his expenses are reimbursed by the
                           Corporation, with any reasonable requests by the
                           Corporation in connection with any contests or
                           disputes with the Internal Revenue Service in
                           connection with the Excise Tax.

                  8. Covenants Not to Compete; Confidentiality.

                  (a) The Employee covenants that if he voluntarily terminates
his employment with the Corporation prior to the end of the term of this
Agreement, unless such termination either is approved by the Board or is within
the two-year period following a Change in Control, he shall not, for a period of
one (1) year following such Date of Termination:

                  (1) engage or be interested, whether alone or together with or
         on behalf or through any other person, firm, association, trust,
         venture, or corporation, whether as sole proprietor, partner,
         shareholder, agent, officer, director, employee, adviser, consultant,
         trustee, beneficiary or otherwise, in any business principally and
         directly engaged in the operation of health maintenance organizations
         or the health insurance business or in the management of specialty
         medical care through case rate contracting; which business operates in
         a geographic area in which, at the time of such termination of
         employment, the Corporation is conducting business or plans to conduct
         business (a "competing business");

                  (2) assist others in conducting any competing business;

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

                  (4) own any capital stock or any other securities of, or have
         any other direct or indirect interest in, any entity which owns or
         operates a competing


                                      -12-
<PAGE>   13
         business, other than the ownership of (i) less than five percent (5%)
         of any such entity whose stock is listed on a national securities
         exchange or traded in the over-the-counter market and which is not
         controlled by the Employee or any affiliate of the Employee or (ii) any
         limited partnership interest in such an entity.

                  Nothing contained in this section, however, shall prohibit the
Employee from taking any of the actions set forth in clause (1), (2), (3) or (4)
above if (i) the Employee's employment has been terminated other than for Cause,
or (ii) the Employee has terminated employment for Good Reason.

                  (b) In the event that the Employee breaches or threatens to
breach any of the terms of this Section 8, the Employee acknowledges that the
Corporation's remedy at law would be inadequate and that the Corporation shall
be entitled to an injunction restraining the Employee from committing or
continuing such breach.

                  9. Payment Obligation Absolute. Except with respect to
continued welfare benefits under Section 7(d), the Corporation's obligation to
pay the Employee the compensation and other benefits provided herein shall be
absolute and unconditional and shall not be affected by an circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Corporation may have against the Employee. All amounts
payable by the Corporation hereunder shall be paid without notice or demand.

                  10. Notice.

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

                  If to the Employee:
                  Kevin Hickey
                  72 Ridgebury Road
                  Avon, Connecticut  06001

                  If to the Corporation:
                  Oxford Health Plans, Inc.
                  800 Connecticut Avenue
                  Norwalk, Connecticut 06854
                  Attention:  Secretary

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

                  (b)      A written notice (a "Notice of Termination") of the
                           Employee's Date of Termination by the Corporation or
                           the Employee, as the case may


                                      -13-
<PAGE>   14
                           be, to the other, shall (i) indicate the specific
                           termination provision in this Agreement relied upon,
                           (ii) to the extent applicable, set forth in
                           reasonable detail the facts and circumstances claimed
                           to provide a basis for termination of the Employee's
                           employment under the provision so indicated and (iii)
                           specify the Date of Termination. The failure by the
                           Employee or the Corporation to set forth in such
                           notice any particular fact or circumstance which
                           contributes to a showing of Good Reason or Cause
                           shall not waive any right of the Employee or the
                           Corporation hereunder or preclude the Employee or the
                           Corporation from asserting such fact or circumstance
                           in enforcing the Employee's or the Corporation's
                           rights hereunder.

                  11. General Provisions.

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


                                      -14-
<PAGE>   15
                  (b) Indemnification of Employee. In the event the employment
of the Employee is terminated by the Corporation without Cause or by the
Employee for Good Reason hereof and the Corporation fails to make timely payment
of the amounts then owed to the Employee under this Agreement, the Employee
shall be entitled to indemnification for all reasonable costs (as such costs are
incurred), including attorneys' fees and disbursements, incurred by the Employee
in taking action to collect such amounts or otherwise to enforce this Agreement,
plus interest on all such amounts at the annual rate of one percent above the
prime rate (defined as the base rate on corporate loans at large U.S. money
center commercial banks as published by the Wall Street Journal), compounded
monthly, for the period from the time payment is due until payment is made to
the Employee. The Employee shall also be entitled to interest (at the rate
described in the immediately preceding sentence) on such reasonable costs
incurred from the date the Employee delivers a receipt to the Corporation for
such costs until the date they are reimbursed to the Employee. Such
indemnification and interest shall be in addition to all rights to which the
Employee is otherwise entitled under this Agreement.

                  (c) Entire Agreement; Amendments or Additions; Action by
Board. This Agreement contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby and supersedes all prior
oral and written agreements, memoranda, understandings and undertakings between
the parties hereto relating to the subject matter hereof. No amendments or
additions to this Agreement shall be binding unless in writing and signed by
both parties. The prior approval by a two-thirds (   ) affirmative vote of the
full Board shall be required in order for the Corporation to authorize any
amendments or additions to this Agreement, to give any consents or waivers of
provisions of this Agreement, or to take any other action under this Agreement
including any termination of the employment of the Employee with or without
Cause. For purposes of Board approval with respect hereto, if the Employee is
also a director of the Corporation, he shall abstain from acting on matters
pertaining to this Agreement and shall not be counted as a Board member for
purposes of the two-thirds (   ) requirement.

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


                                      -15-
<PAGE>   16
                  (e) Arbitration. Except with respect to injunctive relief
under Section 8(b) hereof, any dispute or controversy under this Agreement shall
be settled exclusively by arbitration in Norwalk, Connecticut by three (3)
arbitrators in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitration award in any court
having jurisdiction. The Corporation shall bear all costs and expenses arising
in connection with any arbitration proceeding pursuant to this Section 11(e).

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

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

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

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

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

                                             OXFORD HEALTH PLANS, INC.

                                             By:    ___________________________

Dated:  ________________                            ___________________________
                                                    Kevin Hickey


                                      -16-