Document:

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                                                                   EXHIBIT 10.22

                           SECOND AMENDED AND RESTATED

                         PACIFICARE HEALTH SYSTEMS, INC.

                    NON-QUALIFIED DEFERRED COMPENSATION PLAN

      WHEREAS, PacifiCare Health Systems, Inc., (the "Company") established a
non-qualified deferred compensation plan to provide supplemental retirement
income benefits for a select group of management and highly compensated
employees through deferrals of salary and bonuses, effective as of December 18,
1997;

      WHEREAS, it is believed that providing for deferral of compensation at the
election of each executive is in the best interests of the Company;

      WHEREAS, the Company believes that it is in its best interests to amend
and restate this plan;

      WHEREAS, it is the intent of the Company that this Amended and Restated
Plan supersede any other non-qualified deferred compensation plan, policy or
arrangement which the Company or any of its subsidiaries may have sponsored or
made available in the past; and

      WHEREAS, the Company intends that this plan shall be maintained as a "top
hat" plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA;

      NOW, THEREFORE, it is hereby declared as follows:

                                    ARTICLE I
                                   DEFINITIONS

      Whenever the following words and phrases are used in this Plan, they shall
have the meanings specified below.

Section 1.1 "Beneficiary" or "Beneficiaries" for purposes of this Plan shall
have the meaning set forth in Section 6.4.

Section 1.2 "Board of Directors" or "Board" means the Board of Directors of the
Company.

Section 1.3 "Bonus" means any management incentive plan bonus, long-term bonus,
sign-on bonus, retention bonus, sales commissions or any other bonuses
determined as eligible for the Plan by the Committee payable to a Participant in
addition to the

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                                                                   EXHIBIT 10.22

Participant's Salary, other than moving expenses, prior to any reduction for
deferrals to a plan qualified under Section 125 or Section 401(k) of the Code.

Section 1.4 "Change of Control" shall have the meaning set forth in Section 6.3.

Section 1.5 "Common Stock" means the Company's Common Stock, par value $0.01 per
share.

Section 1.6 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

Section 1.7 "Committee" means the Committee appointed by the Compensation
Committee to administer the Plan in accordance with Article V.

Section 1.8 "Company" means PacifiCare Health Systems, Inc., a Delaware
corporation, or any successor corporation.

Section 1.9 "Compensation Committee" shall mean the Compensation Committee of
the Board of Directors of the Company.

Section 1.10 "Deferral Account" shall mean the amount of Salary and Bonus
deferred under Article III of this Plan, the Interest Rate or Rates credited to
such deferred amounts and the LTPIP Stock Accounts (as defined herein).

Section 1.11 "Disability." A Participant shall be deemed to be incapacitated or
disabled, if such Participant's incapacity or disability prevents a Participant
from fully performing his duties to an Employer 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 the Participant's incapacity or disability,
decide in their reasonable judgments, that such incapacity or disability will be
permanent or of such continued duration as to prevent a Participant from
resuming the rendition of services to the Employer for at least an additional
six-month period.

Section 1.12 "Distributable Amount" shall mean having the meaning set forth in
Section 3.8(a).

Section 1.13 "Eligible Employee" shall mean those Employees who satisfy any of
the requirements of Section 2.1.

Section 1.14 "Employee" shall mean any employee (as defined in accordance with
the Treasury Regulations and Revenue Rulings then applicable under Section 3401
(c) of the Code) of an Employer, whether such employee is so employed at the
time this Plan is adopted or becomes so employed subsequent to the adoption of
this Plan.

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                                                                   EXHIBIT 10.22

Section 1.15 "Employer" means the Company (or any successor by merger,
consolidation or purchase of substantially all of the Company's assets) and any
and all Subsidiaries of the Company.

Section 1.16 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

Section 1.17 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

Section 1.18 "Fund" or "Funds" means one or more of the funds selected by the
Committee pursuant to Section 3.3(b).

Section 1.19 "Initial Election Period" for an Eligible Employee means the 30-day
period following the receipt by an Eligible Employee of enrollment material for
this Plan.

Section 1.20 "Interest Rate" shall mean, for each Fund, an amount equal to the
net gain or loss on the assets of such Fund during each month.

Section 1.21 "LTPIP Stock Account" shall have the meaning specified in Section
3.5.

Section 1.22 "Participant" means for purposes of this Plan, any Eligible
Employee who satisfies the requirements of Section 3.1.

Section 1.23 "Payment Eligibility Date" means the first day of the month
following the end of the calendar quarter in which a Participant terminates
employment for any reason with all Employers or dies.

Section 1.24 "Plan" means this Amended and Restated Non-Qualified Deferred
Compensation Plan of PacifiCare Health Systems, Inc., as it may be amended from
time to time.

Section 1.25 "Plan Year" means the 12 consecutive month period beginning on
January 1 and ending on December 31 of the same year.

Section 1.26 "Retirement" or "Retire" for purposes of this Plan means
termination of a Participant's employment from all Employers, which occurs after
the sum of the following two factors meet or exceed 55: (i) the Participant's
age and (ii) the Participant's number of years of service with all Employers.

Section 1.27 "Salary" shall mean the Participant's salary prior to any reduction
for deferrals to a plan qualified under Section 125 or Section 401 (k) of the
Code.

Section 1.28 "Social Security Wage Base" means contributions and benefits base
under Section 230 of the Social Security Act in effect for the Plan Year.

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                                                                   EXHIBIT 10.22

Section 1.29 "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

                                   ARTICLE II
                                   ELIGIBILITY

Section 2.1 Eligibility.

      a. At the effective date of this Plan, an Employee of an Employer will be
eligible to defer payments of Salary and/or Bonus pursuant to the provisions of
this Plan if at the time when an election may be made: (i) he or she is
designated to be in an eligible position and has an annual base salary of least
$80,000; or (ii) he or she is an Employee scheduled to work at least 32 hours
per week designated by the Committee to be eligible to participate in this Plan
so long as such designation does not make this Plan not eligible for "top hat"
plan status. Notwithstanding any other provisions of this Plan, all Employees
who currently participate in this Plan shall continue to be eligible to
participate in this Plan in future Plan Years so long as the Employee remains
designated in an eligible position.

      b. A new Employee of an Employer will be eligible to defer payments of
Salary and/or Bonus pursuant to the provisions of this Plan if at the time when
an election may be made he or she meets the eligibility requirements in 2.1(a)
above.

      c. An Employee who satisfies the requirements of subsection (a) or (b)
shall be an "Eligible Employee."

                                   ARTICLE III
                            DEFERRAL OF COMPENSATION

Section 3.1 Participation.

      An Eligible Employee shall become a Participant in this Plan by electing
to defer a portion of his or her Salary and/or Bonus in accordance with Section
3.2.

Section 3.2 Elections to Defer Compensation.

      a. Initial Election Period. Subject to Article II and Section 3.1, each
Eligible Employee may elect to defer Salary and/or Bonus by filing with the
Committee, on a form provided by the Committee, an election that conforms to the
requirements of this Section 3.2, no later than the last day of his or her
Initial Election Period.

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                                                                   EXHIBIT 10.22

      b. General Rule. The amount of compensation which an Eligible Employee may
elect to defer is as follows:

            (i) Any whole percentage of Salary up to and including 50 percent of
      Salary and/or

            (ii) Any whole percentage of Bonus up to 100 percent.

      c. Minimum Deferrals. For each Plan Year during which an Eligible Employee
is a Participant, the minimum amount that may be elected to be deferred under
Section 3.2(b) is $5,000. Such minimum may be satisfied by deferring Salary
and/or the Bonus payable for services rendered for such Plan Year (even though
it may not be paid until the next Plan Year); provided that if Salary is
deferred, the minimum Salary deferral is $5,000. Accordingly, if no Salary is
deferred for a Plan Year and the total amount of the Bonus elected to be
deferred with respect to that Plan Year is in fact less than $5,000, then no
portion of the Bonus shall be deferred.

      d. Effect of Initial Election. For Participants who are Employees of an
Employer on the effective date of this Plan, an election to defer Salary and/or
Bonus during the Initial Election Period shall be effective with respect to
Salary and/or Bonus earned during the first pay period beginning after the end
of the Initial Election Period. For Participants who become Employees of an
Employer subsequent to the effective date of this Plan, an election to defer
Salary and/or Bonus during the Initial Election Period shall be effective with
respect to Salary and/or Bonus earned as soon as administratively possible.

      e. Duration of Deferral Election. Any Salary and/or Bonus deferral
election made under subsection (a) or subsection (f) of this Section 3.2 shall
be irrevocable and shall apply to the Salary payable during subsequent Plan
Years and/or Bonus payable with respect to services performed during subsequent
Plan Years until a Participant makes a new election; provided, however, that an
election may not be changed for the first Plan Year after an election is made or
for any Plan Year once the Plan Year has begun. An Eligible Employee may make
changes to his or her election, subject to the limitations set forth in this
Section 3.2, to change the deferral under a previous election by filing with the
Committee on forms provided by the Committee, a new election to defer a
percentage of his or her Salary and/or Bonus on or before the December 15
preceding the Plan Year for which the new election is to apply. Notwithstanding
the foregoing, the Committee may, in its absolute discretion, permit an Eligible
Employee to file an election to defer on or after December 15, if, in its
judgment, his or her failure to do so prior to said date was due to reasonable
cause, but in no event may such election be filed after December 31. All
elections, once made, are irrevocable.

