Document:

<PAGE>   1

                                                                    EXHIBIT 10.2

                      SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of July 17, 2000, by and between PACIFICARE HEALTH SYSTEMS, INC., a Delaware
corporation (the "Company"), with its principal place of business located at
3120 Lake Center Drive, Santa Ana, California 92704 and Howard G. Phanstiel
("Executive").

                                    RECITALS

         WHEREAS, the Company desires to employ Executive in the capacity of
Executive Vice President, Chief Financial Officer.

         WHEREAS, the Company and Executive are entering into this Agreement to
establish the terms and conditions of the employment relationship.

         NOW, THEREFORE, in consideration of the following covenants, conditions
and promises contained herein, and other good and valuable consideration, the
Company and Executive hereby agree as follows:

1. EMPLOYMENT

         1.1 Executive's General Duties. The Company employs Executive and
Executive serves the Company in the capacity of Executive Vice President, Chief
Financial Officer, having such usual and customary duties and authority as an
officer of similar capacity in a corporation of comparable size, holdings, and
business as that of the Company.

         Executive shall do and perform all services, acts, or things necessary
or advisable to manage and conduct the business of the Company and shall preside
over such other areas of corporate activity as specified from time to time by
the Board of Directors of the Company. During the term of this Agreement,
Executive shall perform such additional or different duties, and accept the
election or appointment to such other offices or positions as are mutually
agreed upon by Executive and the Company.

         1.2 Devotion of Executive. During the term of this Agreement, Executive
shall devote his entire productive time, ability, and attention to the business
of the Company. Executive shall use Executive's best efforts, skills, and
abilities to promote the general welfare and interests of the Company and to
preserve, maintain, and foster the Company's business and business relationships
with all persons and entities associated therewith, including, without
limitation, employer groups, medical service providers, shareholders,
affiliates, officers, employees, and banks and other financial institutions. The
Company shall give Executive a reasonable opportunity to perform Executive's
duties and shall neither expect Executive to devote more time, nor assign more
duties or functions to Executive, than are customary and reasonable for a person
in Executive's position.

                                      -1-

<PAGE>   2

2. TERM AND TERMINATION

         2.1 Term. The term of Executive's employment under this Agreement shall
commence on July 18, 2000, and shall continue thereafter unless Executive
resigns or unless terminated as provided in Section 2.2.

         2.2 Termination. This Agreement shall be terminated upon the occurrence
of any one of the following events:

             a. The death of the Executive.

             b. Executive becomes incapacitated or disabled, which incapacity or
         disability prevents Executive from fully performing his duties to the
         Company for a period in excess of 90 days and, after such 90-day
         period, the Company and a physician, duly licensed and qualified in the
         specialty of Executive's incapacity, decide in their reasonable
         judgments, that such incapacity will be of such continued duration as
         to prevent Executive from resuming the rendition of services to the
         Company for at least an additional six-month period. For purposes of
         this Agreement, Executive shall be deemed permanently disabled, and
         this Agreement terminated upon the date Executive receives written
         notice from the Company that such determination has been made.

             c. Executive habitually neglects his duties to the Company or
         engages in gross misconduct during the term of this Agreement. For the
         purposes of this Agreement, "gross misconduct" shall mean Executive's
         misappropriation of funds; securities fraud; insider trading;
         unauthorized possession of corporate property; the sale, distribution,
         possession or use of a controlled substance; or conviction of any
         criminal offense (whether or not such criminal offense is committed in
         connection with Executive's duties hereunder or in the course of his
         employment with the Company). In such event, Executive's termination
         shall be effective immediately upon receipt of written notice from the
         Company.

             d. Either party hereto may terminate this Agreement, with or
         without cause, upon 45 days prior written notice to the other party.
         Except for the circumstances described in Section 2.2(c) above,
         Executive's termination shall be effective 45 days after receipt of
         such written notice. Notwithstanding anything to the contrary in this
         Agreement, receipt of the written notice provided in this Section
         2.2(d) shall deemed to have occurred two days from the date of the
         notice.

