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                         UNITED WISCONSIN SERVICES, INC.

                         STOCK APPRECIATION RIGHTS PLAN

                       (as amended effective May 26, 1999)


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                         UNITED WISCONSIN SERVICES, INC.
                         STOCK APPRECIATION RIGHTS PLAN
                       (as amended effective May 26, 1999)

1.       PURPOSE. The purpose of the United Wisconsin Services, Inc. Stock
         Appreciation Rights Plan (the "Plan") is to attract and retain
         outstanding individuals as officers and key employees of United
         Wisconsin Services, Inc. (the "Corporation") and its subsidiaries, and
         to furnish incentives to such individuals through rewards upon the
         performance of the common stock of the Corporation. To this end, the
         Management Review Committee of the Corporation, or such other committee
         as determined by the Board of Directors (the "Committee") may grant
         stock appreciation rights ("SARs") to officers and other key employees
         of the Corporation and its subsidiaries, on the terms and subject to
         the conditions set forth in this Plan.

2.       PARTICIPANTS. Participants in the Plan shall consist of such officers
         and employees of the Corporation and its subsidiaries as the Committee
         in its sole discretion may select from time to time to receive stock
         appreciation rights. In determining the officers and employees to whom
         stock appreciation rights will be granted, the Committee shall take
         into account the duties of the respective officers and employees, their
         past, present and potential contributions to the success of the
         Corporation, their level of responsibility for the growth, development
         and financial success of the Corporation, and such other factors as the
         Committee deems relevant in connection with accomplishing the purposes
         of the Plan.

3.       ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
         Committee. The Committee shall consist of not less than two members of
         the Board of Directors, all of whom shall, to the extent required,
         qualify to administer the Plan as contemplated by Rule 16b-3, as
         amended, or other applicable rules under Section 16 of the Securities
         Exchange Act of 1934, as amended ("Section 16"). For purposes of
         Section 16 and as of the date of adoption of the Plan, members of the
         Board of Directors shall qualify to administer the Plan if each
         proposed member is a disinterested person. A "disinterested person"
         means a director who is not, during the one year prior to service as a
         member of the Committee, or during such service, granted or awarded
         equity securities pursuant to the Plan or any other plan of the
         Company, or any of its affiliates, subject to certain exceptions.
         Subject to the provisions of the Plan, the Committee shall have sole
         discretion and authority (i) to determine which officers and employees
         of the Corporation and its subsidiaries shall be eligible for
         participation in the Plan; (ii) to select officers and employees to
         receive grants under the Plan; (iii) to determine the number of stock
         appreciation rights subject to the grant, the conditions of exercise,
         the fair market value of the common stock of the Corporation for
         purposes of the Plan, and all other terms and conditions of any grant;
         and (iv) to prescribe the form of agreement, certificate or other
         instrument evidencing the grant. The Committee shall also have
         authority to interpret the Plan and to establish, amend and rescind
         rules and regulations for the administration of the Plan, and all such
         interpretations, rules and regulations shall be conclusive and binding
         on all persons, provided, however, that the Committee shall not
         exercise such authority in a manner

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         adversely and significantly affecting stock appreciation rights
         previously granted unless the action taken is required to comply
         with any applicable law or regulation.

4.       EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
         January 1, 1992. The Plan shall terminate only by action of the Board
         of Directors. No further grants may be made under the Plan after its
         termination, but the termination of the Plan shall not adversely and
         significantly affect the rights of any participant under, or the
         authority of the Committee with respect to, any grants made prior to
         termination unless the action taken is required to comply with any
         applicable law or regulations.

5.       NUMBER OF STOCK APPRECIATION RIGHTS SUBJECT TO THE PLAN. Subject to
         adjustment as provided in paragraph 7 hereof, the aggregate number of
         stock appreciation rights which may be granted under the Plan shall not
         exceed 150,000. Each stock appreciation right evidences the right upon
         exercise to receive payment from the Corporation of the amount set
         forth in Section 6(d) hereof. Whenever stock appreciation rights
         granted under the Plan can no longer under any circumstances be
         exercised, these stock appreciation rights shall be available for
         additional grants under the Plan. Stock appreciation rights which are
         exercised shall thereafter be canceled and retired.

6.       STOCK APPRECIATION RIGHTS.

         (a)      GRANTS. Stock appreciation rights entitling the grantee to
                  receive cash equal to the sum of (i) the appreciation in value
                  and (ii) the value of dividends paid on a stated number of
                  shares of common stock of the Corporation between the date of
                  grant and the date of exercise may be granted without
                  consideration from time to time to such officers and employees
                  of the Corporation and its subsidiaries as may be selected by
                  the Committee.

