<PAGE>
 
                                                                   EXHIBIT 10.21
 
                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Amended and Restated
Agreement") is made and entered into as of the 24th day of July, 1998, by and
between PHP Healthcare Corporation, a Delaware corporation (the "Company"), and
Jack M. Mazur, an individual (the "Executive") (hereinafter collectively
referred to as the "Parties").

          WHEREAS, the Executive and the Company entered into an employment
agreement dated as of May 1, 1992 ("Employment Agreement");

          WHEREAS, the Company continues to desire to employ the Executive as
its Chief Executive Officer and the Executive continues to desire to serve the
Company as its Chief Executive Officer;

          WHEREAS, the Company and the Executive desire to amend and restate the
Employment Agreement as set forth herein:

          NOW, THEREFORE, in consideration of the foregoing, the mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:

          1.  Term.  Subject to the provisions for termination set forth in
              ----                                                         
Section 8, the initial term of employment under this Amended and Restated
Agreement shall be for a period of three (3) years commencing on the date hereof
and shall be automatically extended for additional one (1) year periods, unless
one of the Parties shall give written notice to the other on or before the date
which is fifteen (15) months prior to the expiration of the current term of the
Amended and Restated Agreement of such Party's election not to so extend this
Amended and Restated Agreement.

          2.  Employment.  (a)  The Executive shall be employed as the Chief
              ----------                                                    
Executive Officer of the Company or in such other senior executive capacity as
may be mutually agreed to in writing by the Parties.  The Executive shall
perform the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by persons situated in a similar
executive capacity.  He shall also promote, by entertainment or otherwise, the
business of the Company.  The Executive shall report to the Board of Directors
of the Company (the "Board").  All other officers of the Company shall report to
the Executive or such person(s) as the Executive designates from time to time.

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     (b) Excluding periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and time during
the usual business hours to the business and affairs of the Company to the
extent necessary to discharge the responsibilities assigned to the Executive
hereunder.  Subject to the foregoing, the Executive may (i) serve on corporate,
trade group, civic or charitable boards or committees, (ii) manage his personal,
financial and legal affairs, (iii) deliver lectures, fulfill speaking
engagements or teach at educational institutions or programs, and (iv) invest
personally in any business in a private capacity where no actual conflict of
interest exists between such investment and the business of the Company.

     3.  Base Salary.   The Company agrees to pay or cause to be paid to the
         -----------                                                        
Executive during the term of this Amended and Restated Agreement a base salary
at the rate of $675,000 per annum or such larger amount as the Board may from
time to time determine (hereinafter referred to as the "Base Salary").  Such
Base Salary shall be payable in accordance with the Company's customary
practices applicable to its senior executives.  Such rate of salary, or
increased rate of salary, if any, as the case may be, shall be reviewed at least
annually by the Board and may be further increased (but not decreased) in such
amounts as the Board in its discretion may decide.

          4.  Employee Benefits.  The Executive shall be entitled to participate
              -----------------                                                 
in all employee benefit plans, practices and programs maintained by the Company
and made available to employees generally including, without limitation all
pension, retirement, profit sharing, savings, medical, hospitalization,
disability, dental, life or travel accident insurance benefit plans.  The
Executive's participation in such plans, practices and programs shall be on the
same basis and terms as are applicable to senior executives of the Company
generally. The Executive shall receive service credit under any such plans,
practices and programs for the entire term of his employment with the Company
since March 1, 1976.

          5.  Executive Benefits.  The Executive shall be entitled to
              ------------------                                     
participate in all executive benefit or incentive compensation plans now
maintained or hereafter established by the Company for the purpose of providing
compensation and/or benefits to executives of the Company including, but not
limited to, the Company's 1986 Stock Option Plan, the Company's 401(k) Plan, the
Company's Earnings Growth Incentive Plan and the Company's Stock Appreciation
Incentive Plan, the 1996 Incentive Plan, and any supplemental retirement, salary
continuation, stock option, deferred compensation, supplemental medical or life
insurance or other bonus or incentive compensation plans.  Unless otherwise
provided herein, or in the terms of such executive benefit or incentive
compensation plans, the Executive's participation in such plans shall be on the
same basis and terms as other similarly situated executives of the Company, but
in no event on a basis less favorable in terms of benefit levels or reward
opportunities applicable to the Executive as in effect on the date hereof.  No
additional compensation provided under 

                                      -2-
<PAGE>
 
any of such plans shall be deemed to modify or otherwise affect the terms of
this Amended and Restated Agreement or any of the Executive's entitlements
hereunder. The Executive shall receive service credit under any such plans,
practices and programs for the entire term of his employment with the Company
since March 1, 1976.

        6.  Other Benefits.
            -------------- 

          (a) Fringe Benefits and Perquisites.  The Executive shall be entitled
              -------------------------------                                  
to receive all fringe benefits and perquisites (including, without limitation,
those fringe benefits and perquisites listed in this Section 6) generally made
available by the Company to its executives.

                (1) Tax Preparation and Estate Planning Assistance.  The Company
                    ----------------------------------------------          
shall provide, at its cost, tax preparation and estate planning assistance for
the Executive, to be furnished by such advisors as chosen by the Executive, up
to a maximum of $25,000 per year.

                (2) Limousine.  The Company shall provide, at its cost, a 
                    ---------                                       
chauffeured limousine for the Executive for his personal use outside of the
local Washington D.C. area.

                (3) Airplane.  The Company shall provide, at its cost, an 
                    --------      
airplane for the Executive's use, up to a maximum cost of $40,000 per year for
such use.