                                      -2-

<PAGE>   3

3. COMPENSATION DURING THE TERM OF THIS AGREEMENT

         3.1 Base Salary. As long as Executive satisfactorily performs all of
his obligations under this Agreement, the Company shall pay Executive an annual
base salary, payable in equal installments on the Company's regular payroll
dates. As of this date, Executive's annual base salary has been set at $450,000.
On an annual basis, the Company shall review Executive's salary, but shall be
under no obligation to increase Executive's salary. Executive authorizes the
Company to take such deductions and withholdings from his salary as are required
by law, directed by Executive, or as reasonably directed by the Company for its
employees, which deductions shall include, without limitation, withholding for
federal and state income taxes and social security.

         3.2 Benefits. Executive shall be entitled to fully participate in all
of the employee benefit plans and programs available to other high-level
executives of the Company, including, without limitation, health, dental, and
life insurance benefits for Executive and Executive's dependents, pension and
profit sharing programs, and vacation and sick leave benefits. However, the
terms of this Agreement shall not restrict the Company's right to change, amend,
modify, or terminate any existing benefit plan or program, or to change any
insurance company or modify any insurance policy adopted incident to such
existing benefit plan and program.

         3.3 Automobile Allowance. The Company shall provide Executive with a
$850.00 (eight hundred and fifty dollars) per month automobile allowance. The
Company shall furnish Executive with a cellular telephone. Executive shall
provide and maintain automobile insurance for Executive's car including
collision, comprehensive liability, personal and property damage, and uninsured
and underinsured motorist coverage in amounts customarily obtained to cover such
contingencies in the State of California. Executive shall provide proof of such
coverage to the Company upon the Company's request.

         3.4 Reimbursement of Expenses. The Company shall pay for or reimburse
Executive for all reasonable travel, entertainment, and other business expenses
incurred or paid for by Executive in connection with the performance of his
services under this Agreement. The Company shall not be obligated to make any
such reimbursement unless Executive presents corresponding expense statements or
vouchers and such other supporting information as the Company may from time to
time reasonably request. The Company reserves the right to place subsequent
limitations or restrictions on business expenses to be incurred or reimbursed.

         3.5 Annual Incentive Plan. Executive shall be entitled to participate
fully in the Company's 1996 Management Incentive Compensation Plan, as amended
(the "MICP"), and as may be further amended, modified, or replaced, from time to
time, in accordance with the terms and conditions set forth herein and therein.

         3.6 Stock Option Plans. Executive shall be entitled to participate in
the applicable Stock Option Plans for Officers and Key Employees of PacifiCare
Health Systems, Inc., as amended, and as may be further amended modified or
replaced, from time to time, in accordance with the terms and conditions set
forth herein and therein.

                                      -3-

<PAGE>   4

         3.7 Insurance. During the term of this Agreement, the Company shall
insure Executive under its general liability insurance for all conduct committed
in good faith while acting in the capacity of Executive Vice President, Chief
Financial Officer of the Company or in any other capacity to which Executive may
be appointed or elected.

         3.8 Savings and Profit Sharing Plan. As part of the compensation for
services rendered under this Agreement, Executive shall be entitled to
participate in the Amended and Restated PacifiCare Health Systems, Inc. Savings
and Profit-Sharing Plan, and the trust agreement implemented pursuant thereto,
adopted as of July 1999, as amended, and as may be further amended, modified, or
replaced, from time to time in accordance with the terms and conditions set
forth therein.

         3.9 Non-Qualified Deferred Compensation Plans. Executive shall be
entitled to participate in any non-qualified deferred compensation plan
established by the Company, including, without limitation, the Company's
Statutory Restoration Plan, Deferred Compensation Plan, and such other plans as
may be applicable, as such plans may be amended, modified or replaced, from time
to time, in accordance with the terms set forth herein and therein.

         3.10 Signing Bonus. A signing bonus in the amount of $100,000 shall be
payable after 30 days of employment with the Company. However, if prior to the
first anniversary of the commencement of Executive's employment with the Company
Executive either resigns (except for resignation for good cause pursuant to
Section 5.1(d)) or is terminated pursuant Section 4.3, then Executive shall
repay the entire signing bonus to the Company.

         3.11 Initial Grant of Stock Options. Company shall grant Executive
options to purchase 200,000 shares of the Company's common stock. The options
shall be priced at the closing price on Executive's first day of employment
under this Agreement. The options shall have a ten year (10 year) term, and
vesting shall be 25% per year, commencing on the first anniversary of the grant
date.