      f. Elections other than Elections during the Initial Election Period.
Subject to the minimum deferral requirement of subsection (c) above, any
Eligible Employee who fails to elect to defer Salary and/or Bonus during his or
her Initial Election Period

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                                                                   EXHIBIT 10.22

may subsequently become a Participant, and any Eligible Employee who has
terminated a prior Salary deferral election may elect to again defer Salary and
/or Bonus, by filing an election, on a form provided by the Committee, to defer
Salary and/or Bonus as described in this Section 3.2. An election to defer
Salary and/or Bonus must be filed on or before each December 15 and will be
effective for Salary paid after the following January 1 and the Bonus payable
with respect to services performed in the Plan Year beginning on the following
January 1.

      g. Reduction of Salary and/or Bonus. Upon an election to defer Salary
and/or Bonus, each Participant's Salary or Bonus will be reduced by the amount
elected to be deferred. If necessary, Bonus deferrals may be reduced in order to
cover any taxes that are required to be paid at the time of deferral.

Section 3.3 Investment Elections.

      a. At the time of making the deferral elections described in Section 3.2,
the Participant shall designate, on a form provided by the Committee, the types
of funds the Participant's Deferral Account will be deemed to be invested in for
purposes of determining the amount of Interest Rate or Rates to be credited to
his or her Account. Examples of the types of funds that may be available for
investment are: (i) Money Market Fund; (ii) Common Stock Fund; (iii)
International Equity Fund; (iv) Balanced Fund; (v) Growth Fund; (vi) Aggressive
Growth Fund; (vii) Bond Fund; and (viii) Global Equity Fund.

      In making the designation pursuant to this Section 3.3, the Participant
may specify that all or any whole percentage of his Deferral Account be deemed
to be invested in one or more funds. Weekly, a Participant may change the
designation made under this Section 3.3 with respect to amounts contained in his
or her Deferral Accounts or amounts to be credited to his or her Deferral
Accounts by current or future deferrals by filing an election, on a form
provided by the Committee, submitted no later than 12:00 a.m. Pacific Time
Wednesday of each week. If a Participant fails to elect a type of fund under
this Section 3.3, he or she shall be deemed to have elected a fund similar to a
Money Market Fund.

      b. Although the Participant may designate the type of funds in subsection
(a) above, the Committee shall select from time to time, in its sole discretion,
a commercially available fund similar to the types described in subsection (a)
above to be the Funds. The Interest Rate of such commercially available fund or
contract shall be used to determine the amount of earnings or losses to be
credited to Participants' Deferral Accounts under Section 3.4.

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                                                                   EXHIBIT 10.22

Section 3.4 Deferral Account.

      The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan. Each Participant's Deferral Account shall be further
divided into separate subaccounts ("fund subaccounts"), each of which
corresponds to a fund elected by the Participant pursuant to Section 3.3(a). A
Participant's Deferral Account shall be credited as follows:

      a. Within 10 business days of each regular Company payday, the Committee
shall credit the fund subaccounts of the Participant's Deferral Account with an
amount equal to Salary deferred by the Participant during each pay period in
accordance with the Participant's election under Section 3.3(a); that is, the
portion of the Participant's deferred Salary that the Participant has elected to
be deemed to be invested in a certain type of fund shall be credited to the fund
subaccount corresponding to that fund.

      b. Within 10 business days of the Bonus or partial Bonus payment, the
Committee shall credit the fund subaccounts of the Participant's Deferral
Account with an amount equal to the portion of the Bonus deferred by the
Participant's election under Section 3.3(a); that is, the portion of the
Participant's deferred Bonus that the Participant has elected to be deemed to be
invested in a particular type of fund shall be credited to the fund subaccount
corresponding to that fund.

      c. As of the last day of each month, each fund subaccount of a
Participant's Deferral Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such fund
subaccount as of the last day of the preceding month by the Interest Rate for
the corresponding Fund selected by the Committee pursuant to Section 3.2(b) with
the assumption that all dividends or interest is reinvested at the fair market
value of the Fund at the end of the day in which it would be paid.

      d. All amounts in a Participant's Deferral Account shall be 100 percent
vested at all times.

Section 3.5 Deferred LTPIP Stock Accounts.

      The Long-Term Performance Incentive Plan ("LTPIP") Stock Account (the
"LTPIP Stock Account") shall continue to be maintained by the Plan for
Participants who participated in the LTPIP and deferred all or any portion of
their LTPIP Bonus. The LTPIP Stock Account was credited with stock units (the
"LTPIP Stock Units") equal to the number of shares of Common Stock into which
the amount deferred was converted based on the closing price of the Common Stock
at the time the LTPIP Bonus was deferred. The LTPIP Stock Units shall continue
to be credited to a bookkeeping account, established for this purpose in the
Participant's name. The number of LTPIP Stock Units shall remain constant over
the deferral period except as adjusted pursuant to Section 3.7.

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                                                                   EXHIBIT 10.22

The number of shares of Common Stock to be distributed shall equal the number of
LTPIP Stock Units credited to the LTPIP Stock Account at the time the LTPIP
Bonus was originally awarded.

Section 3.6 Rollovers.

      a. Participant's account balances transferred to this Plan from the FHP
International Corporation Deferred Compensation Plan, as amended, shall be
governed by the terms and conditions of this Plan and shall be referred to as
the "FHP Rollover Amount" and were credited to such Participant's Deferral
Account as of December 31, 1997.

      b. Participant's account balances transferred to this Plan from any prior
deferred compensation maintained by the Company shall be governed by the terms
and conditions of this Plan, shall be referred to as the "Existing PHS Rollover
Amount" and were credited to such Participant's Deferral Account as of December
31, 1997.

Section 3.7 Change In Company Shares.

      If the outstanding shares of Common Stock are hereafter changed into or
exchanged for a different number or kind of shares or other securities of the
Company, or of another company, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or combination of shares, or if the Company distributes a cash or non-cash
dividend to holders of Common Stock or engages in another similar transaction,
the Committee shall make an appropriate and equitable adjustment in the number
and kind of units credited to the LTPIP Stock Account. Any such adjustment made
by the Committee shall be final and binding upon a Participant, the Company and
all other interested persons.

Section 3.8 Distribution of Deferred Compensation.

      (a) In the case of a Participant who terminates employment with all
Employers on or after Retirement or who terminates as a result of a Disability,
the aggregate amount credited to the Deferral Account (the "Distributable
Amount") shall be paid to the Participant (and after his death to his or her
Beneficiary) in the form of substantially equal annual installments over 10
years beginning as soon as administratively possible after a Participant's
Payment Eligibility Date. Notwithstanding the foregoing, a Participant described
in the preceding sentence may elect one of the following optional forms of
distribution provided that his or her election is filed with the Committee at
least one year prior to his or her termination of employment with all Employers:

            (i) a single lump sum cash payment payable as soon as
      administratively possible after Participant's Payment Eligibility Date;

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                                                                   EXHIBIT 10.22

            (ii) substantially equal annual installments over five years
      beginning as soon as administratively possible after Participant's Payment
      Eligibility Date; or

            (iii) substantially equal annual installments over fifteen years
      beginning as soon as administratively possible after Participant's Payment
      Eligibility Date.

      Any such election filed less than one year prior to termination of
employment shall not become effective. If a Participant is receiving salary
continuation/severance payments, and continues to participate in the Plan,
termination of employment shall be defined as the date in which salary
continuation/severance ceases for purposes of the form of distribution election
filing.

      Notwithstanding this subsection, if the Distributable Amount is $50,000 or
less, the Distributable Amount shall automatically be distributed in the form of
a single lump sum cash payment as soon as administratively possible after
Participant's Payment Eligibility Date. The Participant's Deferral Accounts
shall continue to be credited monthly with Interest Rate or Rates pursuant to
Section 3.4 of this Plan until all amounts credited to his or her Deferral
Accounts under this Plan have been distributed. For all purposes under this
Plan, a Participant shall not be considered terminated from employment with all
Employers if the Participant remains employed by an entity that is an Employer.
However, if the Employee is employed by an Employer and such Employer ceases to
be an Employer as a result of a sale or other corporate reorganization, such
sale or other corporate reorganization shall be treated as termination of
employment with all Employers unless immediately following such event and
without any break in employment the Participant remains employed by an Employer
or the former Employer assumes liability for the benefit of the Participant.