                (4) Club Dues.  The Company shall provide the Executive with an
                    ---------                                                  
allowance of $10,000 per year for the dues and other annual membership costs of
The City Club and the Avenel Country Club (separate and apart from incidental
and ordinary business reimbursements associated with the business use of such
facilities).

                (5) Medical Examination.  The Company shall provide, at its 
                    -------------------                         
cost, a medical examination for the Executive on an annual basis at a medical
clinic selected by the Executive.

                (6) Life Insurance.  The Company shall provide (i) at its cost,
                    --------------                                             
supplemental multi-year, renewable term life insurance coverage for the
Executive in the amount of $3.0 million (substantially similar to that provided
by Phoenix Home Life Insurance Co. Policy No. 2719663) and (ii) loans to fund
the premiums on split dollar life insurance coverage for the Executive in the
amount of $5.0 million (substantially similar to that provided by Phoenix Home
Life Insurance Co. Policy No. 2579828).

          (b) Expenses.  The Executive shall be entitled to receive prompt
              --------                                                    
reimbursement of all expenses reasonably incurred by him in connection with the

                                      -3-
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performance of his duties hereunder or for promoting, pursuing or otherwise
furthering the business or interests of the Company.

          (c) Office and Facilities.  Consistent with his senior executive
              ---------------------                                       
status hereunder, the Executive shall be provided with an appropriate office at
the Company's executive offices and such other place as may be mutually agreed
upon by the Parties and with an executive assistant selected by the Executive to
provide organizational, writing, analytical, secretarial and other support
services.

        7.  Vacation and Sick Leave.  At such reasonable times as the Board 
            -----------------------                                        
shall in its discretion permit, the Executive shall be entitled, without loss of
pay, to absent himself voluntarily from the performance of his employment under
this Amended and Restated Agreement, provided that:

          (a) The Executive shall be entitled to annual vacation in accordance
with the policies as periodically established by the Board for similarly
situated executives of the Company, which shall in no event be less than four
weeks per year.

          (b) In addition to the aforesaid paid vacations, the Executive shall
be entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment for such additional periods of time and for such
valid and legitimate reasons as the Board in its discretion may determine.
Further, the Board shall be entitled to grant to the Executive a leave or leaves
of absence with or without pay at such time or times and upon such terms and
conditions as the Board in its discretion may determine.

          (c) The Executive shall be entitled to sick leave (without loss of
pay) in accordance with the Company's policies as in effect from time to time.

        8.  Termination.  The Executive's employment hereunder may be terminated
            -----------                                              
under the following circumstances:

          (a) Disability.  The Company may terminate the Executive's employment
              ----------                                                       
after having established the Executive's Disability.  For purposes of this
Amended and Restated Agreement, "Disability" means a physical or mental
infirmity which impairs the Executive's ability to substantially perform his
duties under this Amended and Restated Agreement which continues for a period of
at least twelve (12) consecutive months.  A determination of Disability shall be
made by a physician satisfactory to both the Executive and the Company, which
physician's determination as to Disability shall be made within 10 days of the
request therefor and shall be binding on all parties; provided, however, that if
                                                      --------  -------         
the Executive and the Company do not agree on a physician, the Executive and the
Company shall each select a physician and these two together shall select a
third physician, which third physician's determination as to 

                                      -4-
<PAGE>
 
Disability shall be binding on all parties. The Executive shall be entitled to
the compensation and benefits provided for under this Amended and Restated
Agreement for any period during the term of this Agreement and prior to the
establishment of the Executive's Disability during which the Executive is unable
to work due to a physical or mental infirmity. Notwithstanding anything
contained in this Amended and Restated Agreement to the contrary, until the
Termination Date specified in a Notice of Termination (as each term is
hereinafter defined) relating to the Executive's Disability, the Executive shall
be entitled to return to his position with the Company as set forth in this
Amended and Restated Agreement in which event no Disability of the Executive
will be deemed to have occurred.

          (b) Cause.  The Company may terminate the Executive's employment for
              -----                                                           
"Cause." The Company shall be deemed to have terminated the Executive's
employment for "Cause" in the event that the Executive's employment is
terminated for any of the following reasons: the Executive (i) willfully and
continually failed to substantially perform his duties with the Company (other
than a failure resulting from the Executive's incapacity due to physical or
mental illness or from the Executive's assignment of duties that would
constitute "Good Reason" as hereinafter defined) which failure continued for a
period of at least thirty (30) days after a written notice of demand for
substantial performance has been delivered to the Executive specifying the
manner in which the Executive has failed to substantially perform, (ii)
willfully engaged in conduct which is demonstrably and materially injurious to
the Company or an affiliate thereof, monetarily or otherwise or (iii) was
convicted of, or entered a plea of guilty or nolo contendere to, a felony;
provided, however, that no termination of the Executive under clause (i) or (ii)
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shall occur until (x) there shall have been delivered to the Executive a copy of
the written resolution adopted by two thirds of the Board (excluding Executive
for purposes of determining this approval) in good faith at a duly called
meeting thereof setting forth that the Executive was guilty of the conduct set
forth in any such clause and specifying the particulars thereof in detail and
(y) the Executive shall have been provided an opportunity to be heard by the
Board at such meeting with 45 days' advance written notice thereof, and,
provided, further, that no act or failure to act shall be considered willful
--------- -------                                                           
unless done or omitted to be done in bad faith and without reasonable belief
that the action or omission was in the best interests of the Company.
Notwithstanding anything contained in this Amended and Restated Agreement to the
contrary, no failure to perform by the Executive after Notice of Termination is
given by the Company shall constitute Cause for purposes of this Amended and
Restated Agreement.