4. COMPENSATION FOLLOWING TERMINATION

         4.1 Death. In the event that this Agreement is terminated by reason of
Executive's death, Executive's estate or legal representative shall be entitled
to receive the following:

             a. Payment of benefits under the life insurance policy purchased by
         the Company on Executive's behalf, if any;

             b. Payments of benefits under the MICP set forth in Section 3.5 in
         accordance with the terms of the MICP plan document;

             c. Payment of any other bonus amounts or benefits to which
         Executive may be entitled under any of the Company's benefit plans; and

                                      -4-

<PAGE>   5

             d. Executive's legal representative shall be permitted to exercise
         any vested and unexercised options granted under the 1996 Stock Option
         Plan and any other existing stock option plans of the Company
         (collectively, the "Stock Option Plans") in accordance with their terms
         for a period of one year following Executive's death.

         4.2 Disability. In the event that Executive is terminated because of
incapacity or disability, the Company shall provide Executive with the
following:

             a. Payment of benefits under the disability insurance policy
         maintained by the Company on Executive's behalf, if any;

             b. Payment of benefits under the MICP set forth in Section 3.5 in
         accordance with the terms of the MICP plan document;

             c. The right to exercise any vested and unexercised options under
         the Stock Option Plans in accordance with the terms stated therein;

             d. Payment of the automobile allowance as provided under Section
         3.3 for a period of 18 months following the effective date of such
         termination; and

             e. Payment of any other bonus amounts or benefits to which
         Executive may be entitled under any of the Company's benefit plans.

         4.3 Neglect, Misconduct or Voluntary Termination. In the event this
Agreement is terminated because of Executive's habitual neglect or gross
misconduct pursuant to Section 2.2(c) or because of Executive's voluntary
termination, the Company shall be relieved from any and all further or future
obligations to compensate Executive; provided, however, that Executive shall be
able to exercise any vested and unexercised awards under the Stock Option Plans
in accordance with the terms set forth therein.

         4.4 Discharge. In the event that the Company terminates Executive under
circumstances other than a Change-of-Control (as defined herein) and for any
reason other than Executive's incapacity or disability or neglect/misconduct as
described in Sections 2.2(b) and 2.2(c), respectively, or voluntary termination
then Executive shall be entitled to the following compensation:

             a. An amount equal to two times of Executive's then current annual
         salary under Section 3.1;

             b. An amount equal to two times Executive's average MICP bonus. If
         Executive has been employed by the Company for more than one, but less
         than two years, then the MICP bonus severance payment shall equal the
         average of the Executive's MICP award for the prior year and the target
         for Executive for the current year. If Executive has been employed by
         the Company for less than one year, Executive will not receive any
         bonus severance payment;

                                      -5-

<PAGE>   6

             c. The right to exercise any vested and unexercised options under
         the Stock Option Plans in accordance with their terms within one year
         of the effective date of such termination;

             d. Continuation of Executive' and his/her dependents' medical,
         dental and vision benefits for a period of 24 months following the
         effective date of such termination;

             e. An amount equal to 24 months of Executive's automobile
         allowance;

             f. Any other bonus amounts or benefits to which the Executive may
         be entitled under any of the Company's benefit plans;

             g. The Company shall provide to Executive outplacement services to
         Executive to assist Executive in securing a position comparable to the
         one from which Executive was terminated. The Company shall be obligated
         to provide those outplacement services which are customarily provided
         by companies of similar size and holdings as those of the Company to
         executives with comparable responsibility and longevity as Executive
         and for reasonable cost as approved by the Company. The Company's
         provision of such outplacement services shall not limit, restrict, or
         reduce, in any manner, any and all other compensation to which
         Executive is entitled hereunder;

             h. Executive shall receive, or have paid, the amounts of severance
         compensation provided in clauses (a), (b), (d) and (e) above in equal
         installments over a period of 24 months. Payments will be made either
         in biweekly installments on the Company's regular paydays or as
         currently being paid to Executive;

             i. Notwithstanding the foregoing, in the event Executive engages in
         employment, whether as an employee, consultant or contractor with a
         competitor of the Company during the 24 month period in which
         Executive's salary continues pursuant to this Section 4.4, the
         severance compensation available to Executive under this Section 4.4
         shall be reduced by the amount of any and all gross earnings Executive
         earns while engaged in employment with any such competitor or
         competitors. For the purposes of this Section 4.4, a "competitor of the
         Company" shall include, without limitation, managed care organizations,
         including a health maintenance organization, competitive medical plan,
         preferred provider organization, provider sponsored organization
         ("PSO"), or health or life insurance company which owns a managed care
         organization, plan or program. Executive agrees to provide immediate
         notice to Company upon receipt of any gross earnings received by
         Executive from a competitor of Company. Quarterly, Executive shall
         provide the Company a certificate certifying as to his/her employment
         status and if employed, the name and business of his/her current
         employer;

             j. If Executive is rehired by Company, payments of severance
         compensation provided for in this Section 4.4 shall cease; and