      (b) In the case of a Participant who terminates employment with all
Employers prior to Retirement or for reasons other than a Disability, the
Distributable Amount shall be paid to the Participant (and after his death to
his or her Beneficiary) in the form of a single lump sum cash payment as soon as
administratively possible after Participant's Payment Eligibility Date.
Notwithstanding the foregoing, a Participant described in the preceding sentence
may elect one of the following optional forms of distribution provided that his
or her election is filed with the Committee at least one year prior to his or
her termination of employment with all Employers:

            (i) substantially equal annual installments over three years
      beginning as soon as administratively possible after Participant's Payment
      Eligibility Date; or

            (ii) substantially equal annual installments over five years
      beginning as soon as administratively possible after Participant's Payment
      Eligibility Date.

      Any such election filed less than one year prior to termination of
employment shall not become effective.

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                                                                   EXHIBIT 10.22

      (c) Individuals who are receiving salary continuation/severance payments
shall continue to be eligible to participate in this Plan. If such Participant
receives salary continuation/severance, and continues to participate in the
Plan, then the Distributable Amount shall be paid to such Participant in
accordance with his or her elections for distribution upon termination of salary
continuation/severance; provided, however, if such Participant can be deemed to
be Retired as of the salary continuation/severance end date, and continues to
participate in the Plan, then the Distributable Amount shall be paid to such
Participant in accordance with his or her election for distribution for
retirement upon termination of salary continuation/severance. Eligibility for
retirement distribution will be calculated using the (i) the Participant's age
at the end of the salary continuation/severance period and (ii) the
Participant's number of years of service with all Employers at the beginning of
the salary continuation/severance period.

      (d) In the case of a Participant who dies while employed by an Employer,
the Participant's Beneficiary will be paid his or her Distributable Amount in a
single lump sum cash payment. If a Participant dies after terminating employment
with all Employers and while receiving installment payments of his or her
Distributable Amount, the remaining portion of the Participant's Distributable
Amount will be paid in a single lump sum payment to the Participant's
Beneficiary.

      (e) A Participant who has not terminated employment with all Employers may
change his or her form of payment applicable to the portion of the Deferral
Account balance attributable to one or more Plan Years to one of the payment
forms permitted by the Plan at least one year prior to his or her termination of
employment with all Employers and, in the case of scheduled early distributions
elected pursuant to Section 3.10, may defer the Scheduled Payment Dates in
accordance with Section 3.10. Any such election to change form of payment less
than one year prior to termination of employment shall not become effective. The
Participant's payment election with respect to a given Plan Year may not be
changed after payment of that portion of the Deferral Account balance has been
made or has begun.

      (f) In the case of a Participant who becomes a Participant in this Plan as
a result of a FHP Rollover and who is receiving salary continuation, the
Distributable Amount of such Participant upon termination of salary continuation
shall be paid to such Participant in the form of a single lump sum cash payment;
provided, however, if such Participant can be deemed to be Retired, then the
Distributable Amount shall be paid to such Participant in accordance with his or
her elections to defer.

Section 3.9 Unscheduled Early Distributions.

      A Participant shall be permitted to elect to withdraw amounts from his or
her Deferral Accounts prior to termination of employment with all Employers
("Early Distributions"), subject to the following restrictions:

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                                                                   EXHIBIT 10.22

      a. The election to take an Early Distribution shall be made by filing a
form provided by and filed with the Committee prior to the end of any calendar
month.

      b. The amount of the Early Distribution shall in all cases equal 90
percent of the Distributable Amount as of the end of the calendar month in which
the distribution is to be made.

      c. The amount described in subsection 3.9(b) above shall be paid in a
single lump sum cash payment as soon as practicable after the end of the
calendar month in which the Early Distribution election is made.

      d. If a Participant receives an Early Distribution pursuant to this
Section 3.9, 10 percent of the Distributable Amount shall be permanently
forfeited and the Company shall have no obligation to the Participant or any
Beneficiary with respect to such forfeited amount.

      e. If a Participant receives an Early Distribution, the Participant will
be ineligible to participate in this Plan for the balance of the Plan Year and
for the following Plan Year.

Section 3.10 Scheduled Early Distributions.

      Participants may elect to have their Salary and/or Bonus deferred during a
given Plan Year and any earnings credited to the deferred be paid on a future
date while still employed, provided the payment date (the "Scheduled Payment
Date") is at least two years from the last day of such Plan Year. This election
shall apply to the Salary and/or Bonus deferred for the Plan Year specified by
the Participant on his or her payment election and the Interest Rate or Rates
credited thereto until the Scheduled Payment Date. A Participant may elect a
different Payment Date for Salary and/or Bonus deferred for each Plan Year. In
addition, Scheduled Payment Dates elected pursuant to this Section 3.10 may be
deferred by at least one year, by filing with the Committee written notice at
least one year prior to the Scheduled Payment Date. A Participant may elect to
defer a Scheduled Payment Date selected by this Section 3.10 once every two
years. A distribution pursuant to this Section 3.10 of less than the
Participant's entire interest in the Deferral Account shall be made pro rata
from his or her investment fund subaccounts according to the balances in such
subaccounts. All early distributions pursuant to this Section 3.10 shall be made
in a single lump sum cash payment. Notwithstanding the foregoing, if a
Participant terminates employment with all Employers for any reason prior to the
date on which a payment is scheduled to be made pursuant to this Section 3.10,
the Participant's entire Deferral Account balance will be paid pursuant to the
provisions of Section 3.8.

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                                                                   EXHIBIT 10.22

Section 3.11 Financial Hardship Withdrawals.

      The Committee may, pursuant to rules adopted by it and applied in a
uniform manner, accelerate the date of distribution of all or any portion of a
Participant's Deferral Account balance, including amounts in the LTPIP Stock
Account, because of a financial hardship. A financial hardship means an
unforeseeable, severe financial emergency resulting from (a), a sudden and
unexpected illness or accident of the Participant or his or her dependent (as
defined in Section 152(a) of the Code); (b) loss of the Participant's property
due to casualty; or (c) other similar extraordinary and unforeseeable
circumstances arising out of an event beyond the control of the Participant,
which may not be relieved through other available resources of the Participant,
as determined by the Committee in accordance with uniform rules adopted by it.
Distribution pursuant to this Section 3.11 of less than the Participant's entire
interest in the Plan shall be made pro rata from his or her investment fund
subaccounts according to the balances in such subaccounts. Subject to the
foregoing, payment of any amount with respect to which a Participant has filed a
request under this Section 3.11 shall be made in a single lump sum cash payment
as soon as practicable after approval of such request by the Committee and shall
be limited to the amount necessary to satisfy the financial hardship.
Distributions made pursuant to this Section 3.11 shall be without penalty.

Section 3.12 Inability to Locate Participant.

      In the event that the Committee is unable to locate a Participant or
Beneficiary within two years following the Participant's Payment Eligibility
Date, the amount allocated to the Participant's Deferral Account shall be
forfeited. If, after such forfeiture, the Participant or Beneficiary later
claims such benefit, such benefit shall be reinstated without interest or
earnings.

Section 3.13 Distributions Upon A Change of Control.

      a. If a Change of Control occurs, the Distributable Amount of each
Participant will be paid by the Trustee of the Trust (as defined herein) to the
Participant (or Beneficiary) in accordance with such Participants' deferral
election.

      b. Following a Change in Control, no changes in the Plan, or in any
documents evidencing an election to defer compensation, and no adjustments,
determinations or other exercises of discretion by the Compensation Committee,
the Committee or the Company's board of directors that were made subsequent to
the Change in Control and that would have the effect of diminishing a
Participant's rights or payments under this Plan or this Section 3.13, or of
causing a Participant to recognize income (for federal income tax purposes) with
respect to a Participant's Deferral Account prior to the actual distribution to
a Participant of such Deferral Account, shall be effective.

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                                                                   EXHIBIT 10.22

                                   ARTICLE IV
                                      TRUST

Section 4.1 Trust.

      a. The Company shall cause the payment of benefits under this Plan to be
made in whole or in part by the Trustee of the PacifiCare Health Systems, Inc.
Rabbi Trust (the "Trust") in accordance with the provisions of this Section 4.1.
As soon as administratively possible after Participant's deferral is made (but
no later than the tax return due date of the Company for such year), the
Employers shall contribute to the Trust for each Participant an amount equal to
the amount deferred by the Participant for the Plan Year. Notwithstanding
anything contained herein, contributions to the Trust by each Employer may be
made throughout the Plan Year.

      b. The Committee shall direct the Trustee to pay the Participant or his or
her Beneficiary at the time and in the amount described in the Article III. In
the event the amounts held under the Trust are not sufficient to provide the
full amount (excluding amounts described in Section 3.8(c)) payable to the
Participant, the Employers shall pay for the remainder of such amount at the
times set forth in Section 3.8, (excluding amounts described in Section 3.8(c)).

                                    ARTICLE V
                                 ADMINISTRATION

Section 5.1 Committee.

      A number of individuals shall be appointed by, and serve at the pleasure
of, the Compensation Committee as a committee to administer this Plan (the
"Committee"). The number of members comprising the Committee shall be determined
by the Compensation Committee, which may from time to time vary the number of
members. A member of the Committee may resign by delivering a written notice of
resignation to the Compensation Committee. The Compensation Committee may remove
any member by delivering a certified copy of its resolution of removal to such
member. Vacancies in the membership of the Committee shall be filled promptly by
the Compensation Committee.