          (c) (1) Good Reason.  The Executive may terminate his employment for
                  -----------                                                 
"Good Reason."  For purposes of this Amended and Restated Agreement, Good Reason
shall mean the occurrence of any of the events or conditions described in
Subsections (i) through (ix) hereof:

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<PAGE>
 
                    (i) following a Change in Control (as defined):

                        (A) a change in the Executive's status, title, position
              or responsibilities (including reporting responsibilities) which,
              in the Executive's reasonable judgment, does not represent a
              promotion from his status, title, position or responsibilities as
              in effect immediately prior thereto; the assignment to the
              Executive of any duties or responsibilities which, in the
              Executive's reasonable judgment, are inconsistent with such
              status, title, position or responsibilities; or any removal of the
              Executive from or failure to reappoint or reelect him to any of
              such positions, except in connection with the termination of his
              employment for Disability, Cause, as a result of his death or by
              the Executive other than for Good Reason;

                        (B) a reduction in the Executive's Base Salary or any
              failure to pay the Executive any compensation or benefits to which
              he is entitled within five (5) days of the date due;

                        (C) a failure by the Company to increase the Executive's
              Base Salary at least annually at a percentage of Base Salary no
              less than the average percentage increases (other than increases
              resulting from the Executive's promotion) granted to the Executive
              during the three most recent full years ended prior to a Change in
              Control (or such lesser number of full years during which the
              Executive was employed);

                        (D) the Company's requiring the Executive to be based at
              any place outside a 30-mile radius from Reston, Virginia, except
              for reasonably required travel on the Company's business which is
              not materially greater than such travel requirements prior to the
              Change in Control;

                        (E) the failure by the Company to (1) continue in effect
              (without reduction in benefit level and/or reward opportunities)
              any material compensation or benefit plan in which the Executive
              was participating at the time of the Change in Control, including,
              but not limited to, the Company's 1986 Stock Option Plan, the
              Company's 401(k) Plan, the Company's Earnings Growth Incentive
              Plan, and the Company's Stock Appreciation Incentive Plan, or (2)
              provide the Executive with compensation and benefits at least
              equal (in terms of benefit levels and/or reward opportunities) to
              those provided for under each employee benefit plan, program and
              practice as in effect 

                                      -6-
<PAGE>
 
              immediately prior to the Change in Control (or as in effect
              following the Change in Control, if greater).

                        (F) the insolvency or the filing (by any party,
              including the Company) of a petition for bankruptcy, of the
              Company;

                        (G) any material breach by the Company of any provision
              of this Amended and Restated Agreement;

                        (H) any purported termination of the Executive's
              employment for Cause by the Company which does not comply with the
              terms of Section 8 of this Amended and Restated Agreement; or

                        (I) the failure of the Company to obtain an agreement,
              satisfactory to the Executive, from any successor or assign of the
              Company to assume and agree to perform this Amended and Restated
              Agreement, as contemplated in Section 14 hereof;

               (ii) the nature of Executive's duties or the scope of Executive's
     responsibilities (including reporting responsibilities) is materially
     modified by the Company without Executive's written consent where such
     material modification constitutes a demotion of Executive or a substantial
     reduction in Executive's responsibilities; or any removal of the Executive
     from or failure to reappoint or reelect him to any positions held by
     Executive as of the date first written above, except in connection with the
     termination of his employment for Disability, Cause, as a result of his
     death or by the Executive other than for Good Reason;

              (iii) a reduction in the Executive's Base Salary;

               (iv) the Company's requiring the Executive to be based at any
     place outside a 30-mile radius from Reston, Virginia, except for reasonably
     required travel on the Company's business;

                (v) any material breach by the Company of any provision of this
     Amended and Restated Agreement that has not been cured within thirty (30)
     days following receipt by the Company of written notice thereof from the
     Executive specifically identifying such material breach; or

               (vi) any purported termination of the Executive's employment for
     Cause by the Company which does not comply with the terms of Section 8 of
     this Amended and Restated Agreement.

                                      -7-
<PAGE>
 
          (2) The Executive's right to terminate his employment pursuant to this
Section 8(c) shall not be affected by his incapacity due to physical or mental
illness if such incapacity occurs after the event or condition giving rise to
Executive's right to terminate his employment pursuant to this Section 8(c).

        (d) Voluntary Termination.  The Executive may voluntarily terminate his
            ---------------------                                          
employment hereunder at any time. If the Executive voluntarily terminates his
employment for any reason or without reason during the 60-day period which
commences on the date which is six (6) months following the date of a Change in
Control, it shall be referred to as a "Limited Period Termination."

