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                                                            Exhibit 10(ii)(A)(1)

                              AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT
                              --------------------

                             CHIEF EXECUTIVE OFFICER
                             -----------------------   


         CHOICECARE CORPORATION (the "ChoiceCare Parent") and CHOICECARE HEALTH
PLANS, INC. (the "ChoiceCare Operating Company" and with the ChoiceCare Parent
and the ChoiceCare Operating Company being collectively referred to as the
"Employer"), and DANIEL A. GREGORIE, M.D. ("Employee"), hereby agree as
follows, effective as of the 1st day of January, 1997:

         1.   RECITALS. Employer and Employee are currently parties to an
employment agreement, the original form of which was adopted on December 23,
1994 and the form of which was amended and/or restated certain times since then.
This Agreement amends and restates any prior employment agreement between
Employer and Employee in its entirety, and supersedes any prior employment
agreement between Employer and Employee, effective as of January 1, 1997.

         2.   EMPLOYMENT. Employer agrees to employ Employee, and Employee
accepts such employment, upon the terms and conditions set forth herein.

         3.   EMPLOYEE'S RESPONSIBILITIES.

              3.1   Employee shall serve as the President and Chief Executive 
Officer of the ChoiceCare Parent and as the Chief Executive Officer of the
ChoiceCare Operating Company. In such positions, Employee shall be responsible
for the management and supervision of Employer's operations and perform such
other duties and responsibilities as shall be requested by the boards of
directors of Employer, including serving as an executive officer or a member
of the board of any affiliated company. For purposes of this Agreement, an
"affiliated company" means any corporation (other than the Employer) which,
now or at any later time, is part of an unbroken chain of corporations (i)
that includes the Employer and (ii) in which each corporation in such chain
either owns at least 50% of the total combined voting power of all classes of
stock in one of the other corporations in such chain or has at least 50% of
the total combined voting power of all classes of its stock owned by one of
the other corporations in such chain.

              3.2   Employee shall devote his full time and best efforts to his
employment with Employer and perform diligently such duties as are required by
Employer from time to time, which duties shall be consistent with Employee's
position with Employer.


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               3.3   Without the prior written consent of the ChoiceCare Parent,
which shall not be unreasonably withheld, during the term of this Agreement
Employee shall not, directly or indirectly, render services of a business,
professional or commercial nature to any other person or firm, for
compensation or otherwise, except in the ordinary course of the business of
Employer or any affiliated company. Notwithstanding the foregoing but subject
to the following provisions, Employee may serve as a director or trustee of
any company, on either a compensated or noncompensated basis, that is not a
competitor of Employer or any affiliated company. Employee may retain any
director fees, committee fees, stock options, restricted stock awards or other
remuneration paid or given to Employee by any such company for such services
as a director or trustee. Employee shall notify the ChoiceCare Parent of any
appointment to a board of directors or board of trustees, and, notwithstanding
the foregoing, Employee shall resign from any board upon the request of the
ChoiceCare Parent, provided that the request has a reasonable basis. Employee
may also retain any honoraria paid to him, provided that, if the honoraria to
be paid for any one appearance or presentation exceeds $2,000, the Chairman of
the Human Resources and Compensation Committee of the board of directors of
the ChoiceCare Parent shall determine, in his or her sole discretion, whether
Employee is entitled to retain the amount in excess of $2,000.

        4.   TERM.

             4.1   The initial term of this Agreement shall begin January 1,
1997 and end December 31, 1999.

             4.2   This Agreement shall automatically be renewed at the end of
its initial term (or at the end of any renewal term provided hereunder) for a
renewal term of one additional year, unless Employer gives Employee, or unless
Employee gives Employer, written notice by October 1 of the last contract year
of the initial term of this Agreement (or by October 1 of any contract year in
which a renewal term of this Agreement is in effect) that this Agreement shall
terminate at the end of the then-current term. If this Agreement terminates at
the end of a then-current term by reason of Employer giving a timely written
notice to Employee that this Agreement shall terminate at the end of the
then-current term, then Employer shall be deemed to have terminated Employee's
employment for purposes of the other provisions of this Agreement. On the
other hand, if this Agreement terminates at the end of a then-current term by
reason of Employee giving a timely written notice to Employer that this
Agreement shall terminate at the end of the then-current term, then, except as
may otherwise be provided under subsection 14.1 below or any other provision
of this Agreement, Employee shall be deemed to have voluntarily resigned his
employment with Employer for purposes of the other provisions of this
Agreement.

             4.3   For all purposes of this Agreement, a "contract year" means
a calendar year, beginning January 1 and ending the following December 31,
which occurs during the term of this Agreement. Also, for all purposes of this
Agreement, a "contract term" means either the initial term of this Agreement
or any renewal term of this Agreement. In addition,

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also for all purposes of this Agreement, any reference to the "then-current
contract year" refers to the contract year which is then in effect and any
reference to the "then-current term" refers to the contract term which is then
in effect.

             4.4   Notwithstanding anything to the contrary in the Employer's
Executive Long-Term Incentive Plan (the "Long-Term Plan"), if Employee ceases
to be an employee of Employer at the end of the initial term or any renewal
term of this Agreement, Employee shall be entitled to be paid, within ninety
days after the expiration of this Agreement, all incentives which have been
earned under the Long-Term Plan in prior contract years, if any, but have not
yet been paid (since an incentive earned for a contract year under such plan
is not normally payable until after a further period of continuous future
employment).

        5.   COMPENSATION AND BENEFITS: During the term of this Agreement:

             5.1   Employee shall receive an initial base salary at the annual
rate of $395,000, payable in equal consecutive bi-weekly installments. Such
base salary shall be reviewed annually, effective as of the first pay period
beginning on or after January 1 of each contract year after the initial
contract year of this Agreement, and shall be adjusted on a basis consistent
with the executive compensation philosophy of Employer as evidenced by the
application of such philosophy to the compensation of Employer's other key
executives. In no event shall Employee's base salary be reduced for any
contract year (whether or not such contract year occurs in the initial term of
this Agreement or in a renewal term of this Agreement) below his base salary
for the immediately preceding contract year.