                                      -6-

<PAGE>   7

             k. If Executive dies while receiving the salary continuation
         benefit as provided in this Section 4.4, Executive's estate will
         receive a lump sum payment of the remaining salary continuation
         benefit.

5. COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT AS A RESULT OF A CHANGE OF
   CONTROL

         5.1 Termination of Employment or Resignation for Good Cause

             a. Executive's Rights. In the event that, during the term of this
         Agreement, the Company undergoes a Change of Control, (as that term is
         defined below) and if within 24 months after the consummation of such
         change either (1) Executive is involuntarily terminated, except as
         provided in Section 5.1(b), or (2) Executive voluntarily terminates his
         employment for "good cause" as defined in Section 5.1(d), then
         Executive shall be entitled to the following compensation:

                1. A lump sum payment consisting of: (i) an amount equal to
             three times Executive's then annual salary; (ii) an amount equal to
             three times Executive's average MICP bonus award for the last two
             years; (iii) a prorated bonus based on target opportunity for the
             year in which the Change-of-Control occurs; (iv) an amount equal to
             the equivalent of the cost of 36 months of COBRA benefits; and (v)
             an amount equal to 36 months of Executive's automobile allowance.
             If Executive has been employed for more than one, but less than two
             years, then the amount attributable to the MICP bonus portion set
             forth in clause (ii) above shall equal the average of Executive's
             MICP bonus for the prior year and the target for Executive for the
             current year. If Executive has been employed for less than one
             year, Executive shall receive an amount equal to three times target
             bonus for the current year.

                2. The right to exercise any and all unexercised stock options
             granted under the Stock Option Plans in accordance with their
             terms, as if all such unexercised stock options were fully vested,
             within one year of the effective date of such termination;

                3. A payment to executive to compensate for any excise penalty
             or other associated taxes resulting from severance payments
             exceeding the cap imposed by Internal Revenue Code Section 280(G);

                4. The Company shall provide to Executive the outplacement
             services described in Section 4.4(g); and

                5. Any other bonus amounts or benefits to which Executive may be
             entitled under any of the Company's benefit plans.

                                      -7-

<PAGE>   8

             b. Limitation of Benefits. In the event that Executive is
         terminated within 24 months after a Change of Control of the Company,
         and such termination results from either Executive's death, incapacity
         or disability or habitual neglect or gross misconduct, then,
         notwithstanding anything in this Section 5 to the contrary, Executive
         shall receive only that compensation, if any, to which he is entitled
         to under Sections 4.1, 4.2 and 4.3, respectively.

             c. Change of Control. As used in this Section 5, the term "Change
         of Control" means and refers to:

                1. any merger, consolidation, or sale of the Company such that
             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")) acquires beneficial ownership, within
             the meaning of Rule 13d-3 of the Exchange Act, of 20 percent or
             more of the voting common stock of the Company;

                2. any transaction in which the Company sells substantially all
             of its material assets;

                3. a dissolution or liquidation of the Company;

                4. the Company becomes a non-publicly held company; or

                5. any change in the composition of the Company's Board of
             Directors during an 18-month period such that the individuals who
             at the beginning of such 18-month period were directors of the
             Company shall cease for any reason (other than death, disability or
             retirement) to constitute a majority of the Board of Directors of
             the Company.

             d. Good Cause. As used in this Agreement "good cause" for Executive
         to terminate his employment shall be deemed to exist if Executive
         voluntarily terminates employment within 24 months of a Change of
         Control for any of the following reasons:

                1. Without Executive's express prior written consent, Executive
             is assigned duties materially inconsistent with Executive's
             position, duties, responsibilities, or status with the Company
             which substantially varies from that which existed immediately
             prior to such change of ownership or control;

                2. Without Executive's express prior written consent, Executive
             experiences a change in his reporting level, titles, or business
             location (or more than 50 miles from his current business location
             or residence whichever is closer to the new business location)
             which substantially varies from that which existed immediately
             prior to the Change of Control; except that if Executive is not
             located at the Company's corporate headquarters in California, a
             relocation to the Company's

                                      -8-

<PAGE>   9
             corporate headquarters in California shall not be deemed a
             substantial variation, unless Executive's reporting level or title
             is also substantially varied.

