EXHIBIT 10.8 (5)








                          SIERRA HEALTH SERVICES, INC.


                           DEFERRED COMPENSATION PLAN


                              Effective May 1, 1996




















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                                TABLE OF CONTENTS

                                                                           Page

Purpose  .................................................................   1

ARTICLE 1            Definitions..........................................   1

ARTICLE 2            Selection, Enrollment, Eligibility...................   6
         2.1         Selection by Committee...............................   6
         2.2         Enrollment Requirements..............................   6
         2.3         Eligibility; Commencement of Participation...........   7
         2.4         Termination of Participation and/or Deferrals........   7

ARTICLE 3            Deferral Commitments/Company Matching/
                          Crediting/Taxes.................................   7
         3.1         Minimum Deferral.....................................   7
         3.2         Maximum Deferral.....................................   8
         3.3         Election to Defer; Effect of Election Form...........   8
         3.4         Withholding of Annual Deferral Amounts...............   8
         3.5         Annual Company Matching Amount.......................   9
         3.6         Vested Company Matching Account
                          and Deferral Account............................   9
         3.7         Crediting/Debiting of Account Balances...............   9
         3.8         FICA, Withholding and Other Taxes....................  11
         3.9         Rollovers From Prior Deferred Compensation Plan......  11

ARTICLE 4            Short-Term Payout; Unforeseeable Financial
                          Emergencies;
                     Withdrawal Election .................................  12
         4.1         Short-Term Payout....................................  12
         4.2         Other Benefits Take Precedence Over
                         Short-Term Payout................................  12
         4.3         Withdrawal Payout/Suspensions for Unforeseeable
                          Financial Emergencies...........................  12
         4.4         Withdrawal Election..................................  12

ARTICLE 5            Retirement Benefit...................................  13
         5.1         Retirement Benefit...................................  13
         5.2         Payment of Retirement Benefit........................  13
         5.3         Death Prior to Completion of Retirement Benefit......  13

ARTICLE 6            Pre-Retirement Survivor Benefit......................  13
         6.1         Pre-Retirement Survivor Benefit......................  13
         6.2         Payment of Pre-Retirement Survivor Benefit...........  14

ARTICLE 7            Termination Benefit..................................  14
         7.1         Termination Benefit..................................  14
         7.2         Payment of Termination Benefit.......................  14

ARTICLE 8            Disability Waiver and Benefit........................  14
         8.1         Disability Waiver....................................  14
         8.2         Continued Eligibility; Disability Benefit............  15

ARTICLE 9            Beneficiary Designation..............................  15
         9.1         Beneficiary..........................................  15
         9.2         Beneficiary Designation; Change; Spousal Consent.....  15



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         9.3         Acknowledgment.......................................  16
         9.4         No Beneficiary Designation...........................  16
         9.5         Doubt as to Beneficiary..............................  16
         9.6         Discharge of Obligations.............................  16

ARTICLE 10           Leave of Absence.....................................  16
         10.1        Paid Leave of Absence................................  16
         10.2        Unpaid Leave of Absence..............................  16

ARTICLE 11           Termination, Amendment or Modification...............  17
         11.1        Termination..........................................  17
         11.2        Amendment............................................  17
         11.3        Plan Agreement.......................................  17
         11.4        Effect of Payment....................................  17

ARTICLE 12           Administration.......................................  18
         12.1        Committee Duties.....................................  18
         12.2        Agents...............................................  18
         12.3        Binding Effect of Decisions..........................  18
         12.4        Indemnity of Committee...............................  18
         12.5        Employer Information.................................  18

ARTICLE 13           Other Benefits and Agreements........................  18
         13.1        Coordination with Other Benefits.....................  18

ARTICLE 14           Claims Procedures....................................  19
         14.1        Presentation of Claim................................  19
         14.2        Notification of Decision.............................  19
         14.3        Review of a Denied Claim.............................  19
         14.4        Decision on Review...................................  20
         14.5        Legal Action.........................................  20

ARTICLE 15           Trust................................................  20
         15.1        Establishment of the Trust...........................  20
         15.2        Interrelationship of the Plan and the Trust..........  20
         15.3        Distributions From the Trust.........................  20

ARTICLE 16           Miscellaneous........................................  21
         16.1        Unsecured General Creditor...........................  21
         16.2        Employer's Liability.................................  21
         16.3        Nonassignability.....................................  21
         16.4        Not a Contract of Employment.........................  21
         16.5        Furnishing Information...............................  21
         16.6        Terms................................................  21
         16.7        Captions.............................................  22
         16.8        Governing Law........................................  22
         16.9        Notice...............................................  22
         16.10       Successors...........................................  22
         16.11       Spouse's Interest....................................  22
         16.12       Validity.............................................  22
         16.13       Incompetent..........................................  22
         16.14       Court Order..........................................  23
         16.15       Distribution in the Event of Taxation................  23
         16.16       Legal Fees To Enforce Rights After
                          Change in Control...............................  23



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                          SIERRA HEALTH SERVICES, INC.

                           DEFERRED COMPENSATION PLAN

                              Effective May 1, 1996


                                     Purpose

        The  purpose of this Plan is to provide  specified  benefits to a select
group of management or highly compensated Employees who contribute materially to
the continued  growth,  development  and future  business  success of the Sierra
Health Services,  Inc., a Nevada  corporation,  and its subsidiaries  (including
lower-tier  subsidiaries),  if any,  that sponsor this Plan.  This Plan shall be
unfunded for tax purposes and for purposes of Title I of ERISA.


                                    ARTICLE 1
                                   Definitions

        For purposes hereof, unless otherwise clearly apparent from the context,
the following phrases or terms shall have the following indicated meanings:

1.1            "Account Balance" shall mean, with respect to a Participant,  the
               sum of (i) the  Deferral  Account  plus (ii) the  Vested  Company
               Matching Account.  This account shall be a bookkeeping entry only
               and shall be utilized  solely as a device for the measurement and
               determination of the amounts to be paid to a Participant pursuant
               to this Plan.

1.2            "Annual  Bonus"  shall  mean  any  annual  cash  compensation  in
               addition to Base  Annual  Salary  relating to services  performed
               during any calendar  year,  whether or not paid in such  calendar
               year or  included  on the  Federal  Income  Tax Form W-2 for such
               calendar year,  payable to a Participant as an Employee under any
               Employer's  annual bonus and incentive plans,  including any such
               bonuses payable to physician employees.

1.3            "Annual Company Matching Amount" for any one Plan Year shall be
               the amount determined in accordance with Section 3.5.

1.4            "Annual   Deferral   Amount"   shall  mean  that   portion  of  a
               Participant's  Base  Annual  Salary  and/or  Annual  Bonus that a
               Participant  elects to have, and is deferred,  in accordance with
               Article 3, for any one Plan Year. In the event of a Participant's
               Retirement,  Disability  (if deferrals  cease in accordance  with
               Section 8.1),  death or a Termination of Employment  prior to the
               end of a Plan Year,  such year's Annual  Deferral Amount shall be
               the actual amount withheld prior to such event.

1.5            "Base  Annual  Salary"  shall mean the annual  cash  compensation
               relating to services  performed during any calendar year, whether
               or not paid in such  calendar  year or  included  on the  Federal
               Income Tax Form W-2 for such calendar year including


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               bonuses (other than the Annual Bonus), commissions, and overtime,
               but   excluding   relocation   expenses,    incentive   payments,
               non-monetary awards, fringe benefits,  retainers,  directors fees
               and other fees, severance  allowances,  pay in lieu of vacations,
               insurance  premiums paid by an Employer,  insurance benefits paid
               to  the   Participant  or  his  or  her   beneficiary,   Employer
               contributions  to qualified or nonqualified  plans and automobile
               and  other  allowances  paid  to  a  Participant  for  employment
               services rendered (whether or not such allowances are included in
               the  Employee's  gross  income).  Base  Annual  Salary  shall  be
               calculated before reduction for compensation voluntarily deferred
               or  contributed by the  Participant  pursuant to all qualified or
               non-qualified  plans and shall be calculated  to include  amounts
               not otherwise  included in the  Participant's  gross income under
               Code  Sections  125,  402(e)(3),  or  402(h)  pursuant  to  plans
               established  by any  Employer;  provided  however  that  all such
               amounts will be included in compensation only to the extent that,
               had there been no such plan,  the amount  would have been payable
               in cash to the Employee.

1.6            "Beneficiary"  shall mean one or more persons,  trusts,  estates
               or other  entities,  designated in accordance  with Article 9,
               that are entitled to receive benefits under this Plan upon the
               death of a Participant.

1.7            "Beneficiary  Designation Form" shall mean the form,  established
               from time to time by the Committee, that a Participant completes,
               signs and  returns  to the  Committee  to  designate  one or more
               Beneficiaries.

1.8            "Board" shall mean the board of directors of the Company.

