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                                                                    EXHIBIT 10.9


                             EMPLOYMENT AGREEMENT



     EMPLOYMENT AGREEMENT (this "Agreement"), dated as of September 20, 1997,
between MEDPARTNERS, INC., a Delaware corporation (together with any successor
corporation, "MedPartners"), and JOHN J. ARLOTTA, a resident of Whitefish Bay,
Wisconsin ("Executive").


                                 WITNESSETH:

     WHEREAS, MedPartners and its subsidiaries and affiliates are engaged in
providing medical practice management services throughout the United States; and

     WHEREAS, MedPartners currently employs Executive as Chief Operating Officer
of Caremark Pharmaceutical Group, and Executive is willing to continue such
employment;

     WHEREAS, MedPartners and Executive desire to enter into this Agreement to
document their understandings and agreements with respect to Executive's
employment.

     NOW THEREFORE, in consideration of the premises, and other mutual promises
and covenants hereinafter contained, MedPartners and Executive do hereby agree,
for their mutual benefit, as follows:


Section 1.  Employment.

     Executive shall be employed by MedPartners under this Agreement, effective
September 20, 1997, and Executive accepts such employment upon the terms and
conditions hereinafter set forth.


Section 2.  Term.

     The term of employment provided for in this Agreement shall commence on
September 20, 1997, and shall remain in full force and effect through December
31, 1999.  Such term shall be automatically extended for an additional year upon
expiration of its initial term or any renewal term, unless, at least 60 days
prior to such expiration, either Executive or MedPartners gives the other party
written notice of intent to terminate the Agreement at the end of such term.

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Section 3.  Powers and Duties.

     Executive shall be employed by MedPartners during the term of employment
under this Agreement as Chief Operating Officer of Caremark Pharmaceutical
Group.  In addition, Executive shall also hold similar offices with MedPartners'
subsidiaries and affiliates and/or their successors, and shall perform such
duties, as may be assigned to him from time to time by the President and Chief
Operating Officer of MedPartners ("President").

     In carrying out his duties under this Agreement, Executive shall have such
powers and duties usually incident to the office of Chief Operating Officer of
Caremark Pharmaceutical Group.  The performance by Executive of any duties
assigned to him which are not of the type provided for herein shall not
constitute a waiver of his rights hereunder or an abrogation, abandonment or
termination of this Agreement.

     Executive shall devote all of his working time and best efforts in the best
interest of and on behalf of MedPartners throughout the term of this Agreement
in a manner appropriate for an executive having Executive's position, duties,
responsibilities and status.  Executive shall not be restricted from investing
his assets in such form or manner as will not require any services on his part
in the operation of the affairs of the companies in which such investments are
made; provided, however, Executive shall be permitted to continue his present
investment and involvement with CustomerCare Corporation based in Milwaukee,
Wisconsin.


Section 4.  Place of Performance.

     The headquarters for the performance of Executive's duties shall be located
in Northbrook, Illinois, but from time to time Executive shall be required to
travel to MedPartners' other locations in the proper conduct of his
responsibilities under this Agreement.  Due to the national scope of
MedPartners' business,  MedPartners may require Executive to spend a reasonable
amount of time traveling, as his duties and the business of MedPartners and its
subsidiaries and affiliates may require.


Section 5.  Compensation.

     For all services rendered by Executive pursuant to this Agreement,
MedPartners shall pay Executive the following compensation:

     (a) Executive shall be paid a Base Salary of $300,000 per year, payable in
accordance with MedPartners' standard payroll practices for executive employees.
Executive's Base Salary shall be reviewed annually during the term of this
Agreement by the President.

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     (b) Executive shall be eligible to receive a guaranteed annual Performance
Bonus of up to 50% of his Base Salary in accordance with MedPartners' Incentive
Compensation Plan. All bonus payments shall be made after February 15 of the
year following the year for which such bonus payments are earned.

     (c) In addition to any stock options heretofore granted by MedPartners
to Executive, Executive shall receive options to purchase 100,000 shares of
MedPartners' Common Stock, to vest 100% on October 1, 1999 with no vesting to
occur prior to that date except as otherwise provided in Section 10(c) hereof.
Except for the vesting provisions described in the preceding sentence, such
options shall be subject to the terms and provisions of MedPartners' Stock
Option Plan and the documents relating thereto.