                3. Without Executive's express prior written consent, Executive
             is removed from any position held immediately prior to the change
             of ownership or control, or if Executive fails to obtain reelection
             to any position held immediately prior to the change of ownership
             or control, which removal or failure to reelect is not directly
             related to Executive's incapacity or disability, habitual neglect,
             gross misconduct or death;

                4. Without Executive's express prior written consent, Executive
             experiences a reduction in salary of more than 10 percent below
             that which existed immediately prior to the change of ownership or
             control.

                5. Without Executive's express prior written consent, Executive
             experiences an elimination or reduction of any employee benefit,
             business expense reimbursement or allotment, incentive bonus
             program, or any other manner or form of compensation available to
             Executive immediately prior to the Change of Control and such
             change is not otherwise applied to others in the Company with
             Executive's position or title;

                6. The Company fails to obtain from any successor, before the
             succession takes place, a written commitment obligating the
             successor to perform this Agreement in accordance with all of its
             terms and conditions; or

                7. The Company or any successor thereto purports to terminate
             Executive pursuant to Section 4.4 without first giving Executive
             prior written notice thereof that specifies the facts and
             circumstances, in reasonable detail, serving as the basis for
             Executive's termination.

         5.2 Resignation for Other Than Good Cause After a Change of Control. In
the event that the Company undergoes a Change-of-Control and Executive remains
with the Company for 12 months following the effective date of the
Change-of-Control, Executive will be given a 30-day "window period" in which to
elect to voluntarily terminate Executive's employment for reasons other than
good cause. Should Executive choose to terminate Executive's employment within
the 30-day "window period," then Executive shall be entitled to the following
compensation:

             a. One-half the lump sum payment referred to in Section 5.1(a)(1).

             b. The right to exercise all vested and unexercised stock options
         granted under the Stock Option Plans in accordance with their terms
         within one year of the effective date of such termination.

             c. Outplacement services as defined in Section 4.4(g).

                                      -9-

<PAGE>   10

6. NOTICES

         All notices or other communications required or permitted to be made
hereunder shall be given in writing and sent by either personal delivery,
overnight delivery, or United States registered or certified mail, return
receipt requested, all of which shall be properly addressed with postal or
delivery charges prepaid, to the parties at their respective addresses set forth
below, or to such other addresses as either party may designate to the other in
accordance with this Section 5:

         If to the Company: PacifiCare Health Systems, Inc.
                            3120 Lake Center Drive
                            Santa Ana, California 92704
                            Attn: President and
                            Chief Executive Officer

         If to Executive:   Howard G. Phanstiel
                            10601 Wilshire Boulevard, Unit 403
                            Los Angeles, California  90024

All notices sent by personal delivery shall be deemed given when actually
received. All notices sent by overnight delivery shall be deemed received on the
next business day. All other notices sent via United States mail shall be deemed
received no later than two business days after mailing. Any notice given by any
method not expressly authorized herein, shall nevertheless be effective if
actually received, and shall be deemed given upon actual receipt.

7. GENERAL PROVISIONS

         7.1 Severance Agreement. Any payments of compensation made pursuant to
Sections 4 and 5 are contingent on Executive executing the Company's standard
severance agreement, including a general release of the Company, its owners,
partners, stockholders, directors, officers, employees, independent contractors,
agents, attorneys, representatives, predecessors, successors and assigns,
parents, subsidiaries, affiliated entities and related entities.

         7.2 Assignability. This Agreement shall inure to the benefit of, and
shall be binding upon the heirs, executors, administrators, successors, and
legal representatives of Executive and shall inure to the benefit of, and be
binding upon the Company and its successors and assigns. Executive shall not
assign, delegate, subdelegate, transfer, pledge, encumber, hypothecate, or
otherwise dispose of this Agreement, or any rights, obligations, or duties
hereunder, and any such attempted delegation or disposition shall be null and
void and without any force or effect; provided, however, that nothing contained
herein shall prevent Executive from designating beneficiaries for insurance,
death or retirement benefits.