             5.2   Employer may during the term of this Agreement, consistent
with its approach to the rest of its executive group:

                   (a)     Award an annual incentive to Employee based on
                           Employer's overall success as a for-profit
                           community resource, Employer's accomplishment of
                           strategic imperatives, Employer's continuous
                           improvements of quality outcomes and Employee's
                           performance of his duties under this Agreement
                           during the previous contract year, in accordance
                           with Employer's Executive Annual Incentive Plan
                           (the "Annual Incentive Plan"), as amended from time
                           to time by the boards of directors of Employer. The
                           amount of any incentive under the Annual Incentive
                           Plan shall be determined by Employer's boards of
                           directors in a manner consistent with the terms and
                           practices of the Annual Incentive Plan. However, in
                           the event of a change in control, the overall value
                           of the annual incentive under the Annual Incentive
                           Plan, as may be reasonably determined by the
                           Employer's boards of directors (taking into account
                           the possibility of meeting the goals which are used
                           under such plan to determine if Employee is
                           entitled to the incentive as

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                           well as the potential amount of the incentive),
                           shall not be reduced for the contract year in which
                           the change in control occurs or any subsequent
                           contract year below the overall value of the annual
                           incentive under such plan which has been
                           established by the Employer prior to the change in
                           control for the contract year in which the change
                           in control occurs (or, if no annual incentive has
                           been established for such contract year by the time
                           of the change in control, for the next preceding
                           contract year);

                  (b)      Award an incentive to Employee pursuant to the
                           provisions of the Long-Term Plan, as amended from
                           time to time by the boards of directors of
                           Employer. The amount of any incentive under the
                           Long-Term Plan shall be determined by Employer's
                           boards of directors in a manner consistent with the
                           terms and practices of the Long-Term Plan. However,
                           in the event of a change in control, in no event
                           shall the overall value of the incentive under the
                           Long-Term Plan which has been established by the
                           Employer prior to the change in control with
                           respect to the contract year which begins January
                           1, 1997, as may be reasonably determined by the
                           Employer's boards of directors, be reduced; and

                  (c)      Cause awards to be granted to Employee pursuant to
                           the provisions of Employer's 1996 Long Term Stock
                           Incentive Plan (the "Stock Incentive Plan"), as
                           amended from time to time by the boards of
                           directors of Employer. The awards granted under the
                           Stock Incentive Plan shall constitute or be
                           otherwise based on shares of common stock of the
                           ChoiceCare Parent ("Common Shares") in accordance
                           with the terms and practices of such plan.
                           Specifically, Employee shall, under the Stock
                           Incentive Plan and subject to its terms, be
                           granted: (i) in the contract year which begins on
                           January 1, 1997, stock options which are not
                           incentive stock options ("nonincentive stock
                           options") and which give Employee the ability to
                           purchase no less than 200,000 Common Shares; and
                           (ii) in the contract year which begins on January
                           1, 1998, nonincentive stock options which give
                           Employee the ability to purchase no less than a
                           number of Common Shares which is equal to the
                           difference between 342,697 Common Shares and the
                           number of Common Shares which are granted under the
                           Stock Incentive Plan to Employee during the
                           contract year which begins on January 1, 1997. Any
                           nonincentive stock option required to be granted
                           under the immediately preceding sentence shall
                           provide that all of the Common Shares which are
                           subject to such option shall be vested, and shall
                           be able to be purchased through the exercise of
                           such option, until the date which is ten years from

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                           the date such option is granted, if and once either
                           (i) Employee's employment with Employer as an
                           employee does not end before the last day of the
                           initial term of this Agreement or (ii) Employee's
                           employment with Employer terminates prior to the
                           last day of the initial term of this Agreement for
                           any reason other than Cause or Employee's voluntary
                           resignation (other than a voluntary resignation
                           which still results in an amount being payable
                           under subsection 6.5(b) below or under subsection
                           8.5 below). Notwithstanding the foregoing, the
                           grant of any nonincentive stock option under this
                           paragraph (c) shall be conditioned on Employee
                           being an employee of Employer, and still performing
                           his duties under this Agreement in a satisfactory
                           manner, on the date such option is otherwise to be
                           granted. In addition, and also notwithstanding the
                           foregoing, the number and class of shares subject
                           to the nonincentive stock options required under
                           the preceding provisions of this paragraph (c)
                           shall be proportionately adjusted, and the terms of
                           such options as to option price and other material
                           provisions shall be appropriately adjusted, in the
                           event of changes in the Common Shares by reason of
                           stock dividends, stock splits, recapitalizations,
                           mergers, consolidations, combinations or exchanges
                           of shares, split-ups, split-offs, spin-offs,
                           liquidations or other similar changes in
                           capitalization, or any distribution to common
                           shareholders other than cash dividends. Further,
                           Employer and Employee agree that no awards other
                           than those described in this paragraph (c) are
                           required to be made to Employee under the Stock
                           Incentive Plan during the term of this Agreement.

         5.3      Employee shall be entitled during the term of this Agreement
                  to:

                  (a)      Six weeks paid vacation per year. Vacation use and
                           carryover rules will be in accordance with the
                           rules established for other executives of Employer.

                  (b)      Disability insurance as is afforded generally from
                           time to time to other members of the executive
                           management group of Employer. However, in the event
                           of a change in control, the value of the coverage
                           provided by such disability insurance, as may be
                           reasonably determined by the Employer's boards of
                           directors, shall not be less at any time on or
                           after the change in control and while this
                           Agreement is in effect than the value of the
                           disability insurance provided Employee under this
                           Agreement immediately prior to the change in
                           control.