1.9            "Change in  Control"  shall mean the first to occur of any of the
               following events:

               (a)  Any  "person"  (as  that  term  is used  in  Section  13 and
                    14(d)(2) of the Securities  Exchange Act of 1934  ("Exchange
                    Act")) becomes the beneficial owner (as that term is used in
                    Section 13(d) of the Exchange Act),  directly or indirectly,
                    of 50% or more of the Company's  capital  stock  entitled to
                    vote in the election of directors;

               (b)  During  any period of not more than two  consecutive  years,
                    not including any period prior to the adoption of this Plan,
                    individuals  who at the beginning of such period  constitute
                    the board of directors of the Company,  and any new director
                    (other  than a  director  designated  by a  person  who  has
                    entered  into an  agreement  with the  Company  to  effect a
                    transaction described in clause (a), (c), (d) or (e) of this
                    Section  1.10) whose  election by the board of  directors or
                    nomination  for election by the Company's  stockholders  was
                    approved by a vote of at least three-fourths (3/4ths) of the
                    directors  then still in office who either were directors at
                    the beginning of the period or whose  election or nomination
                    for  election  was  previously  so  approved,  cease for any
                    reason to constitute at least a majority thereof;



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                    (c)

The  shareholders  of the  Company  approve any  consolidation  or merger of the
Company,  other  than a  consolidation  or  merger of the  Company  in which the
holders  of  the  common  stock  of  the  Company   immediately   prior  to  the
consolidation  or merger hold more than 50% of the common stock of the surviving
corporation immediately after the consolidation or merger;

                    (d)

                    The shareholders of the Company approve any plan or proposal
                    for the liquidation or dissolution of the Company; or

                    (e)

                    The shareholders of the Company approve the sale or transfer
                    of substantially all of the assets of the Company to parties
                    that are not within a "controlled group of corporations" (as
                    defined  in Code  Section  1563) in which the  Company  is a
                    member.

1.10           "Claimant" shall have the meaning set forth in Section 14.1.

1.11           "Code" shall mean the Internal Revenue Code of 1986, as it may be
               amended from time to time.

1.12           "Committee" shall mean the committee described in Article 12.

1.13           "Company"  shall mean  Sierra  Health  Services,  Inc.,  a Nevada
               corporation.

1.14           "Company  Matching  Account"  shall  mean  the  sum  of  all of a
               Participant's   Annual  Company  Matching  Amounts  plus  amounts
               credited  in  accordance   with  all  the  applicable   crediting
               provisions  of this  Plan,  less  all  distributions  made to the
               Participant or his or her Beneficiary  pursuant to this Plan that
               relate to his or her Company Matching Account. This account shall
               be a  bookkeeping  entry only and shall be  utilized  solely as a
               device for the measurement and determination of the amounts to be
               paid to the Participant pursuant to this Plan.

1.15           "Deferral  Account" shall mean the sum of all of a  Participant's
               Annual Deferral Amounts, plus amounts credited in accordance with
               all the applicable  crediting  provisions of this Plan,  less all
               distributions  made to the  Participant or his or her Beneficiary
               pursuant to this Plan that relate to his or her Deferral Account.
               This  account  shall be a  bookkeeping  entry  only and  shall be
               utilized solely as a device for the measurement and determination
               of the  amounts to be paid to the  Participant  pursuant  to this
               Plan.

1.16           "Deduction   Limitation"  shall  mean  the  following   described
               limitation  on a  benefit  that may  otherwise  be  distributable
               pursuant  to the  provisions  of this Plan.  Except as  otherwise
               provided,  this limitation shall be applied to all  distributions
               that are "subject to the Deduction  Limitation"  under this Plan.
               If an  Employer  determines  in good  faith  prior to a Change in
               Control   that  there  is  a  reasonable   likelihood   that  any
               compensation  paid to a  Participant  for a  taxable  year of the
               Employer would not be deductible by the Employer solely by reason
               of the limitation  under Code Section 162(m),  then to the extent
               deemed necessary by the Employer to ensure


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               that the entire  amount of any  distribution  to the  Participant
               pursuant  to  this  Plan  prior  to  the  Change  in  Control  is
               deductible,  the  Employer  may  defer  all or any  portion  of a
               distribution  under this Plan. Any amounts  deferred  pursuant to
               this  limitation  shall be credited  with  additional  amounts in
               accordance  with Section 3.7 below,  even if such amount is being
               paid out in  installments.  The amounts so  deferred  and amounts
               credited  thereon shall be distributed to the  Participant or his
               or her Beneficiary (in the event of the  Participant's  death) at
               the earliest possible date, as determined by the Employer in good
               faith, on which the deductibility of compensation paid or payable
               to the  Participant  for the taxable year of the Employer  during
               which the  distribution  is made will not be  limited  by Section
               162(m), or if earlier, the effective date of a Change in Control.
               Notwithstanding  anything  to the  contrary  in  this  Plan,  the
               Deduction  Limitation shall not apply to any  distributions  made
               after a Change in Control.

1.17           "Disability"  shall mean a period of  disability  during  which a
               Participant   qualifies  for   disability   benefits   under  the
               Participant's  Employer's  long-term  disability  plan,  or, if a
               Participant  does not  participate  in such a plan,  a period  of
               disability  during which the Participant would have qualified for
               disability  benefits under such a plan had the Participant been a
               participant in such a plan, as determined in the sole  discretion
               of the Committee.  If the Participant's Employer does not sponsor
               such a plan, or discontinues  to sponsor such a plan,  Disability
               shall be determined by the Committee in its sole discretion.

1.18           "Disability  Benefit" shall mean the benefit set forth in Article
               8.

1.19           "Election Form" shall mean the form established from time to time
               by the Committee that a Participant completes,  signs and returns
               to the Committee to make an election under the Plan.

1.20           "Employee"  shall  mean  a  person  who  is an  employee  of  any
               Employer.

1.21           "Employer(s)"   shall  mean  the   Company   and/or  any  of  its
               subsidiaries  (now in existence or hereafter  formed or acquired)
               that have been selected by the Board to  participate  in the Plan
               and have adopted the Plan.

1.22           "ERISA" shall mean the Employee Retirement Income Security Act of
               1974, as amended from time to time.

1.23           "401(k) Plan" shall be that certain Sierra Health Services,  Inc.
               Profit  Sharing  /401(k) Plan & Trust,  dated January 1, 1989 and
               adopted by the Company.

1.24           "Monthly  Installment  Method"  shall be an  installment  payment
               method  over  the  duration   selected  by  the   Participant  in
               accordance   with  this  Plan,   calculated   as   follows:   The
               Participant's   Account   Balance,   as  of  the   date   of  the
               Participant's  Retirement,  death,  Disability or  Termination of
               Employment,  shall be multiplied by a fraction,  the numerator of
               which is 1 and the  denominator of which is the number of periods
               over which the installment  payments shall be paid. The result of
               this  multiplication  shall  be the  amount  of each  installment
               payment for the Plan


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               Year  in  which  the  Participant   Retired,   died,  suffered  a
               Disability or  experienced a Termination  of Employment  and this
               amount  shall be paid  starting  on the  first  day of the  month
               following  the  Participant's  Retirement,  death,  Disability or
               Termination  of Employment  and shall  continue to be paid on the
               first day of each month  thereafter  during  that Plan Year.  For
               each subsequent Plan Year during the installment  payment period,
               the  Participant's  Account  Balance  shall be  determined  as of
               January 1 of that Plan Year,  in  accordance  with  Section  3.7,
               after taking into account all previous installment payments,  and
               such balance shall be multiplied by the fraction described above,
               except  that the  denominator  shall be the  number of  remaining
               periods over which the  installment  payments are to be paid. The
               resulting amount shall be the amount of each installment  payment
               for the Plan Year, which amount shall be paid on the first day of
               each month during the Plan Year. If a Participant  has a positive
               Account Balance after the end of the elected  installment payment
               period, the remaining Account Balance shall be paid in a lump sum
               on the first day of the  month  following  the month in which the
               installment  period  ends.  If any  installment,  if paid,  would
               reduce the  Participant's  Account Balance to zero or below, that
               installment  payment  shall be reduced so that the  Participant's
               Account Balance does not go below zero and all future installment
               payments shall cease.

1.25           "Participant"  shall mean any  Employee  (i) who is  selected  to
               participate  in the Plan,  (ii) who elects to  participate in the
               Plan,  (iii) who signs a Plan  Agreement,  an Election Form and a
               Beneficiary  Designation  Form, (iv) whose signed Plan Agreement,
               Election Form and  Beneficiary  Designation  Form are accepted by
               the Committee,  (v) who commences  participation in the Plan, and
               (vi) whose Plan Agreement has not terminated.  A spouse or former
               spouse of a Participant  shall not be treated as a Participant in
               the Plan, even if he or she has an interest in the  Participant's
               benefits  under the Plan under  applicable  law or as a result of
               property settlements resulting from legal separation or divorce.

