Re: Severance Agreement

Exhibit 10(ar)

PERSONAL AND CONFIDENTIAL

October 31, 2002

Daniel S. Messina
545 Highland Street
Wethersfield, CT 06109

Re: Severance Agreement

Dear Dan:

        As you know, we have discussed the termination of your employment with Magellan Health Services, Inc. ("Magellan"), effective November 30, 2002. Set forth below are the details of your separation and information regarding your benefits.

1.

Your employment with Magellan will terminate on November 30, 2002 ("Termination Date"). Provided that your employment is not terminated for cause prior to the Termination Date, Magellan will pay you a lump sum payment equal to thirteen months of your current annual salary. This payment will be made on December 1, 2002. In addition, you will be paid your accrued and unused PTO pay. If you die before Magellan has made all of these payments, Magellan shall make these payments to your estate.

2.

In addition to the payments set forth above, Magellan will reimburse you for the cost of leasing your current apartment in Columbia, Maryland for the months of November and December 2002. Magellan will also reimburse your moving expenses from Columbia, Maryland to Connecticut, up to a maximum of $5,000.

3.

The following benefits will terminate upon the end of the month in which your termination occurs:

(i)

health insurance;

(ii)

dental insurance;

(iii)

vision insurance;

(iv)

Group Universal life insurance;

(v)

dependent life insurance;

(vi)

accidental death and dismemberment.

        COBRA coverage may be elected to continue your health, dental, and vision insurance. If you elect COBRA coverage, you pay the previous contribution rate for such coverage during the 12 months following the Termination Date.

4.

The following benefits will cease as of your Termination Date:

(i)

participation in Magellan's 401(k) Plan;

(ii)

participation in Flexible Spending Accounts ("FSAs"), although you may continue to receive reimbursement from your FSA balances for expenses incurred prior to your Termination Date by submitting the appropriate invoices and receipts up to sixty (60) days past the date of the Termination Date. In the alternative, you may elect, under COBRA, to continue a Health Care FSA through the end of the current calendar year. Any contributions made to the Health Care FSA after your Termination Date must be made with after-tax dollars.

(iii)

short term and long term disability coverage;

(iv)

PTO accrual;

(v)

Employer paid portion of life insurance;



(vi)

Participation in Magellan's Employee Stock Purchase plan. Any contributions you made to the stock purchase plan prior to the Termination Date will be refunded unless such date occurs during the calendar month in which the last day of the offering period occurs. In that case, your payroll deductions will be used to purchase shares on the last day of the offering period.