                                      -10-

<PAGE>   11

         7.3 Entire Agreement. This Agreement is a fully integrated document and
contains any and all promises, covenants, and agreements between the parties
hereto with respect to Executive's employment. This Agreement supersedes any and
all other, prior or contemporaneous, discussions, negotiations, representations,
warranties, covenants, conditions, and agreements, whether written or oral,
between the parties hereto. Except as expressed herein, the parties have not
exchanged any other representations, warranties, inducements, promises, or
agreements respecting Executive's employment with the Company.

         7.4 Severability. In the event any one or more of the provisions of
this Agreement shall be rendered by a court of competent jurisdiction to be
invalid, illegal, or unenforceable, in any respect, such invalidity, illegality,
or unenforceability shall not affect or impair the remainder of this Agreement
which shall remain in full force and effect and enforced accordingly, unless a
party demonstrates by a preponderance of the evidence that the invalidated
provision was an essential economic term of this Agreement.

         7.5 Amendment. This Agreement shall not be changed, amended, or
modified, nor shall any performance or condition hereunder be waived, in whole
or in part, except by written instrument signed by the party against whom
enforcement or waiver is sought. The waiver of any breach of any term or
condition of this Agreement shall not be deemed to constitute the waiver of any
other or subsequent breach of the same or any other term or condition of this
Agreement.

         7.6 Governing Law. This Agreement shall be governed by, enforced under,
and construed in accordance with the laws of the State of California.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

The Company:                               PACIFICARE HEALTH SYSTEMS, INC.,
                                           a Delaware corporation

                                           /s/ ROBERT W. O'LEARY
                                           --------------------------------
                                           By:    Robert W. O'Leary
                                           Title: President and
                                                  Chief Executive Officer

Executive:                                 /s/ HOWARD G. PHANSTIEL
                                           -------------------------------------
                                           Howard G. Phanstiel

                                      -11-<PAGE>   1
                                                                    EXHIBIT 10.3

                               FIRST AMENDMENT TO
                      SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

         This First Amendment to Senior Executive Employment Agreement, dated as
of July 17, 2000 (the "Amendment"), hereby amends the Senior Executive
Employment Agreement, dated as of July 17, 2000 (the "Agreement") between
PacifiCare Health Systems, Inc., a Delaware Corporation, and Howard G.
Phanstiel, an individual ("Executive"), as follows:

         1. Amendment to the Agreement. The Agreement is amended by adding a new
Section 7.7 as follows:

                  7.7 Membership on Other Boards. Executive, with the permission
         and knowledge of the Company's Chief Executive Officer, may serve on
         the Board of Directors of Wedbush Morgan Securities and on the
         "Advisory Board" of XYZ Auto Corporation during the course of his
         Contract with the Company, as long as such service does not interrupt
         Executive in the performance of his duties as the full-time Executive
         Vice President, Chief Financial Officer of the Company. From time to
         time, Executive may serve on additional Boards with the approval of the
         Company's Chief Executive Officer.

         2 Limitation of Amendments. Except as expressly provided herein, no
terms or provisions of any agreement or instrument are modified or changed by
this Amendment and the terms and provisions of the Agreement, as amended by this
Amendment, shall continue in full force and effect, and are incorporated herein
by this reference.

         3. Governing Law. This Amendment shall be construed, interpreted and
enforced in accordance with, and governed by California law.

         4. Capitalized Terms. Capitalized terms not defined herein shall have
the meanings ascribed to them in the Agreement.

         5. Duplicate Originals; Execution in Counterparts. This Amendment may
be executed in two or more counterparts, each of which shall be an original but
all of which together shall constitute one and the same instrument.

         6. Waivers and Amendments. Neither this Amendment nor any term hereof
may be changed, waived, discharged or terminated orally, or by any action or
inaction, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.

         7. Section Headings. The titles of the sections hereof appear as a
matter of convenience only, and do not constitute a part of this Agreement and
shall not affect the construction hereof.

                                      -1-

<PAGE>   2

         8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.

The Company:                                PACIFICARE HEALTH SYSTEMS, INC.,
                                            A Delaware corporation

                                            /s/ ROBERT W. O'LEARY
                                            ------------------------------------
                                            By: Robert W. O'Leary
                                            Title: President and Chief Executive
                                                   Officer

                                            /s/ HOWARD G. PHANSTIEL
Executive:                                  ------------------------------------
                                            Howard G. Phanstiel

                                      -2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]