         (b)      TERMS OF GRANT AND EXERCISE: GENERAL. The grantee's rights
                  with respect to stock appreciation rights granted shall vest
                  three years after the date of grant as to 50% of the stock
                  appreciation rights; the remaining 50% of the stock
                  appreciation rights granted shall vest six years after the
                  date of grant. Not withstanding the above, the Committee has
                  the sole discretion to alter the time in which previously
                  granted SARs vest in the event a grantee becomes disabled,
                  retires or dies; provided, however, that no previously granted
                  SARs vest prior to six months from the date of grant. Stock
                  appreciation rights are exercisable in whole or in part
                  provided all of the following conditions are met at the time
                  of exercise: (i) the stock appreciation rights to be exercised
                  are vested; (ii) the stock appreciation rights are exercised
                  only during the period beginning on the third business day
                  following the date of release of the Corporation's quarterly
                  or annual summary statements of revenues and earnings and
                  ending on the twelfth business day following such date (the
                  "Exercise Date"); (iii) the stock appreciation rights are
                  exercised prior to the

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                  expiration of twelve years from the date of grant; and (iv)
                  the grantee is employed by the Corporation or any present or
                  future parent or subsidiary of the Corporation at the time
                  of exercise. Stock appreciation rights not exercised on or
                  before the close of business twelve years from the date of
                  grant shall automatically expire and the stock appreciation
                  rights shall become void. The Committee may at the time of
                  grant or at any time thereafter impose such additional terms
                  and conditions on the exercise of stock appreciation rights
                  as it deems necessary or desirable for compliance with
                  Section 16.

         (c)      TERMS OF GRANT AND EXERCISE: TERMINATION OF EMPLOYMENT,
                  RETIREMENT OR DEATH. If a grantee ceases to be employed by the
                  Corporation or any of its subsidiaries for any reason other
                  than death or retirement, any stock appreciation right held by
                  such grantee may be exercised only on the Exercise Date
                  immediately following the date of such cessation of
                  employment, but only with respect to that number of stock
                  appreciation rights which were exercisable immediately prior
                  to the date of cessation of employment.

                  If a grantee ceases to be employed by the Corporation or any
                  of its subsidiaries by reason of death, or dies after
                  termination of his employment by the Corporation or any of its
                  subsidiaries but prior to the Exercise Date immediately
                  following thereto, any stock appreciation right held by such
                  grantee which was exercisable by the grantee immediately prior
                  to his or her death, may be exercised by the grantee's
                  personal representative or executor of his or her estate on
                  any date, so long as such date is during the period ending on
                  the earlier of the first anniversary of the date of such
                  grantee's death or the date of expiration of such stock
                  appreciation rights.

                  If a grantee ceases to be employed by the Corporation or any
                  of its subsidiaries by reason of Retirement, any stock
                  appreciation right held by such grantee which was exercisable
                  by the grantee immediately prior to his Retirement may be
                  exercised by the grantee on any date, so long as such date is
                  during the period ending on the earlier of the third
                  anniversary of the date of the grantee's Retirement or the
                  date of expiration of such stock appreciation rights. For
                  purposes of this Plan, Retirement shall mean a termination of
                  employment after the grantee has attained age 55 and completed
                  10 years of service. Notwithstanding anything in this Section
                  to the contrary, no grantee who terminates employment by
                  reason of Retirement may exercise his stock appreciation
                  rights on a date other than an Exercise Date if exercise on
                  such date could subject the grantee to liability under federal
                  or state securities laws.

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                  The Committee has the sole discretion to alter the time in
                  which previously granted SARs vest in the event a grantee
                  becomes disabled, retires or dies; provided, however, that no
                  previously granted SARs vest prior to six months from the date
                  of grant.

         (d)      PAYMENT ON EXERCISE. Upon exercise of a stock appreciation
                  right, the grantee shall be paid within five business days an
                  amount in cash equal to the sum of (i) the amount by which the
                  fair market value of one share of the Corporation's common
                  stock on the date of exercise exceeds the date of grant value
                  thereof multiplied by the number of stock appreciation rights
                  being exercised and (ii) the value of the cash dividends
                  associated therewith. The value of the cash dividends
                  associated with exercised stock appreciation rights shall be
                  equal to the actual cash dividend paid on a share of common
                  stock between the date of grant and the date of exercise, plus
                  annual interest earned on the dividend paid between the date
                  the cash dividend is paid and the date of exercise, multiplied
                  by the number of stock appreciation rights being exercised.
                  Annual interest shall be reset annually and shall be at the
                  rate of the one year Treasury Bill as of September 30th of the
                  prior year plus 150 basis points; provided, however, the
                  annual interest rate shall in no event be less than 7.00% or
                  greater than 10.00% per annum.

                  For purposes of this paragraph, the fair market value of a
                  share of common stock of the Corporation shall be determined
                  using the first of the following rules which apply:

                  (A)         During such time as the Corporation's common stock
                              is traded on the New York Stock Exchange (the
                              "Exchange"), the closing price of the
                              Corporation's common stock on the Exchange; or

                  (B)         If the Corporation's common stock is not then
                              traded on the Exchange, the mean between the
                              published bid and asked prices of the common stock
                              of the Corporation if the common stock of the
                              Corporation was then traded on a bona fide
                              over-the-counter market; or

                  (C)         If the common stock of the Corporation was not
                              traded on the Exchange or on a bona fide
                              over-the-counter market, a value determined by an
                              appraiser selected by the Committee.

