<PAGE>

                                                                   EXHIBIT 10(e)

                                AMENDMENT NO. 4
                                      TO
                        AMERICAN DENTAL PARTNERS, INC.
             AMENDED AND RESTATED 1996 DIRECTORS STOCK OPTION PLAN
             -----------------------------------------------------


     The American Dental Partners, Inc. Amended and Restated 1996 Directors
Stock Option Plan, as previously amended by Amendment No. 1 dated October 27,
1997, Amendment No. 2 dated November 6, 1998, and Amendment No. 3 dated February
26, 1999 (collectively, the "Plan"), is hereby amended pursuant to the following
provisions:

     1.   Definitions
          -----------

     All capitalized terms used in this amendment which are not otherwise
defined herein shall have the respective meanings given such terms in the Plan.

     2.   Exercise Price
          --------------

          Section 5(b) of the Plan is hereby deleted from the Plan in its
          entirety and replaced with the following:

     (b)  Exercise Price.
          --------------

          The exercise price per Share issuable upon exercise of an Option shall
     be determined by the Committee at the time of grant and set forth in the
     applicable Stock Option Agreement; provided that such exercise price shall
     not be less than the fair market value per Share on the date the Option is
     granted. For purposes of the Plan, the fair market value of the Shares
     shall mean, as of any given date, whichever of the following is applicable:
     (i) the last reported sale price on the New York Stock Exchange ("NYSE") on
     that date, or, if none, the last reported sale price on the NYSE on the
     most recent previous trading day; (ii) the last reported sale price on the
     NASDAQ National Market System ("NASDAQ") on that date, or, if none, the
     last reported sale price on the NASDAQ on the most recent previous trading
     day; (iii) the mean between the high and low bid and ask prices, as
     reported by the National Association of Securities Dealers, Inc. ("NASD")
     on that date, or, if none, the mean between the high and low bid and ask
     prices, as reported by the NASD on the most recent previous trading day; or
     (iv) the last reported sale price on any other stock exchange on which the
     Shares are listed on that date, or, if none, the last reported sale price
     on any other stock exchange on which the Shares are listed on the most
     recent previous trading day, whichever is applicable; provided that if none
     of the foregoing is applicable, then the fair market value of the Shares
     shall be the value determined by the Committee, in its sole discretion.

     3.   Effective Date; Construction
          ----------------------------

     The effective date of this amendment is July 1, 1999, and this amendment
shall be deemed to be a part of the Plan as of such date; provided that this
amendment shall not modify the exercise price of any Options granted under the
Plan prior to such date. In the event of any inconsistencies between the
provisions of the Plan and this amendment, the provisions of this amendment
shall control. Except as modified by this amendment, the Plan shall continue in
full force and effect without change.

                                      54