     (d) For purposes of administration, the terms of this Agreement shall be
given effect on a pro-rata basis for partial calendar years and otherwise
administered on a calendar year basis.


Section 6.  Employee Benefits.

     Subject to eligibility requirements, Executive will be entitled to
participate in any employee retirement, benefit or welfare plans provided by
MedPartners to its employees and/or to its senior executives, such as life
insurance, health and dental, retirement, savings and disability plans which
MedPartners has in effect or may adopt from time to time.  Without limiting the
generality of the foregoing, MedPartners shall provide Executive the following
during the term of this Agreement:

     (a) four (4) weeks of vacation during each year of this Agreement;

     (b) payment of dues for such professional societies and associations of
which Executive is a member in furtherance of his duties hereunder;

     (c) consideration, at least annually, by the Board of Directors for the
grant to Executive of options to purchase Common Stock of MedPartners, subject
to the terms of MedPartners' stock option plans;

     (d) relocation costs if Executive elects to move from Whitefish Bay,
Wisconsin to the Chicago area in accordance with MedPartners' relocation policy
for executives, which shall include, without limitation, costs for movement of
household goods and certain closing costs associated with the sale of
Executive's prior residence and purchase of Executive's new residence; and

     (e) participation in the MedPartners executive benefits program, which
shall include, without limitation, an automobile allowance, an allowance for
personal estate and tax planning services and split-dollar life insurance.

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Section 7.  Expenses.

     Executive is authorized to incur reasonable expenses in promoting the
business of MedPartners and its subsidiaries and affiliates, including expenses,
to the extent used for business purposes, for entertainment, travel and similar
items.  MedPartners will reimburse Executive for all such expenses, upon the
presentation by him of an itemized account of such expenditures in accordance
with the MedPartners expense reimbursement procedures.


Section 8.  Definitions.

     As used in this Agreement, the following terms shall have the meanings set
forth below:

     (a) "Cause" shall mean (i) willful refusal by Executive to follow a lawful
order of the Chairman of the Board, Chief Executive Officer, President, the
Board of Directors or other executive of MedPartners to whom Executive reports
that is consistent with the duties of Executive, subject, however, to
Executive's right to receive written notice of the order not followed by
Executive and the opportunity to promptly follow the order; (ii) any act of
moral turpitude or Executive's willful engagement in conduct materially
injurious to the business interests of MedPartners or any of its subsidiaries
and affiliates (as determined by the President in his reasonable judgment);
(iii) Executive's conviction for any felony; or (iv) Executive's material breach
of his duties, responsibilities and obligations under this Agreement (except due
to Executive's incapacity as a result of physical or mental illness) that has
not been corrected or remedied within 60 days after Executive's receipt of
written notice from MedPartners specifying such breach; provided, however, (A)
such cure period may be extended if Executive is working diligently to cure such
breach and reasonably needs an extension to effect such cure, and (B) no such
cure period will be provided if, in the President's reasonable judgment, such
breach cannot be sufficiently corrected or remedied so as to avoid any material
detriment to MedPartners.

     (b)  "Change in Control" shall mean:

           (i) The acquisition by any individual, entity or group (within the
               meaning of Section 13(d)(3) or 14(d)(2) of the Securities
               Exchange Act of 1934, as amended (the "Exchange Act") (a
               "Person") of beneficial ownership (within the meaning of 
               Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
               either (A) the then outstanding shares of Common Stock of
               MedPartners (the "Outstanding Company Common Stock") or (B) the
               combined voting power of the then outstanding voting securities
               of MedPartners entitled to vote generally in the election of
               directors ("the Outstanding Company Voting Securities");
               provided, however, that for purposes of this subsection (i), the
               following acquisitions shall not constitute a Change in Control:
               (1) any acquisition directly from