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                  (c)      Medical benefits (not including dental or other
                           benefits to the extent they are provided under a
                           plan or arrangement which is not part of Employer's
                           comprehensive program of hospital, physician, and
                           similar types of medical benefits) for Employee and
                           his family as are afforded from time to time to the
                           rest of Employer's executive group. However, in the
                           event of a change in control, the value of the
                           coverage provided by such medical benefits, as may
                           be reasonably determined by the Employer's boards
                           of directors, shall not be less at any time on or
                           after the change in control and while this
                           Agreement is in effect (or thereafter to the extent
                           medical benefits must be provided under the
                           following provisions of this paragraph (c)) than
                           the value of the medical benefits provided Employee
                           under this Agreement immediately prior to the
                           change in control. Except as may otherwise be
                           specifically provided in the other provisions of
                           this Agreement, such medical benefits shall be
                           provided to Employee after the termination of his
                           employment with Employer for any reason except
                           Cause (as defined in subsection 6.1 below) or his
                           voluntary resignation from his employment with
                           Employer other than at the end of a contract term,
                           as if Employee had remained employed by Employer,
                           until such time as is indicated below. After his
                           termination of employment with Employer, such
                           benefits shall be comparable to those provided to
                           active executive employees and shall be provided
                           through insurance, health maintenance organization
                           products or other arrangements, at Employer's
                           discretion, so long as the result is to provide
                           such benefits in the immediate vicinity of
                           Employee's residence at any time following his
                           termination of employment. Such benefits shall
                           continue until either (i) Employee is eligible to
                           receive benefits under Medicare or a successor
                           government-sponsored program or (ii) Employee
                           obtains employment with another employer and is
                           eligible to receive comparable medical benefits
                           under any plan maintained by such other employer,
                           at which time Employee shall not be entitled under
                           this Agreement to any additional medical benefits
                           from Employer (unless Employee is actively employed
                           full-time or part-time by Employer). In the event
                           of the death of Employee while Employee and his
                           family are receiving the medical benefits provided
                           hereunder, Employee's family shall continue to
                           receive medical benefits hereunder, to the same
                           extent as if Employee had left the employ of
                           Employer and was entitled to medical benefits
                           hereunder, until such time as Employee's spouse
                           either (i) becomes eligible to receive benefits
                           under Medicare or a successor government-sponsored
                           program or (ii) obtains employment or

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                           remarries when such spouse, as a result of her
                           employment or remarriage, is otherwise eligible to
                           receive comparable medical benefits under a plan
                           maintained by her employer or her spouse's
                           employer.

                  (d)      Tax-qualified retirement plan benefits, dental
                           benefits and such other similar employment
                           privileges, perquisites and benefits (not including
                           the benefits described in paragraphs (b) and (c)
                           immediately above) as are afforded generally from
                           time to time to other members of the executive
                           management group of Employer. However, in the event
                           of a change in control, the overall value of such
                           benefits, considered in the aggregate and as may be
                           reasonably determined by the Employer's boards of
                           directors, shall not be less at any time on or
                           after the change in control and while this
                           Agreement is in effect than the value of the
                           tax-qualified retirement plan benefits, dental
                           benefits and such other similar employment
                           privileges, perquisites and benefits (not including
                           the benefits described in paragraphs (b) and (c)
                           immediately above) provided Employee under this
                           Agreement immediately prior to the change in
                           control.

                  (e)      Life insurance in an amount during each contract
                           year equal to two times Employee's base salary for
                           such contract year. Employer may purchase, in its
                           sole discretion, either whole life or term
                           insurance to meet Employer's obligation hereunder.
                           Any group life insurance which is provided Employee
                           by Employer shall be counted towards the obligation
                           of Employer hereunder. If Employer is unable to
                           obtain insurance in the amount required on the life
                           of Employee, Employer shall pay to the estate of
                           Employee the difference between the amount of
                           insurance proceeds to be received by Employee's
                           estate under all life insurance policies paid for
                           by Employer and the amount of life insurance
                           Employer is required to provide hereunder.

                  (f)      Business related transportation assistance,
                           including transportation between Employee's home
                           and office or other business location, a personal
                           executive assistant and audio/visual equipment as
                           may be required by Employee as certified by
                           Employee's treating physician.

                  (g)      Participate in the Supplemental Executive
                           Retirement Plan ("SERP") attached hereto as Exhibit
                           A, in accordance with the terms of SERP. However,
                           in event of a change in control, the percent of
                           Employee's compensation allocated to the SERP shall

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                           not be reduced for any contract year which ends
                           after the change in control below the percent of
                           his compensation which is allocated to the SERP for
                           the immediately preceding contract year.

               Employee (or, if applicable, any other recipient of any benefits
provided under this subsection 5.3) shall be solely responsible and liable for
payment of any taxes imposed on Employee (or, if applicable, such recipient)
resulting from the provision of any benefits under this subsection 5.3,
including but not limited to any medical benefits provided on a self-insured
basis or any life insurance benefits.

         5.4   Employer shall reimburse Employee (or provide an expense
allowance) for travel, entertainment, continuing education and other expenses
which are reasonably incurred by Employee in the promotion of Employer's
business, provided Employee provides a proper accounting for such expenses.

         6.    TERMINATION; SEVERANCE BENEFITS.

               6.1   Employer may terminate this Agreement and Employee's
employment hereunder at any time for Cause. If Employee's employment hereunder
is terminated for Cause, Employee shall not be entitled to any payments or
benefits hereunder except for (i) unpaid salary already earned and (ii) unpaid
benefits which are provided under subsection 5.3 above, have already become
vested and are payable upon such termination of employment under the terms and
practices of the plans or arrangements under which such benefits are provided.
For all purposes of this Agreement, "Cause" means:

                     (a)        Employee's fraud, dishonesty or willful
                                misconduct in the performance of his duties
                                to Employer; or

                     (b)        Employee's material breach of any material
                                provision of this Agreement; provided that a
                                material breach shall not be deemed to have
                                occurred if Employee's breach relates to the
                                receipt of a payment of money and Employee
                                cures such breach within thirty (30) days of
                                receipt by Employee of a written notice of
                                such breach.

               6.2   If Employee's employment hereunder terminates because of
his voluntary resignation as an employee of Employer, then, except as may
otherwise be provided under subsection 6.6 below, Section 8 below or any other
provision of this Agreement, Employee shall not be entitled to any payments or
benefits hereunder except for (i) salary already earned and (ii) unpaid
benefits which are provided under subsection 5.3 above, have already become
vested and are payable upon such termination of employment under the terms and
practices of the plans or arrangements under which such benefits are provided.

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               6.3   If Employee's employment hereunder terminates by reason of
his death, then, in addition to any other payment which may be provided under
subsection 8.2 below or any other provision of this Agreement, Employee's
estate (or, where applicable or the context requires, the surviving members of
his family or his beneficiaries) shall be entitled to (i) his unpaid salary
which has already been earned, (ii) an amount equal to the product obtained by
multiplying his targeted incentives with respect to the contract year in which
his termination occurs under the Annual Incentive Plan and the Long-Term Plan
(if any) by a fraction having a numerator equal to the number of days he was
an employee of Employer in such contract year and a denominator equal to the
number of days in such contract year, (iii) any incentives which have been
earned for prior contract years under the Long-Term Plan but have not yet been
paid (since an incentive earned for a contract year under such plan is not
normally payable until after a further period of continuous future
employment), (iv) the continuing medical benefits described in subsection
5.3(c) above, (v) any benefits due under any life insurance benefits in effect
for him at the time of his death under subsection 5.3(e) above and (vi) any
other unpaid benefits which are provided under subsection 5.3 above, have
already become vested (or vest by reason of his death) and are payable upon
such termination of employment under the terms and practices of the plans or
arrangements under which such benefits are provided.

