Exhibit 10.8(3)
                              EMPLOYMENT AGREEMENT

     This  Agreement  is made this 10th day of  December  1999 , by and  between
SIERRA  HEALTH  SERVICES,  Inc.,  a Nevada  Corporation,  of Las  Vegas,  Nevada
(hereinafter  referred to as "Employer"),  and William R. Godfrey , (hereinafter
referred to as "Employee").
                                     WITNESSETH
WHEREAS,  Employer is a publicly traded company  engaged in the  business of
providing  managed  health  care  services through subsidiary companies;
WHEREAS, Employee has expertise and experience in
providing managed health care services;  and, WHEREAS,  Employee has made and is
expected to continue to make a major contribution to the  profitability,  growth
and financial  strength of Employer;  NOW,  THEREFORE,  in  consideration of the
mutual  promises and  agreements  hereinafter  set forth,  Employer and Employee
agree as follows:  ARTICLE I  EMPLOYMENT/DUTIES  AND POWERS 1.  Employer  hereby
employs, engages and hires Employee as Executive Vice President,  Administrative
Services, and Employee hereby accepts and agrees to such hiring,  engagement and
employment, subject to the general supervision and direction of Employer.


                                                        1

     2.  Employee  shall perform such duties as are assigned by the President of
Employer or his/her designee,  and shall at all times faithfully and to the best
of his/her  ability  perform  all the duties that may be required of Employee to
the  reasonable  satisfaction  of Employer.  Employee  shall exercise only those
powers for signing  contracts and conveyances in the ordinary course of business
as are expressly  authorized by Employer's President or the appropriate Board of
Directors.  Employee  further  agrees  to  participate  in  and  assist  in  the
development of quality improvement programs offered by Employer.

     ARTICLE II TERM OF EMPLOYMENT - TERM OF AGREEMENT 1. The term of employment
governed by this Agreement  shall be for  approximately a 5 year period starting
December 10, 1999 and terminating  December 31, 2004 subject,  however, to prior
termination as hereinafter provided in Article VII. Unless earlier terminated by
the mutual  agreement of the parties  hereto,  this Agreement shall terminate at
December  31, 2004 or, if  Employee  has become  entitled  to any benefit  under
Article VII due to termination of employment on or before  December 31, 2004, at
such date as Employer has no further  obligations to Employee under Article VII;
provided,  however,  that the  provisions  of Article V and Article VI (and this
clause of Article II) shall survive any termination of this Agreement.




                                                        2

                       ARTICLE III COMPENSATION AND REVIEW

     1. Employer  shall pay Employee and Employee  shall accept from Employer as
payment for  Employee's  services  hereunder,  compensation  in the form of base
salary in the amount as set forth in Attachment A of this Agreement,  payable at
such  times as are deemed  appropriate  by  Employer,  but not less than twice a
month,  and other  compensation  payable under this  Agreement.  2. (a) Employer
shall  reimburse  Employee for all necessary and  reasonable  business  expenses
incurred by Employee while performing services pursuant to Employer's direction.
(b) Employee agrees to maintain adequate records of expenses,  in such detail as
Employer may  reasonably  request.  3. (a)  Employee  shall also be eligible for
those Employee fringe benefit  programs,  bonus plans, and stock option plans as
are made  available to other  employees  of Employer at the same  organizational
level,  and as approved  by the Board of  Directors.  (b) Except for  Employee's
vested  benefits  under the  Supplemental  Executive  Retirement  Plan ("SERP"),
Employer may, at any time and at its sole  discretion,  amend any fringe benefit
programs,  bonus  programs,  or stock option  programs  without  prior notice to
Employee even though such an amendment may decrease the benefits available under
said programs. Notwithstanding this subparagraph,  Employer shall have the right
to retroactively amend Employer's policies concerning vacation and paid time off
accruals.


