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                                                                    EXHIBIT 10.3

                            EMPIRE HEALTHCHOICE, INC.
                  ANNUAL EXECUTIVE INCENTIVE COMPENSATION PLAN
                              2002 PLAN DESCRIPTION

PURPOSE

The purpose of the Empire HealthChoice, Inc. (the "Company") Annual Executive
Incentive Compensation Plan (the "Plan") is to improve Company performance by
relating executive and management compensation to corporate and division annual
objectives and to motivate eligible employees to achieve operational excellence.

ELIGIBILITY

Participation in the Plan is generally restricted to full-time positions that
are:

1.   Executive, middle management, or other key contributors, and

2.   Grades 25 or above.

However, additional positions below grade 25 that significantly and directly
influence business performance may be selectively included at the discretion of
the Chief Executive Officer (the "CEO"). Positions otherwise eligible may be
deleted at the CEO's discretion. The Target Award Pool will not be increased to
accommodate the target awards for any such positions that are added.

Positions participating in the Sales Incentive Plan or other short-term
incentive plans offered by the Company are not eligible to participate in this
Plan for that portion of the year during which they participated in another
plan.

ADMINISTRATION SUMMARY

At the beginning of each year, the CEO will develop performance measures for the
Company based on Empire's annual plan. The CEO will recommend the corporate
objectives to the Board of Directors for approval.

At the beginning of each year (See Exhibit A), the Nominating and Compensation
Committee of the Board (the "Committee") will evaluate the performance of the
CEO and the Company for the most recent Plan year. The Committee will then
establish the Performance Adjusted Award Pool and recommend the actual incentive
payments to be awarded to the CEO and direct reports to the CEO, and present
them to the full Board for ratification. The Committee may, at its discretion,
establish separate pools and separate multipliers for the CEO and for the group
of all other eligible executives.

The Committee has overall responsibility for, and has the maximum discretion
permitted under the law over, the administration of the Plan and the
interpretation of all of the Plan's terms. The Board of Directors reserves the
right to amend, suspend, or terminate the Plan at any time without recourse on
the part of any employee.

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PLAN FEATURES

Individual Awards - For 2002, the determination of Individual Awards will be as
follows: (1) new participants who entered the Plan on or after June 28, 2000
will have Individual Awards based on their base salary in effect as of April 15,
2002 times the target award percentage associated with their grade level as
shown in Exhibit B, and (2) participants who were in the Plan prior to June 28,
2000 will have their Individual Target Awards based on their April 15, 2002 base
salary times the target award percentage associated with their grade level as
shown in Exhibit B, or, if greater, the incentive opportunity that was available
to them under the Plan approved by the Board on March 29, 2000. This
"grandfathering" feature will cease when the incentive opportunity provided in
methodology (1) exceeds the incentive opportunity provided in methodology (2).
Pro-rations will be made for salary and grade changes that occur after April 15,
2002 as appropriate.

Adjusted Individual Awards are determined by the CEO and management based on the
individual's contribution to corporate, division and individual business
objectives. Adjusted Individual Awards for the direct reports to the CEO, or any
other position with the title Senior Vice President, will be individually
reviewed by the Nominating and Compensation Committee. An Adjusted Individual
Award may be more or less than the Individual Target Award depending on actual
results achieved, but will not exceed 1.5 times the Individual Target Award. All
awards are granted as lump sum payments.

Target Award Pool - The sum of the Individual Target Awards of eligible Plan
participants in grade 25 and above at 100% performance on all objectives is the
Target Award Pool. At target, if all Plan participants as of December 2002
remain in the Plan for the full year, the Target Award Pool would be $13.2
million (not including the target award for the CEO, for whom the Board may
establish a separate pool). The actual pool will be based on participants as of
December 31, 2002, prorated based on months of participation in the Plan and any
changes in grade level during the Plan year as well as changes to base salary
that occur during the Plan year.

Performance Objectives - Specific objectives are established at the beginning of
the performance period (See Exhibit C) for the corporation, each division and
each eligible individual. Objectives may be weighted based on relative
importance.

