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                                                                 Exhibit 10(ae)








                         MAGELLAN HEALTH SERVICES, INC.
                         EMPLOYEE STOCK PURCHASE PLAN

                         2000 SUMMARY PLAN DESCRIPTION


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                         MAGELLAN HEALTH SERVICES, INC.
                        2000 EMPLOYEE STOCK PURCHASE PLAN

         1. PURPOSE. The purpose of the Magellan Health Services, Inc. 2000
Employee Stock Purchase Plan (the "Plan"), is to provide employees of Magellan
Health Services, Inc. (the "Company") and its subsidiary companies with an
opportunity to be compensated through the benefits of stock ownership and to
acquire an interest in the Company through the purchase of Common Stock of the
Company. It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986 (the "Code"). The provisions of the Plan shall, accordingly, be construed
so as to extend and limit participation in a manner consistent with the
requirements of that section of the Code.

         2. DEFINITIONS.

            (a) "Base Pay" means the compensation payable to an employee by the
Company or a designated subsidiary (as defined in Code Section 424(f)) (a
"subsidiary") calculated at that employee's base salary or standard hourly rate
of compensation, but excluding overtime, commissions, shift differential,
incentive bonus compensation and compensation payable under any deferred
compensation or other fringe benefit plan.

            (b) "Employee" means for each Offering Period (as defined in
Section 4) any person who is employed by the Company or by any subsidiary of the
Company designated from time to time by the Committee (as defined in Section 13)
to participate in such Offering Period.

         3. ELIGIBILITY.

            (a) Any Employee who shall be employed on the 60th day preceding the
Offering Date of an Offering Period shall be eligible to participate in the Plan
for such Offering Period. Notwithstanding the foregoing, the Committee, in its
sole discretion, may credit the employment service of persons employed by a
business acquired by the Company or by any subsidiary thereof for the purpose of
satisfying the 60-day rule herein.

         (b) Any provision of the Plan to the contrary notwithstanding, no
Employee shall be granted an option:

                  (i)      If, immediately after the grant such Employee would
                           own shares, and/or hold outstanding options to
                           purchase stock, possessing 5% or more of the total
                           combined voting power or value of all classes of
                           shares of the Company or of any subsidiary of the
                           Company; or

                  (ii)     Which permits his rights to purchase shares under all
                           employee stock purchase plans of the Company and its
                           subsidiaries to accrue at a rate which exceeds
                           $25,000 of the fair market value of the shares
                           (determined at the time such option is granted) for
                           each calendar year in which such stock option is
                           outstanding at any time.

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         4. OFFERING PERIODS. The Committee shall establish the Offering Periods
under the Plan which shall be of not less than three months nor more than twelve
months duration each, the first of which shall not begin before January 1, 2000,
and the last of which shall end not later than December 31, 2002. The beginning
date (the "Offering Date") and the ending date (the "Termination Date") of each
Offering Period shall be set in advance of each Offering Period by the
Committee.

         5. PARTICIPATION. An eligible Employee may become a participant only by
completing an election notice provided by the Company and filing it with the
designated representative of the Company no later than the date specified by the
Company in the election notice form.

         Unless otherwise adjusted in accordance with rules established by the
Committee in its sole discretion, payroll deductions for a participant with
respect to an Offering Period shall commence with the first pay date beginning
on or after the Offering Date, and shall end with the last pay date ending on or
before the Termination Date, unless sooner terminated by the participant as
provided in Section 10. All Employees granted options under the Plan shall have
the same rights and privileges, except that the amount of stock which may be
purchased under such option may vary in a uniform manner as described in Section
7.

         6. METHOD OF PAYMENT. Payments for shares under the Plan may be made
only by payroll deductions, as follows:

         (a) If a participant wishes to participate in the Plan, then at the
time he files his election notice, he shall elect to have deductions made from
his Base Pay at a rate, expressed as a percentage, not to exceed 10% of his
annualized Base Pay as of the Offering Date. Any or all amounts withheld during
the one-month period immediately preceding the Termination Date in any Offering
Period may be applied to the purchase of shares on the Termination Date or to
the purchase of shares offered for the next subsequent Offering Period in a
manner as may be determined by the Committee, in its sole discretion, but only
if such application is administered consistently among all participants during
such Offering Period.

         (b) All payroll deductions made for a participant shall be credited to
his account under the Plan. A participant may not make any separate cash payment
into such account. A participant's account shall be no more than a bookkeeping
account maintained by the Company, and neither the Company nor any subsidiary
shall be obligated to segregate or hold in trust or escrow any funds in a
participant's account.

