Choicecare Health Plans, Inc.

CHOICECARE CORPORATION
CHOICECARE HEALTH PLANS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR EXECUTIVE OFFICERS


(As adopted effective January 1, 1997)


SECTION 1
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PURPOSE OF PLAN
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The purpose of this Plan is to provide deferred compensation for Key Employees of the Employer. The Plan is intended to be an unfunded deferred compensation plan within the meaning of sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended and will be construed as such.


SECTION 2
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GENERAL DEFINITIONS
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GENERAL DEFINITIONS. For purposes of the Plan, the following terms will have the meanings hereinafter set forth unless the context otherwise requires.


2.1 "Base Salary" means an Employee's base salary payable to him or her by the Employer pursuant to Section 5.1 of the Employment Agreement, prior to any reduction of such base salary under Sections 125 and 402(e)(3) of the Code or under the ChoiceCare Voluntary Deferred Compensation Plan, and excluding any additional amounts computed with reference to such base salary and payable under Sections 7 or 8 of the Employment Agreement following a change in control or a strategic investor purchase (as those terms are defined in the Employment Agreement).


2.2 "Beneficiary" means the person or entity last designated by a Key Employee, on forms furnished and in the manner prescribed by the Committee and delivered to the Committee before the Key Employee's death, to receive any benefit payable under the Plan after the Key Employee's death. If a Key Employee does not designate a beneficiary or if, for any reason, such designation is not effective, the Key Employee's "Beneficiary" will be his or her surviving spouse or, if none, his or her estate.


2.3 "Cause" will have the same meaning given such term in the Key Employee's employment agreement with the Employer.


2.4 "Code" means the Internal Revenue Code of 1986 as it now exists or is hereafter amended.


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2.5 "Committee" means the Human Resources and Compensation Committee of the Board of Directors of ChoiceCare Health Plans, Inc. and any successor thereof.


2.6 "Employer" means, collectively, ChoiceCare Health Plans, Inc. and ChoiceCare Corporation.


2.7 "Employee" means a person who is an employee of the Employer or of any other corporation which is a member of a controlled group of corporations (within the meaning of section 1563 of the Code) that includes the Employer under common law standards and who is classified on the payroll of the Employer or such other corporation as an employee.


2.8 "Employment" means employment as an Employee.


2.9 "Employment Agreement" means the employment agreement between the Key Employee and the Employer, as effective January 1, 1997 and as amended from time to time.


2.10 "Key Employee" means Jane E. Rollinson, Michael J. Barber, M.D., and Thomas D. Anthony.


2.11 "Qualified Plans" means all defined contribution retirement plans maintained by the Employer that are intended to be qualified under Section 401(a) of the Code.


2.12 "Year" or "year" means the calendar year.


SECTION 3
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CREDITS
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3.1 CREDITS DURING EMPLOYMENT. For the year 1997, and for each subsequent year in which a Key Employee remains an Employee of the Employer, the Employer will credit to the book Account established for the Key Employee under Section 4.1, as of the last day of such year, an amount equal to 8% of the total of: (i) the Key Employee's actual Base Salary paid to him or her by the Employer for that year, and (ii) the Key Employee's actual award for that year under the Employer's Annual Executive Incentive Plan (as defined in the Employment Agreement and excluding any additional amounts computed with reference to such Annual Executive Incentive Plan and payable under Sections 7 or 8 of the Employment Agreement following a change in control or a strategic investor purchase as those terms are defined in the Employment Agreement).


3.2 CREDIT FOR YEAR OF TERMINATION. If the Key Employee's ceases to be an Employee of the Employer for any reason except Cause, the credit for the year of termination will be made pursuant to Section 3.1, based solely upon the Key Employee's actual Base Salary paid to him or her by the Employer for that year and the Employee's actual award for that year under the


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Employer's Annual Executive Incentive Plan, but without regard to any additional compensation paid to the Key Employee for that year, including but not limited to additional compensation of any type paid due to his or her termination of employment and any additional amounts computed with reference to such Annual Executive Incentive Plan and payable under Sections 7 or 8 of the Employment Agreement following a change in control or a strategic investor purchase as those terms are defined in the Employment Agreement. Notwithstanding the prior sentence or Section 3.1, if the Key Employee ceases to be an Employee because his or her Employment is terminated for Cause, no credit will be made to the Key Employee's Account for the year in which his or her Employment ends.


3.3 NO CONTRIBUTIONS BY KEY EMPLOYEES. Key Employees will not be required or permitted to make contributions to their Accounts under this Plan.


SECTION 4
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MAINTENANCE AND VALUATION OF ACCOUNTS
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4.1 ESTABLISHMENT OF ACCOUNTS. There will be established for each Key Employee a separate book account (the "Account"), which will reflect the amounts credited to him or her pursuant to Section 3, the assumed investment thereof and distributions therefrom. Subject to such rules as the Committee may prescribe, any amount credited under Sections 3.1 or 3.2 will be credited to the Key Employee's Account as of the last day of the year for which that credit is made, and will be assumed to have been invested within a reasonable period after that date pursuant to Section 4.2 of this Plan.


4.2 ASSUMED INVESTMENTS. The Committee will designate, in its discretion, two or more investment funds among which a Key Employee may designate as the assumed investment of his or her Account. Such investment funds may, but need not, be the same investment funds that are available under the Employer's Qualified Plans. The assumed investment return or loss for each year will be credited to the Key Employee's Account as of the last day of such year, provided, however, that the assumed investment return or loss for the year or years in which the Account is distributed to the Key Employee or his or her Beneficiary will be deemed to be credited to the Account as of each date or dates as of which the distribution from the Account is made.


4.3 VALUATION. As soon as practical following the end of each year, the Key Employee, or, in the event of his or her death, his or her Beneficiary, will be furnished a statement as of December 31 or the Key Employee's date of death, whichever is earlier, showing the then balance of the Key Employee's Account, the total credits to such Account during the preceding year pursuant to Sections 3.1 or 3.2, and the investment return or loss credited to that Account pursuant to Section 4.2.


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SECTION 5
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VESTING
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5.1 VESTING. The vested percentage of each Key Employee's Account will become 100% as of the date of that Key Employee's 60th birthday, provided he or she remains an Employee on that date. At any relevant time prior to the Key Employee's 60th birthday, the vested percentage of that Employee's Account will be 0%, except as otherwise provided in Section 5.2.


5.2 EARLY VESTING. Notwithstanding Section 5.1 but subject to Section 5.3, a Key Employee's Account will become vested as follows upon the occurrence of the following events:


(a) The vested percentage of the Key Employee's Account will become 100% upon termination of the Key Employee's Employment by the Employer without Cause;


(b) The vested percentage of the Key Employee's Account will become 100% upon the Key Employee's death or "permane ...