Corporate objectives will be expressed as measurable results, (e.g., achievement
of targeted pre-tax return on average GAAP equity, increase in membership,
etc.), and/or relative performance, (e.g., customer satisfaction relative to
prior customer surveys, etc.).

Performance Measures - Objectives will have numerical measures by which to
assess performance. Each objective will generally have a threshold level of
performance, below which no credit will be earned. In some cases, the target
performance level may also be the threshold. Each objective will also have a
maximum level of performance above which no additional credit will be earned.
Achieving the objective, i.e., the target performance level, earns 1.0 credit
for that goal.

Measures selected for the Corporation may vary from one year to another. Chosen
measures will, in each instance, reflect important strategic and/or tactical
objectives crucial to the applicable entity's success.

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Corporate Multiplier - The Corporate Multiplier will be based on the aggregate
level of corporate objective achievement and will range from 0 to 1.5. Each
weighted corporate objective will be evaluated and scored separately. The
weighted scores will be summed to become the Corporate Multiplier (See Exhibit
D) to be utilized in determining the Performance Adjusted Award Pool. The
Committee has discretion to modify the results of the calculation if, in their
opinion, it does not appropriately reflect overall performance.

Performance Adjusted Award Pool - Calculation of a Performance Adjusted Award
Pool will be made at the end of each performance year. The Pool is equal to the
product of the Target Award Pool adjusted by the Corporate Multiplier. Payments
to all eligible participants may not exceed the Performance Adjusted Award Pool.

SPECIAL CONSIDERATIONS

If a participant's employment is terminated due to death or long-term
disability, or if a termination of employment occurs due to retirement (defined
herein as eligibility for as eligibility for retiree medical coverage based on
meeting the following criteria: (1) at least 65 years of age plus 10 or more
years of service, (2) at least 55 years of age plus 20 or more years of service,
or (3) at least 30 years of service at any age), prior to the date of payment,
the participant or the participant's beneficiary will eligible to receive,
subject to recommendation by the participant's manager and the CEO along with
approval by the Committee and ratification by the Board, a pro-rata portion of
the award that would have been received had the participant been active for the
full year. Notwithstanding anything to the contrary in this paragraph, if a
participant's employment is terminated prior to the date of payment due to job
elimination or discharge, any rights to an award will be forfeited.

If a participant terminates employment prior to the date of payment for any
reason other than death, long-term disability or retirement (as defined above),
any rights to an award will be forfeited. Such terminations shall include but
not be limited to resignation, job elimination or discharge.

LIMITATIONS

(a)      No part of the Plan shall be construed as an employment or compensation
         contract, either explicit or implied. The establishment of the Plan
         shall not be construed as conferring any legal rights upon any
         participant for a continuation of employment, nor shall it interfere
         with the rights of the Company to discharge a participant and to treat
         him or her without regard to the effect which such treatment might have
         upon him or her as a participant in the Plan.

(b)      The Company shall have the right to deduct from any amounts otherwise
         payable to a participant, whether pursuant to the Plan or otherwise, or
         otherwise to collect from the participant, any required withholding
         taxes with respect to benefits under the Plan.

(c)      Subject to any applicable law, no benefit under the Plan shall be
         subject in any manner to, nor shall the Company be obligated to
         recognize, any purported anticipation, alienation, sale, transfer
         (otherwise than by will or the laws of descent and distribution),
         assignment, pledge encumbrance, or charge, and any attempt to do so
         shall be void. No such benefit shall in any manner be liable for or
         subject to garnishment, attachment, execution, or as a levy, or liable
         for or subject to the debts, contracts, liabilities, engagements, or
         torts of the participant.

(d)      The Plan shall not be construed conferring on a participant any right,
         title, interest, or claim in or to any specific asset, reserve,
         account, or property of any kind possessed by the Company. To the
         extent that as a participant or any other person acquired a right to
         receive payments from the Company, such right shall be no greater than
         the rights of an unsecured general creditor.