1.26           "Plan" shall mean the Company's Deferred Compensation Plan, which
               shall be evidenced by this instrument and by each Plan Agreement,
               as they may be amended from time to time.

1.27           "Plan  Agreement"  shall  mean  a  written  agreement,  as may be
               amended  from time to time,  which is entered into by and between
               an Employer and a  Participant.  The terms of any Plan  Agreement
               may vary any of the terms set forth in this Plan and such changes
               shall be binding on the Employer and the  Participant if the Plan
               Agreement  is  signed  by the  Participant  and  accepted  by the
               Employer.  The  Plan  Agreement  executed  by a  Participant  and
               accepted by the Employer  shall provide for the entire benefit to
               which such  Participant is entitled under the Plan;  should there
               be more than one Plan Agreement,  the Plan Agreement  bearing the
               latest date of  acceptance  by the Employer  shall  supersede all
               previous Plan  Agreements in their  entirety and shall govern the
               agreement between the parties.

1.28           "Plan Year" shall,  for the first Plan Year, begin on May 1, 1996
               and end on December 31, 1996. For each Plan Year thereafter,  the
               Plan Year  shall  begin on  January  1 of each year and  continue
               through December 31.


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1.29           "Pre-Retirement  Survivor  Benefit"  shall mean the  benefit  set
               forth in Article 6.

1.30           "Retirement",  "Retire(s)" or "Retired"  shall mean, with respect
               to an Employee,  severance from employment from all Employers for
               any reason other than a leave of absence,  death or Disability on
               or after age sixty-five  (65) or on or after age fifty-five  (55)
               with ten (10) Years of Service.

1.31           "Retirement  Benefit" shall mean the benefit set forth in Article
               5.

1.32           "Short-Term Payout" shall mean the payout set forth in Section
               4.1.

1.33           "Termination Benefit" shall mean the benefit set forth in Article
               7.

1.34           "Termination of Employment"  shall mean the ceasing of employment
               with all Employers,  voluntarily or involuntarily, for any reason
               other than Retirement,  Disability,  death or an authorized leave
               of absence.

1.35           "Trust" shall mean the trust established pursuant to that certain
               Master  Trust  Agreement,  dated as of May 1,  1996  between  the
               Company and the trustee  named  therein,  as amended from time to
               time.

1.36           "Unforeseeable  Financial  Emergency" shall mean an unanticipated
               emergency  that is caused by an event  beyond the  control of the
               Participant that would result in severe financial hardship to the
               Participant resulting from (i) a sudden and unexpected illness or
               accident of the  Participant  or a dependent of the  Participant,
               (ii) a loss of the  Participant's  property due to  casualty,  or
               (iii) such other  extraordinary and  unforeseeable  circumstances
               arising  as  a  result  of  events  beyond  the  control  of  the
               Participant,  all as  determined  in the sole  discretion  of the
               Committee.

1.37           "Vested  Company  Matching  Account"  shall have the  meaning set
               forth in Section 3.6.

1.38           "Years of Service"  shall mean the total  number of full years in
               which a Participant  has been employed by one or more  Employers.
               For purposes of this definition,  a year of employment shall be a
               365 day  period  (or 366 day  period in the case of a leap  year)
               that,  for  the  first  year  of  employment,  commences  on  the
               Employee's  date of hiring  and that,  for any  subsequent  year,
               commences on an anniversary of that hiring date. Any partial year
               of employment shall not be counted.


                                    ARTICLE 2
                       Selection, Enrollment, Eligibility

2.1            Selection  by  Committee.  Participation  in the  Plan  shall  be
               limited to a select  group of  management  or highly  compensated
               Employees of the Employers, as determined by the Committee in its
               sole discretion.  From that group, the Committee shall select, in
               its sole discretion, Employees to participate in the Plan.


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2.2            Enrollment  Requirements.  As a condition to participation,  each
               selected  Employee  shall  complete,  execute  and  return to the
               Committee,  within 30 days of  selection,  a Plan  Agreement,  an
               Election  Form and a Beneficiary  Designation  Form. In addition,
               the  Committee  shall  establish  from  time to time  such  other
               enrollment  requirements  as it determines in its sole discretion
               are necessary.

2.3            Eligibility;  Commencement of Participation. Provided an Employee
               selected  to  participate  in the  Plan  has met  all  enrollment
               requirements   set  forth  in  this  Plan  and  required  by  the
               Committee,  including  returning  all  required  documents to the
               Committee  within  30  days of  selection,  that  Employee  shall
               commence   participation   in  the   Plan  (i)  in  the  case  of
               Participants  meeting all enrollment  requirements by April 30 of
               the first  Plan Year,  as of May 1,  1996;  and (ii) in all other
               cases,  on the January 1 or July 1  following  the month in which
               the  Employee  completes  all  enrollment  requirements.   If  an
               Employee fails to meet all such requirements  within the required
               30 day period, that Employee shall not be eligible to participate
               in the Plan  until the first day of the Plan Year  following  the
               delivery  to and  acceptance  by the  Committee  of the  required
               documents.

2.4            Termination of Participation  and/or Deferrals.  If the Committee
               determines in good faith that a Participant  no longer  qualifies
               as a member of a select group of management or highly compensated
               employees,   as   membership  in  such  group  is  determined  in
               accordance  with  Sections  201(2),  301(a)(3)  and  401(a)(1) of
               ERISA,   the  Committee   shall  have  the  right,  in  its  sole
               discretion,   to  (i)   terminate   any  deferral   election  the
               Participant has made for the Plan Year in which the Participant's
               membership  status  changes,  (ii) prevent the  Participant  from
               making  future  deferral   elections  and/or  (iii)   immediately
               distribute the Participant's then Account Balance,  determined as
               if there has occurred a Termination  of Employment  and terminate
               the  Participant's  participation  in the Plan.  If the Committee
               chooses to terminate the Participant's participation in the Plan,
               the  Committee  may,  in  its  sole  discretion,   reinstate  the
               Participant to full Plan participation at such time in the future
               as the  Participant  again  becomes a member of the select  group
               described above.


                                    ARTICLE 3
               Deferral Commitments/Company Matching/Crediting/Taxes

3.1            Minimum Deferral.

               (a)  Minimum.  For each Plan  Year,  a  Participant  may elect to
                    defer,  as his or her Annual Deferral  Amount,  a minimum of
                    $2,000 from  either his or her Base Annual  Salary or Annual
                    Bonus.  If an  election  is made  for less  than the  stated
                    minimum  amount,  or if no  election  is  made,  the  amount
                    deferred shall be zero.

               (b)  Short  Plan  Year.   If  a   Participant   first  becomes  a
                    Participant  after the first day of a Plan  Year,  or in the
                    case of the first Plan Year of the Plan itself,  the minimum
                    deferral shall be an amount equal to the minimum set forth


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                    above,  multiplied by a fraction,  the numerator of which is
                    the number of complete months remaining in the Plan Year and
                    the denominator of which is 12.

3.2            Maximum Deferral.

               (a)  Maximum.  For each Plan  Year,  a  Participant  may elect to
                    defer,  as his or her Annual  Deferral  Amount,  Base Annual
                    Salary  and/or  Annual  Bonus  up to the  following  maximum
                    percentages for each deferral elected:

                                                                      Maximum
                          Deferral                                    Amount

                          Base Annual Salary                             90%
                          Annual Bonus                                   90%

               (b)  Short  Plan  Year.   If  a   Participant   first  becomes  a
                    Participant  after the first day of a Plan  Year,  or in the
                    case of the first Plan Year itself, for such Plan Year only,
                    a  Participant  may  elect to  defer,  as his or her  Annual
                    Deferral Amount, Base Annual Salary and/or Annual Bonus that
                    accrue  after  the date of entry  into  the  Plan,  a dollar
                    amount  up to an  amount  equal to the  limits  set forth in
                    Section 3.2(a) above multiplied by such Participant's  total
                    amount of Base Annual  Salary  and/or  Annual  Bonus for the
                    entire Plan Year.

3.3            Election to Defer; Effect of Election Form.

               (a)  First  Plan  Year.  In  connection   with  a   Participant's
                    commencement of  participation  in the Plan, the Participant
                    shall make an  irrevocable  deferral  election  for the Plan
                    Year in which the Participant commences participation in the
                    Plan, along with such other elections as the Committee deems
                    necessary or desirable  under the Plan. For these  elections
                    to be valid,  the Election Form must be completed and signed
                    by the  Participant,  timely  delivered to the Committee (in
                    accordance  with  Section  2.3 above),  and  accepted by the
                    Committee.