               (e) For purposes of this Amended and Restated Agreement, a
"Change in Control" shall mean any of the following events:

          (1) An acquisition (other than directly from the Company or pursuant
to options granted under this Plan or otherwise by the Company) of any voting
securities of the Company ("Voting Securities") by any "Person" (as the term
person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of twenty percent (20%) or more of the combined voting
power of the Company's then outstanding Voting Securities; provided, however,
                                                           --------  ------- 
that Beneficial Ownership of not more than thirty-five percent (35%) of the
combined voting power of the Company's outstanding Voting Securities by Jack M.
Mazur shall not constitute a Change in Control; provided, further, however, in
                                                --------  -------  -------    
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as defined below) shall not
constitute an acquisition which would cause a Change in Control.  (A "Non-
Control Acquisition" shall mean an acquisition by (A) an employee benefit plan
(or a trust forming a part thereof) maintained by (i) the Company or (ii) any
corporation or other Person of which a majority of its voting power or its
equity securities of equity interest is owned directly or indirectly by the
Company (a "Company Subsidiary"), (B) the Company or any Company Subsidiary, or
(C) any Person in connection with a "Non-Control Transaction" (as defined
below);

          (2) The individuals who, as of October 1, 1996, are members of the
Board of Directors (the "Incumbent Board"), cease for any reason to constitute
at least two-thirds of the Board of Directors; provided, however, that if the
                                               --------  -------             
election, or nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of the Plan, be considered as a member of
the Incumbent Board; provided, further, however, that no individual shall be
                     --------  -------                                      
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual 

                                      -8-
<PAGE>
 
or threatened "Election Contest" (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors (a "Proxy
Contest") including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or

                    (3)  the consummation of:

                    (A) A merger, consolidation or reorganization involving the
          Company, unless

                         (i) the stockholders of the Company immediately before
               such merger, consolidation or reorganization own, directly or
               indirectly, immediately following such merger, consolidation or
               reorganization, at least a majority of the combined voting power
               of the outstanding voting securities of the corporation resulting
               from merger or consolidation or reorganization (the "Surviving
               Corporation") in substantially the same proportion as their
               ownership of the Voting Securities immediately before such
               merger, consolidation or reorganization,

                        (ii) the individuals who were members of the Incumbent
               Board immediately prior to the execution of the agreement
               providing for such merger, consolidation or reorganization
               constitute at least two-thirds of the members of the board of
               directors of the Surviving Corporation, or a corporation
               beneficially directly or indirectly owning a majority of the
               Voting Securities of the Surviving Corporation,

                       (iii) no Person (other than the Company or any Company
               Subsidiary, any employee benefit plan (or any trust apart
               thereof) maintained by the Company, the Surviving Corporation or
               any Company's Subsidiary, or any Person who, immediately prior to
               such merger, consolidation or reorganization had Beneficial
               Ownership of twenty percent (20%) or more of the then outstanding
               Voting Securities) has Beneficial Ownership of twenty percent
               (20%) or more of the combined voting power of the Surviving
               Corporation's then outstanding Voting Securities, and

                        (iv) a transaction described in clauses (i) through
               (iii) shall herein be referred to as a "Non-Control Transaction";

                                      -9-
<PAGE>
 
                    (B) A complete liquidation or dissolution of the Company; or

                    (C) An agreement for the sale or other disposition of all or
          substantially all of the assets of the Company to any Person (other
          than a transfer to a Company Subsidiary).

                    Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares beneficially owned by the Subject Person;
provided, however, that if a Change in Control would occur (but for the
--------  -------
operation of this sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities beneficially
owned by the Subject Person, then a Change in Control shall occur.

          (4) Notwithstanding anything contained in this Amended and Restated
Agreement to the contrary, if the Executive's employment is terminated during
the term of this Amended and Restated Agreement and the Executive reasonably
demonstrates that such termination (i) was at the request of a third party who
has indicated an intention or taken steps reasonably calculated to effect a
Change in Control and who effectuates a Change in Control (a "Third Party") or
(ii) otherwise occurred in connection with, or in anticipation of, a Change in
Control which actually occurs, then for all purposes of this Agreement, the date
of a Change in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the Executive's employment.

          (f) Notice of Termination.  Any purported termination by the Company
              ---------------------                                           
or by the Executive shall be communicated by written Notice of Termination to
the other.  For purposes of this Amended and Restated Agreement, a "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Amended and Restated Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.  For
purposes of this Amended and Restated Agreement, no such purported termination
of employment shall be effective without such Notice of Termination.

          (g) Termination Date, Etc.  "Termination Date" shall mean in the case
              ----------------------                                           
of the Executive's death, his date of death, or in all other cases, the date
specified in the Notice of Termination subject to the following:

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<PAGE>
 
          (1) If the Executive's employment is terminated by the Company for
Cause or due to Disability, the date specified in the Notice of Termination
shall be at least thirty (30) days from the date the Notice of Termination is
given to the Executive, provided that in the case of Disability the Executive
shall not have returned to the full-time performance of his duties during such
period of at least thirty (30) days; and

          (2) If the Executive's employment is terminated for Good Reason or is
a Limited Period Termination, the date specified in the Notice of Termination
shall not be more than sixty (60) days from the date the Notice of Termination
is given to the Company.

        9.  Compensation Upon Termination.  Upon termination of the Executive's 
            -----------------------------                          
employment during the term of this Amended and Restated Agreement (including any
extensions thereof), the Executive shall be entitled to the following benefits:

          (a) If the Executive's employment is terminated by the Company for
Cause or Disability or by the Executive (other than for Good Reason or a Limited
Period Termination), or by reason of the Executive's death, the Company shall
pay the Executive all amounts earned or accrued hereunder through the
Termination Date but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for any and all monies advanced or expenses incurred
in connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company for the period
ending on the Termination Date, (iii) vacation pay, (iv) any bonuses or
incentive compensation and (v) any previous compensation which the Executive has
previously deferred (including any interest earned or credited thereon)
(collectively, "Accrued Compensation").  In addition to the foregoing, if the
Executive's employment is terminated by the Company for Disability or by reason
of the Executive's death, the Company shall pay to the Executive or his
beneficiaries (i) an amount equal to the bonus and incentive award(s) that the
Executive would have been entitled to receive in respect of the fiscal year in
which the Executive's Termination Date occurs had he continued in employment
until the end of such fiscal year, calculated as if all performance targets and
goals (if applicable) had been fully met by the Company and by the Executive, as
applicable, for such year, multiplied by a fraction the numerator of which is
the number of days in such fiscal year through the Termination Date and the
denominator of which is 365 (a "Pro Rata Bonus") plus (ii) a severance payment
equal to the Executive's Base Salary at the rate in effect immediately prior to
the termination of the Executive's employment.  The Executive's entitlement to
any other compensation or benefits shall be determined in accordance with the
Company's employee benefit plans and other applicable programs and practices
then in effect.