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               MedPartners, (2) any acquisition by MedPartners, (3) any
               acquisition by any employee benefit plan (or related trust)
               sponsored or maintained by MedPartners or any corporation
               controlled by MedPartners, or (4) any acquisition by any
               corporation pursuant to a transaction which complies with clauses
               (1), (2) and (3) of subsection (iii) below;

         (ii)  Individuals who, as of the date of this Agreement, constitute the
               Board of Directors of MedPartners (the "Incumbent Board") cease
               for any reason to constitute at least a majority of the Board of
               Directors; provided, however, that any individual becoming a
               director subsequent to the date hereof whose election, or
               nomination for election by MedPartners' stockholders, was
               approved by a vote of at least a majority of the directors then
               comprising the Incumbent Board shall be considered as though such
               individual were a member of the Incumbent Board, but excluding,
               for this purpose, any such individual whose initial assumption of
               office occurs as a result of an actual or threatened election
               contest with respect to the election or removal of directors or
               other actual or threatened solicitation of proxies or consents by
               or on behalf of a Person other than the Board;


        (iii)  Consummation of a reorganization, merger or consolidation or sale
               or other disposition of all or substantially all of the assets of
               MedPartners (a "Business Combination"), in each case, unless,
               following such Business Combination, (1) all or substantially all
               of the individuals and entities who were the beneficial owners,
               respectively, of the Outstanding Company Common Stock and
               Outstanding Company Voting Securities immediately prior to such
               Business Combination beneficially own, directly or indirectly,
               more than 50% of, respectively, the then outstanding shares of
               common stock and the combined voting power of the then
               outstanding voting securities entitled to vote generally in the
               election of directors, as the case may be, of the corporation
               resulting from such Business Combination (including, without
               limitation, a corporation which as a result of such transaction
               owns MedPartners or all or substantially all of MedPartners'
               assets either directly or through one or more subsidiaries) in
               substantially the same proportions as their ownership,
               immediately prior to such Business Combination of the Outstanding
               Company Common Stock and Outstanding Company Voting Securities,
               as the case may be, (2) no party (excluding any corporation
               resulting from such Business Combination or any employee benefit
               plan (or related trust) of the Company or such corporation
               resulting from such Business Combination) beneficially owns,
               directly or indirectly, 20% or more of, respectively, the then
               outstanding shares of common stock of the corporation resulting
               from such Business Combination or the combined voting power of
               the then outstanding voting securities of such corporation except
               to the extent that 

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               such ownership existed prior to the Business Combination, and (3)
               at least a majority of the members of the board of directors of
               the corporation resulting from such Business Combination were
               members of the Board of Directors of MedPartners at the time of
               the execution of the initial agreement, or of the action of the
               Board of Directors, providing for such Business Combination; or



          (iv) Approval by the stockholders of MedPartners of a complete
               liquidation or dissolution of MedPartners.

     (c) "Code" shall mean the Internal Revenue Code of 1986 and all regulations
promulgated thereunder, as the same may be amended from time to time.

     (d) "Disability" shall be deemed to have occurred if Executive makes
application for or is otherwise eligible for disability benefits under any
MedPartners-sponsored long-term disability program covering Executive, and
Executive qualifies for such benefits.  In the absence of a MedPartners-
sponsored long-term disability program covering Executive, Executive shall be
presumed totally and permanently disabled if so determined by the Executive Vice
President following reasonable review of a medical opinion certifying that
Executive will be unable to perform his duties under this Agreement for at least
90 days due to a physical or mental condition.

     (e)  "Good Reason" shall mean:

          (i)  A reduction in Executive's Base Salary, as the same may be
increased from time to time, other than a reduction in connection with an
across-the-board salary reduction affecting MedPartners' employees at a
comparable level to Executive;

          (ii) A material reduction in Executive's title, duties or
responsibilities unless replaced with a new title, duties or new
responsibilities of comparable stature or value to MedPartners within 30 days;

          (iii) A material breach of this Agreement by MedPartners that is not
remedied within 30 days after receiving written notice from Executive of such
failure;

          (iv)  Any purported termination for Cause or Disability without
reasonable grounds therefor;

          (v)   Any change in Executive's primary work location from the
Chicago, Illinois area; or

          (vi)  Executive ceases to be operationally responsible for the
Caremark Pharmaceutical Group business.