               (b)  Subsequent  Plan Years.  For each  succeeding  Plan Year, an
                    irrevocable  deferral  election for that Plan Year, and such
                    other   elections  as  the  Committee   deems  necessary  or
                    desirable under the Plan, shall be made by timely delivering
                    to  the  Committee,   in  accordance   with  its  rules  and
                    procedures,  before the end of the Plan Year  preceding  the
                    Plan Year for which the  election  is made,  a new  Election
                    Form.  If no Election  Form is timely  delivered  for a Plan
                    Year, no Annual  Deferral  Amount shall be withheld for that
                    Plan Year.

3.4            Withholding of Annual Deferral  Amounts.  For each Plan Year, the
               Base Annual Salary portion of the Annual Deferral Amount shall be
               withheld in equal  amounts  from each  regularly  scheduled  Base
               Annual Salary payroll. The Annual Bonus


                                        8

<PAGE>



               portion of the Annual  Deferral  Amount  shall be withheld at the
               time  the  Annual  Bonus  is or  otherwise  would  be paid to the
               Participant,  whether  or not this  occurs  during  the Plan Year
               itself.

3.5            Annual Company  Matching  Amount.  If, and only if, a Participant
               participates  in the 401(k) Plan to the maximum  extent  possible
               under the limits  applicable  to the Plan for the Plan Year,  the
               Participant's  Annual Company  Matching Amount for such Plan Year
               shall be equal to 50% of the Participant's Annual Deferral Amount
               for such Plan  Year,  up to an amount  that does not  exceed  the
               lesser of 5% of the  Participant's  Base Annual  Salary or 50% of
               the IRC 402(g)(i) limit in the effect for the Plan Year,  reduced
               by the amount of any Company matching  contributions  made to the
               401(k)  Plan on his or her behalf for the plan year of the 401(k)
               Plan  that  corresponds  to the Plan  Year.  The  Annual  Company
               Matching  Amount shall be credited to the  Participant's  Company
               Matching Account as of the first day of February of the Plan Year
               following the Plan Year to which it relates.
                Notwithstanding  the above,  if a Participant is not employed by
               an  Employer  as of the last  day of a Plan  Year  other  than by
               reason of his or her Retirement,  Disability or death, the Annual
               Company  Matching Amount for such Plan Year shall be zero. In the
               event of Retirement,  Disability or death, a Participant shall be
               credited  with the Annual  Company  Matching  Amount for the Plan
               Year in which he or she Retires, dies or becomes disabled.

3.6            Vested  Company  Matching  Account  and  Deferral  Account.  With
               respect  to  all   benefits   under  this  Plan  other  than  the
               Termination  Benefit,  a  Participant's  Vested Company  Matching
               Account shall equal 100% of such  Participant's  Company Matching
               Account. With respect to the Termination Benefit, a Participant's
               Company   Matching  Account  shall  vest  on  the  basis  of  the
               Participant's  Years  of  Service  at the  time  the  Participant
               experiences a Termination of Employment,  in accordance  with the
               following schedule:

                 Years of Service at Date of              Vested Percentage of
                  Termination of Employment            Company Matching Account

                       Less than 2 years                            0%
               2 years or more, but less than 3                    20%
               3 years or more, but less than 4                    40%
               4 years or more, but less than 5                    60%
               5 years or more, but less than 6                    80%
               6 years or more                                     100%

               Notwithstanding   the  above,   after  a  Change  in  Control,  a
               Participant's Vested Company Matching Account shall equal 100% of
               such  Participant's  Company  Matching  Account.  A Participant's
               Deferral Account shall always be 100% vested.

3.7            Crediting/Debiting  of Account Balances.  In accordance with, and
               subject to, the rules and procedures  that are  established  from
               time to time by the Committee,  in its sole  discretion,  amounts
               shall be credited or debited to a  Participant's  Account Balance
               in accordance with the following rules:


                                        9

<PAGE>



               (a)  Election of Measurement Funds. A Participant,  in connection
                    with his or her initial deferral election in accordance with
                    Section 3.3(a) above, shall elect, on the Election Form, one
                    or more Measurement  Fund(s) (as described in Section 3.7(c)
                    below) to be used to determine the additional  amounts to be
                    credited  to his or her  Account  Balance  from  the date on
                    which the Participant  commences  participation  in the Plan
                    and continuing thereafter, unless changed in accordance with
                    the next sentence.  Commencing  with the January 1 or July 1
                    ("Investment  Election Date") that follows the Participant's
                    commencement  of  participation  in the  Plan  and  on  each
                    subsequent   Investment   Election  Date  during  which  the
                    Participant  participates in the Plan, no later than the day
                    before an Investment Election Date, the Participant may (but
                    is not required to) elect, by submitting an Election Form to
                    the Committee that is accepted by the  Committee,  to add or
                    delete  one  or  more  Measurement  Fund(s)  to be  used  to
                    determine  the  additional  amounts to be credited to his or
                    her Account Balance,  or to change the portion of his or her
                    Account  Balance  allocated  to  each  previously  or  newly
                    elected   Measurement  Fund.  If  an  election  is  made  in
                    accordance with the previous sentence, it shall apply to the
                    next  Investment  Election  Date  and  continue  thereafter,
                    unless  changed in  accordance  with the previous  sentence.
                    Notwithstanding  the foregoing the maximum transfer that may
                    be made from the Declared Rate  Measurement  Fund to another
                    Measurement  Fund in any one Plan Year cannot  exceed 20% of
                    the  maximum  balance  in the  Participant's  account in the
                    Declared Rate  Measurement Fund in the current Plan Year and
                    the four prior Plan Years.

               (b)  Proportionate  Allocation.  In making any election described
                    in Section 3.6(a) above,  the  Participant  shall specify on
                    the Election  Form,  in whole  percentage  points (1%),  the
                    percentage of his or her Account  Balance to be allocated to
                    a  Measurement  Fund (as if the  Participant  was  making an
                    investment in that Measurement Fund with that portion of his
                    or her Account Balance).

               (c)  Measurement  Funds.  The  Participant  may elect one or more
                    measurement  funds,  based  on  certain  mutual  funds  (the
                    "Measurement   Funds"),   for  the   purpose  of   crediting
                    additional  amounts  to  his  or her  Account  Balance.  The
                    Committee  shall select the mutual funds that are to be used
                    as Measurement  Funds.  As necessary,  the Committee may, in
                    its  sole  discretion,  discontinue,  substitute  or  add  a
                    Measurement  Fund at any time.  Each such  action  will take
                    effect  as of the  first day of the  calendar  quarter  that
                    follows by thirty  (30) days the day on which the  Committee
                    gives Participants advance written notice of such change. In
                    addition,   a  Declared  Rate   Measurement  Fund  shall  be
                    maintained  under which interest shall be credited at a rate
                    as  specified  by the Company on the  November 1 of the year
                    prior to the Plan Year for which the amount of  interest  is
                    being  determined.  In the  first  Plan  Year,  the  rate of
                    interest  on the  Declared  Rate  Measurement  Fund shall be
                    equal to 8.75%.



                                       10

<PAGE>



               (d)  Crediting  or  Debiting  Method.  The  performance  of  each
                    selected Measurement Fund (either positive or negative) will
                    be determined by the Committee in its sole discretion  based
                    on the performance of the Measurement  Funds  themselves or,
                    in the case of the Declared Rate Measurement  Fund, based on
                    the  amount of  accrued  interest  credited  to the fund.  A
                    Participant's  Account  Balance shall be credited or debited
                    based  on  such  performance  of the  Measurement  Funds  as
                    determined  by the Committee in its sole  discretion.  As of
                    each   Investment   Election  Date,   the  Committee   shall
                    distribute  to  the   Participants   a  statement  of  their
                    respective Account Balances.  Furthermore, in the event of a
                    Participant's  termination  of employment or any other event
                    requiring a determination  of the  Participant's  Benefit or
                    the value of a Participant's  Account  Balance,  the Account
                    Balance shall be determined  based on the performance of the
                    relevant  Measurement  Fund(s)  through the last date of the
                    pay period  during  which the event  occurs and shall not be
                    further adjusted thereafter.

               (e)  No Actual Investment. Notwithstanding any other provision of
                    this  Plan  that may be  interpreted  to the  contrary,  the
                    Measurement  Funds are to be used for  measurement  purposes
                    only, and a Participant's  election of any such  Measurement
                    Fund, the allocation to his or her Account Balance  thereto,
                    the  calculation of additional  amounts and the crediting or
                    debiting of such amounts to a Participant's  Account Balance
                    shall not be  considered  or  construed  in any manner as an
                    actual  investment of his or her Account Balance in any such
                    Measurement  Fund.  In the  event  that the  Company  or the
                    Trustee (as that term is defined in the  Trust),  in its own
                    discretion,  decides  to  invest  funds in any or all of the
                    Measurement  Funds, no Participant  shall have any rights in
                    or to such  investments  themselves.  Without  limiting  the
                    foregoing,  a  Participant's  Account  Balance  shall at all
                    times be a  bookkeeping  entry only and shall not  represent
                    any  investment  made on his or her behalf by the Company or
                    the  Trust;  the  Participant  shall at all times  remain an
                    unsecured creditor of the Company.