                                                        3

     4.  Employee's  performance  shall be reviewed at least  annually  based on
established job duties,  goals and objectives and other reasonable  standards as
deemed  necessary  and  appropriate  by  Employer.  ARTICLE IV OTHER  EMPLOYMENT
Employee shall devote all of his time, attention,  knowledge,  and skills solely
to the  business  and  interest of  Employer,  unless  otherwise  authorized  by
Employer,  and  Employer  shall be entitled to all of the income,  benefits,  or
profits arising from or incident to all work, work  associations,  services,  or
advice of Employee, unless otherwise authorized in writing by Employer. Employee
shall not,  during the term hereof,  be  interested  in any manner,  as partner,
officer,  director,  advisor,  employee  or in any other  capacity  in any other
business  similar to  Employer's  business  or any allied  trade,  or obtain any
interest  adverse to  Employer;  provided,  however,  that  Employee may provide
advice and consultation to other entities with the written approval of Employer,
and further provided,  however, that nothing herein contained shall be deemed to
prevent or limit the right of Employee to invest any of his/her surplus funds in
the  capital  stock  or  other  securities  of any  corporation  whose  stock or
securities  are publicly owned or are regularly  traded on any public  exchange,
nor shall anything herein contained be deemed to prevent Employee from investing
or limit  Employee's  right to  invest  his/her  surplus  funds in real  estate.
Employee  shall  complete a Conflict  of  Interest  form by  February 15 of each
calendar year and submit it to Employer for review. All conflicts of interest or
any potential conflicts of



                                                        4

     interest  which  arise  during  the year must be  immediately  reported  to
Employer.  All conflict of interest  concerns must be resolved to the reasonable
satisfaction of Employer as a condition of continuation of employment.

                                                      ARTICLE V
                                                  BUSINESS SECRETS

     1.  Employee  shall not at any time or in any  manner,  either  directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation,
in any manner whatsoever, any proprietary or confidential information concerning
any  matter   affecting   or  relating  to  the  business  of  Employer  or  its
subsidiaries, including without limiting the generality of the foregoing, any of
their customers, the prices they obtain from providers or have obtained from the
sale of,  or at  which  they  sell or have  sold,  its  services,  or any  other
information  concerning  the  business of Employer  or its  subsidiaries,  their
manner of operation,  or their plans, if such a disclosure  would be detrimental
to the business  interests  of Employer or its  subsidiaries.  2. If  Employee's
employment  hereunder is terminated by either party at any time hereafter,  then
Employee agrees to turn over to Employer all papers, documents,  working papers,
correspondence,  memos and any and all other documents in Employee's  possession
relating to or  concerning  any matter  affecting or relating to the business of
Employer or its subsidiaries.




                                                        5

                                   ARTICLE VI
                            NON-COMPETITION AGREEMENT

     1. Employee acknowledges that in Employee's employment hereunder,  Employee
will have  continual  contacts with the groups,  members,  and providers who are
covered by or  associated  with the  managed  health  care  programs  offered by
Employer or its  subsidiaries  in Nevada and other states.  In all of Employee's
activities, Employee, through the nature of Employee's work, will have access to
and will acquire confidential information related to the business and operations
of Employer and its subsidiaries,  including, without limiting the generality of
the foregoing,  member and group lists, and confidential information relating to
processes,  plans,  methods of doing  business  and  special  needs of  doctors,
hospitals,  members,  groups,  pharmacies,  or other health care  providers  who
contract with Employer or its subsidiaries.  Employee acknowledges that all such
information  is  the  property  of  Employer  or  its  subsidiaries  solely  and
constitutes  confidential  information  of such  parties;  that  the  disclosure
thereof  would  cause  substantial  loss to the  goodwill  of  Employer  and its
subsidiaries;  that disclosure thereof to Employee is being made only because of
the position of trust and  confidence  which Employee will occupy and because of
Employee's agreement to the restrictions herein contained; that his knowledge of
these matters would enable him, on  termination  of this  Agreement,  to compete
with Employer or its  subsidiaries  in a manner likely to cause Employer and its
subsidiaries  irreparable harm, and disclosure of such matters would,  likewise,
cause such



                                                        6

     harm;  and that the  restrictions  imposed upon  Employee  herein would not
prohibit  Employee  in  earning  a living.