Section 5.2 Committee Action.

      The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter, which relates solely to himself
or herself as a Participant. The Chairman or

                                       13
<PAGE>
                                                                   EXHIBIT 10.22

any other member or members of the Committee designated by the Chairman may
execute any certificate or other written direction on behalf of the Committee.

Section 5.3 Powers and Duties of the Committee.

      a. The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be the "Plan
Administrator" charged with the general administration of the Plan, and shall
have all discretionary authority and powers necessary to accomplish its
purposes, including, but not by way of limitation, the following:

            i. To select the funds or contracts to be the Funds in accordance
      with Section 3.3(b);

           ii. To construe and interpret the terms and provisions of this Plan;

           iii. To compute and certify to the amount and kind of benefits
     payable to Participants and their Beneficiaries;

           iv. To maintain all records that may be necessary for the
     administration of the Plan;

           v. To provide for the disclosure of all information and the filing or
     provision of all reports and statements to Participants, Beneficiaries or
     governmental agencies as shall be required by law;

           vi. To make and publish such rules for the regulation of this Plan
     and procedures for the administration of this Plan as are not inconsistent
     with, the terms hereof;

           vii. To appoint a plan administrator or any other agent, and to
     delegate to them such powers and duties in connection with the
     administration of this Plan as the Committee may from time to time
     prescribe; and

           viii. To take all actions set forth in the Trust agreement, including
     determining whether to hold or discontinue the policies.

Section 5.4 Construction and Interpretation.

      The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretation or construction shall be
final and binding on all parties, including but not limited to the Company and
any Participant or Beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.

                                       14
<PAGE>
                                                                   EXHIBIT 10.22

Section 5.5 Information.

      To enable the Committee to perform its functions, the Employers shall
supply full and timely information to the Committee on all matters relating to
the compensation of all Participants, their death or other cause of termination,
and such other pertinent facts as the Committee may require.

Section 5.6 Compensation, Expenses and Indemnity.

      a. The members of the Committee shall serve without compensation for their
services hereunder.

      b. The Committee is authorized at the expense of the Company to employ
such legal counsel, as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company.

      c. To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the Board of
Directors, the Compensation Committee and any delegate of the Committee who is
an employee of the Company against any and all expenses, liabilities and claims,
including legal fees to defend against such liabilities and claims arising out
of their discharge in good faith of responsibilities under or incident to this
Plan, other than expenses and liabilities arising out of bad faith willful
misconduct. This indemnity shall not preclude such further indemnities as may be
available under insurance purchased by the Company or provided by the Company
under any bylaw, agreement or otherwise, as such indemnities are permitted under
state law.

Section 5.7 Quarterly Statements.

      Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Deferral Accounts on a quarterly
basis as of each March 31, June 30, September 30 and December 31.

Section 5.8 Suspension of Deferrals.

      a. At the request of a Participant, the Committee may at its sole
discretion, pursuant to rules adopted by it and applied in a uniform manner,
suspend an election to defer Salary made pursuant to Article III during the Plan
Year for which the election to defer was made because of circumstances arising
out of an event beyond the control of the Participant, as determined by the
Committee in accordance with uniform rules adopted by it. Requests to suspend
Bonus deferrals must be made prior to October 1 of a succeeding plan year to be
considered by the Committee for suspension. If the Committee permits the
suspension of an election to defer, a Participant will be ineligible

                                       15
<PAGE>
                                                                   EXHIBIT 10.22

      to participate in this Plan for the balance of the Plan Year and for the
following Plan Year.

      b. In the event a Participant requests to suspend participation during his
or her salary continuation/severance period and his or her request is approved
by the Committee, this event will trigger termination and distribution will be
made subject to the following restrictions:

            (i) The election to cease participation during salary
      continuation/severance shall be made by filing a form provided by and
      filed with the Committee;

            (ii) Distribution of the Distributable Amount shall be paid as soon
      as administratively possible after the end of the calendar month of the
      Committee approval; and

            (iii) The Distributable Amount shall be paid as elected under the
      Participant's retirement or termination election provided his or her
      election is filed with the Committee at least one year prior to his or her
      termination of employment with all Employers

            (iv) If a Participant receives Distribution under the above
      provisions, the Participant will be ineligible to particpate in this Plan
      for the balance of the salary continuation/severance period.

Section 5.9 Claim Procedures.

      a. Claim. A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Plan (hereinafter referred to as
"Claimant") may file a written request for such benefit with the Plan
Administrator, setting forth his or her claim.

      b. Claim Decision. Upon receipt of a claim, the Plan Administrator shall
advise the Claimant that a reply will be forthcoming within 90 days and shall,
in fact, deliver such reply within such period. The Plan Administrator may,
however, extend the reply period for an additional 90 days for special
circumstances.

      If the claim is denied in whole or in part, the Plan Administrator shall
inform the Claimant in writing, using language calculated to be understood by
the Claimant, setting forth: (A) the specified reason or reasons for such
denial; (B) the specific reference to pertinent provisions of this Plan on which
such denial is based; (C) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation why such material or such information is necessary; (D) appropriate
information as to the steps to be taken if the Claimant wishes to submit the
claim for review; and (E) the time limits for requesting a review under
subsection 5.9(c).

                                       16
<PAGE>
                                                                   EXHIBIT 10.22

      c. Request for Review. Within 60 days after the receipt by the Claimant of
the written opinion described above, the Claimant may request in writing that
the Committee review the determination of the Plan Administrator. The Claimant
or his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Committee. If the Claimant does not request a review within such 60 day
period, he or she shall be barred and estopped from challenging the Plan
Administrator's determination.

      d. Review of Decision. Within 60 days after the Committee's receipt of a
request for review, after considering all materials presented by the Claimant,
the Committee will inform the Participant in writing, in a manner calculated to
be understood by the Claimant, of its decision setting forth the specific
reasons for the decision and containing specific references to the pertinent
provisions of this Plan on which the decision is based. If special circumstances
require that the 60 day time period be extended, the Committee will so notify
the Claimant and will render the decision as soon as possible, but no later than
120 days after receipt of the request for review.

                                   ARTICLE VI
                                  MISCELLANEOUS

Section 6.1 Unsecured General Creditor.

      Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interest in any specific property
or assets of any Employer. Any and all of the assets of each Employer shall be,
and remain, the general unpledged, unrestricted assets of such Employer. Each
Employer's obligation under this Plan shall be merely that of an unsecured
promise to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors. It
is the intention of the Company that this Plan (and the Trust described in
Article IV) be unfunded for purposes of the Code and for purposes of Title I of
ERISA.

Section 6.2 Restriction Against Assignment.

      The Employers shall pay all amounts payable hereunder only to the person
or persons designated by the Plan and not to any other person or corporation. No
part of a Participant's Deferral Account shall be liable for the debts,
contracts, or engagements of any Participant, his or her Beneficiary, or
successors in interest, nor shall a Participant's Deferral Account be subject to
execution by levy, attachment, or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate,
sell, transfer, commute, pledge, encumber, or assign any benefits or payments
hereunder in any manner whatsoever. If any Participant, Beneficiary or successor
in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or
payment from the Plan, voluntarily or involuntarily, the Committee, in its
discretion, may cancel such distribution

                                       17
<PAGE>
                                                                   EXHIBIT 10.22

or payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Committee shall
direct.

Section 6.3 Change of Control.

      For purposes of this Plan, "Change of Control" means the occurrence of any
of the following: (i) a business combination effectuated through the merger or
consolidation of the Company with or into another entity where the Company is
not the Surviving Organization; (ii) any business combination effectuated
through the merger or consolidation of the Company with or into another entity
where the Company is the Surviving Organization and such business combination
occurred with an entity whose market capitalization prior to the transaction was
greater than 50 percent of the Company's market capitalization prior to the
transaction; (iii) the sale in a transaction or series of transactions of all or
substantially all of the Company's assets; (iv) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act) other than
UniHealth, a California non-profit public benefit corporation; (v) a dissolution
or liquidation of the Company; or (vi) the Company ceases to be subject to the
reporting requirements of the Exchange Act as a result of a "going private
transaction" (within the meaning of the Exchange Act). For purposes hereof,
"Surviving Organization" shall mean any entity where the majority of the members
of such entity's board of directors are persons who were members of the
Company's board of directors prior to the merger, consolidation or other
business combination and the senior management of the surviving entity includes
all of the individuals who were the Company's executive management (the
Company's chief executive officer and those individuals who report directly to
the Company's chief executive officer) prior to the merger, consolidation or
other business combination and such individuals are in at least comparable
positions with such entity. The Committee may make such determinations and
interpretations and adopt such rules and conditions as it, in its absolute
discretion, deems appropriate in connection with a Change in Control. All such
determinations and interpretations by the Committee shall be conclusive.

Section 6.4 Beneficiary.