               6.4   If Employee's employment hereunder terminates by reason of
his permanent disability, then, in addition to any other payment which may be
provided under subsection 8.2 below or any other provision of this Agreement,
Employee shall be entitled to (i) his unpaid salary which has already been
earned, (ii) an amount equal to the product obtained by multiplying his
targeted incentives with respect to the contract year in which his termination
occurs under the Annual Incentive Plan and the Long-Term Plan (if any) by a
fraction having a numerator equal to the number of days he was an employee of
Employer in such contract year and a denominator equal to the number of days
in such contract year, (iii) any incentives which have been earned for prior
contract years under the Long-Term Plan but have not yet been paid (since an
incentive earned for a contract year under such plan is not normally payable
until after a further period of continuous future employment), (iv) the
continuing medical benefits described in subsection 5.3(c) above, (v) any
benefits due him under any disability insurance applicable to him and in
effect at the time he becomes permanently disabled under subsection 5.3(b)
above, (vi) any other unpaid benefits which are provided under subsection 5.3
above, have already become vested (or vest by reason of his permanent
disability) and are payable upon such termination of employment under the
terms and practices of the plans or arrangements under which such benefits are
provided and (vii) a lump sum payment which is made within 60 days after
Employer reasonably determines Employee is permanently disabled and which is
equal to two times Employee's annual base rate of salary in effect at the time
of his termination of employment. For all purposes of this Agreement, Employee
shall be deemed to be "permanently disabled" and to have incurred a "permanent
disability" if he, by reason of his physical or mental injury, illness or
condition, is determined to be disabled for a period which is expected will
exist until his death under the disability insurance which is then in effect
for him under subsection 5.3(b) above.

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               6.5   In the event that Employer notifies Employee that his
services as President and Chief Executive Officer of Employer are no longer
desired by Employer during a contract term for any reason other than Cause or
his permanent disability, then, except as may otherwise be provided under
Sections 7 and 8 below or any other provision of this Agreement, (i) upon
receipt of such notice Employee shall no longer serve in the offices of
President and Chief Executive Officer of Employer and shall give up all the
authority and accouterments of those offices (except as otherwise agreed by
Employer) and, except as may otherwise be provided in paragraph (b) of this
subsection 6.5 or in subsection 6.6 below, (ii) Employee's employment with
Employer shall terminate at the end of the then-current term (or, if such
notice is not given Employee by the latest October 1 which precedes the end of
the then-current term and no notice was previously given Employee by Employer
on or prior to the latest October 1 which precedes the end of the then-current
term that his employment with Employer would terminate at the end of the
then-current term, his employment with Employer shall terminate at the end of
the renewal term of this Agreement which immediately follows the then-current
term). In addition, in such situation, the following provisions of this
subsection 6.5 shall apply to Employee's employment with Employer until such
employment terminates:

                      (a)        Except as is otherwise provided in paragraph
                                 (b) immediately below, Employee shall during
                                 the then remaining period of his employment
                                 with Employer serve as a special project
                                 advisor to Employer and have and perform only
                                 such specific special project advisor duties
                                 as shall be reasonably requested by Employer;
                                 provided that any such duties shall be
                                 limited to those normally performed by and
                                 requiring the skills of a senior executive.
                                 It is understood and agreed that, in
                                 performing his duties as a special project
                                 advisor, Employee shall be an employee of
                                 Employer and shall be entitled to the
                                 compensation and benefits, including but not
                                 limited to SERP, perquisite allowance and
                                 stock options, provided him under, and
                                 subject to all provisions contained in, this
                                 Agreement; except that in determining the
                                 amount of any incentive payable under the
                                 Annual Incentive Plan for any contract year
                                 which ends after the date on which Employee
                                 no longer serves in the offices of President
                                 and Chief Executive Officer of Employer, the
                                 final percentage which is applied to
                                 Employee's base pay to calculate such
                                 incentive shall be equal to the percentage
                                 used to determine the targeted incentive
                                 under the Annual Incentive Plan for or with
                                 respect to the latest contract year which
                                 begins prior to the date on which Employee no
                                 longer serves in such offices and for which a
                                 targeted incentive under the Annual Incentive
                                 Plan had been set for Employee by Employer.


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                      (b)        Notwithstanding the foregoing or the
                                 provisions of subsection 6.2 above or
                                 subsection 6.6 below, Employee shall have the
                                 right at any time during the then remaining
                                 period of his employment with Employer, by a
                                 written signed notice to Employer, to be
                                 paid, in a lump sum payment which is made as
                                 soon as is administratively practical after
                                 such election, an amount equal to 90% of the
                                 then value of the compensation and benefits
                                 (other than disability, medical, life
                                 insurance and other similar welfare insurance
                                 benefits) which, if Employee were not
                                 exercising his rights under this paragraph
                                 (b), would otherwise be provided under
                                 paragraph (a) immediately above after such
                                 election and during the remaining period of
                                 his employment with Employer and under
                                 subsection 6.6 below after his employment
                                 with Employer had terminated. In the event of
                                 such election and upon such payment,
                                 Employee's employment with Employer shall
                                 terminate, Employee shall not serve as a
                                 consultant under subsection 6.6 below and all
                                 of Employee's further rights to compensation
                                 or benefits under this Agreement shall end;
                                 except that Employee shall continue to be
                                 entitled to such medical benefits as are
                                 described in paragraph (c) of subsection 5.3
                                 above and shall continue to be entitled until
                                 the end of the then-current term of this
                                 Agreement to such life insurance benefits as
                                 are described in paragraph (e) of subsection
                                 5.3 above.