3.8            FICA, Withholding and Other Taxes. For each Plan Year in which an
               Annual  Deferral  Amount is being  withheld or an Annual  Company
               Matching Amount is credited to a Participant,  the  Participant's
               Employer(s) shall withhold from that portion of the Participant's
               Base  Annual  Salary  and/or  Annual  Bonus  that  is  not  being
               deferred,  in  a  manner  determined  by  the  Employer(s),   the
               Participant's  share  of FICA  and  other  employment  taxes.  If
               necessary,  the Committee shall reduce the Annual Deferral Amount
               in order to comply  with  this  Section  3.8.  In  addition,  the
               Participant's  Employer(s) or the Trust,  shall withhold from any
               payments made to a Participant under this Plan all federal, state
               and local  income,  employment  and other  taxes  required  to be
               withheld in connection  with such  payments,  in amounts and in a
               manner to be determined in the sole discretion of the Employer(s)
               or the Trust.

3.9            Rollovers  From Prior Deferred  Compensation  Plan. A Participant
               who  participated  in the Company's prior  nonqualified  deferred
               compensation  plan shall have the right,  under such rules and at
               such times as are prescribed by the


                                       11

<PAGE>



               Committee,  to roll  over the  benefit  that the  Participant  is
               entitled to receive pursuant to such prior nonqualified  deferred
               compensation   plan  so  that  such  amount  shall  be  held  and
               administered  pursuant  to the  terms of this  Plan and  shall be
               received at the same time that benefits are received  pursuant to
               this Plan.

                                    ARTICLE 4
   Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election

4.1            Short-Term  Payout.  In connection with each election to defer an
               Annual  Deferral  Amount,  a  Participant  may elect to receive a
               future  "Short-Term  Payout"  from the Plan with  respect to that
               Annual Deferral Amount. Subject to the Deduction Limitation,  the
               Short-Term  Payout  shall be a lump sum payment in an amount that
               is equal to the Annual Deferral  Amount plus amounts  credited or
               debited  in the  manner  provided  in  Section  3.7 above on that
               amount,  determined at the time of the Short-Term  Payout becomes
               payable.  Subject to the other terms and conditions of this Plan,
               each  Short-Term  Payout  elected  shall be paid,  subject to the
               Deduction Limitation, within 60 days of the first day of the Plan
               Year that is at least four  years  after the last day of the Plan
               Year in which the Annual Deferral Amount is actually deferred. By
               way of  example,  if a  Short-Term  Payout is elected for amounts
               that are  deferred in the Plan Year  commencing  January 1, 1997,
               the Short-Term  Payout becomes  payable within 60 days of January
               1, 2002.

4.2            Other Benefits Take Precedence Over Short-Term Payout.  Should an
               event occur that triggers a benefit under  Articles 5, 6, 7 or 8,
               any Annual  Deferral  Amount,  plus  amounts  credited or debited
               thereon,  that is subject to a Short-Term  Payout  election under
               Section 4.1 shall not be paid in accordance  with Section 4.1 but
               shall be paid in accordance with the other applicable Article.

4.3            Withdrawal   Payout/Suspensions   for   Unforeseeable   Financial
               Emergencies.  If the  Participant  experiences  an  Unforeseeable
               Financial  Emergency,  the Participant may petition the Committee
               to (i) suspend any deferrals required to be made by a Participant
               and/or (ii)  receive a partial or full payout from the Plan.  The
               payout shall not exceed the lesser of the  Participant's  Account
               Balance,  calculated  as if such  Participant  were  receiving  a
               Termination  Benefit,  or the amount reasonably needed to satisfy
               the Unforeseeable  Financial  Emergency.  If, subject to the sole
               discretion of the Committee, the petition for a suspension and/or
               payout is approved, suspension shall take effect upon the date of
               approval  and any payout shall be made within 60 days of the date
               of  approval.  The payment of any amount  under this  Section 4.3
               shall not be subject to the Deduction Limitation.

4.4            Withdrawal  Election.  A Participant  may elect,  at any time, to
               withdraw  all of his or her Account  Balance,  less a  withdrawal
               penalty  equal to 10% of such  amount  (the net  amount  shall be
               referred to as the  "Withdrawal  Amount").  This  election can be
               made at any time, before or after Retirement,  Disability,  death
               or Termination of Employment,  and whether or not the Participant
               (or  Beneficiary)  is in the process of being paid pursuant to an
               installment   payment  schedule.   If  made  before   Retirement,
               Disability or death, a Participant's  Withdrawal  Amount shall be
               his or her Account Balance  calculated as if there had occurred a
               Termination  of  Employment  as of the  day of the  election.  No
               partial  withdrawals of the  Withdrawal  Amount shall be allowed.
               The Participant  shall make this election by giving the Committee
               advance  written notice of the election in a form determined from
               time to time by the Committee.  The Participant shall be paid the
               Withdrawal Amount within 60 days of his or her election. Once the
               Withdrawal


                                       12

<PAGE>



               Amount is paid, the Participant's participation in the Plan shall
               terminate   and  the   Participant   shall  not  be  eligible  to
               participate  in the  Plan  in the  future.  The  payment  of this
               Withdrawal   Amount  shall  not  be  subject  to  the   Deduction
               Limitation.


                                    ARTICLE 5
                               Retirement Benefit

5.1            Retirement  Benefit.  Subject  to  the  Deduction  Limitation,  a
               Participant who Retires shall receive,  as a Retirement  Benefit,
               his or her Account Balance.

5.2            Payment of Retirement Benefit. A Participant,  in connection with
               his or her commencement of participation in the Plan, shall elect
               on an Election Form to receive the  Retirement  Benefit in a lump
               sum or pursuant to a Monthly Installment Method of 60, 120 or 180
               months.  The  Participant may annually change his or her election
               to an allowable  alternative  payout  period by  submitting a new
               Election Form to the  Committee,  provided that any such Election
               Form is  submitted  at least 2 years  prior to the  Participant's
               Retirement   and  is  accepted  by  the  Committee  in  its  sole
               discretion.  The  Election  Form most  recently  accepted  by the
               Committee shall govern the payout of the Retirement Benefit. If a
               Participant  does not  make  any  election  with  respect  to the
               payment of the Retirement Benefit,  such benefit shall be payable
               in a lump sum. The lump sum payment shall be made, or installment
               payments shall commence, no later than 60 days after the date the
               Participant  Retires.   Notwithstanding  the  foregoing,  if  the
               Company enters into a consulting  arrangement  with a Participant
               following  the  Participant's  Retirement,  the  payment  of  the
               Retirement  Benefit shall be delayed and shall  commence no later
               than  60  days   after  the  date  the   consulting   arrangement
               terminates.  Any payment  made shall be subject to the  Deduction
               Limitation.

5.3            Death Prior to Completion of Retirement Benefit. If a Participant
               dies after  Retirement but before the Retirement  Benefit is paid
               in full, the  Participant's  unpaid  Retirement  Benefit payments
               shall continue and shall be paid to the Participant's Beneficiary
               (a) over the  remaining  number of months and in the same amounts
               as that benefit would have been paid to the  Participant  had the
               Participant  survived,  or (b) in a lump sum, if requested by the
               Beneficiary  and allowed in the sole discretion of the Committee,
               that is  equal  to the  Participant's  unpaid  remaining  Account
               Balance.


                                    ARTICLE 6
                         Pre-Retirement Survivor Benefit

6.1            Pre-Retirement   Survivor  Benefit.   Subject  to  the  Deduction
               Limitation,   the  Participant's   Beneficiary  shall  receive  a
               Pre-Retirement   Survivor  Benefit  equal  to  the  Participant's
               Account Balance if the Participant dies before he or she Retires,
               experiences a Termination of Employment or suffers a Disability.



                                       13

<PAGE>



6.2            Payment of Pre-Retirement  Survivor Benefit.  The  Pre-Retirement
               Survivor Benefit shall be paid in the same manner and at the same
               time  as  specified  in the  election  made  by  the  Participant
               pursuant to Section 5.2.


                                    ARTICLE 7
                               Termination Benefit

7.1            Termination  Benefit.  Subject to the Deduction  Limitation,  the
               Participant shall receive a Termination  Benefit,  which shall be
               equal  to  the   Participant's   vested  Account  Balances  if  a
               Participant  experiences a Termination of Employment prior to his
               or her Retirement, death or Disability.

7.2            Payment of Termination  Benefit. The Termination Benefit shall be
               paid  in a  lump  sum  within  60  days  of  the  Termination  of
               Employment.  Notwithstanding  the  foregoing,  a Participant  may
               elect either (i) upon his election to  participate in the Plan or
               (ii) at any time at least  two  years  prior  to  Termination  of
               Employment  to receive the  Termination  Benefit in three  annual
               installments.  Any payment made shall be subject to the Deduction
               Limitation.