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     (f) "Retirement Date" shall mean the date Executive reaches age 70 1/2, or
the date Executive retires in accordance with MedPartners' retirement
arrangements established for Executive with Executive's consent.


Section 9.  Termination.

     This Agreement shall terminate upon the occurrence of any of the following
termination events:

     (a) Executive gives notice to MedPartners that Executive wishes to
terminate this Agreement for any reason other than Good Reason not less than 90
days after such notice is given, such termination to be effective on the date
specified in such notice;

     (b) Executive gives notice to MedPartners that Executive wishes to
terminate this Agreement for Good Reason not less than 90 days after such notice
is given, such termination to be effective on the date specified in such notice;

     (c) MedPartners gives notice to Executive that MedPartners wishes to
terminate this Agreement for Cause, such termination to be effective upon
receipt by Executive of such notice;

     (d) Executive dies or Executive ceases to be able to perform his duties
hereunder due to death or Disability, such termination to be effective
immediately upon such death or Disability;

     (e) Executive reaches his Retirement Date, such termination to be effective
upon such Retirement Date; or

     (f) MedPartners gives notice to Executive that MedPartners wishes to
terminate this Agreement for any reason other than for Cause or due to
Executive's death, Disability or Retirement Date not less than 90 days after
such notice is given, such termination to be effective on the date specified in
such notice.


Section 10.  Termination Benefits.

     (a) Upon the occurrence of an event of termination described in Section
9(a) or 9(c), Executive shall be entitled to receive the following as severance
compensation:

          (i) payment of any previously unpaid Base Salary through the date of
termination; and

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          (ii) payment of any life insurance, disability or other benefits, if
any, for which Executive is then eligible under the terms of MedPartners'
employee retirement, benefit and welfare plans.

     (b) Upon the occurrence of an event of termination described in Section
9(d) or 9(e), Executive (or Executive's estate in the event of Executive's
death) shall be entitled to receive the following as severance compensation:

         (i)   payment of any previously unpaid Base Salary through the date of
termination;

         (ii)  payment of Executive's Performance Bonus under Section 5(b)
through the date of termination, calculated on the basis of the sum of the total
achievable amounts of the Performance Bonus for the current fiscal year, divided
by twelve months, and multiplied by the number of months Executive is employed
during such fiscal year through the date of termination, with any partial month
of employment to be treated as a full month; and

         (iii) payment of any life insurance, disability or other benefits, if
any, for which Executive is then eligible under the terms of MedPartners'
employee retirement, benefit and welfare plans.

     (c) Upon the occurrence of an event of termination described in Sections
9(b) or 9(f), Executive shall be entitled to receive the following as severance
compensation:

         (i)   payment of any previously unpaid Base Salary through the date of
termination;

         (ii)  payment of Executive's Performance Bonus under Section 5(b)
through the date of termination, calculated on the basis of the sum of the total
achievable amounts of the Performance Bonus for the current fiscal year, divided
by twelve months, and multiplied by the number of months Executive is employed
during such fiscal year through the date of termination, with any partial month
of employment to be treated as a full month;

          (iii) continued payment of Executive's annual Base Salary at the time
of termination (or, if greater, of Executive's annual Base Salary in effect
immediately prior to the current annual Base Salary rate) for a period of two
years;

          (iv) continued payment of the total achievable amounts of Executive's
Performance Bonus under Section 5(b) for the current fiscal year (or, if
greater, of the total achievable amounts of Executive's Performance Bonus in
effect for the fiscal year most recently ended) for a period of two years;

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          (v)    payment of any life insurance, disability or other benefits, if
any, for which Executive is then eligible under the terms of MedPartners'
employee retirement, benefit and welfare plans;