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                                                                    Exhibit 10.4

                        EMPIRE BLUE CROSS AND BLUE SHIELD
                             EXECUTIVE SAVINGS PLAN
               (As Amended and Restated Effective January 1, 1999)

1.   Purpose of the Plan

     The purpose of this Empire Blue Cross and Blue Shield Executive Savings
     Plan is to enable the Company and its participating subsidiaries and other
     affiliates to compete more effectively with other employers in obtaining
     and retaining the executive talent necessary to carry on the Company's
     affairs. To that end, the Plan provides a select group of executives with
     an opportunity to defer a portion of their base salary and/or incentive
     compensation, and to receive the benefit of an Employer Match, to the
     extent such benefits are unavailable to such executives under the Company's
     401(k) Plan as a result of limitations imposed by the Code or other
     limitations imposed by the terms of such plan.

2.   Definitions

     2.1  "Account" means the bookkeeping account consisting of a Participant's
          Deferral Account and Employer Match Account.

     2.2  "Administrator" means the Company.

     2.3  "Base Salary" means a Participant's base pay, including any salary
          increases taking effect during a Plan Year.

     2.4  "Code" means the Internal Revenue Code of 1986, as amended from time
          to time.

     2.5  "Company" means Empire Blue Cross and Blue Shield and any successor
          thereto by merger, consolidation, or sale or transfer of substantially
          all of its assets.

     2.6  "Deferral Account" means the bookkeeping account maintained for a
          Participant to record his or her Deferred Amounts, together with
          earnings thereon credited pursuant to Section 5.3.

     2.7  "Deferral Election" means a Whole-Year Election or a Make-Up Election.

     2.8  "Deferred Amounts" means the amounts credited to a Participant's
          Deferral Account pursuant to Section 3.4.

     2.9  "Eligible Employee" with respect to a Plan Year means an Employee (i)
          whose annual Base Salary rate as of December 1 of the immediately
          prior calendar year (or, in the case of an Employee hired during the
          Plan Year, as of his or her date of hire) is at least $90,000, or (ii)
          whose Total Compensation from January 1 through December 1 of such
          immediately prior calendar year is at least $120,000. Both the $90,000
          and the $120,000 thresholds will be adjusted from time to time by the
          Administrator to reflect cost-of-living increases.

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2.10  "Employee" means an employee of the Employer, but shall not include any
      employee covered by a collective bargaining unit.

2.11  "Employer" means the Company and any subsidiary or other affiliate of the
      Company which has adopted the Plan and has been designated by the
      Company's Board of Directors as a participating employer under the Plan.

2.12  "Employer Match" means the amount credited to a Participant's Employer
      Match Account pursuant to Article 4.

2.13  "Employer Match Account" means the bookkeeping account maintained for a
      Participant to record his or her Employer Matches, together with earnings
      thereon credited pursuant to Section 5.3.

2.14  "401(k) Plan" means the Empire Blue Cross and Blue Shield Employee Savings
      Plan, as amended from time to time.

2.15  "Incentive Award" means an award under the Annual Executive Incentive
      Compensation Plan.

2.16  "Investment Election" means a Participant's election under Article 5 of
      the investment fund or funds used to measure the investment performance of
      the Participant's Account.

2.17  "Make-Up Election" means an election made pursuant to Section 3.3.

2.18  "$160,000 Limit" with respect to a Plan Year or calendar year means the
      dollar limitation under Section 401(a)(17) of the Code in effect for such
      year.

2.19  "Other Performance-Based Award" means any performance-based award other
      than an Incentive Award.

2.20  "Participant" means an Employee who satisfies the requirements for
      participation in the Plan pursuant to Section 3.1 and whose Account has
      not been distributed.

2.21  "Plan" means this Empire Blue Cross and Blue Shield Executive Savings
      Plan, as amended from time to time.

2.22  "Plan Year" means the calendar year.

2.23  "Total Compensation" means a participant's Base Salary, Incentive Awards,
      and any other compensation of a type that qualifies under the 401(k) Plan
      for elective deferral contributions thereunder. Total Compensation
      includes amounts deferred pursuant to a Make-Up Election but excludes
      amounts deferred pursuant to a Whole-Year Election.

2.24  "Unforeseeable Emergency" shall have the meaning ascribed thereto in
      Section 9.2.