                                    ARTICLE 8
                          Disability Waiver and Benefit

8.1            Disability Waiver.

               (a)  Waiver of Deferral.  A Participant  who is determined by the
                    Committee to be suffering from a Disability shall be excused
                    from  fulfilling  that portion of the Annual Deferral Amount
                    commitment  that would  otherwise  have been withheld from a
                    Participant's Base Annual Salary and/or Annual Bonus for the
                    Plan Year  during  which  the  Participant  first  suffers a
                    Disability. During the period of Disability, the Participant
                    shall  not  be  allowed  to  make  any  additional  deferral
                    elections,  but will continue to be considered a Participant
                    for all other  purposes  of this Plan.  Notwithstanding  the
                    foregoing,  if the Disability is determined by the Committee
                    to be  expected to be of a short term  duration,  the Annual
                    Deferral  Amount  shall  continue  to  be  withheld  from  a
                    Participant's Base Annual Salary and/or Annual Bonus.

               (b)  Return to Work. If a Participant  returns to employment with
                    an Employer,  after a Disability ceases, the Participant may
                    elect to defer an Annual  Deferral  Amount for the Plan Year
                    following his or her return to employment or service and for
                    every Plan Year thereafter  while a Participant in the Plan;
                    provided such deferral  elections are otherwise  allowed and
                    an  Election  Form  is  delivered  to  and  accepted  by the
                    Committee for each such election in accordance  with Section
                    3.3 above.



                                       14

<PAGE>



8.2            Continued   Eligibility;   Disability   Benefit.   A  Participant
               suffering a Disability  shall,  for benefit  purposes  under this
               Plan,  continue to be  considered  to be  employed,  and shall be
               eligible for the  benefits  provided for in Articles 4, 5, 6 or 7
               in   accordance   with  the   provisions   of   those   Articles.
               Notwithstanding the above, the Committee shall have the right to,
               in its sole and absolute discretion and for purposes of this Plan
               only,  and must in the  case of a  Participant  who is  otherwise
               eligible to Retire,  deem the  Participant to have  experienced a
               Termination of Employment, or in the case of a Participant who is
               eligible to Retire, to have Retired,  at any time (or in the case
               of  a  Participant  who  is  eligible  to  Retire,   as  soon  as
               practicable)   after  such   Participant   is  determined  to  be
               permanently   disabled  (i)  under  the  Participant   Employer's
               long-term  disability  plan (or would have been  determined to be
               permanently disabled had he or she participated in that plan), or
               (ii) if such a plan does not exist,  by the Committee in its sole
               discretion,  in  which  case  the  Participant  shall  receive  a
               Disability  Benefit  equal to his or her  Account  Balance at the
               time the Committee's determination.  The Disability Benefit shall
               be paid in the same manner and at the same time as  specified  in
               the  election  made by the  Participant  pursuant to Section 5.2,
               unless the Committee in its sole discretion elects at any time to
               pay such amount or any  remaining  amount in a lump sum  payment.
               Any payment made shall be subject to the Deduction Limitation.


                                    ARTICLE 9
                             Beneficiary Designation

9.1            Beneficiary.  Each Participant shall have the right, at any time,
               to designate his or her Beneficiary(ies) (both primary as well as
               contingent)  to receive any benefits  payable under the Plan to a
               beneficiary  upon the  death of a  Participant.  The  Beneficiary
               designated  under this Plan may be the same as or different  from
               the Beneficiary  designation  under any other plan of an Employer
               in which the Participant participates.

9.2            Beneficiary  Designation;  Change; Spousal Consent. A Participant
               shall  designate his or her Beneficiary by completing and signing
               the  Beneficiary  Designation  Form,  and  returning  it  to  the
               Committee or its designated  agent. A Participant  shall have the
               right  to  change  a  Beneficiary  by  completing,   signing  and
               otherwise complying with the terms of the Beneficiary Designation
               Form and the Committee's rules and procedures,  as in effect from
               time to time. If the Participant  names someone other than his or
               her   spouse  as  a   Beneficiary   for  more  than  50%  of  the
               Participant's benefits, a spousal consent, in the form designated
               by the Committee, must be signed by that Participant's spouse and
               returned to the  Committee.  Upon the acceptance by the Committee
               of  a  new   Beneficiary   Designation   Form,  all   Beneficiary
               designations  previously filed shall be cancelled.  The Committee
               shall be  entitled  to rely on the last  Beneficiary  Designation
               Form filed by the Participant and accepted by the Committee prior
               to his or her death.



                                       15

<PAGE>



9.3            Acknowledgment.  No  designation  or change in  designation  of a
               Beneficiary  shall be  effective  until  received,  accepted  and
               acknowledged in writing by the Committee or its designated agent.

9.4            No Beneficiary Designation. If a Participant fails to designate a
               Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if
               all designated  Beneficiaries  predecease the  Participant or die
               prior to complete  distribution  of the  Participant's  benefits,
               then the Participant's  designated Beneficiary shall be deemed to
               be  his or  her  surviving  spouse.  If  the  Participant  has no
               surviving  spouse,  the benefits  remaining  under the Plan to be
               paid  to a  Beneficiary  shall  be  payable  to the  executor  or
               personal representative of the Participant's estate.

9.5            Doubt as to Beneficiary. If the Committee has any doubt as to the
               proper Beneficiary to receive payments pursuant to this Plan, the
               Committee shall have the right, exercisable in its discretion, to
               cause the Participant's  Employer to withhold such payments until
               this matter is resolved to the Committee's satisfaction.

9.6            Discharge of Obligations.  The payment of benefits under the Plan
               to  a  Beneficiary  shall  fully  and  completely  discharge  the
               Company,  all  Employers  and  the  Committee  from  all  further
               obligations under this Plan with respect to the Participant,  and
               that  Participant's Plan Agreement shall terminate upon such full
               payment of benefits.


                                   ARTICLE 10
                                Leave of Absence

10.1           Paid Leave of Absence.  If a  Participant  is  authorized  by the
               Participant's  Employer  for any  reason to take a paid  leave of
               absence from the  employment  of the  Employer,  the  Participant
               shall continue to be considered  employed by the Employer and the
               Annual  Deferral Amount shall continue to be withheld during such
               paid leave of absence in accordance with Section 3.3.

10.2           Unpaid Leave of Absence.  If a  Participant  is authorized by the
               Participant's  Employer for any reason to take an unpaid leave of
               absence from the  employment  of the  Employer,  the  Participant
               shall continue to be considered  employed by the Employer and the
               Participant  shall be excused  from  making  deferrals  until the
               earlier  of  the  date  the  leave  of  absence  expires  or  the
               Participant  returns  to a  paid  employment  status.  Upon  such
               expiration  or return,  deferrals  shall resume for the remaining
               portion  of the  Plan  Year in which  the  expiration  or  return
               occurs,  based on the deferral  election,  if any,  made for that
               Plan  Year.  If no  election  was  made for that  Plan  Year,  no
               deferral shall be withheld.




                                       16

<PAGE>



                                   ARTICLE 11
                     Termination, Amendment or Modification

11.1           Termination.  Each  Employer  reserves the right to terminate the
               Plan at any time with respect to any or all of its  participating
               Employees  by the  actions  of its board of  directors.  Upon the
               termination  of the Plan with respect to any  Employer,  the Plan
               Agreements of the affected  Participants who are employed by that
               Employer shall terminate and their Account  Balances,  determined
               as if they had  experienced  a  Termination  of Employment on the
               date of Plan termination or, if Plan termination occurs after the
               date upon which a Participant  was eligible to Retire,  then with
               respect to that  Participant  as if he or she had  Retired on the
               date of Plan  termination,  shall be paid to the  Participants as
               follows:  Prior to a Change in Control, if the Plan is terminated
               with respect to all of its  Participants,  an Employer shall have
               the  right,  in its  sole  discretion,  and  notwithstanding  any
               elections made by the Participant, to pay such benefits in a lump
               sum or  pursuant  to a  Monthly  Installment  Method  of up to 15
               years,  with amounts  credited and debited during the installment
               period as provided herein. If the Plan is terminated with respect
               to less  than  all of its  Participants,  an  Employer  shall  be
               required to pay such  benefits  in a lump sum.  After a Change in
               Control, the Employer shall be required to pay such benefits in a
               lump sum. The termination of the Plan shall not adversely  affect
               any  Participant  or Beneficiary  who has become  entitled to the
               payment  of  any  benefits  under  the  Plan  as of the  date  of
               termination;  provided however,  that the Employer shall have the
               right to  accelerate  installment  payments by paying the Account
               Balance in a lump sum or pursuant to a Monthly Installment Method
               using fewer months.