                                      -11-
<PAGE>
 
          (b) If the Executive's employment by the Company shall be terminated
(1) by the Company other than for Cause, death or Disability, (2) by the
Executive for Good Reason, or (3) by the Executive as a Limited Period
Termination, then the Executive shall be entitled to the benefits provided
below:

                         (i) the Company shall pay the Executive all Accrued
               Compensation and a Pro Rata Bonus;

                        (ii) the Company shall pay the Executive as severance
               pay and in lieu of any further salary for periods subsequent to
               the Termination Date, in a single payment an amount in cash equal
               to three (3) times the sum of (A) the Executive's Base Salary at
               the highest rate in effect at any time within the ninety (90)
               day period ending on the date the Notice of Termination is given
               (or if the Executive's employment is terminated after a Change in
               Control, the Executive's Base Salary immediately prior to the
               Change in Control, if greater) and (B) the "Bonus Amount." The
               term "Bonus Amount" shall mean the greatest amount of the cash
               awards received by the Executive during any of the three fiscal
               years immediately preceding the Termination Date under the 1996
               Incentive Plan and any other plan of the Company; provided,
                                                                 -------- 
               however, that if the Executive's employment is terminated before
               -------                                                         
               a cash award under the Company's Earnings Growth Incentive Plan
               may be made in respect of 1998, the Bonus Amount shall be fifty
               percent (50%) of the Executive's Base Salary;

                       (iii) for a period of thirty-six (36) months following
               such termination, the Company shall at its expense continue on
               behalf of the Executive and his dependents and beneficiaries the
               life insurance, disability, medical, dental and hospitalization
               benefits which were being provided to the Executive at the time
               Notice of Termination is given (or, if the Executive is
               terminated following a Change in Control, the benefits provided
               to the Executive at the time of the Change in Control, if
               greater).  The benefits provided in this Section 9 (b) (iii)
               shall be no less favorable to the Executive, in terms of amounts
               and deductibles and costs to him, than the coverage provided the
               Executive under the plans providing such benefits at the time
               Notice of Termination is given (or, if the Executive is
               terminated following a Change in Control, at the time of the
               Change in Control if more favorable to the Executive).  The
               Company's obligation hereunder with respect to the foregoing
               benefits shall be limited to the extent that the Executive
               obtains any such benefits 

                                      -12-
<PAGE>
 
               pursuant to a subsequent employer's benefit plans, in which case
               the Company may reduce the coverage of any benefits it is
               required to provide the Executive hereunder as long as the
               aggregate coverage of the combined benefit plans is no less
               favorable to the Executive, in terms of amounts and deductibles
               and costs to him, than the coverage required to be provided
               hereunder. This Subsection (iii) shall not be interpreted so as
               to limit any benefits to which the Executive or his dependents
               may be entitled under any of the Company's employee benefit
               plans, programs or practices following the Executive's
               termination of employment, including, without limitation, retiree
               medical and life insurance benefits;

                        (iv) for a period of thirty-six (36) months following
               such termination, the Company shall at its expense continue to
               provide the Executive with all of the fringe benefits and
               perquisites provided in Sections 6(a) and (c) hereof; provided,
                                                                     -------- 
               however, that the benefits described in Section 6(c) shall not
               -------                                                       
               include an office in or physical access to the Company's offices
               and will cease upon the acceptance by the Executive of a position
               with another employer;

                         (v) the Company shall pay in a single payment an amount
               in cash equal to the excess of (A) the actuarial equivalent of
               the aggregate retirement benefit the Executive would have been
               entitled to receive under the Company's retirement plans had (x)
               the Executive remained employed by the Company for an additional
               three (3) complete years of credited service, (y) his annual
               compensation during such period been equal to his Base Salary (at
               the rate used for purposes of Section 9(b)(ii)) and the Bonus
               Amount, and (z) he been fully (100%) vested in his benefit under
               each such retirement plan, over (B) the actuarial equivalent of
               the aggregate retirement benefit the Executive is actually
               entitled to receive under such retirement plans.  For purposes of
               this Subsection (iv), "actuarial equivalent" shall be determined
               in accordance with the actuarial assumptions used for the
               calculation of benefits under the Company's retirement plans as
               applied prior to the Termination Date in accordance with such
               plans' past practices (but shall in any event take into account
               the value of any subsidized early retirement benefit); and

                        (vi) (A) all restrictions on any outstanding award
               (including restricted stock and performance stock awards) granted
               to the Executive shall lapse and such awards shall become fully
               (100%) 

                                      -13-
<PAGE>
 
               vested immediately, assuming all performance targets and goals
               (if applicable) had been fully met by the Company and by the
               Executive, as applicable, for such year, and all stock options
               and stock appreciation rights granted to the Executive shall
               become fully (100%) vested and shall become immediately
               exercisable and (B) the Executive shall have the right to require
               the Company to purchase, for cash, any shares of unrestricted
               stock or shares purchased upon the exercise of any options, at a
               price equal to the fair market value of such shares on the date
               of purchase by the Company.