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     2.25   "Valuation Date" means the last day of each calendar quarter and
            such additional dates as the Administrator may establish.

     2.26   "Whole-Year Election" means an election made pursuant to Section
            3.2.

3.   Participation and Deferral Elections

     3.1    Participation. To commence participation in the Plan, an Eligible
            Employee must file with the Administrator a Whole-Year Election
            and/or a Make-Up Election with respect to a Plan Year in accordance
            with Sections 3.2 and 3.3, respectively. Participation in the Plan
            shall terminate when all amounts credited to a Participant's Account
            have been distributed.

     3.2    Whole-Year Elections. A Whole-Year Election for a Plan Year shall
            specify the respective deferral percentages applicable to the
            Participant's Base Salary, Incentive Award, and Other
            Performance-Based Awards, payable during such Plan Year. Each such
            percentage must be either 0% or a percentage between 5% and 33-1/3%;
            provided, however, that the maximum Whole-Year Election deferral
            percentage for a Participant who has made a Make-Up Election for
            such Plan Year shall be 27-1/3%.

     3.3    Make-Up Elections. A Make-Up Election, which shall be for any whole
            percentage up to 6%, shall apply to a Participant's Total
            Compensation for the Plan Year in excess of the $160,000 Limit. For
            purposes of the preceding sentence, Total Compensation received by a
            Participant before he or she becomes eligible to participate in the
            401(k) Plan shall be disregarded.

     3.4    General Rules Governing Elections.

            (a)  Whole-Year Elections and Make-Up Elections shall be filed with
                 the Administrator, on such forms as the Administrator shall
                 designate, before such date prior to the commencement of the
                 Plan Year as the Administrator shall establish and may not be
                 modified or revoked after the commencement of such Plan Year
                 except as provided in Sections 3.6 and 9.3. An amount deferred
                 pursuant to a Deferral Election shall be credited to the
                 Participant's Deferral Account within 30 days after the date on
                 which such amount would otherwise be payable.

            (b)  A Deferral Election shall be applicable only to compensation
                 payable during the Plan Year to which it relates, exclusive of
                 any compensation payable before the Participant commences
                 participation in the Plan.

     3.5    Newly Hired Employees. In the case of an Employee who becomes an
            Eligible Employee after January 1 and before December 1 of a Plan
            Year, notwithstanding the provisions of Section 3.4(a) such Employee
            may make a Deferral Election at any time within the 30-day period
            following the date on which he or she becomes an Eligible Employee.
            Such Deferral Election shall be effective as soon as
            administratively practicable after it is received.

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     3.6    Cessation of Deferrals.

            (a)  A participant may revoke his or her Whole-Year Election, with
                 respect to the Participant's Base Salary only, effective as of
                 the first day of April, July, or October by filing a written
                 notice of revocation at least 30 days before the effective date
                 of such revocation. Any such revocation shall apply to Base
                 Salary (but not to Annual Incentive Awards or any Other
                 Performance-Based Awards) paid on or after such effective date
                 and shall remain in effect for the balance of the Plan Year.
                 Except as otherwise provided in Section 9.3, a Participant's
                 Make-Up Election with respect to a Plan Year may not be
                 revoked.

            (b)  In the event a Participant revokes his or her Whole-Year
                 Election pursuant to this Section 3.6, he or she shall not be
                 permitted to make another Whole-Year Election until the second
                 Plan Year following the Plan Year in which such revocation
                 became effective.

            (c)  In the event a Participant receives an emergency distribution
                 pursuant to Section 9, the Deferral Election suspension and
                 restriction provisions of Section 9.3 shall apply.

4.   Employer Match

     For each Plan Year, the Employer shall credit to a Participant's Employer
     Match Account an Employer Match equal to 50% of the amount of the
     Participant's Total Compensation deferred pursuant to his or her Make-Up
     Election. Such Employer Match shall be credited to the Participant's
     Employer Match Account not later than 30 days following the end of the
     payroll period to which such Employer Match relates.