                  6.6   In the event that Employee's employment with Employer
terminates at the end of any then-current term for any reason other than Cause
or Employee's death or permanent disability, and Employee agrees not to file any
administrative charge or lawsuit relating to his prior employment with Employer
and agrees to release Employer and all of its then current and former directors,
trustees, officers, employees, agents, members and affiliated companies from any
and all claims, in such form as is determined by Employer and consistent with
Employer's normal practices concerning employee releases, then, except as may
otherwise be provided under subsection 6.5(b) above or any other provision of
this Agreement, Employer agrees to offer to hire Employee as a consultant to
Employer for two years beginning on the day immediately following the last day
of the then-current term. Such consulting services shall consist of such
services as are requested by Employer, which shall be those normally required of
consultants with Employee's level of skill and experience; but Employer shall
not in any event require Employee to perform consulting services in excess of
fifty hours per calendar quarter or direct the manner by which such services
must be accomplished. Further, Employer shall permit Employee to perform such
services at such times and at such locations as Employee reasonably determines
and to communicate the results of his services telephonically or by telecopy.
Employee shall receive, as compensation for his performing such consulting
services, payments at a rate equal to Employee's annual base salary for the last
contract year of this Agreement for each year, or fraction thereof, that
Employee performs such consulting services, with such payments being made on a
bi-weekly basis. At all times that Employee is

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performing such consulting services for Employer, Employee shall be an
independent contractor and not an employee of Employer and shall be responsible
for the payment of all taxes with respect to all amounts paid to him as
compensation for performing such consulting services. In the event Employee's
employment ends for any reason other than Cause, Employee's death or permanent
disability or his voluntary resignation (not including a voluntary resignation
which occurs at the end of a contract term), Employer shall pay for executive
outplacement services for Employee, up to a maximum cost of $25,000 (adjusted
annually in accordance with the CPI), through a mutually agreeable outplacement
consulting firm.

                  6.7   At any time that Employee is receiving compensation
pursuant to subsection 6.5 or 6.6 above, Employee shall continue to participate
in the health, disability and life insurance plans of Employer applicable to
executive employees of Employer or be provided comparable benefits.

             7.   PAYMENT FOLLOWING A CHANGE IN CONTROL AND INVOLUNTARY
TERMINATION. Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall apply in the event of a change in
control (as is defined below):

                  7.1   Employer shall have the right to terminate Employee's
employment hereunder without Cause at any time on or after a change in control.
In addition, in the event of a change in control and upon the request of
Employer, Employee agrees (i) that he shall remain as an employee of Employer
for a period ending no earlier than the earliest of the last day of the period
requested by Employer that Employee remain an employee after the change in
control, the day which is twelve months after the change in control or the last
day of the then-current term and (ii) that, should Employee voluntarily resign
from his employment with Employer after the change in control but before the
earliest of such days, he shall not be entitled to any benefits under this
Section 7.

                  7.2   Subject to the foregoing, if a change in control occurs
and Employee's employment with Employer terminates for any reason, other than
for Cause, Employee's death or permanent disability or his voluntary
resignation, during the period which begins six months prior to the date of the
change in control and ends one year after the date of the change in control,
Employee shall be entitled to a lump sum payment, which is made within 60 days
after the later of Employee's termination of employment or the change in
control, in an amount equal to five times the sum of: (i) Employee's
then-current annual base rate of salary; (ii) the amount set forth by Employer
as the target for Employee's incentive for the then-current contract year under
the Annual Incentive Plan; and (iii) if the contract year in which the change in
control occurs is 1997, the amount set forth by Employer as the target for
Employee's incentive for the 1997 contract year under the Long-Term Plan.
Notwithstanding the foregoing, the amount of any payment otherwise required by
the immediately preceding sentence shall be reduced by the amount of any payment
that Employee has previously received (or is entitled to receive within 60 days
of his termination of employment) under

                                    - 12 -


<PAGE>   13



subsection 8.1, 8.2, 8.3 or 8.4 below. Further, Employee shall also, if he is
entitled to the payment described in the foregoing sentences of this subsection
7.2, be paid an amount equal to the product obtained by multiplying his targeted
incentives with respect to the contract year in which his termination occurs
under the Annual Incentive Plan and the Long-Term Plan (if any) by a fraction
having a numerator equal to the number of days he was an employee of Employer in
such contract year and a denominator equal to the number of days in such
contract year, plus any incentives which have been earned for prior contract
years under the Long-Term Plan but have not yet been paid (since an incentive
earned for a contract year under such plan is not normally payable until after a
further period of continuous future employment).

               7.3   If a change in control payment described in subsection 7.2
above is made, then, notwithstanding any other provision of this Agreement to
the contrary, Employee shall not be entitled to any payments under Section 6
above that relate to any period which ends after his termination of employment
and that are based upon or calculated with respect to Employee's base salary,
then-current or otherwise, or the Annual Incentive Plan or Long-Term Plan.

               7.4   For all purposes of this Agreement, a "change in control"
means and occurs on the date of: (i) the election of persons constituting more
than 33-1/3% of the whole number of directors of the ChoiceCare Parent, if
such persons were not nominated by the nominating committee of the ChoiceCare
Parent or, if so nominated, were not recommended by a majority of the
directors in office prior to being nominated by such nominating committee
unless the person nominated is nominated to take the place of an individual
previously so recommended by the directors who has died, become disabled or
chose not to serve, in which event that nominee shall be deemed to be
recommended by the majority of the directors in office if such majority
recommends that nominee at the meeting of directors next following the
nomination of such person; (ii) any consolidation or merger of the ChoiceCare
Parent if, within two years after such consolidation or merger, individuals
who were directors of the ChoiceCare Parent immediately prior to such
consolidation or merger cease to constitute at least 66-2/3% of the board of
directors of the ChoiceCare Parent or its successor by consolidation or
merger; (iii) any sale, lease, exchange or other transfer, in one transaction
or a series of related transactions (and other than to a directly or
indirectly majority-owned subsidiary of the ChoiceCare Parent) of all, or
substantially all, of the assets of the ChoiceCare Parent; (iv) the sale,
whether by outright purchase, merger, consolidation, reorganization or other
form of transaction (but not including a reorganization solely involving
affiliated companies), or the execution of a definitive agreement (subject
only to regulatory approvals or other similar conditions) for the sale, of at
least 33-1/3% of the ownership and/or voting interests in any direct or
indirect subsidiary or subsidiaries of the ChoiceCare Parent if such
subsidiary or subsidiaries before such sale held assets that constituted all
or substantially all of the assets of the ChoiceCare Parent and its direct and
indirect subsidiaries on a consolidated basis; (v) the sale, whether by
outright purchase, merger, consolidation, reorganization or other form of
transaction (but not including a reorganization solely involving affiliated
companies), or the execution of a definitive agreement (subject only to
regulatory approvals or other similar conditions) for the sale, of at least
33-1/3% of the ownership and/or voting interests in the

                                    - 13 -


<PAGE>   14



ChoiceCare Parent to one purchaser, related purchasers or several purchasers
acting directly or indirectly in concert; or (vi) the approval by the
shareholders of the ChoiceCare Parent of any plan or proposal for the
liquidation of dissolution of the ChoiceCare Parent.