      For purposes of the this Plan, "Beneficiary" or "Beneficiaries" mean the
person or persons, including a trustee, personal representative or other
fiduciary, last designated in writing by a Participant in accordance with
procedures established by the Committee to receive the benefits specified
hereunder in the event of the Participant's death. No beneficiary designation
shall become effective until it is filed with the Committee. If there is no such
designation or if there is no surviving designated Beneficiary, then the
Participant's surviving spouse shall be the Beneficiary. If there is no
surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the participant's

                                       18
<PAGE>
                                                                   EXHIBIT 10.22

estate shall be the Beneficiary. In the event any amount is payable under the
Plan to a minor, payment shall not be made to the minor, but instead be paid (a)
to that person's living parent(s) to act as custodian, (b) if that person's
parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (c) if no parent of that person is then living, to a
custodian selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which
the minor resides. If no parent is living and the Committee decides not to
select another custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently acting guardian of the estate for the
minor or, if no guardian of the estate for the minor is duly appointed and
currently acting within 60 days after the date the amount becomes payable,
payment shall be deposited with the court having jurisdiction over the estate of
the minor.

Section 6.5 Withholding.

      There shall be deducted from each payment made under this Plan or any
other compensation payable to the Participant (or Beneficiary) all taxes which
are required to be withheld by the Company in respect to such payment under this
Plan. The Company shall have the right to reduce any payment (or compensation)
by the amount of cash sufficient to provide the amount of said taxes.

Section 6.6 Amendment, Modification, Suspension or Termination.

      The Compensation Committee may amend, modify, suspend or terminate this
Plan in whole or in part, except that no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
a Participant's Deferral Accounts (neither the policies themselves, nor the
death benefit described in Section 3.8(c) shall be treated as allocated to
Deferral Accounts). In the event that this Plan is terminated, the amounts
allocated to a Participant's Deferral Accounts shall be distributed to the
Participant or, in the event of his or her death, his or her Beneficiary in a
lump sum within 30 days following the date of termination.

Section 6.7 Governing Law.

      This Plan shall be construed, governed and administered in accordance with
the laws of the United States and to the extent not preempted by such law by the
laws of the State of California.

Section 6.8 Receipt or Release.

      Any payment to a Participant or the Participant's Beneficiary in
accordance with the provisions of this Plan shall to the extent thereof, be in
full satisfaction of all claims for benefits under this Plan against the
Committee and the Company. The Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

                                       19
<PAGE>
                                                                   EXHIBIT 10.22

Section 6.9 Effective Date.

      This Plan shall be effective as of November 1, 2000.

                                       20
<PAGE>
                                                                   EXHIBIT 10.22

      IN WITNESS WHEREOF, this Plan is adopted as of November 1, 2000.

                              PACIFICARE HEALTH SYSTEMS, INC.

                              ------------------------------------
                              By:
                              Title:

                                       21<PAGE>
                                                                   EXHIBIT 10.23

                           SECOND AMENDED AND RESTATED
                         PACIFICARE HEALTH SYSTEMS, INC.
                           STATUTORY RESTORATION PLAN

      WHEREAS, PacifiCare Health Systems, Inc., (the "Company") established the
amended and restated statutory restoration plan to provide supplemental
retirement income benefits for a select group of management and highly
compensated employees through deferrals of salary and bonuses, effective as of
January 1, 1999 (the "Amended and Restated Statutory Restoration Plan");

      WHEREAS, it is believed that providing for deferral of compensation at the
election of each eligible executive will be in the best interests of the
Company;

      WHEREAS, the Company wishes to amend and restate the Amended and Restated
Statutory Plan to reflect the administration of the plan and incorporate the
first amendment to the Amended and Restated Statutory Plan; this second amended
and restated PacifiCare Health Systems, Inc. statutory restoration plan shall be
referred to herein as the "Plan;"

      WHEREAS, it is the intent of the Company that the Plan shall supersede any
other statutory restoration plan, policy or arrangement which the Company or any
of its subsidiaries may have sponsored or made available in the past; and

      WHEREAS, the Company intends that this plan shall be maintained as a "top
hat" plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA;

      NOW, THEREFORE, it is hereby declared as follows:

                                    ARTICLE I
                                   DEFINITIONS

      Whenever the following words and phrases are used in this Plan, they shall
have the meanings specified below.

Section 1.1 "Accounts" shall mean the accounts maintained by the Committee for
each Participant, which includes the Deferral Account, the Matching Account and
the Three Percent Account.

Section 1.2 "Board of Directors" or "Board" means the Board of Directors of the
Company.

Section 1.3 "Bonus" means any management incentive plan bonus, long-term bonus,
sign-on bonus, retention bonus, sales commission or any other bonuses determined
as eligible for the Plan by the Committee payable to a Participant in addition
to the Participant's Salary, other than moving expenses, prior to any reduction
for deferrals to a plan qualified under Section 125 or Section 401(k) of the
Code.

                                       1
<PAGE>
                                                                   EXHIBIT 10.23

Section 1.4 "Change of Control" shall have the meaning set forth in Section 7.3.

Section 1.5 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

Section 1.6 "Committee" means the Committee appointed by the Compensation
Committee to administer the Plan in accordance with Article VI.

Section 1.7 "Company" means PacifiCare Health Systems, Inc., a Delaware
corporation, or any successor corporation.

Section 1.8 "Compensation" means for any Participant for any Plan Year his or
her Statutory Compensation for such Plan Year, excluding all reimbursements or
other expense allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation and welfare benefits (including severance benefits).

Section 1.9 "Compensation Committee" shall mean the Compensation Committee of
the Board of Directors of the Company.

Section 1.10 "Deferral Account" shall mean the account maintained by the
Committee for each Participant that is credited with the amounts deferred under
Section 2.2 of this Plan together with any Earnings on such deferred amounts.

Section 1.11 "Disability." A Participant shall be deemed to be incapacitated or
disabled, if such Participant's incapacity or disability prevents a Participant
from fully performing his duties to an Employer 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 the Participant's incapacity or disability,
decide in their reasonable judgments, that such incapacity or disability will be
permanent or of such continued duration as to prevent a Participant from
resuming the rendition of services to the Employer for at least an additional
six-month period.

Section 1.12 "Distributable Amount" shall have the meaning set forth in Section
4.1.

Section 1.13 "Earnings" shall mean the amount credited to a Participant's
Account as result of the investment elections made by a Participant pursuant to
Section 3.1.

Section 1.14 "Eligible Employee" means any Employee of an Employer who the
Company has designated to be at an executive salary grade of 15 or above and who
is scheduled to work at least 32 hours per week.

Section 1.15 "Employee" shall mean any employee (as defined in accordance with
the Treasury Regulations and Revenue Rulings then applicable under Section
3401(c) of the Code) of an Employer, whether such employee is so employed at the
time this Plan is adopted or becomes so employed subsequent to the adoption of
this Plan.

                                       2
<PAGE>
                                                                   EXHIBIT 10.23

Section 1.16 "Employer" means the Company (or any successor by merger,
consolidation or purchase of substantially all of the Company's assets) and any
and all Subsidiaries of the Company.

Section 1.17 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

Section 1.18 "Fund" or "Funds" means one or more of the funds selected by the
Committee pursuant to Section 3.1(b).

Section 1.19 "Initial Election Period" for an Eligible Employee means the 30-day
period following the receipt by an Eligible Employee of enrollment material for
this Plan.

Section 1.20 "Interest Rate" shall mean, for each Fund, an amount equal to the
net gain or loss on the assets of such Fund during each month.

Section 1.21 "Matching Account" shall mean the account maintained by the
Committee for each Participant that is to be credited with contributions
pursuant to Section 2.4 of this Plan together with the Earnings credited to such
amounts as provided herein.

Section 1.22 "Participant" means, for purposes of this Plan, any Eligible
Employee who satisfies the requirements of Section 2.1.

Section 1.23 "Payment Eligibility Date" means the first day of the month
following the end of the calendar quarter in which a Participant terminates
employment for any reason with all Employers or dies

Section 1.24 "Plan" means this Second Amended and Restated Statutory Restoration
Plan of PacifiCare Health Systems, Inc., as it may be amended from time to time.

Section 1.25 "Plan Year" means the 12 consecutive month period beginning on
January 1 and ending on December 31 of the same year.

Section 1.26 "Qualified Plan" shall mean the 2001 Amendment and Restatement of
the PacifiCare Health Systems, Inc. Savings and Profit-Sharing Plan, as amended
from time to time.

Section 1.27 "Retirement" or "Retire" for purposes of this Plan means
termination of a Participant's employment from all Employers, which occurs after
the sum of the following two factors meet or exceed 55: (i) the Participant's
age and (ii) the Participant's number of years of service with all Employers.