     2. It is understood and agreed by Employee and Employer that the essence of
this  Employment  Agreement is the mutual  covenants of the parties herein made,
that the present and future  members and groups of Employer or its  subsidiaries
will remain Employer's or its  subsidiaries'  members and groups during the term
of this Agreement and following its termination for any reason. In consideration
for the  employment and continued  employment of Employee by Employer,  and also
for the amount received by Employee as compensation, Employee hereby irrevocably
warrants,  covenants,  and agrees as follows:

     (a)  during  the  term of  Employee's  employment  and  after  leaving  the
employment  of  Employer  for any  reason,  whether  involuntary  or  voluntary,
Employee  will not take any action  whatsoever  which may or might  disturb  any
existing business relationship of Employer or its subsidiaries with any doctors,
groups, members, hospitals,  pharmacies or other health care providers in Nevada
who contract with Employer or its subsidiaries;

     (b) for a period of one (1) year after leaving the  employment of Employer,
Employee will not solicit business from the members or groups of Employer or its
subsidiaries  in Nevada,  or in any manner  disrupt  any  business  relationship
Employer or its  subsidiaries  has with any  contracted  health care provider in
Nevada with whom Employee came in contact as an employee of Employer.



                                                        7

     (c) for a period of one (1) year after leaving the  employment of Employer,
Employee will not, either directly or indirectly, work for any present or future
competitors of Employer operating in the state of Nevada who in any manner offer
any managed health care programs,  insurance coverage, or administer health care
claims for employers.  Such competitors  shall include,  but are not limited to,
HMOs, PPOs,  insurance companies,  utilization  management  companies,  or third
party administrators.

     3. The one (1) year period  specified in this Article will be tolled during
any period of breach of any of the terms of Article VI by Employee.

     4.  Employee  agrees  that in the  event  of a  breach  of any term of this
Agreement,  and more particularly,  in the event of a breach of any of the terms
and  provisions of Article VI,  Employer shall be entitled to secure an order in
any suit brought for that purpose to enjoin  Employee from  violating any of the
provisions of the  Agreement  and that,  pending the hearing and the decision on
the  application  for such  order,  Employer  shall be  entitled  to a temporary
restraining  order without  prejudice to any other remedy available to Employer,
all at the expense of Employee should Employer prevail in such action.  Employee
understands  that  the  covenants  of  this  Article  are  the  essence  of this
Employment  Agreement,  and without which no Employment  Agreement with Employee
would be entered into by Employer.

     5. The  provisions  of Article VI shall in no event be  construed  to be an
exclusive  remedy and such remedy shall be held and  construed to be  cumulative
and not exclusive of any rights or



                                                        8

remedies,  whether in law or equity, otherwise available under the terms of
this Agreement or under the laws of the United States or the state of Nevada.

     6. The covenants and  agreements  made by Employee in this Article VI shall
be construed as an agreement independent of any other provision in the Agreement
and the existence of any claim or cause of action by Employee against  Employer,
whether  predicated  on this  Agreement  or  otherwise,  shall not  constitute a
defense to the enforcement by Employer,  by injunctive  relief or otherwise,  of
the  provisions of Article VI. The  invalidity of all or any part of any section
or paragraph of this Article VI shall not render  invalid the  remainder of this
Article or any section hereof.

     7. No failure or failures on the part of Employer to enforce any  violation
by Employee of this  Non-Competition  Agreement,  shall  constitute  a waiver of
Employer's rights thereafter to enforce all of the terms, covenants,  provisions
and  agreements  herein  contained.

                                   ARTICLE VII

                          TERMINATION OF EMPLOYMENT

     1.  Termination  of employment by either  Employer or Employee shall follow
established Sierra Health Services Policies and Procedures including appropriate
notice, except as otherwise  specifically set forth in this Article.

     2. Employee may terminate  employment  hereunder with sixty (60) days prior
written  notice.  If  Employee is  terminated  during such sixty (60) day notice
period,  Employee  shall be entitled to be paid his customary  salary during the
remainder of the notice period. If Employee



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shall voluntarily terminate employment all eligible separation compensation
and benefits as are routinely made  available to other  employees of Employer at
the same organizational  level, shall be paid or made available to Employee.

     3.  If  Employer  shall  terminate  Employee's  employment  hereunder,   or
subsequent  to the  termination  of this  Agreement  or any similar  agreements,
without  cause,  except as  otherwise  set forth in  Paragraphs  6 and 7 of this
Article,  Employee  shall be entitled to twelve (12) months salary and all other
separation  compensation  and benefits as are routinely  made available to other
employees  of  Employer  at the  same  organizational  level.