11.2           Amendment.  Any  Employer  may, at any time,  amend or modify the
               Plan in whole or in part with  respect  to that  Employer  by the
               actions of its board of  directors;  provided,  however,  that no
               amendment  or  modification  shall be  effective  to  decrease or
               restrict  the  value  of  a  Participant's   Account  Balance  in
               existence  at the time the  amendment  or  modification  is made,
               calculated as if the Participant had experienced a Termination of
               Employment  as  of  the  effective   date  of  the  amendment  or
               modification,  or, if the amendment or modification  occurs after
               the date upon which the Participant  was eligible to Retire,  the
               Participant had Retired as of the effective date of the amendment
               or modification.  The amendment or modification of the Plan shall
               not affect any Participant or Beneficiary who has become entitled
               to the payment of  benefits  under the Plan as of the date of the
               amendment or modification;  provided,  however, that the Employer
               shall have the right to accelerate installment payments by paying
               the  Account  Balance  in a lump  sum or  pursuant  to a  Monthly
               Installment Method using fewer months.

11.3           Plan Agreement.  Despite the provisions of Sections 11.1 and 11.2
               above, if a  Participant's  Plan Agreement  contains  benefits or
               limitations that are not in this Plan document,  the Employer may
               only amend or terminate such  provisions  with the consent of the
               Participant.

11.4           Effect of Payment.  The full  payment of the  applicable  benefit
               under  Section  4.4 or  Articles  5, 6, 7 or 8 of the Plan  shall
               completely discharge all obligations to a


                                       17

<PAGE>



               Participant  and his or her designated  Beneficiaries  under this
               Plan and the Participant's Plan Agreement shall terminate.


                                   ARTICLE 12
                                 Administration

12.1           Committee Duties.  This Plan shall be administered by a Committee
               which shall consist of the Board,  or such committee as the Board
               shall appoint. Members of the Committee may be Participants under
               this  Plan.  The  Committee  shall also have the  discretion  and
               authority  to  (i)  make,  amend,  interpret,   and  enforce  all
               appropriate rules and regulations for the  administration of this
               Plan and (ii) decide or resolve any and all  questions  including
               interpretations of this Plan, as may arise in connection with the
               Plan.

12.2           Agents.  In the  administration  of this Plan, the Committee may,
               from  time to time,  employ  agents  and  delegate  to them  such
               administrative  duties as it sees fit (including acting through a
               duly appointed  representative) and may from time to time consult
               with counsel who may be counsel to any Employer.

12.3           Binding  Effect  of  Decisions.  The  decision  or  action of the
               Committee  with  respect  to any  question  arising  out of or in
               connection   with   the   administration,    interpretation   and
               application of the Plan and the rules and regulations promulgated
               hereunder  shall be final and  conclusive  and  binding  upon all
               persons having any interest in the Plan.

12.4           Indemnity of Committee.  All Employers  shall  indemnify and hold
               harmless the members of the Committee against any and all claims,
               losses, damages,  expenses or liabilities arising from any action
               or failure to act with  respect to this Plan,  except in the case
               of willful misconduct by the Committee or any of its members.

12.5           Employer  Information.  To enable the  Committee  to perform  its
               functions, each Employer shall supply full and timely information
               to the Committee on all matters  relating to the  compensation of
               its  Participants,  the date and circumstances of the Retirement,
               Disability,   death  or   Termination   of   Employment   of  its
               Participants,   and  such  other  pertinent  information  as  the
               Committee may reasonably require.


                                   ARTICLE 13
                          Other Benefits and Agreements

13.1           Coordination  with Other  Benefits.  The benefits  provided for a
               Participant and  Participant's  Beneficiary under the Plan are in
               addition  to any other  benefits  available  to such  Participant
               under  any  other  plan  or   program   for   employees   of  the
               Participant's  Employer.  The Plan shall supplement and shall not
               supersede,  modify or amend any other such plan or program except
               as may otherwise be expressly provided.



                                       18

<PAGE>



                                   ARTICLE 14
                                Claims Procedures

14.1           Presentation  of  Claim.  Any  Participant  or  Beneficiary  of a
               deceased  Participant  (such  Participant  or  Beneficiary  being
               referred to below as a "Claimant") may deliver to the Committee a
               written  claim for a  determination  with  respect to the amounts
               distributable  to such  Claimant  from the Plan.  If such a claim
               relates to the contents of a notice received by the Claimant, the
               claim must be made within 60 days after such notice was  received
               by the Claimant. All other claims must be made within 180 days of
               the  date on which  the  event  that  caused  the  claim to arise
               occurred.   The  claim   must  state   with   particularity   the
               determination desired by the Claimant.

14.2           Notification   of  Decision.   The  Committee  shall  consider  a
               Claimant's  claim within a reasonable  time, and shall notify the
               Claimant in writing:

               (a)  that the Claimant's  requested  determination has been made,
                    and that the claim has been allowed in full; or

               (b)  that the  Committee  has reached a conclusion  contrary,  in
                    whole or in part, to the Claimant's requested determination,
                    and such notice must set forth in a manner  calculated to be
                    understood by the Claimant:

                    (i)   the specific reason(s) for the denial of the claim,
                          or any part of it;

                    (ii)  specific reference(s) to pertinent provisions of the
                          Plan upon which such denial was based;

                    (iii) a description of any additional material or
                          information necessary for the Claimant to perfect the
                          claim, and an explanation of why such material or
                          information is necessary; and
                    (iv)  an explanation of the claim review procedure set forth
                          in Section 14.3 below.

14.3           Review of a Denied Claim. Within 60 days after receiving a notice
               from the Committee  that a claim has been denied,  in whole or in
               part,   a   Claimant   (or   the   Claimant's   duly   authorized
               representative) may file with the Committee a written request for
               a review of the  denial of the claim.  Thereafter,  but not later
               than 30 days after the review  procedure  began, the Claimant (or
               the Claimant's duly authorized representative):

               (a)     may review pertinent documents;

               (b)     may submit written comments or other documents; and/or



                                       19

<PAGE>



               (c)  may  request a  hearing,  which the  Committee,  in its sole
                    discretion, may grant.

14.4           Decision on Review.  The  Committee  shall render its decision on
               review promptly, and not later than 60 days after the filing of a
               written  request  for review of the  denial,  unless a hearing is
               held or other special  circumstances  require additional time, in
               which case the  Committee's  decision must be rendered within 120
               days after such date.  Such  decision must be written in a manner
               calculated to be understood by the Claimant, and it must contain:

               (a)  specific reasons for the decision;

               (b)  specific  reference(s) to the pertinent Plan provisions upon
                    which the decision was based; and

               (c)  such other matters as the Committee deems relevant.

14.5           Legal  Action.   A  Claimant's   compliance  with  the  foregoing
               provisions  of this Article 14 is a mandatory  prerequisite  to a
               Claimant's right to commence any legal action with respect to any
               claim for benefits under this Plan.


                                   ARTICLE 15
                                      Trust

15.1           Establishment  of the Trust.  The  Company  shall  establish  the
               Trust,  and the each Employer  shall at least  annually  transfer
               over to the Trust  such  assets as the  Employer  determines  are
               necessary to provide,  on a present  value basis,  for its future
               liabilities  created with respect to all Annual Deferral  Amounts
               and Company Matching Amounts for such Employer's Participants for
               all  periods  prior to the  transfer,  as well as the  debits and
               credits to the  Participants'  Account  Balances  for all periods
               prior to the transfer, taking into consideration the value of the
               assets in the trust at the time of the transfer.

15.2           Interrelationship  of the Plan and the Trust.  The  provisions of
               the Plan and the Plan  Agreement  shall  govern  the  rights of a
               Participant  to receive  distributions  pursuant to the Plan. The
               provisions of the Trust shall govern the rights of the Employers,
               Participants  and the  creditors  of the  Employers to the assets
               transferred to the Trust. Each Employer shall at all times remain
               liable to carry out its obligations under the Plan.

15.3           Distributions  From the Trust. Each Employer's  obligations under
               the Plan may be satisfied with Trust assets distributed  pursuant
               to the terms of the Trust, and any such distribution shall reduce
               the Employer's obligations under this Plan.




                                       20

<PAGE>



                                   ARTICLE 16
                                  Miscellaneous

16.1           Unsecured General Creditor. Participants and their Beneficiaries,
               heirs,  successors  and assigns  shall have no legal or equitable
               rights,  interests  or  claims  in any  property  or assets of an
               Employer.  For  purposes of the  payment of  benefits  under this
               Plan,  any and all of an Employer's  assets shall be, and remain,
               the general,  unpledged  unrestricted assets of the Employer.  An
               Employer's  obligation  under the Plan shall be merely that of an
               unfunded and unsecured promise to pay money in the future.