          (vi)   subject to the terms and eligibility requirements of any such
plan, continued coverage for a period of two years following the date of
termination under any executive benefits program, employee retirement, benefit
and welfare plans of MedPartners for which Executive is then eligible; provided
that, (A) if Executive's participation in any such plan is not permitted under
the terms thereof, MedPartners will use reasonable best efforts to provide or
arrange comparable coverage for Executive, (B) MedPartners' obligation under
this paragraph (vi) will terminate with respect to any plan on the date
Executive first becomes eligible for the same type of coverage under another
employer's plan, and (C) to the extent applicable, upon termination of coverage
under any MedPartners plan pursuant to this paragraph (vi), Executive shall have
the option to have assigned to him at no cost and with no apportionment for
prepaid premiums, any assignable insurance policy owned by MedPartners and
relating specifically to Executive;

          (vii)  a right to immediately vest in 100% of all options to purchase
Common Stock of MedPartners that have been granted to Executive by MedPartners
(including, without limitation, the options described in Section 5(c) hereof)
and a period of at least 90 days following termination for Executive to exercise
all such options in accordance with the terms thereof; and

          (viii) payment of all reasonable legal fees and expenses incurred by
Executive as a result of termination, including all such fees and expenses, if
any, incurred in contesting or disputing Executive's termination or in seeking
to obtain or enforce any right or benefit provided by this Agreement.

     (d) Payment of severance compensation under paragraph (c) of this Section
10 shall be conditioned upon Executive signing a Separation Agreement and
General Release in substantially the form attached hereto as Exhibit A, or such
other form of similar scope and content as may be mutually agreed by the
parties.

     (e) Subject to Section 12 hereof, Executive shall be entitled to receive
severance compensation to the extent provided in this Agreement regardless of
whether Executive obtains other employment following termination of his
employment with MedPartners.


Section 11.  Certain Additional Payments By MedPartners.

     (a) Anything in this Agreement to the contrary notwithstanding and except
as set forth below, if it shall be determined that any payment or distribution
by MedPartners to or for Executive's benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments 

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required under this Section 11) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax") , then Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.

          Notwithstanding the foregoing provisions of this Section 11, if it
shall be determined that Executive is entitled to a Gross-Up Payment, but that
the Payments do not exceed 110% of the greatest amount that could be paid to
Executive such that the receipt of Payments would not give rise to any Excise
Tax (the "Reduced Amount"), then no Gross-Up Payment shall be made to Executive
and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

          All determinations required to be made under this Section 11,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized accounting firm as may
be designated by Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to MedPartners and Executive within 15 business
days of the receipt of notice from Executive that there has been a  Payment, or
such earlier time as is requested by MedPartners.  In the event that the
Accounting Firm is serving as accountant or auditor for an individual, entity or
group effecting a Change in Control, Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne by MedPartners.  Any
Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by
MedPartners to Executive within five days of the receipt of the Accounting
Firm's determination.  Any determination by the Accounting Firm shall be binding
upon MedPartners and Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by MedPartners should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder.  In the event
that MedPartners exhausts its remedies pursuant to Section 11(b)  and Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by MedPartners to or for Executive's
benefit.

     (b) Executive shall notify MedPartners in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
MedPartners of the Gross-Up Payment.  Such notification shall be given as soon
as practicable but no later then ten business days after Executive is informed
in writing of such claim and shall apprise MedPartners of the 

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nature of such claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to MedPartners (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If MedPartners notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive shall:

          (i)   give MedPartners any information reasonably requested by
MedPartners relating to such claim,

          (ii)  take such action in connection with contesting such claim as
MedPartners shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by MedPartners,

          (iii) cooperate with MedPartners in good faith in order effectively
to contest such claim, and

          (iv)  permit MedPartners to participate in any proceeding relating to
such claim;

provided, however, that MedPartners shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an after-
tax basis, from any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such representation and payment of
costs and expense.  Without limitation on the foregoing provisions of this
Section 11, MedPartners shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as MedPartners shall
determine; provided, however, that if MedPartners directs Executive to pay such
claim and sue for a refund, MedPartners shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for Executive's taxable year with respect to which such contested amount
is claimed to be due is limited solely to such contested amount.  Furthermore,
MedPartners' control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.

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     (c) If, after Executive's receipt of an amount advanced by MedPartners
pursuant to Section 11(b), Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to MedPartners' complying with
the requirements of this Section 11(b)) promptly pay to MedPartners the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after Executive's receipt of an amount advanced by
MedPartners pursuant to Section 11(b), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and MedPartners
does not notify Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.