     4. In the event Employee's  employment  hereunder terminates for any reason
other than for cause, as set forth in Paragraph 6 of this Article,  Employee and
his/her family shall be eligible to remain covered under Employer's health care,
dental,  vision and life coverage program,  at no expense,  for a period of time
equal to  Employee's  length of service or until  Medicare  eligible,  whichever
occurs first,  following termination of such employment.

     5.  Notwithstanding  any other provision in this Agreement to the contrary,
Employee hereby agrees that any separation  compensation due to Employee,  other
than accrued  vacation,  shall be paid out 25% after the first 30 days,  37 1/2%
after  the  first 60 days,  and the  remaining  37 1/2% at the end of 180  days,
except in the event of a change in control.  Payment of such amounts shall fully
release  Employer  from  any and all  liability  of  Employer  relating  to this
Agreement or the employment hereunder.  Any payments or such amounts which would
otherwise  be  payable  after a change in  control,  or arising as a result of a
change in control, shall



                                                        10

be made in a lump sum within five (5) business  days  following the date of
the  change in control  and shall,  except as  otherwise  provided  in any other
benefit  program or in this Agreement,  fully release  Employer from any and all
liability of Employer relating to this Agreement or the employment hereunder.

     6. If Employer shall terminate  Employee's  employment for Cause,  which is
defined as (1) Employee's  conduct that is materially  detrimental to Employer's
reputation or business  relationships,  or (2)  Employee's  misappropriation  of
Employer's  funds,  Employee shall be eligible for four (4) weeks salary and any
other  separation  compensation  and benefits as are routinely made available to
other employees of Employer at the same organizational  level, as full and final
payment  under this  Agreement.  Payment of such  amounts  shall  fully  release
Employer  from any and all liability of Employer  relating to this  Agreement or
the  employment  hereunder.

     7. (a) If Employee is unable to perform  Employee's  duties  hereunder,  by
reason of illness or  incapacity  of any kind,  for a period of more than twelve
(12) months in excess of accrued sick leave, Employee's employment hereunder may
be  terminated  by Employer at its  absolute  discretion  with one week of prior
written notice.

     (b) If  Employee's  illness or  incapacity  shall have ended,  and Employee
shall have assumed  Employee's duties hereunder,  prior to the date specified in
the notice of  termination,  Employee  shall be  entitled  to resume  Employee's
employment hereunder as if such notice had not been given.



                                                        11

     8. In the event of a change in control of  Employer,  whereby any  "person"
(as  such  term is used in  Sections  3(a)(9)  and  13(d)(3)  of the  Securities
Exchange  Act  of  1934)  is  or  becomes  the  beneficial  owner,  directly  or
indirectly,  of securities of Employer  representing 51% or more of the combined
voting power of the then outstanding  securities of Employer, and such change in
control was not  approved by a majority of the Board of  Directors  of Employer,
Employee,  at his/her  sole  option,  shall be  entitled  to  terminate  his/her
employment  hereunder  and,  upon such  termination,  will be entitled to a cash
amount equal to (2.99) times  Employee's  current  salary and the target  annual
bonus for which Employee is eligible in the year of  termination,  together with
any other  separation  compensation and benefits as are routinely made available
to other  employees  of Employer at the same  organizational  level.  Employee's
right to  terminate  under this  Paragraph 8 may be exercised at the time of the
change in control or at any time  within two years  after the change in control,
including  upon  receipt of any notice that  Employer  has elected to  terminate
Employee's employment without cause during such two-year period. Payment of such
amounts shall be made in a lump sum within five (5) business days  following the
date such  amounts  become  payable  hereunder  and shall,  except as  otherwise
provided  in any other  benefit  program  or in this  Agreement,  fully  release
Employer  from any and all liability of Employer  relating to this  Agreement or
the  employment  hereunder.