                         (vii)  If the Executive's employment by the Company
               shall be terminated by the Executive for Good Reason, or by the
               Executive as a Limited Period Termination, for a period not to
               exceed six (6) months from the Executive's Termination Date, the
               Company shall at its expense provide the Executive with (A) a
               telephone number assigned to the Executive at the Company's
               offices, telephone mail and a secretary to answer the telephone;
               provided, however, such benefits described in this Subsection
               --------  -------                                            
               9(b)(vii) shall not include an office in or physical access to
               the Company's offices and will cease upon the acceptance by the
               Executive of a position with another employer, and (B) at the
               Executive's option, the services of an employment
               search/outplacement agency selected by the Executive for a period
               not to exceed six (6) months.

          (c) The amounts provided for in Sections 9(a) and 9(b)(i), (ii) and
(iv) shall be paid within five (5) days after the Executive's Termination Date.

          (d) The Executive shall not be required to mitigate the amount of any
payment, benefit or other Company obligation  provided for in this Amended and
Restated Agreement by seeking other employment or otherwise and no such payment,
benefit or other Company obligation shall be offset or reduced by the amount of
any compensation or benefits provided to the Executive in any subsequent
employment.

        10.  Excise Tax Payments
             -------------------

          (a) In the event that any payment or benefit (within the meaning of
Section 280G(b) (2) of the Internal Revenue Code of 1986, as amended (the
"Code")), to the Executive or for his benefit paid or payable or distributed or
distributable pursuant to the terms of this Amended and Restated Agreement or
otherwise in connection with, or arising out of, his employment with the Company
or a change in ownership or effective control of the Company or of a substantial
portion of its assets (a "Payment" or 

                                      -14-
<PAGE>
 
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the 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 the
Executive will be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and penalties imposed
by reason of the Executive's failure to file timely a tax return or pay taxes
shown due on his return, imposed with respect to such taxes and the Excise Tax),
including any Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.

          (b) An initial determination as to whether a Gross-Up Payment is
required pursuant to this Amended and Restated Agreement and the amount of such
Gross-Up Payment shall be made at the Company's expense by an accounting firm
selected by the Company and reasonably acceptable to the Executive which is
designated as one of the five largest accounting firms in the United States (the
"Accounting Firm").  The Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation to the Company and the Executive within five days of the
Termination Date if applicable, or such other time as requested by the Company
or by the Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax) and if the Accounting Firm determines
that no Excise Tax is payable by the Executive with respect to a Payment or
Payments, it shall furnish the Executive with an opinion reasonably acceptable
to the Executive that no Excise Tax will be imposed with respect to any such
Payment or Payments.  Within ten days of the delivery of the Determination to
the Executive, the Executive shall have the right to dispute the Determination
(the "Dispute").  The Gross-Up Payment, if any, as determined pursuant to this
Paragraph 10(b) shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination.  The existence of the
Dispute shall not in any way affect the Executive's right to receive the Gross-
Up Payment in accordance with the Determination.  If there is no Dispute, the
Determination shall be binding, final and conclusive upon the Company and the
Executive subject to the application of Paragraph 10(c) below.

          (c) As a result of the uncertainty in the application of Sections 4999
and 280G of the Code, it is possible that a Gross-Up Payment (or a portion
thereof) will be paid which should not have been paid (an "Excess Payment") or a
Gross-Up Payment (or a portion thereof) which should have been paid will not
have been paid (an "Underpayment").  An Underpayment shall be deemed to have
occurred (i) upon notice (formal or informal) to the Executive from any
governmental taxing authority that the Executive's tax liability (whether in
respect of the Executive's current taxable year or in respect of any prior
taxable year) may be increased by reason of the imposition of the Excise Tax on
a Payment or Payments with respect to which the Company has failed to 

                                      -15-
<PAGE>
 
make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of determination by the Company (which shall include the position
taken by the Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has
requested payment, pay to the Executive an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's failure to file
timely a tax return or pay taxes shown due on the Executive's return) imposed on
the Underpayment. An Excess Payment shall be deemed to have occurred upon a
"Final Determination" (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments (or portion thereof) with respect to which
the Executive had previously received a Gross-Up Payment. A "Final
Determination" shall be deemed to have occurred when the Executive has received
from the applicable government taxing authority a refund of taxes or other
reduction in the Executive's tax liability by reason of the Excise Payment and
upon either (x) the date a determination is made by, or an agreement is entered
into with, the applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority, or in the event that
a claim is brought before a court of competent jurisdiction, the date upon which
a final determination has been made by such court and either all appeals have
been taken and finally resolved or the time for all appeals has expired or (y)
the statute of limitations with respect to the Executive's applicable tax return
has expired. If an Excess Payment is determined to have been made, the amount of
the Excess Payment shall be treated as a loan by the Company to the Executive
and the Executive shall pay to the Company on demand (but not less than 10 days
after the determination of such Excess Payment and written notice has been
delivered to the Executive) the amount of the Excess Payment plus interest at an
annual rate equal to the Applicable Federal Rate provided for in Section 1274(d)
of the Code from the date the Gross-Up Payment (to which the Excess Payment
relates) was paid to the Executive until the date of repayment to the Company.