5.   Investment Performance Elections

     5.1    Additions to Account. At the time a participant makes a Deferral
            Election with respect to a Plan Year, he or she shall file an
            Investment Election which shall designate from among the investment
            funds available for selection under the Plan the investment fund or
            funds which shall be used to measure the investment performance of
            Deferred Amounts and Employer Matching Amounts added to the
            Participant's Account during such Plan Year.

     5.2    Existing Account Balances. A Participant may, on or before July 1 of
            any Plan Year, change the proportions of his or her existing Account
            balance that are deemed invested in the investment fund or funds
            referred to in Section 5.1. Such change shall be implemented as of
            August 1 of such Plan Year or as soon as administratively
            practicable thereafter.

     5.3    Crediting of Investment Return. As of any Valuation Date, each
            Participant's Account shall, under such procedures as the
            Administrator shall establish, be credited with any income, and
            debited with any loss, that would have been realized if

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            the amounts credited to his or her Account had been invested since
            the preceding Valuation Date in accordance with his or her
            Investment Election.

            References in the Plan to Investment Elections are for the sole
            purpose of attributing hypothetical investment performance to each
            Participant's Account. Nothing herein shall require the Employer to
            invest, earmark, or set aside its general assets in any specific
            manner.

6.   Accounts

     6.1    Maintenance of Accounts. The Administrator shall maintain or cause
            to be maintained for each Participant an Account consisting of his
            or her Deferral Account and Employer Match Account. Each Participant
            shall be furnished with quarterly statements setting forth the
            balances in his or her Deferral Account and Employer Match Account.

     6.2    Vesting.

            (a)  The amounts in a Participant's Deferral Account shall be fully
                 vested at all times.

            (b)  Notwithstanding any provisions herein to the contrary, the
                 balance in a Participant's Employer Match Account shall be
                 distributed only to the extent it is vested. The amounts in a
                 Participant's Employer Match Account shall be vested only to
                 the extent his or her matching contribution account under the
                 401(k) Plan is vested (or would be vested if he or she had
                 elected to make elective deferral contributions under such
                 plan). If a Participant's Employer Match Account is not fully
                 vested at the time of his or her separation from service, the
                 nonvested portion of such Employer Match Account shall be
                 immediately forfeited as of the Participant's severance date,
                 but shall be returned to such Employer Match Account if he or
                 she is rehired before incurring a break in service of five
                 years (as determined by applying the rules of the 401(k) Plan).

7.   Distribution of Benefits

     7.1    Benefit Payment Election.

            (a)  Prior to the commencement of his or her participation in the
                 Plan, each Participant shall file a benefit payment election
                 with the Administrator on such form as the Administrator shall
                 prescribe specifying (i) whether the Participant's benefit is
                 to be paid in a lump sum, substantially equal annual
                 installments, or both, (ii) the year in which such lump-sum
                 payment is to be made or such installments are to commence,
                 (iii) if installments are elected, the number of such
                 installments. No portion of a Participant's benefit may be
                 distributed prior to his or her separation from service from
                 the Employer or one of its affiliates. Lump-sum payments may
                 not be made later than, and

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                 installment payments may not extend beyond, the 20th year
                 following the year in which the Participant separates from
                 service.

            (b)  In the event a Participant fails to make an initial benefit
                 payment election pursuant to subsection (a), he or she shall be
                 deemed to have made an initial election to receive his or her
                 benefit in a lump sum within 60 days following the date of his
                 or her retirement or other separation from service.

     7.2    Change in Election. A Participant's benefit payment election may be
            changed from time to time, provided, however, that no such change
            shall be effective if the Participant's separation from service from
            the Employer occurs less than 12 months after the date such change
            is made. In such event the Participant's benefit shall be paid in
            accordance with his or her most recent election or change in
            election (other than a change in election made less than 12 months
            before his or her separation from service). For purposes of this
            Section 7.2, a revocation of a prior change of election shall itself
            be treated as a new change of election.