     9. In the event of a change in control of  Employer,  whereby any  "person"
(as  such  term is used in  Sections  3(a)(9)  and  13(d)(3)  of the  Securities
Exchange  Act  of  1934)  is  or  becomes  the  beneficial  owner,  directly  or
indirectly, of securities of Employer representing 51% or more



                                                        12

of  the  combined  voting  power  of the  then  outstanding  securities  of
Employer,  and such  change in control is approved by a majority of the Board of
Directors of Employer,  Employee,  at his/her sole option,  shall be entitled to
terminate  his/her  employment  hereunder  and, upon such  termination,  will be
entitled to a cash amount equal to (2.99) times  Employee's  current  salary and
the  target  annual  bonus  for  which  Employee  is  eligible  in the  year  of
termination, together with any other separation compensation and benefits as are
routinely   made   available  to  other   employees  of  Employer  at  the  same
organizational  level,  if, within two (2) years after the effective date of the
change  in  control  any one of the  following  occurs:  (a) the  assignment  to
Employee of any duties  inconsistent with Employee's position (including status,
offices,   titles,   and  reporting   requirements),   authority,   duties,   or
responsibilities  or any other  action by  Employer  that  results in a material
diminution in such position,  authority, duties, or responsibilities,  excluding
for this  purpose  an action  not taken in bad  faith  and that is  remedied  by
Employer  within 10 days  after  receipt of written  notice by  Employee;  (b) a
reduction in Employee's  annual base salary or target bonus;  (c) the relocation
of Employer's  principle executive offices to a location more than 75 miles from
the current location of such offices or (d), in the event such change in control
occurs  within  the final two years  prior to the  calendar  date  stated as the
termination  date of the  Agreement  in Article II, and if, prior to such stated
termination date and prior to termination of Employee's employment, Employer has
not offered to enter into an  extension  of this  employment  agreement or a new
employment agreement providing benefits  substantially equal to those under this
agreement for a term to extend until at least two years after



                                                        13

the date of such change in control. In addition,  if Employee's  employment
hereunder is terminated for reasons other than those set forth in Paragraph 6 or
7 of this Article  within two (2) years after the effective  date of a change in
control  which was  approved by a majority  of  Employer's  Board of  Directors,
Employee  shall be entitled to a cash amount  equal to (2.99)  times  Employee's
current salary and the target annual bonus for which Employee is eligible in the
year of  termination,  together  with  all  other  separation  compensation  and
benefits as are routinely made  available to other  employees of Employer at the
same organizational  level.  Payment of such amounts shall be made in a lump sum
within five (5) business  days  following the date such amounts  become  payable
hereunder,  and shall, except as otherwise provided in any other benefit program
or in this  Agreement,  fully  release  Employer  from any and all  liability of
Employer  relating to this Agreement or the employment  hereunder.  10. Anything
contained  herein to the  contrary  notwithstanding  in the event that  Employer
shall  discontinue  operation  of  Employer  other than as a result of a merger,
consolidation  or  acquisition,  then this  Agreement  shall  terminate  and the
provisions  of  Article  VI shall  terminate  as of the last day of the month in
which Employer  ceases  operation with the same force and effect as if such last
day of the month were  originally set as the  termination  date hereof.  11. Any
amounts  payable under this Article VII shall also be payable to Employee in the
event  Employee is terminated  without cause during the 90-day period prior to a
Change in Control.




                                                        14

     12.  Whether  or  not  Employee  becomes  entitled  to any  payments  under
Paragraphs  1 through  11 of this  Article  VII,  if any  payments  or  benefits
received,  or to be received,  by Employee  (including the vesting of any option
and other non-cash benefits and property),  whether pursuant to any provision of
this Agreement or any other plan,  arrangement or agreement with Employer or any
affiliated  company,  excluding  the  Gross-Up  Payment  described  herein (such
payments and benefits being the "Total Payments"), will be subject to any excise
tax imposed under section 4999 of the Internal  Revenue Code of 1986, as amended
(such excise tax,  including  penalties and interest thereon,  being the "Excise
Tax"),  Employer  shall pay to Employee  an  additional  amount  (the  "Gross-Up
Payment") such that the net amount retained by Employee, after reduction for any
Excise Tax on the Total  Payments and any federal and Excise Tax on the Gross-Up
Payment,  shall be  equal to the sum of (i) the  Total  Payments  plus  (ii) any
deductions  disallowed for federal income tax purposes  because of the inclusion
of the Gross-Up Payment in Executive's  adjusted gross income  multiplied by the
Executive's  highest  marginal rate of federal income  taxation for the calendar
year in which the Gross-Up Payment is to be made.