         (c) A participant's election to have deductions made from his Base
Pay shall be effective for all pay dates occurring during the Offering Period
which commences immediately following the filing, in accordance with Section
5, of the participant's election notice and for each subsequent Offering
Period until such election is modified or revoked by the participant or until
such participant no longer meets the eligibility requirements of Section
3(a). A participant may discontinue his participation in the Plan as provided
in Section 10. A participant may elect to change the rate of payroll
deductions at such times and in accordance with such rules as may be
prescribed by the Committee; any such change in the rate of payroll

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deductions shall be applicable only with respect to Offering Periods
commencing after a participant files with the Committee an election notice
requesting such change.

         7. GRANTING OF OPTION.

         (a) Subject to any adjustment under Sections 12 or 17, on the Offering
Date for each Offering Period, a participant shall be granted an option to
purchase a number of whole shares determined by dividing the amount to be
withheld for participation in the Plan and applied to such Offering Period by
the option price per share of Common Stock determined in accordance with Section
7(b) but, in no event shall the maximum number of shares for which an option is
granted to a participant with respect to any single Offering Period exceed 200
shares per month for each full or partial month during the Offering Period.

         (b) The option price per share of shares purchased with payroll
deductions for a participant will be equal to the lesser of: (i) 85% of the
closing price of the Common Stock on the New York Stock Exchange on the Offering
Date; or (ii) 85% of the closing price of the Common Stock on the New York Stock
Exchange on the Termination Date. If no shares are traded on such exchange on
either such date, such price shall be determined on the last trading date for
such shares immediately preceding the Offering Date or the Termination Date, as
applicable.

         8. EXERCISE OF OPTION. Unless a participant gives written notice of
withdrawal pursuant to Section 10(a) or such participant's payroll deductions
are returned in accordance with Section 10(c), his option for the purchase of
shares during an Offering Period with payroll deductions will be exercised
automatically for him on the Termination Date of that Offering Period. The
automatic exercise shall, subject to Sections 12 and 17, be for the purchase of
the maximum number of full shares subject to his option which the sum of payroll
deductions credited to the participant's account on the Termination Date can
purchase at the option price.

         9. DELIVERY. As promptly as practicable after the end of an Offering
Period, the Company will deliver the shares purchased upon the exercise of the
option to a designated broker selected by the Company to administer and hold
shares in individual accounts established for the benefit of each participant.
The Committee, in its sole discretion, may establish procedures to permit a
participant to receive such shares directly. Amounts credited to the
participant's account in excess of the amount necessary to pay the option price
for the maximum number of full shares subject to his option shall either be
refunded to the participant or credited to the participant's account for the
next subsequent Offering Period as may be determined by the Committee, in its
sole discretion.

         10. WITHDRAWAL.

             (a) A participant may withdraw payroll deductions credited to his
account under the Plan by giving written notice to the representative of the
Company designated on the election notice form. A participant may withdraw
amounts credited to his account at any time prior to the first day of the
calendar month ending on the Termination Date or such later date as may be
established by the Committee in its sole discretion. All of the participant's
payroll

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deductions credited to his account will be paid to him promptly after receipt of
his notice of withdrawal, and no further deductions will be made from his pay
during that Offering Period.

            (b) A participant's withdrawal will not limit his eligibility to
participate in any similar plan which may hereafter be adopted by the Company or
in any subsequent Offering Period.

            (c) Upon termination of the participant's employment during an
Offering Period for any reason, including death or retirement, the payroll
deductions credited to his account for such period will be returned to him or,
in the case of his death, to the person or persons entitled thereto under
Section 14. Notwithstanding the foregoing, the payroll deductions credited to
the account of any participant whose employment is terminated during the
calendar month ending on the Termination Date shall not be returned but shall
instead be used to purchase shares in accordance with Section 8.

         11. NO INTEREST. No interest shall be accrued or payable with respect
to amounts in a participant's account.

         12. STOCK.

             (a) The shares of Common Stock to be sold to participants under the
Plan may, at the election of the Company, be either treasury shares or shares
originally issued for such purpose. The maximum number of shares which shall be
made available for sale under the Plan shall be 1,000,000 shares and the maximum
number of shares available for sale in each Offering Period shall be determined
by the Committee in its sole discretion, subject in each case to adjustment upon
changes in capitalization of the Company as provided in Section 17. If the total
number of shares for which options are to be exercised for an Offering Period in
accordance with Section 8 exceeds the number of shares then available under the
Plan for such Offering Period, the Company shall make a pro rata allocation of
the shares available based on a fraction, the numerator of which shall be the
number of shares with respect to which a participant has an option to purchase
for an Offering Period and the denominator of which shall be the number of
shares available for purchase, with rounding down for each participant to the
nearest whole number.

            (b) A participant will have no interest in shares covered by an
option until such option has been exercised.