Section 12.  Non-Competition.

     (a) In the event that Executive's employment under this Agreement shall
terminate during its term, for the period of time with respect to which
Executive is entitled to receive compensation hereunder after such termination
(but in any event for a period of not less than one year), Executive shall not,
directly or indirectly, (i) own, operate, be employed by, be a director of, act
as a consultant for, be associated with, or be a partner or have a proprietary
interest in, any enterprise, partnership, association, corporation, joint
venture or other entity, which is competitive with the businesses of
MedPartners, or any subsidiary or affiliate thereof, in any county in a state
where MedPartners or its subsidiaries or affiliates are conducting such business
at the time of such termination, or (ii) hire, permit the hiring of, offer to
hire, entice away or otherwise persuade or attempt to persuade any employee
(including any employee during the six (6) month period prior to Executive's
termination of service), officer, affiliated health care provider, supplier or
any prospective health care provider or supplier then negotiating with
MedPartners, to discontinue or alter its or their relationship with MedPartners
or any of its subsidiaries and affiliates; provided, however, that if such
termination shall occur as a result of a Change in Control, this Section 12
shall be void and shall be of no further force and effect.

     (b) The parties have entered into this Section 12 of this Agreement in good
faith and for the reasons set forth in the recitals hereto and assume that this
Agreement is legally binding.  If, for any reason, this Section 12 is not
binding because of its geographical scope or because of its term, then the
parties agree that this Agreement shall be deemed effective to the widest
geographical area and/or the longest period of time (but not in excess of one
year) as may be legally enforceable.

     (c) Executive acknowledges that the rights and privileges granted to
MedPartners in this Section 12 are of special and unique character, which gives
them a peculiar value, the loss of which may not be reasonably or adequately
compensated for by damages in an action of law, and that a breach thereof by
Executive of this Section 12 will cause MedPartners great and irreparable injury
and damage.  Accordingly, Executive hereby agrees that MedPartners shall be

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entitled to remedies of injunction, specific performance or other equitable
relief to prevent a breach of this Section 12 of this Agreement by Executive.
This provision shall not be construed as a waiver of any other rights or
remedies MedPartners may have for damages or otherwise.


Section 13.  Change in Control.

  Upon a Change in Control, Executive shall have no additional benefits beyond
those described in this Agreement, except that immediately upon the occurrence
of a Change in Control, Executive shall vest 100% in all options to purchase
Common Stock of MedPartners granted to Executive by MedPartners including,
without limitation, the options described in Section 5(c) hereof.


Section 14.  Non-Assignability.

     Executive shall not have the right to assign, transfer, pledge, hypothecate
or dispose of any right to receive payments hereunder or any rights, privileges
or interest hereunder, all of which are hereby expressly declared to be non-
assignable and non-transferable, except after termination of his employment
hereunder.  In the event of a violation of the provisions of this Section 14, no
further sums shall hereafter become due or payable by MedPartners or its
subsidiaries and affiliates to Executive or his assignee, transferee, pledgee or
to any other person whatsoever, and MedPartners shall have no further liability
under this Agreement to Executive.


Section 15.  Claims; Arbitration.

     (a) All claims by Executive for compensation and benefits under this
Agreement shall be directed to and determined by the President and shall be in
writing.  Any denial by the President of a claim for benefits under this
Agreement shall be delivered to Executive in writing and shall set forth the
specific reasons for the denial and specific provisions of this Agreement relied
upon.  The President shall afford a reasonable opportunity to Executive for a
review of a decision denying a claim and shall further allow Executive to appeal
any such decision to the President within 60 days after notification by the
President that Executive's claim has been denied.

     (b) To the extent permitted by applicable law, any further dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Chicago, Illinois, in accordance with the rules of
the American Arbitration Association then in effect.  The agreement set forth
herein to arbitrate shall be specifically enforceable under the prevailing
arbitration law.