                                                        15

                                  ARTICLE VIII
                                EFFECT OF WAIVER

     The waiver by either party of a breach of any  provision of this  agreement
shall not operate or be construed as a waiver of any subsequent breach thereof.

                                   ARTICLE IX
                         ACTUAL ATTORNEY'S FEES EXPENDED

     Employer  and Employee  agree that all  attorneys  fees  expended by either
party in any dispute,  arbitration or litigation  concerning this Agreement will
be paid by the losing party in that dispute, arbitration or litigation.

                                    ARTICLE X
                                     NOTICE

     Any and all notices  referred to herein shall be sufficient if furnished in
writing, sent by registered mail to the representative  parties at the addresses
subscribed below their  signatures to this Agreement.

                                   ARTICLE XI
                                   ASSIGNMENT

     The rights, benefits and obligations of Employee under this Agreement shall
be  assignable,  and all covenants and agreements  hereunder  shall inure to the
benefit of and be enforceable by or against Employer's successors or assigns.




                                                        16

                                   ARTICLE XII
                                ENTIRE AGREEMENT

     This Agreement  contains the entire Agreement between the parties,  and the
parties hereby agree that no other oral  representations or agreements have been
entered into in  connection  with this  transaction.

                                  ARTICLE XIII
                                   AMENDMENT

     No amendment or modification  of this Agreement shall be deemed  effective,
unless or until, it is executed in writing by the parties hereto.

                                   ARTICLE XIV
                                    VALIDITY

     This Agreement,  having been executed and delivered in the State of Nevada,
its validity,  interpretation,  performance and enforcement  will be governed by
the laws of that state.

                                   ARTICLE XV
                                  SEVERABILITY

     It is mutually  agreed that all of the terms,  covenants,  provisions,  and
agreements  contained  herein are  severable  and that, in the event any of them
shall be held to be invalid by any  competent  court,  this  Agreement  shall be
interpreted as if such invalid term, covenant,  provision, or agreement were not
contained herein.





                                                        17

                                   ARTICLE XVI
                                      FORUM

     The  parties  hereto  consent  and agree that any  action to  enforce  this
Agreement  or any  provision  therein  or any  rights  hereunder  or any  action
relating to the  employment of Employee  with  Employer  shall be brought in the
State of Nevada.

                                  ARTICLE XVII
                                 INDEMNIFICATION

     Employer shall  indemnify  Employee  whether or not then in office,  to the
fullest extent provided for in Employer's  Articles of  Incorporation or Bylaws,
as in effect, or as may thereafter be amended,  modified or revised from time to
time (collectively, "Employer's Articles"), or permitted under the law of Nevada
or such other state in which  Employer may hereafter be  domiciled,  against any
and all costs, claims, judgments, fines, settlements,  liabilities,  and fees or
expenses (including, without limitation, reasonable attorneys' fees) incurred in
connection  with  any  proceedings  (including  without  limitation,  threatened
actions,  suits or  investigations)  arising out of, or relating to,  Employee's
actions or in actions as a  director,  officer or  employee  of  Employer at any
point  during  his  employment  by or service to  Employer,  whether  under this
Agreement,  any prior employment  agreements or otherwise.  The  indemnification
contemplated  under this Section  shall be provided to Employee  unless,  at the
time indemnification is sought, such  indemnification  would be prohibited under
the law of




                                                        18

Nevada or of the state in which  Employer may then be  domiciled;  Employer
may rely on the advice of its counsel in determining whether  indemnification is
so prohibited.




                                                        19

     IN WITNESS WHEREOF,  the parties have executed this Agreement at Las Vegas,
Nevada, on the day of , 19 .


SIERRA HEALTH SERVICES, INC.

By:______________________________
               President
               P. O. Box 15645
               Las Vegas, NV 89114-5645


EMPLOYEE

By:______________________________
               William R. Godfrey
               9520 Coral Way
               Las Vegas, NV  89117







                                                        20