                  In the event that the date of exercise of a stock appreciation
                  right is a date for which there were no sales of the
                  Corporation's common stock if the stock is traded on the
                  Exchange, such fair market value shall be

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                  determined by taking an average of the closing prices on
                  the nearest day before and the nearest day after the
                  exercise date. In the event that the date of exercise of a
                  stock appreciation right is a date for which there is no
                  published bid and asked prices if the stock is traded on the
                  over-the-counter market, such fair market value shall be
                  determined by referring to the next preceding business day
                  on which trading occurs or on which published prices are
                  available.

                  With regard to only the initial grants of SARs, the Committee,
                  in its sole discretion, may set the date of grant value of one
                  share of the Corporation's common stock at a value equal to
                  the Initial Public Offering price of the Corporation's common
                  stock declared effective October 24, 1991. All subsequent
                  grants of SARs, shall be valued as of the date of grant.

         (E)      ADDITIONAL TERMS AND CONDITIONS. The agreement or instrument
                  evidencing the grant of stock appreciation rights may contain
                  such other terms, provisions and conditions not inconsistent
                  with the Plan as may be determined by the Committee in its
                  sole discretion.

7.       ADJUSTMENTS FOR CHANGES IN CAPITALIZATION, ETC. The terms and
         conditions of stock appreciation rights shall be subject to adjustment
         by the Committee in its sole discretion as to the number, kind and date
         of grant value in the event of changes in the outstanding common stock
         of the Corporation by reason of stock dividends, stock splits,
         recapitalization, reorganizations, mergers, consolidations,
         combinations, exchanges or other relevant changes in corporate
         structure or capitalization occurring after the date of the grant of
         any stock appreciation right, provided that if the Corporation shall
         change its common stock into a greater or lesser number of shares
         through a stock dividend, stock split-up, or combination of shares,
         outstanding rights shall be adjusted proportionately, consistent with
         existing law and regulation, to prevent inequitable results.

8.       EFFECT OF LIQUIDATION, MERGER, CONSOLIDATION OR OTHER EVENTS. Nothing
         contained in the Plan or in the terms of any stock appreciation rights
         granted under the Plan shall in any way prohibit the Corporation from
         merging with or consolidating into another corporation, or from selling
         or transferring all or substantially all of its assets, or from
         distributing all or substantially all of its assets to its shareholders
         in liquidation, or from dissolving and terminating its corporate
         existence; and in any such event, all outstanding stock appreciation
         rights granted under the Plan which have vested shall be deemed to have
         been exercised at the time of any such merger, consolidation, sale or
         transfer of assets, liquidation, or dissolution, except to the extent
         that any agreement or undertaking of any party to such merger,
         consolidation, or sale or transfer of assets, or any plan pursuant to
         which such liquidation or dissolution is effected, shall make specific
         provision to continue such stock appreciation rights and the rights of
         such person or persons entitled to exercise such stock appreciation
         rights.

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9.       AMENDMENT AND TERMINATION OF PLAN. The Plan may be amended or
         terminated by the Board of Directors of the Corporation in any respect;
         provided, however, the Board shall not exercise such authority in a
         manner adversely and significantly affecting stock appreciation rights
         previously granted unless the action taken is required to comply with
         any applicable law or regulation.

10.      MISCELLANEOUS.

         (a)      NO RIGHT TO A GRANT. Neither the adoption of the Plan nor any
                  action of the Board of Directors or of the Committee shall be
                  deemed to give any officer or employee any right to be
                  selected as a participant or to be granted a stock
                  appreciation right.

         (b)      NO RIGHTS AS SHAREHOLDER. No officer or employee shall have
                  any rights of any kind as a shareholder of the Corporation
                  with respect to stock appreciation rights.

         (c)      EMPLOYMENT. Nothing contained in this Plan shall be deemed to
                  confer upon any officer or employee any right of continued
                  employment with the Corporation or any of its subsidiaries or
                  to limit or diminish in any way the right of the Corporation
                  or any such subsidiary to terminate his or her employment at
                  any time with or without cause.

         (d)      TAXES. The Corporation shall be entitled to deduct from any
                  payment under the Plan the amount of any tax required by law
                  to be withheld with respect to such payment or may require any
                  participant to pay such amount to the Corporation prior to and
                  as a condition of making such payment.

         (e)      NONTRANSFERABILITY. No stock appreciation right shall be
                  transferable except by will or the laws of descent and
                  distribution. During the grantee's lifetime, stock
                  appreciation rights shall be exercisable only by such grantee.

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