     7.3    Distribution of Benefits. Except as otherwise provided in Articles 8
            and 9, a Participant's Account shall be distributed in accordance
            with his or her benefit payment election made pursuant to Section
            7.1 (after giving effect to any modifications to such election
            pursuant to Section 7.2). The payment of any installment or lump sum
            shall, in accordance with the Participant's election, be made either
            (i) within 60 days after the date of the Participant's separation
            from service or (ii) during the first 60 days of a calendar year
            commencing after the Participant separates from service.

     7.4    Disability. For purposes of this Article 7, in the event a
            Participant becomes totally and permanently disabled he or she will
            not be considered to have separated from service before the earlier
            of the date he or she ceases to be totally and permanently disabled
            (as determined by the Administrator in its sole discretion) or the
            date he or she ceases receiving benefits under the Employer's
            long-term disability plan; provided, however, that a Participant
            shall not be regarded as totally and permanently disabled for
            purposes of this Article 7 if the Participant (i) fails to provide
            proof to the Employer that he or she is disabled -- this includes,
            but is not limited to, granting access to the Participant's medical
            records upon the request and in the sole discretion of the Employer
            -- or (ii) fails to submit to a medical examination performed by a
            physician selected by the Employer, upon the Employer's request in
            its sole discretion; and provided further that a Participant's
            eligibility for, or receipt of, benefits from the Employer's
            long-term disability plan -- or a determination as to a
            Participant's disability status by any other third party -- is not
            determinative of a Participant's disability status.

8.   Death of a Participant

     8.1    A Participant may designate in writing, on such form as the
            Administrator may prescribe, a beneficiary to receive any benefits
            with respect to such Participant in the event of his or her death.
            Such beneficiary designation may be changed at any time.

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      8.2   Except as otherwise provided in Article 9 and in Section 8.3, in the
            event of a Participant's death prior to the distribution of his or
            her entire Account balance, the remaining balance in the
            Participant's Account shall be distributed in accordance with his or
            her benefit payment election made pursuant to Section 7.1 (after
            giving effect to any modifications to such election pursuant to
            Section 7.2). Such distribution shall be made to the Participant's
            designated beneficiary or, in the absence of any such designated
            beneficiary, to the Participant's estate.

      8.3   A Participant may elect to have any amount remaining in his or her
            Account upon the Participant's death paid to his or her designated
            beneficiary in a lump sum within 60 days after the Administrator has
            received notification of his or her death, rather than in accordance
            with his or her benefit payment election under Section 7.1. Such a
            lump-sum death benefit election may be made or revoked at any time;
            provided, however, that no such election or revocation shall be
            effective if made less than 12 months before the date of the
            Participant's death.

9.    Unforeseeable Emergencies

      9.1   Emergency Acceleration. In the event that a Participant experiences
            an Unforeseeable Emergency, such Participant may request an
            acceleration of the distribution of all or a portion of his or her
            Account. Any such request shall be subject to the approval of both
            the Company's Senior Vice President of Human Resources and Services
            and the Company's Chief Executive Officer, which approval (a) shall
            only be granted to the extent such distribution is reasonably needed
            to satisfy the need created by the Unforeseeable Emergency and (b)
            shall not be granted to the extent that such need may reasonably be
            relieved (i) through reimbursement or compensation by insurance or
            otherwise or (ii) by liquidation of the Participant's assets (to the
            extent the liquidation of such assets would not itself cause severe
            financial hardship). The amount paid in an accelerated distribution
            shall approximate the amount reasonably necessary to alleviate the
            need created by the Unforeseeable Emergency.

      9.2   Unforeseeable Emergency. An "Unforeseeable Emergency" means severe
            financial hardship to the Participant resulting from a sudden and
            unexpected illness or accident of the Participant or his or her
            dependent, loss of the Participant's property due to casualty, or
            other similar extraordinary and unforeseeable circumstances arising
            as a result of events beyond the Participant's control. Examples of
            circumstances not qualifying as an Unforeseeable Emergency include
            the need to send a Participant's child to college and the desire to
            purchase a home.