                                       13
<PAGE>
 
     (c) By initialing below, the parties hereto (i) acknowledge that they have
read and understood the provisions of this Section regarding arbitration and
(ii) that performance of this Agreement will be an interstate commerce as that
term is used in the Federal Arbitration Act, 9 U.S.C. (S) 1 et seq., and the
parties contemplated substantial interstate activity in the performance of this
Agreement including, but not limited to, interstate travel, the use of
interstate phone lines, the use of the U.S. mail services and other interstate
courier services.

                    John J. Arlotta             For MedPartners:


                 _______________________     ________________________

     (d) Notice of the demand for arbitration shall be filed in writing with the
other party to this Agreement and with the American Arbitration Association.
The demand for arbitration shall be made within a reasonable time after the
claim, dispute or other matter in question has arisen, and in no event shall it
be made after the date when institution of legal or equitable proceedings based
on such claim, dispute or other matter in question would be barred by the
applicable statute of limitations.

     (e) The award rendered by the arbitrator shall be final and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof.

     (f) Unless otherwise agreed in writing, MedPartners shall continue to make
payments and provide benefits in accordance with this Agreement, and Executive
shall continue to perform his obligations hereunder during any arbitration
proceedings.

     (g) Subject to Section 10(c)(viii), in the event Executive incurs legal
fees and other expenses in seeking to obtain or to enforce any rights or
benefits provided by this Agreement and is successful, in whole or in part, in
obtaining or enforcing any such rights or benefits through settlement,
arbitration, or otherwise, MedPartners shall promptly pay Executive's reasonable
legal fees and expenses incurred in enforcing this Agreement and the fees of the
arbitrator or arbitrators.  Except to the extent provided in the preceding
sentence, each party shall pay its own legal fees and other expenses associated
with any dispute.


Section 16.  Employment Taxes.

     All compensation paid pursuant to this Agreement, including compensation
paid pursuant to Section 5 and Section 10 of this Agreement, shall be subject to
reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions.

                                       14
<PAGE>
 
Section 17.  Binding Effect.

     The rights and obligations of MedPartners and its subsidiaries under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of MedPartners.  Executive shall not assign or alienate any interest
of his in this Agreement, except as provided in Section 11 hereof.


Section 18.  Waiver of Breach.

     The waiver by either party to this Agreement of a breach of any provision
thereof by the other party shall not operate or be construed as a waiver of any
subsequent breach of such party.


Section 19.  Notices.

     Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if sent by certified or registered mail to
Executive's residence (if such notice is addressed to Executive), or to the
principal executive offices of MedPartners in Birmingham, Alabama (if such
notice is addressed to MedPartners).

Section 20.  Entire Agreement.

     This instrument shall be governed by the laws of the State of Illinois and
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any other agreements, whether written or oral, between the
parties.  This Agreement may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.


Section 21.  Counterparts.

     This Agreement may be executed in two or more counterparts, each of which
shall for all purposes be deemed to be an original, but each of which, when so
executed, shall constitute but one and the same instrument.

                                       15
<PAGE>
 
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.



                              MEDPARTNERS, INC.


_____________________________       By:__________________________________
JOHN J. ARLOTTA                     Title:_______________________________

                                       16
<PAGE>
 
                                   EXHIBIT A


                    SEPARATION AGREEMENT AND GENERAL RELEASE
                    ----------------------------------------



     1.  General Release.  I, John J. Arlotta ("Executive"), release, dismiss
         ---------------                                                     
and forever discharge MedPartners, Inc. ("MedPartners") and its affiliated
corporations and stockholders, officers, directors, employees, agents,
predecessors, successors, transferees and assigns from any and all actions,
causes of action, suits, damages, debts, claims, counterclaims, obligations and
liabilities of whatever nature, known or unknown, resulting or arising out of,
directly or indirectly, my employment relationship or the termination of my
employment relationship with MedPartners, including, without limitation by
reason of specification, any claims for breach of contract of any kind, wrongful
discharge of any kind, any tort claims of any kind, and any claims arising under
any federal, state, or local laws or ordinances prohibiting any form of
discrimination, including, without limitation by reason of specification, the
Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act
of 1964, the Older Workers Benefits Protection Act, the Americans with
Disabilities Act, the Civil Rights Act of 1991, and any common law claims now or
hereafter recognized.  The foregoing release shall not, however, constitute a
release by Executive of MedPartners from its obligations under this Agreement.