         8.  RETENTION INCENTIVE. If a change in control (as defined in
subsection 7.4 above) or a strategic investor purchase (as is defined below)
occurs while this Agreement is in effect, then Employee will be eligible for a
retention incentive (in addition to any other payments or benefits provided
under the other provisions of this Agreement, including but not limited to the
provisions of Sections 5 and 6 above) in accordance with the following
provisions:

               8.1   If Employee is continuously employed by Employer to the end
of the retention incentive period (as is defined below), then Employee shall
be entitled to a retention incentive under this Section 8 which is payable in
a lump sum within 60 days after the end of such retention incentive period and
which is equal to the lesser of (i) an amount equal to four times his annual
base rate of salary in effect on the date of the change in control or
strategic investor purchase, as applicable and whichever is earlier, or (ii)
$1,600,000.

               8.2   If Employee's employment with Employer is terminated after
the earlier of a change in control or a strategic investor purchase but prior
to the end of the retention incentive period by reason of his death or his
permanent disability (as defined in subsection 6.4 above), then Employee shall
be entitled to a retention incentive under this Section 8 which is payable in
a lump sum within 60 days after Employee's death or the date Employer
reasonably determines Employee has incurred a permanent disability, as
appropriate, and which is equal to the product obtained by multiplying (i) the
retention incentive that would be paid Employee under subsection 8.1 above by
reason of the change in control or strategic investor purchase if Employee had
been continuously employed by Employer to the end of the retention incentive
period by (ii) a percentage which is determined in accordance with the
immediately following sentence. The percentage to be used in the immediately
preceding sentence shall be: (i) 20% if the duration of the period from the
earlier of the change in control or strategic investor purchase to the date of
Employee's termination of employment is less than one year; (ii) 50% if the
duration of the period from the earlier of the change in control or strategic
investor purchase to the date of Employee's termination of employment is at
least one year but less than two years; and (iii) 100% if the duration of the
period from the earlier of the change in control or strategic investor
purchase to the date of Employee's termination of employment is at least two
years.

               8.3   If, after a strategic investor purchase but prior to both a
change in control and the end of the retention incentive period, Employee's
employment with Employer is terminated for any reason other than Cause,
Employee's death or permanent disability or his voluntary resignation, then
Employee shall be entitled to a retention incentive under this Section 8 which
is payable in a lump sum within 60 days after Employee's termination of
employment and which is equal to the product obtained by multiplying (i) the
retention incentive that would be paid Employee under subsection 8.1 above by
reason of the strategic

                                    - 14 -


<PAGE>   15



investor purchase if Employee had been continuously employed by Employer to the
end of the retention incentive period by (ii) a percentage which is determined
in accordance with the immediately following sentence. The percentage to be used
in the immediately preceding sentence shall be: (i) 20% if the duration of the
period from the strategic investor purchase to the date of Employee's
termination of employment is less than one year; (ii) 50% if the duration of the
period from the strategic investor purchase to the date of Employee's
termination of employment is at least one year but less than two years; and
(iii) 100% if the duration of the period from the strategic investor purchase to
the date of Employee's termination of employment is at least two years.

               8.4   If, after one year has expired after a change in control
but prior to the end of the retention incentive period, Employee's employment
with Employer is terminated for any reason other than Cause, Employee's death
or permanent disability or his voluntary resignation, then Employee shall be
entitled to a retention incentive under this Section 8 which is payable in a
lump sum within 60 days after Employee's termination of employment and which
is equal to the retention incentive that would be paid Employee under
subsection 8.1 above by reason of the change in control or, if applicable, an
earlier strategic investor purchase if Employee had been continuously employed
by Employer to the end of the retention incentive period.

               8.5   If, after one year has expired after a change in control
but prior to both the end of the retention incentive period and the end of the
then-current term, Employee's employment with Employer terminates other than
for Cause or Employee's death or permanent disability, then, provided that
Employee is not otherwise entitled to the benefits of subsections 6.5(b) and
6.6 above upon such termination of employment and also provided that Employee
agrees not to file any administrative charge or lawsuit relating to his prior
employment with Employer and agrees to release Employer and all of its then
current and former directors, trustees, officers, employees, agents, members
and affiliated companies from any and all claims, in such form as is
determined by Employer and consistent with Employer's normal practices
concerning employee releases, Employee shall be entitled to a retention
incentive under this Section 8 which is payable in a lump sum as soon as is
administratively practical after Employee's termination and which is equal to
90% of the then value of the compensation and benefits (other than disability,
medical, life insurance and other similar welfare insurance benefits) which
would otherwise be provided under or pursuant to the other provisions of this
Agreement (including but not limited to subsection 6.6 above) if this
Agreement had been terminated by the Employer (other than for Cause) at the
end of the then-current term; except that no payment shall be made hereunder
with respect to the retention incentive in subsection 8.1 above and also
except that, in determining the amount of any incentive payable under the
Annual Incentive Plan for any contract year which ends after the date of such
termination, the final percentage which is applied to Employee's base pay to
calculate such incentive shall be equal to the greater of the percentage used
to determine the targeted incentive under the Annual Incentive Plan for or
with respect to the latest contract year which begins prior to the date of
such termination or the percentage used to determine the targeted incentive
under the Annual Incentive Plan for or with respect to the latest contract
year which begins prior to the date of the change in control. In the event of
such termination and

                                    - 15 -


<PAGE>   16



upon payment of the retention incentive described in this subsection 8.5,
Employee's employment with Employer shall terminate and all of Employee's
further rights to compensation or benefits under this Agreement shall end;
except that Employee shall continue to be entitled to such medical benefits as
are described in paragraph (c) of subsection 5.3 above and shall continue to be
entitled until the end of the then-current term of this Agreement to such life
insurance benefits as are described in paragraph (e) of subsection 5.3 above.