          (d) Notwithstanding anything contained in this Amended and Restated
Agreement to the contrary, in the event that, according to the Determination, an
Excise Tax will be imposed on any Payment or Payments, the company shall pay to
the applicable government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually withheld from the Payment
or Payments.

        11.  Unauthorized Disclosure.  The Executive shall not make any
             -----------------------                                   
Unauthorized Disclosure.  For purposes of this Amended and Restated Agreement,
"Unauthorized Disclosure" shall mean disclosure by the Executive without the
consent of the Board to any person, other than an employee of the Company or a
person to whom disclosure is reasonably necessary or appropriate in connection
with the performance by 

                                      -16-
<PAGE>
 
the Executive of his duties as an executive of the Company or as may be legally
required, of any confidential information obtained by the Executive while in the
employ of the Company (including, but not limited to, any confidential
information with respect to any of the Company's customers or methods of
distribution) the disclosure of which he knows or has reason to believe will be
materially injurious to the Company; provided, however, that such term shall not
                                     --------  -------
include the use or disclosure by the Executive, without consent, of any
information known generally to the public (other than as a result of disclosure
by him in violation of this Section 11) or any information not otherwise
considered confidential by a reasonable person engaged in the same business as
that conducted by the Company.

        12.  Indemnification.
             --------------- 
 
          (a) General.  The Company agrees that if the Executive is made a party
              -------                                                           
or threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that the Executive is or was a director or officer of the Company or
any subsidiary thereof or is or was serving at the request of the Company or any
subsidiary thereof as a director, officer, member, employee or agent of another
corporation or a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employees benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a director, officer, member, employee or agent while serving as a
director, officer, member, employee or agent, the Executive shall be indemnified
and held harmless by the Company to the fullest extent authorized by Virginia
law, as the same exists or may hereafter be amended, against all Expenses (as
hereinafter defined) incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
the Executive has ceased to be an officer, director, or agent, or is no longer
employed by the Company and shall inure to the benefit of his heirs, executors
and administrators; provided, however, that the Executive shall not be so
                    --------  ------- 
indemnified for any Proceeding which shall have been adjudicated to have arisen
out of or been based upon his willful misconduct, bad faith, gross negligence or
reckless disregard of duty or his failure to act in good faith in the reasonable
belief that his action was in the best interests of the Company.
 
          (b) Expenses.  As used in this Amended and Restated Agreement, the
              --------                                                      
term "Expenses" shall include, without limitation, damages, losses, judgments,
liabilities, fines, penalties, excise taxes, settlements, and costs, attorneys'
fees, accountants' investigations, and any expenses of establishing a right to
indemnification under this Amended and Restated Agreement.

                                      -17-
<PAGE>
 
          (c) Enforcement.  If a claim or request under this Amended and
              -----------                                               
Restated Agreement is not paid by the Company or on its behalf, within thirty
(30) days after a written claim or request has been received by the Company, the
Executive may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim or request and if successful in whole or in part,
the Executive shall be entitled to be paid also the expenses of prosecuting such
suit.  All obligations for indemnification hereunder shall be subject to, and
paid in accordance with, applicable Virginia law.
 
          (d) Partial Indemnification.  If the Executive is entitled under any
              -----------------------                                         
provision of this Amended and Restated Agreement to indemnification by the
Company for some or a portion of any Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify the Executive for the
portion of such Expenses to which Executive is entitled.
 
          (e) Advances of Expenses.  Expenses incurred by the Executive in
              --------------------                                        
connection with any Proceeding shall be paid by the Company in advance upon
request of the Executive that the Company pay such Expenses and upon the
Executive's delivery of an undertaking to reimburse the Company for Expenses
with respect to which the Executive is not entitled to indemnification.
 
          (f) Notice of Claim.  The Executive shall give to the Company notice
              ---------------                                                 
of any claim made against him for which indemnification will or could be sought
under this Amended and Restated Agreement, but the failure of the Executive to
give such notice shall not relieve the Company of any liability the Company may
have to the Executive except to the extent that the Company is prejudiced
thereby.  In addition, the Executive shall give the Company such information and
cooperation as it may reasonably require and as shall be within the Executive's
power and at such time and places as are convenient for the Executive.
 
          (g) Defense of Claim.  With respect to any Proceeding as to which the
              ----------------                                                 
Executive notifies the Company of the commencement thereof;
 
                (1) The Company will be entitled to participate therein at its
own expense; and
 
                (2) Except as otherwise provided below, to the extent that it
may wish, the Company will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to the Executive. The Executive also shall have
the right to employ his own counsel in such action, suit or proceeding if he
reasonably concludes that failure to do so would involve a conflict of interest
between the Company and the

                                      -18-
<PAGE>
 
Executive, and under such circumstances the fees and expenses of such counsel
shall be at the expense of the Company.
 
                (3) The Company shall not be liable to indemnify the Executive
under this Amended and Restated Agreement for any amounts paid in settlement of
any action or claim effected without its written consent. The Company shall not
settle any action or claim in any manner which would not include a full and
unconditional release of the Executive without the Executive's prior written
consent. Neither the Company nor the Executive will unreasonably withhold or
delay their consent to any proposed settlement.
 
          (h) Non-exclusivity.  The right to indemnification and the payment of
              ---------------                                                  
Expenses incurred in defending a Proceeding in advance of its final disposition
conferred in this Amended and Restated Agreement shall not be exclusive of any
other right which the Executive may have or hereafter may acquire under any
statute, provision of the declaration of trust or certificate of incorporation
or by-laws of the Company or any subsidiary, agreement, vote of shareholders or
disinterested directors or otherwise.