      9.3   Suspension of Deferrals. Notwithstanding anything to the contrary in
            this Article 9, in the event the Administrator approves a
            Participant's request for a suspension of deferrals pursuant to
            Section 9.1 on account of an Unforeseeable Emergency, the
            Participant's Make-Up Election and Whole-Year Election shall be
            suspended (and the Participant shall be ineligible to make a new
            Deferral Election) with respect to any compensation otherwise
            payable during the period beginning on the date of such

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                  withdrawal or effective date of such approval and ending on
                  the last day of the next succeeding Plan Year.

10.    Administration

       The Plan shall be administered by the Administrator. The Administrator
       shall have all powers necessary to carry out the provisions of the Plan,
       including the right to adopt rules under the Plan, and shall have
       absolute discretionary authority to construe the Plan, to resolve any
       ambiguities therein, and to determine and resolve any question that may
       arise in connection with the application or administration of the Plan.
       Any such determination by the Administrator shall be conclusive and
       final.

11.    General Provisions

       11.1  No Contract of Employment. The establishment of the Plan shall not
             be construed as conferring any legal rights upon any Participant
             for a continuation of employment, nor shall it interfere with the
             rights of the Employer to discharge a Participant and to treat the
             Participant without regard to the effect which such treatment might
             have upon him or her as a Participant in the Plan.

       11.2  Withholding. As a condition to a Participant's entitlement to
             benefits hereunder, the Employer shall have the right to deduct
             from any amounts otherwise payable to a Participant, whether
             pursuant to the Plan or otherwise, or otherwise to collect from the
             Participant, any required withholding taxes with respect to
             benefits under the Plan.

       11.3  Non-Assignability of Benefits. Subject to any applicable law, no
             benefit under the Plan shall be subject in any manner to, nor shall
             the Employer be obligated to recognize, any purported anticipation,
             alienation, sale, transfer, assignment, pledge, encumbrance, or
             charge, and any attempt to do so shall be void. No such benefit
             shall in any manner be liable for or subject to garnishment,
             attachment, execution, or a levy, or liable for or subject to the
             debts, contracts, liabilities, engagements, or torts of the
             Participant.

       11.4  Successor Employers. The Plan shall be binding upon any successor
             to the Company by merger, consolidation, or sale or transfer of
             substantially all of its assets.

       11.5  Governing Law. The laws of the State of New York shall govern the
             construction of this Plan and the rights and the liabilities
             hereunder of the parties hereto.

12.   Source of Benefits

      The Plan is an unfunded plan maintained by each Employer for the purpose
      of providing deferred compensation for a select group of management or
      highly compensated employees. Benefits under the Plan shall be payable
      from the general assets of each Employer. The Plan shall not be construed
      as conferring on a Participant any right, title, interest, or claim in or
      to any specific asset, reserve account, or property of any kind possessed
      by the Employer. To

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     the extent that a Participant or any other person acquires a right to
     receive payments from the Employer, such right shall be no greater than the
     right of an unsecured general creditor.

13.  Effective Date

     This Plan, as amended and restated, shall be effective January 1, 1999.

14.  Amendment or Termination

     The Company's Board of Directors reserves the right to amend or terminate
     this Plan at any time. Notwithstanding the foregoing, the Board of
     Directors may authorize one or more officers of the Company to amend the
     Plan, in which event any amendment executed by such officer shall be
     effective hereunder. No amendment or termination of the Plan shall
     adversely affect the right of any Participant to receive his or her accrued
     benefits as determined as of the date of amendment or termination.

                                      -9-

<PAGE>

                            AMENDMENT AND RESTATEMENT
                      OF EMPIRE BLUE CROSS AND BLUE SHIELD
                             EXECUTIVE SAVINGS PLAN

         WHEREAS, Empire Blue Cross and Blue Shield (the "Company") has
heretofore adopted the Empire Blue Cross and Blue Shield Executive Savings Plan
(the "Plan"); and

         WHEREAS, the Company desires to amend and restate the Plan.

         NOW, THEREFORE, the Plan is amended and restated, effective January 1,
1999, to read substantially in the form attached hereto.

         IN WITNESS WHEREOF, the Company has executed this instrument as of this
6 day of August, 1999.

                                               EMPIRE BLUE CROSS AND BLUE SHIELD

                                               By: /s/ Michael A. Stocker
                                                  ------------------------------

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