               8.6   Subject to the immediately following sentence but
notwithstanding any other provision of this Section 8 to the contrary, no more
than one retention incentive may be paid under this Section 8, and thus the
payment of any retention incentive under any subsection of this Section 8
shall terminate and nullify any right of Employee to any additional incentive
which may otherwise arise under another subsection of this Section 8. However,
if, after one year has expired after a change in control but prior to the end
of the retention incentive period, Employee's employment with Employer
terminates other than for Cause, Employee's death or permanent disability or
his voluntary resignation, then Employee shall be entitled to both the
retention incentive described in subsection 8.4 above and, if he meets all of
the conditions provided under subsection 8.5 above, the retention incentive
described in subsection 8.5 above.

               8.7   For purposes of this Agreement, a "strategic investor
purchase" means, and occurs on the date of, the purchase or obtaining by any
person, corporation, partnership or other organization of stock possessing
less than 33-1/3% of the total combined voting power of all classes of stock
of the ChoiceCare Parent together with the option or right to purchase in the
future additional stock of the ChoiceCare Parent which would permit such
person, corporation, partnership or other organization to own stock possessing
33-1/3% or more of the total combined voting power of all classes of stock of
the ChoiceCare Parent. In addition, for purposes of this Agreement, the
"retention incentive period" means the period which begins on the date
immediately following the earlier of a change in control or a strategic
investor purchase (such date referred to herein as the "beginning date") and
which ends on the earlier of (i) the date which is three years after the
beginning date or (ii) the later of the date which is two years after the
beginning date or the end of the contract term which is in effect on the
beginning date.

           9.  NON-COMPETE COVENANTS AND CONFIDENTIAL INFORMATION.

               9.1   Employee agrees that during the term of this Agreement and
for a period of one year after his termination of employment with Employer for
any reason whatsoever (or, if Employee either is entitled to a retention
incentive under Section 8 above after such termination of employment or has
been paid a retention incentive under Section 8 above prior to such
termination of employment, for a period of two years after such termination of
employment), Employee shall not, without the express written consent of
Employer, anywhere in the United States where the Employer was doing business
or actively planning to do business during Employee's term of employment: (i)
compete with Employer in the managed health care business; or (ii) interfere
with, disrupt or attempt to interfere with or disrupt the

                                    - 16 -


<PAGE>   17



relationship between Employer and any person or business that was a customer,
supplier, lessor, contractor or employee of Employer during Employee's term of
employment with Employer. Notwithstanding the above, Employee may, without
breaching the provisions of this subsection 9.1, work for an employer in the
managed health care business or an employer that interferes, disrupts or
attempts to interfere with or disrupt the relationship between Employer and any
person or business that was a customer, supplier, lessor, contractor or employee
of Employer during Employee's term of employment with Employer, provided that:
(i) no more than ten percent (10%) of such new employer's business is conducted
in areas where Employer is conducting business as of the date of termination of
the employment of Employee with Employer; (ii) such new employer does not
provide either health insurance or managed care services to ten percent (10%) or
more of the population in the areas where Employer is conducting business as of
the termination of employment of Employee with Employer; or (iii) the markets in
which Employer is conducting, or actively planning to conduct, business as of
the date of termination of Employee's termination with Employer and for which
Employee will have certain duties or responsibilities with the new employer, as
measured by revenues or enrollment within such areas, do not exceed ten percent
(10%) of all markets for which Employee will have certain duties or
responsibilities with the new employer, as measured by revenues or enrollment
within all such markets (provided that this clause (iii) shall not apply if
Employee has voluntarily resigned his employment with Employer other than by a
voluntary resignation which occurs at the end of a contract term or a voluntary
resignation which still results in an amount being payable under subsection
6.5(b) above or under subsection 8.5 above). For purposes of this subsection
9.1, if Employee, at the time of Employee's termination of employment with
Employer, only has duties and responsibilities with Employer as to certain
specified, and not all, areas or markets in which Employer then does business,
then any reference to "Employer" in this subsection 9.1 shall be deemed to refer
only to the part of the Employer which involves the areas and markets in which
Employee has duties and responsibilities at the time of his/her termination of
employment with Employer.

               9.2   Employee agrees that, during the term of this Agreement or
at any time thereafter, Employee will not, directly or indirectly, disclose,
divulge, discuss, copy or otherwise use or suffer to be used in any manner, in
competition with or contrary to the interests of Employer or any affiliated
companies, the customer lists, proprietary organizational methods or other
trade secrets of Employer or any affiliated companies, it being acknowledged
by Employee that all such information regarding the business of Employer and
affiliated companies compiled or obtained by, or furnished to, Employee while
Employee shall have been employed by or associated with Employer is
confidential information and Employer's exclusive property.

               9.3   Employee expressly agrees and understands that the remedy
at law for any breach by him of this Section 9 will be inadequate and that the
damages flowing from such breach are not readily susceptible to being measured
in monetary terms. Accordingly, it is acknowledged that, upon adequate proof
of Employee's violation of any legally enforceable provision of this Section
9, Employer shall be entitled to immediate injunctive relief and may obtain a
temporary order and permanent injunction restraining any threatened or further
breach.

                                    - 17 -


<PAGE>   18



However, nothing in this Section 9 shall be deemed to limit Employer's remedies
at law or in equity for any breach by Employee of any of the provisions of this
Section 9 which may be pursued or availed of by Employer.

               9.4   Employee has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon Employer
under the provisions of this Section 9, and hereby acknowledges and agrees
that the same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to Employer, do not stifle the
inherent skill and experience of Employee, would not operate as a bar to
Employee's sole means of support, are fully required to protect the legitimate
interests of Employer and do not confer a benefit upon Employer
disproportionate to the detriment to Employee which is caused by the
provisions of this Section 9.

         10.   SEVERABLE PROVISION. The provisions of this Agreement are
severable, and, if any one or more provisions are determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions of this
Agreement and any partially unenforceable provision of this Agreement, to the
extent enforceable in any jurisdiction, shall nevertheless be binding and
enforceable hereunder.