Section 1.28 "Statutory Compensation" means for any Participant for any Plan
Year his or her total taxable remuneration received from an Employer in that
Plan Year for service rendered as an Employee (including those items not
reported on Form W-2 as determined

                                       3
<PAGE>
                                                                   EXHIBIT 10.23

under Treas. Reg. Section 1.415-2(d)(2)(iii)-(vi)) and including any elective
deferrals as defined in Code Section 402(g)(3) and any amounts not includable in
gross income by reason of the Code Section 125 (cafeteria plan) or Code Section
457 (deferred compensation plan of state and local governments and tax-exempt
organizations) and excluding

            (a) Employer contributions to a deferred compensation plan ( to the
      extent includable in the Participant's gross income solely by reason of
      Code Section 415) or to a simplified employee pension plan (to the extent
      deductible by the Participant) and any distribution from a deferred
      compensation plan (other than an unfunded, non-qualified plan);

            (b) amounts realized from the exercise of a non-qualified stock
      option or taxable by reason of restricted property becoming freely
      tradable or free of a substantial risk of forfeiture as described in Code
      Section 83;

            (c) amounts realized from the sale, exchange, or other disposition
      of stock acquired under a qualified stock option; and

            (d) other amounts which receive special tax benefits such as
      Employer contributions toward the purchase of an annuity contract
      described in Code Section 403(b) (whether or not excludable form the
      Participant's gross income).

Section 1.29 "Statutory Limits" shall mean the limitations on contributions
imposed by Sections 415, 401(a)(17) and 402(g) of the Code.

Section 1.30 "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

Section 1.31 "Three Percent Contribution Account" shall mean the account
maintained by the Committee for each Participant which is to be credited with
contributions made pursuant to Section 2.3 of this Plan together with the
Earnings credited thereon as provided herein.

Section 1.32 "Termination" shall mean termination of employment with all
Employees for any reason, including, without limitation, death, disability and
when an Employee begins to receive severance/salary continuation payments.

                                       4
<PAGE>
                                                                   EXHIBIT 10.23

                                   ARTICLE II
                              CONTRIBUTIONS TO PLAN

Section 2.1 Election to Participate.

      a. To be eligible to participate in this Plan, an Eligible Employee must
be participating in the Qualified Plan and be contributing to the Qualified Plan
the maximum elective deferral allowed under the Qualified Plan.

      b. An Eligible Employee shall become a Participant in this Plan through
either (1) an election to defer a portion of his or her Salary in accordance
with subsection 2.1 (c) or (d) or (2) a contribution by the Company to an
Employee's Three Percent Account.

      c. The Compensation Committee shall determine the Eligible Employees who
may participate in this Plan for the next Plan Year at least 60 days prior to
the beginning of the next Plan Year and the Committee shall notify each Employee
of his prospective eligibility to participate in this Plan at least 30 days
prior to the time he must file an application for participation. To be eligible
to defer Salary and/or Bonus paid during any Plan Year, an Eligible Employee
must file a written application with the Committee no later than December 15 of
the preceding Plan Year. Notwithstanding the foregoing, the Committee may, in
its sole and absolute discretion, permit an Eligible Employee to file an
application on, or after December 15 if, in its judgment, his or her failure to
do so prior to said date was due to reasonable cause, but in no event may such
application be filed after December 31. The application for participation shall
signify the Eligible Employee's acceptance of the terms of this Plan and the
portion of Salary and/or Bonus that he elects to defer in accordance with
Section 2.2 of this Plan. Elections by Eligible Employees to defer Salary and/or
Bonus for a Plan Year shall be irrevocable.

      d. Subject to Section 2.1(a), upon an individual being employed as an
Eligible Employee or an Employee being promoted to a position where he or she is
an Eligible Employee, such individual may become a Participant in this Plan by
making (i) an election to defer a portion of his or her Salary by filing with
the Committee, on a form provided by the Committee, no later than the last day
of his or her Initial Election Period or (ii) a contribution by the Company to
an Employee's Three Percent Account. Elections made pursuant to this subsection
(d) shall be irrevocable. An election to defer during the Initial Election
Period shall be effective with respect to Salary and/or Bonus as soon as
administratively possible.

      c. Duration of Deferral Election. Any Salary and/or Bonus deferral
election made under subsection (c) of this Section 2.1 shall be irrevocable and
shall apply to the Salary payable during subsequent Plan Years and/or Bonus
payable with respect to services performed during subsequent Plan Years until a
Participant makes a new election; provided, however, that an election may not be
changed for the first Plan Year after an election is made or for any Plan Year
once the Plan Year has begun. An Eligible Employee may make changes to his or
her election, subject to the limitations set forth in this Section 2.1, to
change the deferral under a previous election by filing with the Committee on
forms provided by the Committee, a new election to defer a percentage of his or
her Salary and/or Bonus on or before the December 15 preceding the Plan Year for
which the new election is to apply. Notwithstanding the foregoing, the Committee
may, in its absolute discretion, permit an Eligible Employee to file an election
to defer on or

                                       5
<PAGE>
                                                                   EXHIBIT 10.23

after December 15, if, in its judgment, his or her failure to do so prior to
said date was due to reasonable cause, but in no event may such election be
filed after December 31. All elections, once made, are irrevocable.

Section 2.2 Amount of Deferral.

      A Participant may elect to defer all, or a portion of, the amount of his
Salary and/or Bonus that he could defer under the terms of the Qualified Plan,
except for the application of the Statutory Limits. If a Participant so elects,
any such excess deferral will be credited to that Participant's Deferral Account
under this Plan. Upon an election to defer Salary and/or Bonus, each
Participant's Salary and/or Bonus will be reduced by the amount deferred.

Section 2.3 Amount of Three Percent Contribution.

      Any excess three percent contribution that would have been contributed on
behalf of a Participant under the terms of the Qualified Plan, except for the
application of the Statutory Limits, will be credited to that Participant's
Three Percent Account under this Plan.

Section 2.4 Amount of Matching Contribution.

      Any excess Company matching contribution that would have been contributed
on behalf of a Participant under the terms of the Qualified Plan, except for the
application of the Statutory Limits, will be credited to that Participant's
Matching Account under this Plan. Such matching contributions shall be
determined assuming that such Participant's Salary and/or Bonus deferrals under
this Plan would have been made under the Qualified Plan.

Section 2.5 Designation of Beneficiary.

      For purposes of this Plan, a Participant's Beneficiary or Beneficiaries
will be the individual(s) designated as such under the Qualified Plan. The
Employer and the Committee may rely on the designation of the Beneficiary or
Beneficiaries last filed in accordance with the terms of the Qualified Plan.

Section 2.6 Administration.

      Any amounts credited to a Participant's Account under this Plan will be
administered by the Committee.

                                       6
<PAGE>
                                                                   EXHIBIT 10.23

                                   ARTICLE III
                               ACCRUAL OF BENEFITS

Section 3.1 Investment Elections.

      a. At the time of making the deferral elections described in Section 2.2,
the Participant shall designate, on a form provided by the Committee, the types
of funds the Participant's Accounts will be deemed to be invested in for
purposes of determining the amount of Earnings to be credited to his or her
Account. Examples of the types of funds that may be available for investment
are: (i) Money Market Fund; (ii) Common Stock Fund; (iii) International Equity
Fund; (iv) Balanced Fund; (v) Growth Fund; (vi) Aggressive Growth Fund; (vii)
Bond Fund; and (viii) Global Equity Fund.

      In making the designation pursuant to this Section 3.1, a Participant may
specify that all or any multiple of a Participant's Account (at least 10
percent) be deemed to be invested in one or more funds. Weekly, a Participant
may change the designation made under this Section 3.1 with respect to amounts
contained in his or her Accounts or amounts to be credited to his Accounts by
current or future deferrals by filing an election, on a form provided by the
Committee, submitted no later than 12:00 a.m. Pacific Time, Wednesday of each
week. If a Participant fails to elect a type of fund under this Section 3.1, he
or she shall be deemed to have elected a fund similar to a Money Market Fund.

      b. Although the Participant may designate the type of funds in subsection
(a) above, the Committee shall select from time to time, in its sole discretion,
a commercially available fund similar to the types described in subsection (a)
above to be the Funds. The Interest Rate of such commercially available fund or
contract shall be used to determine the amount of Earnings to be credited to
Participants' Accounts under Section 4.4.

Section 3.2 Deferral Account.

      The Committee shall establish and maintain an Account for each Participant
under the Plan. Each Participant's Accounts shall be further divided into
separate subaccounts ("fund subaccounts"), each of which corresponds to a fund
elected by the Participant pursuant to Section 3.1(a). A Participant's Accounts
shall be credited as follows:

      a. Within 10 business days of each regular Company payday, the Committee
shall credit the fund subaccounts of the Participant's Accounts with an amount
equal to Salary deferred by the Participant during each pay period in accordance
with the Participant's election under Section 3.1(a); that is, the portion of
the Participant's deferred Salary that the Participant has elected to be deemed
to be invested in a certain type of fund shall be credited to the fund
subaccount corresponding to that fund.

      b. With 10 business days of the Bonus or partial Bonus payment, the
Committee shall credit the fund subaccounts of the Participant's Accounts with
an amount equal to the portion of the Bonus deferred by the Participant's
election under Section 3.1(a); that is, the portion of the Participant's
deferred Bonus that the Participant has elected to be deemed to be invested in a
particular type of fund shall be credited to the fund subaccount corresponding
to that fund.