         13. ADMINISTRATION. The Plan shall be administered by a Committee (the
"Committee") consisting of not less than three members who shall be appointed by
the Chief Executive Officer of the Company. Each member of the Committee shall
be either a director, an officer, or an employee of the Company or of a
subsidiary thereof. The Committee shall be vested with full authority to make,
administer, and interpret such rules and regulations as it deems necessary to
administer the Plan, and any determination, decision, or action of the Committee
in connection with the construction, interpretation, administration, or
application of the Plan shall be final, conclusive, and binding upon all
participants and all persons claiming under or through any participant.

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         14. DESIGNATION OF BENEFICIARY. A participant may file a written
designation of a beneficiary who is to receive any shares or cash to the
participant's credit under the Plan in the event of such participant's death
before, on, or after the Termination Date but prior to the delivery of shares
and, if applicable, cash. Such designation of beneficiary may be changed by the
participant at any time by written notice. Upon the death of a participant and
upon receipt by the Company of proof of the identity and existence at the
participant's death of a beneficiary validly designated by him under the Plan,
the Company shall deliver such shares or cash to the account of such
beneficiary. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares or cash to the
account of the executor or administrator of the estate of the participant, or if
no such executor or administrator has been appointed (to the knowledge of the
Company) the Company, in its discretion, may deliver such shares or cash to the
account of the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent, or relative is known to the Company,
then to the account of such other person as the Company may designate. No
designated beneficiary shall, prior to the death of the participant by whom he
has been designated, acquire any interest in the shares or cash credited to the
participant under the Plan.

         15. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant. Any such attempted
assignment, transfer, pledge, or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.

         16. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose.

         17. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization,
reclassification, stock split, combination of shares, or dividend payable in
shares of Common Stock, an appropriate adjustment shall be made by the Committee
to the number and kind of shares as to which outstanding options shall be
exercisable and to the option price. No fractional shares shall be issued or
optioned in making the foregoing adjustments. All adjustments made by the
Committee under this paragraph shall be conclusive and binding on all
participants and all persons claiming under or through any participant.

         Subject to any required action by the stockholders, if the Company
shall be a party to any reorganization involving merger, consolidation,
acquisition of the stock or acquisition of the assets of the Company, the
Committee in its discretion may declare (a) that all options granted hereunder
are to be terminated after giving at least ten days' notice to holders of
outstanding options, or (b) that any option granted hereunder shall pertain to
and apply with appropriate adjustment as determined by the Committee to the
securities of the resulting corporation to which a holder of the number of
shares of Common Stock subject to the option would have been entitled. The
adoption of a plan of dissolution or liquidation by the Board of Directors and

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stockholders of the Company shall cause every option outstanding hereunder to
terminate on the fifteenth day thereafter, except that, in the event of the
adoption of a plan of dissolution or liquidation in connection with a
reorganization as provided in the preceding sentence, options outstanding
hereunder shall be governed by and shall be subject to the provisions of the
preceding sentence.

         Any issue by the Company of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to any option, except as specifically provided
otherwise in this Section 17. The grant of an option pursuant to the Plan shall
not affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

         18. AMENDMENT OR TERMINATION. The Board of Directors of the Company may
at any time terminate or amend the Plan. No such termination can affect options
previously granted and no amendment can make any change in any option
theretofore granted which would adversely affect the rights of any participant.
No amendment can be made without prior approval of the stockholders of the
Company if such amendment would:

            (a) Require the sale of more shares than are authorized under
Section 12; or

            (b) Permit payroll deductions or cash payments at a rate in excess
of 10% of a participant's Base Pay.

         19. NOTICES. All notices or other communications by a participant to
the Company under or in connection with the Plan shall not be deemed to have
been duly given until actually received by the representative of the Company
designated on the election notice form provided by Section 5.

         20. MISSING PAYEE. If (i) the Company utilizes a designated broker to
administer and hold in individual accounts the shares purchased by the
participants, (ii) the Company subsequently cannot ascertain the whereabouts of
a participant whose account is held with the designated broker, (iii) after
three years from the date of the last purchase by such participant, a notice of
such account balance and pending action under this section is mailed to the last
known address of such person, as shown on the records of the designated broker
or the Company, and (iv) within three months after such mailing, such person has
not made written claim therefor, then the Committee may direct that such account
balance (including both shares and withholdings) otherwise due to such person be
canceled and returned to the Company. Upon such cancellation, the Company or the
designated broker shall have no further liability therefor, except that, in the
event such person, within one year of the date of the notice referred to in
(iii) above, notifies the Company or the broker of his whereabouts and requests
the amounts due to him under the Plan, the number of shares (as may be adjusted
to reflect any extraordinary corporate event or recapitalization) together with
any dividends or other accretions thereon and the amount of withholdings
contained in such account so canceled shall be delivered to him as provided
herein by the Plan.