         11.   ASSIGNMENTS AND BINDING AGREEMENT. This Agreement may not be
assigned by one party hereto without the consent of the other, except that
this Agreement may be assigned by Employer to any affiliated company.
Notwithstanding the foregoing general restriction on voluntary assignments,
the rights and obligations of the parties under this Agreement shall inure to
the benefit of, and shall be binding upon, the parties hereto and their
respective successors, assigns, heirs, personal representatives and estates,
which successors and assigns in the case of Employer shall include (i) any
affiliated company to which this Agreement is assigned by Employer, (ii) any
successor of the ChoiceCare Parent or the ChoiceCare Operating Company by
merger, combination or reorganization in any manner, whether such successor is
a corporation, limited liability company, partnership (either general or
limited), business trust or other organization or person, and whether or not
such successor is a successor by operation of law, (iii) any recipient of
materially all the assets and/or business of Employer in liquidation or
distribution or by way of contribution of capital, (iv) any successor to
materially all the assets and/or business of Employer by purchase or exchange,
either singly or in combination or (v) any combination of the foregoing.
Employer covenants that it will make no distribution or contribution of assets
and/or business as described in clause (iii) of the immediately preceding
sentence nor enter into any agreement of sale or exchange of assets and/or
business as described in clause (iv) of the immediately preceding sentence
without requiring the recipient(s) of such assets or business to assume the
obligations of Employer in this Agreement as a co-obligor.

                                    - 18 -


<PAGE>   19



           12.   NOTICES. Any notice to be given under this Agreement to any
party hereto shall be deemed duly given if it is personally delivered in
writing or it is posted in the United States mails, postage prepaid,
registered or certified, return receipt requested. Further, if mailed to
Employer, such a notice shall be addressed to the ChoiceCare Parent at its
principal place of business. If mailed to Employee, such a notice shall be
addressed to him at his home address last shown on the records of Employer (or
at such other address or addresses as Employee may hereafter designate in
writing to Employer).

           13.   WAIVER. The failure of any party hereto to this Agreement to
enforce any provision or provisions of this Agreement shall not in any way be
construed as a waiver of such provision or provisions as to any future
violations thereof nor prevent that party thereafter from enforcing each and
every other provision of this Agreement. The rights granted the parties herein
are cumulative and the waiver of any single remedy shall not constitute a
waiver of such party's right to assert all other legal remedies available to
him or it under the circumstances.

           14.   MISCELLANEOUS.

                 14.1   For all purposes of this Agreement, Employee's 
resignation from his employment with Employer shall be deemed not to constitute 
a voluntary resignation, and instead to be treated as a termination of his
employment by Employer, if: (i) such resignation occurs at least 120 days
after, and no more than 180 days after, Employer either (a) changes the
principal party to which Employee reports and which has the responsibility to
evaluate Employee's performance to a party which is not either the board of
directors of the ChoiceCare Parent or a board of directors of any corporation
which owns at least 80% of the ChoiceCare Parent or (b) reduces or changes
Employee's duties to those which are not consistent with the usual and
customary duties of a chief executive officer of a managed care company in the
U.S. which is comparable or larger, in terms of revenues, enrollments and
geographical area served, than the Company as in operation at the time
Employee's duties are reduced or changed or (ii) such resignation occurs after
Employer requires Employee to change his principal work location by at least
50 miles and Employee refuses to make such move. In the event Employee's
resignation from his employment with Employer is treated as a termination of
his employment by Employer by reason of the provisions of clause (i) of the
immediately preceding sentence, then, for purposes of determining Employee's
rights to any change in control payment described in subsection 7.2 above or
any retention incentive payment under Section 8 above, Employee shall be
deemed to have had his employment with Employer terminated by Employer on the
date that Employer took the action described in clause (i) of the immediately
preceding sentence which is applicable to Employee's resignation.

                 14.2   The captions set forth in this Agreement are for
convenience and reference only and shall not be deemed to construe or
interpret any term or provision set forth in this Agreement. This Agreement
supersedes all prior agreements and understandings

                                    - 19 -


<PAGE>   20



between the parties and may not be modified or terminated orally. No
modification, termination or attempted waiver of this Agreement shall be valid
unless in writing and signed by the party against whom the same is sought to be
enforced. This Agreement shall be governed by and construed according to the
laws of the State of Ohio.

               14.3   If the firm of independent outside auditors then used by
Employer (the "Auditors") determine that any payment or distribution by
Employer to or for the benefit of Employee, whether paid or payable (or
distributed or distributable) pursuant to the terms of this Agreement or
otherwise, would be subject to tax as an excess parachute payment pursuant to
the provisions of Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code), then, notwithstanding any other provision of this
Agreement to the contrary, Employer shall "gross up" such payment or
distribution so that the net amount of such payment or distribution, after
taking into consideration the payment of the tax imposed on Employee under
Section 4999 of the Code, is the same as the amount that such payment or
distribution would be if no such tax applied.

         15.   ARBITRATION. Any dispute or disagreement among the parties
hereto shall be submitted to mandatory and binding arbitration at the election
of any party hereto. The arbitration shall be pursuant to the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
shall be held in Cincinnati, Ohio. The ChoiceCare Parent and the ChoiceCare
Operating Company shall together select one arbitrator, Employee shall select
one arbitrator and the two selected arbitrators shall select a third
arbitrator. The decision of the arbitrators, and any award rendered therein,
shall be final, conclusive and binding upon the parties hereto and any
judgment thereon may be entered and enforced in any court of competent
jurisdiction. Employer shall bear 50% of all fees, costs and expenses of the
arbitration, Employee shall bear 50% of all fees, costs and expenses of the
arbitration and each party will bear all the fees, costs and expenses of his
or its own attorneys, experts and witnesses.

         Signed at Cincinnati, Ohio on the 25th day of April , 1997.
                                          -----       -------

                                               EMPLOYER:

                                               ChoiceCare Corporation


                                               By: /s/ Donald E. Hoffman
                                                   ----------------------------

                                               ChoiceCare Health Plans, Inc.

                                               By: /s/ Jane E. Rollinson
                                                   ----------------------------



                                    - 20 -


<PAGE>   21




                              EMPLOYEE:

                              /s/ Daniel A. Gregorie
                             ---------------------------------
                             Daniel A. Gregorie, M.D.



                                    - 21 -