        13.  Successors and Assigns.
             ---------------------- 

          (a) This Amended and Restated Agreement shall be binding upon and
shall inure to the benefit of the Company, its successors and assigns and the
Company shall require any successor or assign to expressly assume and agree to
perform this Amended and Restated Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession or
assignment had taken place.  The term "the Company" as used herein shall include
such successors and assigns.  The term "successors and assigns" as used herein
shall mean a corporation or other entity acquiring all or substantially all the
assets and business of the Company (including this Amended and Restated
Agreement) whether by operation of law or otherwise.

          (b) Neither this Amended and Restated Agreement nor any right or
interest hereunder shall be assignable or transferable by the Executive, his
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution.  This Amended and Restated Agreement shall inure to the
benefit of and be enforceable by the Executive's legal personal representative.

        14.  Fees and Expenses.  The Company shall pay all legal fees and
             -----------------                                           
related expenses (including the costs of experts, evidence and counsel) incurred
by the Executive as they become due as a result of (i) the Company and the
Executive entering into this Amended and Restated Agreement, (ii) the
Executive's termination of 

                                      -19-
<PAGE>
 
employment (including all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (iii) the Executive's hearing
before the Board as contemplated in Section 8(b) of this Amended and Restated
Agreement, or (iv) the Executive's seeking to obtain or enforce any right or
benefit provided by this Amended and Restated Agreement (including, without
limitation, any such fees and expenses incurred in connection with (x) the
Dispute and (y) the Gross-Up Payment, whether as a result of any applicable
government taxing authority, proceeding, audit or otherwise) or by any other
plan or arrangement maintained by the Company under which the Executive is or
may be entitled to receive benefits.

        15.  Notice.  For the purposes of this Amended and Restated Agreement,
             ------                                                           
notices and all other communications provided for in the Amended and Restated
Agreement (including the Notice of Termination) shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other, provided that all notices to
the Company shall be directed to the attention of the Board with a copy to the
Secretary of the Company.  All notices and communications shall be deemed to
have been received on the date of delivery thereof or on the third business day
after the mailing thereof, except that notice of change of address shall be
effective only upon receipt.

        16.  Non-exclusivity of Rights.  Nothing in this Amended and Restated
             -------------------------                                       
Agreement shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company or any of its subsidiaries and for which the Executive may
qualify, nor shall anything herein limit or reduce such rights as the Executive
may have under any other agreements with the Company or any of its subsidiaries.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan or program of the Company or any of its subsidiaries
shall be payable in accordance with such plan or program, except as explicitly
modified by this Amended and Restated Agreement.

        17.  Settlement of Claims.  The Company's obligation to make the
             --------------------                                       
payments provided for in this Amended and Restated Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or others.

        18.  Survival.  The agreements and obligations of the Company and the
             --------                                                        
Executive made in Sections 9, 10, 11, 12, 14, 18, and 19 of this Amended and
Restated Agreement shall survive the expiration or termination of this Amended
and Restated Agreement.

                                      -20-
<PAGE>
 
        19.  Federal Income Tax Withholding.  The Company may withhold from
             ------------------------------                                
any benefits payable under this Amended and Restated Agreement all federal,
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.

        20.  Miscellaneous.  No provision of this Amended and Restated
             -------------                                            
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive and the
Company.  No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Amended and Restated Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.  No agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Amended and
Restated Agreement.

        21.  Governing Law.  This Amended and Restated Agreement shall be
             -------------                                               
governed by and construed and enforced in accordance with the laws of the
Commonwealth of Virginia, without giving effect to the conflict of law
principles thereof.

        22.  Jurisdiction and Venue.  Each of the parties to this Amended and
             ----------------------                                          
Restated Agreement hereby (i) consents to personal jurisdiction in any suit,
claim, action or proceeding relating to or arising under this Amended and
Restated Agreement which is brought in any local or federal court in the
Commonwealth of Virginia, (ii) consents to service of process upon such party in
the manner set forth in Section 16 hereof, and (iii) waives any objection such
party may have to venue in any such Virginia court or to any claim that any such
Virginia court is an inconvenient forum.

        23.  Public Announcements.  Neither the Company nor the Executive
             --------------------                                        
shall make any public statements, including, without limitations, any press
releases, with respect to this Amended and Restated Agreement and the
transactions contemplated hereby without the prior written consent of the other
party (which consent may not be unreasonably withheld), except as may be
required by law.

        24.  Severability.  The provisions of this Amended and Restated 
             ------------                                              
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.

        25.  Entire Agreement.  This Amended and Restated Agreement constitutes 
             ----------------                                      
the entire agreement between the parties hereto and supersedes all prior
agreements, if any, understandings and arrangements, oral or written, between
the parties 

                                      -21-
<PAGE>
 
hereto with respect to the subject matter hereof, including, without limitation,
the Employment Agreement dated May 1, 1992 between the Company and the
Executive.

                                      -22-
<PAGE>
 
          IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Agreement to be executed by its duly authorized officer and the Executive has
executed this Amended and Restated Agreement as of the day and year first above
written.


                              PHP HEALTHCARE CORPORATION


                              By: /s/ Donald J. Ruffing
                                 --------------------------------  
                                 Name:  Donald J. Ruffing
                                 Title: On behalf of the 
                                        Compensation Committee
 
 
                              JACK M. MAZUR
 
                              /s/ Jack M. Mazur
                              -----------------------------------  

                                      -23-