16.2           Employer's Liability.  An Employer's liability for the payment of
               benefits  shall  be  defined  only  by  the  Plan  and  the  Plan
               Agreement,   as  entered   into   between  the   Employer  and  a
               Participant.   An  Employer   shall  have  no   obligation  to  a
               Participant  under the Plan except as  expressly  provided in the
               Plan and his or her Plan Agreement.

16.3           Nonassignability.  Neither a  Participant  nor any  other  person
               shall have any right to commute, sell, assign, transfer,  pledge,
               anticipate,    mortgage   or   otherwise   encumber,    transfer,
               hypothecate, alienate or convey in advance of actual receipt, the
               amounts,  if any, payable hereunder,  or any part thereof,  which
               are,  and all  rights  to which  are  expressly  declared  to be,
               unassignable  and  non-transferable,  except  that the  foregoing
               shall not apply to any family support  obligations set forth in a
               court  order.  No part of the  amounts  payable  shall,  prior to
               actual payment, be subject to seizure, attachment, garnishment or
               sequestration for the payment of any debts, judgments, alimony or
               separate  maintenance  owed by a Participant or any other person,
               nor be  transferable  by  operation  of law  in  the  event  of a
               Participant's or any other person's bankruptcy or insolvency.

16.4           Not a Contract of  Employment.  The terms and  conditions of this
               Plan shall not be deemed to  constitute a contract of  employment
               between the Company or any  Employer  and the  Participant.  Such
               employment is hereby  acknowledged to be an "at will"  employment
               relationship  that can be  terminated at any time for any reason,
               or no reason,  with or without cause, and with or without notice,
               unless  expressly  provided  in a written  employment  agreement.
               Nothing  in this Plan shall be deemed to give a  Participant  the
               right  to be  retained  in  the  service  of the  Company  or any
               Employer  or to  interfere  with the right of the  Company or any
               Employer to discipline or discharge the Participant at any time.

16.5           Furnishing  Information.  A Participant or his or her Beneficiary
               will  cooperate  with the  Committee  by  furnishing  any and all
               information  requested  by the  Committee  and  take  such  other
               actions  as  may  be  requested  in  order  to   facilitate   the
               administration   of  the  Plan  and  the   payments  of  benefits
               hereunder,  including  but not  limited to taking  such  physical
               examinations as the Committee may deem necessary.

16.6           Terms. Whenever any words are used herein in the masculine,  they
               shall be  construed  as though  they were in the  feminine in all
               cases where they would so


                                       21

<PAGE>



               apply;  and whenever any words are used herein in the singular or
               in the plural,  they shall be  construed as though they were used
               in the plural or the  singular,  as the case may be, in all cases
               where they would so apply.

16.7           Captions.  The captions of the articles,  sections and paragraphs
               of this Plan are for  convenience  only and shall not  control or
               affect the meaning or construction of any of its provisions.

16.8           Governing  Law.  Subject to ERISA,  the  provisions  of this Plan
               shall be construed and interpreted according to the internal laws
               of the State of Nevada  without  regard to its  conflicts of laws
               principles.

16.9           Notice. Any notice or filing required or permitted to be given to
               the  Committee  under this Plan shall be sufficient if in writing
               and  hand-delivered,  or sent by registered or certified mail, to
               the address below:

                                Sierra Health Services
                      Deferred Compensation Plan Committee
                                 P.O. Box 15645
                          Las Vegas, Nevada 89114-5645

               Such notice  shall be deemed given as of the date of delivery or,
               if delivery is made by mail, as of the date shown on the postmark
               on the receipt for registration or certification.

               Any  notice  or filing  required  or  permitted  to be given to a
               Participant under this Plan shall be sufficient if in writing and
               hand-delivered, or sent by mail, to the last known address of the
               Participant.

16.10          Successors.  The  provisions of this Plan shall bind and inure to
               the benefit of the Participant's  Employer and its successors and
               assigns  and the  Participant  and the  Participant's  designated
               Beneficiaries.

16.11          Spouse's  Interest.  The interest in the benefits  hereunder of a
               spouse of a Participant who has predeceased the Participant shall
               automatically   pass  to  the   Participant   and  shall  not  be
               transferable  by such  spouse in any  manner,  including  but not
               limited to such spouse's will, nor shall such interest pass under
               the laws of intestate succession.

16.12          Validity.  In case any provision of this Plan shall be illegal or
               invalid for any reason,  said  illegality or invalidly  shall not
               affect  the  remaining  parts  hereof,  but  this  Plan  shall be
               construed  and enforced as if such  illegal or invalid  provision
               had never been inserted herein.

16.13          Incompetent. If the Committee determines in its discretion that a
               benefit  under  this  Plan  is to be paid to a  minor,  a  person
               declared  incompetent  or to a person  incapable  of handling the
               disposition of that person's  property,  the Committee may direct
               payment of such benefit to the guardian,  legal representative or
               person


                                       22

<PAGE>



               having  the  care  and  custody  of such  minor,  incompetent  or
               incapable  person.  The  Committee may require proof of minority,
               incompetency,   incapacity  or  guardianship,   as  it  may  deem
               appropriate prior to distribution of the benefit.  Any payment of
               a benefit  shall be a payment for the account of the  Participant
               and the Participant's Beneficiary,  as the case may be, and shall
               be a complete  discharge of any liability under the Plan for such
               payment amount.

16.14          Court Order.  The  Committee is  authorized  to make any payments
               directed  by court  order in any  action in which the Plan or the
               Committee  has been  named as a party.  In  addition,  if a court
               determines that a spouse or former spouse of a Participant has an
               interest  in the Plan as the result of a property  settlement  or
               otherwise, the Committee, in its sole discretion,  shall have the
               right,  notwithstanding  any election made by a  Participant,  to
               immediately  distribute the spouse's or former spouse's  interest
               in the Plan to that spouse or former spouse.

16.15          Distribution in the Event of Taxation.

               (a)  In  General.  If, for any  reason,  all or any  portion of a
                    Participant's benefit under this Plan becomes taxable to the
                    Participant prior to receipt, a Participant may petition the
                    Committee before a Change in Control,  or the trustee of the
                    Trust after a Change in Control,  for a distribution of that
                    portion of his or her benefit that has become taxable.  Upon
                    the  grant of such a  petition,  which  grant  shall  not be
                    unreasonably withheld (and, after a Change in Control, shall
                    be granted),  a Participant's  Employer shall  distribute to
                    the  Participant  immediately  available  funds in an amount
                    equal to the taxable  portion of his or her  benefit  (which
                    amount  shall  not  exceed a  Participant's  unpaid  Account
                    Balance under the Plan). If the petition is granted, the tax
                    liability  distribution  shall be made within 90 days of the
                    date when the  Participant's  petition  is  granted.  Such a
                    distribution shall affect and reduce the benefits to be paid
                    under this Plan.

               (b)  Trust.  If the Trust  terminates in accordance  with Section
                    3.6(e) of the Trust and  benefits are  distributed  from the
                    Trust to a Participant in accordance with that Section,  the
                    Participant's  benefits  under this Plan shall be reduced to
                    the extent of such distributions.

16.16          Legal Fees To Enforce Rights After Change in Control. The Company
               and each  Employer is aware that upon the  occurrence of a Change
               in Control,  the Board or the board of  directors of the Employer
               (which might then be composed of new members) or a shareholder of
               the  Company or the  Employer,  or of any  successor  corporation
               might then cause or attempt to cause the Company, the Employer or
               such successor to refuse to comply with its obligations under the
               Plan and  might  cause or  attempt  to cause the  Company  or the
               Employer to institute,  or may institute,  litigation  seeking to
               deny  Participants the benefits intended under the Plan. In these
               circumstances,  the  purpose  of the Plan  could  be  frustrated.
               Accordingly,  if, following a Change in Control, it should appear
               to  any  Participant  that  the  Company,  its  Employer  or  any
               successor  corporation  has  failed  to  comply  with  any of its
               obligations under the Plan or any agreement thereunder or, if the


                                       23

<PAGE>


               Company,  such  Employer or any other  person takes any action to
               declare  the  Plan  void  or   unenforceable  or  institutes  any
               litigation or other legal action designed to deny, diminish or to
               recover  from  any  Participant  the  benefits   intended  to  be
               provided, then the Company and the Employer irrevocably authorize
               such  Participant  to retain  counsel of his or her choice at the
               expense of the Company and the Employer (who shall be jointly and
               severally  liable) to represent  such  Participant  in connection
               with the  initiation or defense of any  litigation or other legal
               action,  whether by or against the  Company,  the Employer or any
               director,  officer,  shareholder or other person  affiliated with
               the  Company,  the  Employer  or  any  successor  thereto  in any
               jurisdiction.

               IN WITNESS WHEREOF,  the Company has signed this Plan document as
               of ___________________, 1996.

SIERRA HEALTH SERVICES, INC., a Nevada corporation



By: __________________________________

Title: _______________________________




                                       24