                                       7
<PAGE>
                                                                   EXHIBIT 10.23

      c. As of the last day of each month, each fund subaccount of a
Participant's Accounts shall be credited with earnings or losses in an amount
equal to that determined by multiplying the balance credited to such fund
subaccount as of the last day of the preceding month by the Interest Rate for
the corresponding Fund selected by the Company pursuant to Section 3.1(b) with
the assumption that all dividends or interest is reinvested at the fair market
value of the Fund at the end of the day in which it would be paid.

Section 3.3 Vesting.

      The interest of each Participant in any benefit accrued hereunder shall be
vested in accordance with the vesting provisions of the Qualified Plan. In the
event of death or Disability, the Participant will become 100 percent vested.

                                   ARTICLE IV
                            DISTRIBUTION OF ACCOUNTS

Section 4.1 Payment upon Retirement or Disability.

      In the case of a Participant who terminates employment with all Employers
on or after Retirement or who terminates as a result of a Disability, the vested
amounts credited to the Accounts (the "Distributable Amount") shall be paid to
the Participant (and after his death to his or her Beneficiary) in the form of
substantially equal annual installments over 10 years beginning as soon as
administratively possible after the Payment Eligibility Date. Notwithstanding
the foregoing, a Participant described in the preceding sentence may elect one
of the following optional forms of distribution provided that his or her
election is filed with the Committee at least one year prior to his or her
termination of employment with all Employers:

            (i) a single lump sum cash payment payable as soon as
      administratively possible after the Payment Eligibility Date;

            (ii) substantially equal annual installments over five years
      beginning as soon as administratively possible after the Payment
      Eligibility Date; or

            (iii) substantially equal annual installments over fifteen years
      beginning as soon as administratively possible after the Payment
      Eligibility Date.

      Any such election filed less than one year prior to termination of
employment shall not become effective.

      If the Distributable Amount is $50,000 or less, the Distributable Amount
shall automatically be distributed in the form of a single lump sum cash payment
as soon as administratively possible after the Payment Eligibility Date. The
Participant's vested Accounts shall continue to be credited monthly with
Interest Rate or Rates pursuant to Section 3.2 of this Plan until all amounts
credited to his or her vested Accounts under this Plan have been distributed.
For all purposes under this Plan, a Participant shall not be

                                       8
<PAGE>
                                                                   EXHIBIT 10.23

considered terminated from employment with all Employers if the Participant
remains employed by an entity that is an Employer. However, if the Employee is
employed by an Employer and such Employer ceases to be an Employer as a result
of a sale or other corporate reorganization, such sale or other corporate
reorganization shall be treated as a Termination of employment with all
Employers unless immediately following such event and without any break in
employment the Participant remains employed by an Employer or the former
Employer assumes liability for the benefit of the Participant.

Section 4.2 Payment upon Termination of Employment.

      (a) In the case of a Participant who terminates employment with all
Employers prior to Retirement or for reasons other than a Disability, the
Distributable Amount shall be paid to the Participant (and after his death to
his or her Beneficiary) in the form of a single lump sum cash payment as soon as
administratively possible after the Payment Eligibility Date. Notwithstanding
the foregoing, a Participant described in the preceding sentence may elect one
of the following optional forms of distribution provided that his or her
election is filed with the Committee at least one year prior to his or her
termination of employment with all Employers:

            (i) substantially equal annual installments over three years
      beginning as soon as administratively possible after the Payment
      Eligibility Date; or

             (ii) substantially equal annual installments over five years
      beginning as soon as administratively possible after the Payment
      Eligibility Date.

      Any such election filed less than one year prior to termination of
employment shall not become effective.

      (b) In the case of a Participant who dies while employed by an Employer,
the Participant's Beneficiary will be paid his or her Distributable Amount in a
single lump sum cash payment. If the Participant dies after Termination with all
Employers and while receiving installment payments of his or her Distributable
Amount, the remaining portion of the Participant's Distributable Amount will be
paid in a single lump sum payment to the Participant's Beneficiary.

                                       9
<PAGE>
                                                                   EXHIBIT 10.23

Section 4.3 Payment Upon a Change of Control

      a. If a Change of Control occurs, the Distributable Amount (determined
pursuant to Section 3.1) as of the date of such Change of Control shall be paid
by the Trustee of the Trust (as defined herein) to the Participant in a single
lump sum cash payment, as soon as practicable after the Payment Eligibility Date
following the effective date of such Change of Control.

      b. In the event of a Change in Control, no changes in the Plan and no
adjustments, determinations or other exercises of discretion by the Plan
Administrator, the Committee, the Compensation Committee or the Board of
Directors that were made at the effective time of, or subsequent to the Change
in Control and that would have the effect of diminishing a Participant's rights
or payments under this Plan or this Section or of causing a Participant to
recognize income (for federal income tax purposes) with respect to a
Participant's Distributable Amount prior to the actual distribution to a
Participant of such Distributable Amount shall be effective.

Section 4.4 Amount Distributable.

      The amount of a Participant's Accounts distributable to a Participant or
any designated Beneficiary or Beneficiaries as of any date specified in this
Plan shall be an amount equal to the vested balance credited to the
Participant's Accounts as of the Payment Eligibility Date immediately following
said date.

                                    ARTICLE V
                                      TRUST

Section 5.1 Trust.

      a. The Company shall cause the payment of benefits under this Plan to be
made in whole or in part by the Trustee of the PacifiCare Health Systems, Inc.
Rabbi Trust (the "Trust") in accordance with the provisions of this Section 5.1.
As soon as practicable after the end of each Plan Year (but no later than the
tax return due date of the Company for such year), each Employer shall
contribute to the Trust for each Participant an amount equal to the amount
deferred by the Participant for the Plan Year and an amount equal to the Three
Percent and Company Matching Contributions for such Participant for such Plan
Year. Notwithstanding anything contained herein, contributions to the Trust by
each Employer may be made throughout the Plan Year.

      b. The Committee shall direct the Trustee to pay the Participant or his
beneficiary at the time and in the amount described in Article IV. In the event
the amounts held under the Trust are not sufficient to provide the full amount
payable to the Participant, the Employers shall pay for the remainder of such
amount at the time set forth in Article IV.

                                       10
<PAGE>
                                                                   EXHIBIT 10.23

                                   ARTICLE VI.
                                 ADMINISTRATION

Section 6.1 Committee.

      A number of individuals shall be appointed by, and serve at the pleasure
of, the Compensation Committee as a committee to administer this Plan (the
"Committee"). The number of members comprising the Committee shall be determined
by the Compensation Committee, which may from time to time vary the number of
members. A member of the Committee may resign by delivering a written notice of
resignation to the Compensation Committee. The Compensation Committee may remove
any member by delivering a certified copy of its resolution of removal to such
member. Vacancies in the membership of the Committee shall be filled promptly by
the Compensation Committee.

Section 6.2 Committee Action.

      The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee. A member of the
Committee shall not vote or act upon any matter, which relates solely to himself
or herself as a Participant. The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.

Section 6.3 Powers and Duties of the Committee.

      a. The Committee, on behalf of the Participants and their Beneficiaries,
shall enforce the Plan in accordance with its terms, shall be the "Plan
Administrator" charged with the general administration of the Plan, and shall
have all discretionary authority and powers necessary to accomplish its
purposes, including, but not by way of limitation, the following:

            i. To select the funds or contracts to be the Funds in accordance
      with Section 3.1(b);

            ii. To construe and interpret the terms and provisions of this Plan;

            iii. To compute and certify the amount and kind of benefits payable
      to Participants and their beneficiaries;

            iv. To maintain all records that may be necessary for the
      administration of the Plan;

            v. To provide for the disclosure of all information and the filing
      or provision of all reports and statements to Participants, beneficiaries
      or governmental agencies as shall be required by law;

                                       11
<PAGE>
                                                                   EXHIBIT 10.23

            vi. To make and publish such rules for the regulation of this Plan
      and procedures for the administration of this Plan as are not inconsistent
      with the terms hereof;

            vii. To appoint a plan administrator or any other agent, and to
      delegate to them such powers and duties in connection with the
      administration of the Plan as the Committee may from time to time
      prescribe; and

            viii. To take all actions set forth in the Trust agreement,
      including determining whether to hold or discontinue the policies.

Section 6.4 Construction and Interpretation.

      The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretation or construction shall be
final and binding on all parties, including but not limited to the Company and
any Participant or beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to this Plan.

Section 6.5 Information.

      To enable the Committee to perform its functions, the Employers shall
supply full and timely information to the Committee on all matters relating to
the Compensation of all Participants, their death or other cause of termination
and such other pertinent facts as the Committee may require.