     2.  Separation Date.  Executive acknowledges that the last day of his
         ---------------                                                  
employment with MedPartners was ______________, ________________, 199__.

     3.  Non-Admission.  Executive agrees and acknowledges that neither this
         -------------                                                      
Agreement nor MedPartners' offer to enter into this Agreement should be
construed as an admission by MedPartners that it has acted wrongfully towards
Executive or any other employee, and that MedPartners expressly denies any
liability to, or wrongful acts against Executive on the part of itself, its
employees or its agents.

     4.   Severance Consideration.  In full consideration and as material
          -----------------------                                        
inducement of signing this Agreement, MedPartners will, contingent upon the
expiration of the revocation period set forth in paragraph 7(e) herein, pay or
provide the compensation and benefits required to be paid under Section 10(c) of
the Employment Agreement dated as of September 20, 1997 between MedPartners and
Executive.

     5.  Other Employment Documents. MedPartners specifically retains the right
         --------------------------                                            
to enforce terms and provisions of Executive's Employment Agreement,
Confidentiality and Conflict of Interest Agreement and Property Agreement, Stock
Option Agreement and related documents, and other documents signed by Executive,
to the extent such terms and provisions survive termination of Executive's
employment.

                                       17
<PAGE>
 
     6.  Confidentiality.  Executive represents and agrees that Executive will
         ---------------                                                      
keep the terms, amount and fact of this Agreement completely confidential except
that Executive may disclose information concerning this Agreement (a) to his
immediate family, investment advisor, tax advisor, outplacement advisor,
accountant and attorney, provided that they agree to keep this information
confidential, (b) to the extent necessary to enforce the terms of this Agreement
or (c) if required by applicable law or court order.

     7.  Compliance with Law.  Executive hereby acknowledges and agrees that
         -------------------                                                
this Agreement and the termination of his employment and all actions taken in
connection therewith are in compliance with the Age Discrimination in Employment
Act and the Older Workers Benefits Protection Act and that the release set forth
in paragraph 1 hereof shall be applicable, without limitation, to any claims
brought under these Acts.  Executive further acknowledges and agrees that:

          (a) The release given by Executive in this Agreement are given solely
in exchange for the consideration set forth in paragraph 4 of this Agreement and
such consideration is in addition to anything of value to which Executive
received prior to entering into this Agreement;

          (b) By entering into this Agreement, Executive does not waive rights
or claims that may arise after the date of this Agreement is executed;

          (c) Executive has been advised to consult an attorney prior to
entering into this Agreement, and this provision of this Agreement satisfies the
requirement of the Older Workers Benefits Protection Act that Executive be so
advised in writing;

          (d) Executive has had at least twenty-one (21) days within which to
consider this agreement; and

          (e) For a period of seven (7) days following execution of this
Agreement, Executive may revoke this Agreement and this Agreement shall not
become effective or enforceable until such seven (7) day period has expired.

     8.  Knowledgeable Decision by Executive.  Executive has read all of the
         -----------------------------------                                
terms of this Agreement and has had an opportunity to discuss it with
individuals of Executive's own choice, as limited by paragraph 6 of this
Agreement, who are not associated with MedPartners.  Executive understands the
terms of this Agreement and that this Agreement releases MedPartners forever
from any legal action arising from Executive's employment relationship and the
termination of his employment relationship by MedPartners.  Executive signs this
Agreement of his own free will in exchange for the consideration to be given to
Executive, which Executive acknowledges is adequate and satisfactory.  Neither
MedPartners nor its agents, representatives, 

                                       18
<PAGE>
 
or employees have made any representations to Executive concerning the terms or
effects of this Agreement, other than those contained in the Agreement.

     In witness whereof, the parties have executed this Agreement this ____ day
of __________________, 199__.



Executive:                    MedPartners:

                              MEDPARTNERS, INC.

/s/ John J. Arlotta                 By: /s/ Larry R. House  
-----------------------------           -----------------------------
JOHN J. ARLOTTA                     Title: President and CEO
                                           --------------------------

                                       19