Section 6.6 Compensation, Expenses and Indemnity.

      a. The members of the Committee shall serve without compensation for their
services hereunder.

      b. The Committee is authorized at the expense of the Company to employ
such legal counsel as it may deem advisable to assist in the performance of its
duties hereunder. Expenses and fees in connection with the administration of the
Plan shall be paid by the Company.

      c. To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the Board of
Directors, the Compensation Committee and any delegate of the Committee who is
an employee of the Company against any and all expenses, liabilities and claims,
including legal fees to defend against such liabilities and claims arising out
of their discharge in good faith of responsibilities under or incident to this
Plan, other than expenses and liabilities arising out of bad faith or willful
misconduct. This indemnity shall not preclude such further indemnities as may be
available under insurance purchased by the Company

                                       12
<PAGE>
                                                                   EXHIBIT 10.23

or provided by the Company under any bylaw, agreement or otherwise, as such
indemnities are permitted under state law.

Section 6.7 Quarterly Statements.

      Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Accounts on a quarterly basis as
of each March 31, June 30, September 30 and December 31.

Section 6.8 Claim Procedures.

      a. Claim. A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Plan (hereinafter referred to as
"Claimant") may file a written request for such benefit with the Plan
Administrator, setting forth his or her claim.

      b. Claim Decision. Upon receipt of a claim, the Plan Administrator shall
advise the Claimant that a reply will be forthcoming within 90 days and shall,
in fact, deliver a reply within such period. The Plan Administrator may,
however, extend the reply period for an additional 90 days for special
circumstances.

      If the claim is denied in whole or in part, the Plan Administrator shall
inform the Claimant in writing, using language calculated to be understood by
the Claimant, setting forth: (A) the specified reason or reasons for such
denial; (B) the specific reference to pertinent provisions of this Plan on which
such denial is based; (C) a description of any additional material or
information necessary for the Claimant to perfect his or her claim and an
explanation of why such material or such information is necessary; (D)
appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review; and (E) the time limits for requesting a review
under subsection 6.9(c).

      c. Request for Review. Within 60 days after the receipt by the Claimant of
the written opinion described above, the Claimant may request in writing that
the Committee review the determination of the Plan Administration. The Claimant
or his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Committee. If the Claimant does not request a review within such 60 day
period, he or she shall be barred and estopped from challenging the Plan
Administrator's determination.

      d. Review of Decision. Within 60 days after the Committee's receipt of a
request for review, after considering all materials presented by the Claimant,
the Committee will inform the Participant in writing, in a manner calculated to
be understood by the Claimant, of its decision setting forth the specific
reasons for the decision and containing specific references to the pertinent
provisions of this Agreement on which the decision is based. If special
circumstances require that the 60 day time period be extended, the Committee
will so notify the Claimant and will render the decision as soon as possible,
but no later than 120 days after receipt of the request for review.

                                       13
<PAGE>
                                                                   EXHIBIT 10.23

                                   ARTICLE VII
                                  MISCELLANEOUS

Section 7.1 Unsecured General Creditor.

      Participants and their beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interest in any specific property
or assets of any Employer. Any and all of the assets of each Employer shall be,
and remain, the general unpledged, unrestricted assets of such Employer. Each
Employer's obligation under this Plan shall be merely that of an unsecured
promise of such Employer to pay money in the future, and the rights of the
Participants and beneficiaries shall be no greater than those of unsecured
general creditors. It is the intention of the Company that this Plan (and the
Trust described in Article V) be unfunded for purposes of the Code and for
purposes of Title I of ERISA.

Section 7.2 Restriction Against Assignment.

      The Employers shall pay all amounts payable hereunder only to the person
or persons designated by the Plan and not to any other person or corporation. No
part of a Participant's Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her beneficiary, or successors in
interest, nor shall a Participant's Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever. If any Participant, beneficiary or successor in interest is
adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant, beneficiary or successor in interest in such manner as the
Committee shall direct.

                                       14
<PAGE>
                                                                   EXHIBIT 10.23

Section 7.3 Change of Control.

      a. For purposes of this Plan, "Change of Control" means:

            (i) The acquisition by any Person (as hereinafter defined) of
      Beneficial Ownership (as hereinafter defined) of 20% or more of either the
      then outstanding stock (the "Outstanding Company Stock") or the combined
      voting power of the then outstanding voting securities of the Company
      entitled to vote generally in the election of directors (the "Outstanding
      Company Voting Securities"), provided that, for purposes of this
      subsection (a), the following acquisitions shall not constitute a Change
      of Control: (I) any acquisition by the Company, (II) any acquisition by
      any employee benefit plan (or related trust) sponsored or maintained by
      the Company or any Person that controls, is controlled by or is under
      common control with, the Company or (III) any acquisition by any Person
      pursuant to a transaction which complies with clauses (I), (II) and (III)
      of subsection (iii) of this definition; or

            (ii) Individuals who, as of the Effective Date, constitute the Board
      (the "Incumbent Board") cease for any reason to constitute at least a
      majority of the Board, provided that, for purposes of this subsection (b),
      any individual who becomes a director subsequent to the Effective Date
      whose election, or nomination for election by the Company's shareholders,
      was approved by a vote of at least a majority of the directors then
      comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, excluding, however, any
      such individual who initially assumes office as a result of an actual or
      threatened election contest with respect to the election or removal of
      directors or other actual or threatened solicitation of proxies or
      consents by or on behalf of a Person other than the Board; or

            (iii) Consummation of a reorganization, merger or consolidation or
      sale or other disposition of all or substantially all of the assets of the
      Company or the acquisition of assets or stock of another corporation (a
      "Business Combination"), in each case, unless, following such Business
      Combination, (I) the Persons who had Beneficial Ownership, respectively,
      of the Outstanding Company Stock and Outstanding Company Voting Securities
      immediately prior to such Business Combination have Beneficial Ownership
      immediately following the consummation of such Business Combination,
      directly or indirectly, of more than 50% of, respectively, the then
      outstanding common shares and the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election
      of directors, as the case may be, of the corporation resulting or
      surviving from such Business Combination (including, without limitation, a
      corporation which as a result of such transaction owns the Company or all
      or substantially all of the Company's assets either directly or through
      one or more subsidiaries) in substantially the same proportions as their
      ownership immediately prior to such Business Combination of the
      Outstanding Company Stock and Outstanding Company Voting Securities, as
      the case may be, (II) no Person (excluding any entity resulting from such
      Business Combination or any employee

                                       15
<PAGE>
                                                                   EXHIBIT 10.23

      benefit plan (or related trust) of the Company or such entity resulting
      from such Business Combination) has Beneficially Ownership, directly or
      indirectly, of 20% or more of, respectively, the then outstanding common
      shares of the entity resulting from such Business Combination or the
      combined voting power of the then outstanding voting securities of such
      entity, except to the extent that such ownership existed in respect of the
      Company prior to such Business Combination and (III) at least a majority
      of the members of the board of directors or similar body of the entity
      resulting from such Business Combination were members of the Incumbent
      Board at the time of the execution of the initial agreement, or of the
      action of the Board of Directors, providing for such Business Combination;
      or

            (iv) Approval by the shareholders of the Company of a complete
      liquidation or dissolution of the Company.

      b. For purposes of this Change of Control definition, "Person" means an
individual, partnership, joint venture corporation, trust, unincorporated
organization, government (or agency or political subdivision thereof), 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")) or any other entity, and
"Beneficial Ownership" means beneficial ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act.

      c. The Committee may make such determinations and interpretations and
adopt such rules and conditions as it, in its absolute discretion, deems
appropriate in connection with a Change of Control. All such determinations and
interpretations by the Committee shall be conclusive.

Section 7.4 Withholding.

      There shall be deducted from each payment made under the Plan or any other
compensation payable to the Participant (or beneficiary) all taxes which are
required to be withheld by the Company in respect to such payment or this Plan.
The Company shall have the right to reduce any payment (or compensation) by the
amount of cash sufficient to provide the amount of said taxes.

Section 7.5 Amendment, Modification, Suspension or Termination.

      The Compensation Committee may amend, modify, suspend or terminate the
Plan in whole or in part, except that no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
a Participant's Accounts. In the event that this Plan is terminated, the amounts
allocated to a Participant's Accounts (regardless of whether such amounts had
become vested) shall be distributed to the Participant or, in the event of his
or her death, his or her beneficiary in a lump sum within 30 days following the
date of termination.

                                       16
<PAGE>
                                                                   EXHIBIT 10.23

Section 7.6 Governing Law.

      This Plan shall be construed, governed and administered in accordance with
the laws of the United States and to the extent not preempted by such law by the
laws of the State of California.

Section 7.7 Receipt or Release.

      Any payment to a Participant or the Participant's Beneficiary in
accordance with the provisions of the Plan shall to the extent thereof, be in
full satisfaction of all claims for benefits under this Plan against the
Committee and the Company. The Committee may require such Participant or
beneficiary, as a condition precedent to such payment, to execute a receipt and
release to such effect.

Section 7.8 Effective Date.

              This Plan shall be effective as of January 1, 2002.

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       17
<PAGE>
                                                                   EXHIBIT 10.23

        IN WITNESS WHEREOF, this Plan is adopted as of January 1, 2002.

                              PACIFICARE HEALTH SYSTEMS, INC.

                              ------------------------------------
                              By:
                              Title:

                                       18

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