<PAGE>


                                 EXHIBIT 10.1






                                      25


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                                    EQUITY
                                INCENTIVE PLAN

                       UNITED WISCONSIN SERVICES, INC.

                                 July 1, 1998


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                           UNITED WISCONSIN SERVICES, INC.
                                EQUITY INCENTIVE PLAN

                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>

ARTICLE   SECTION                                                                PAGE
------    -------                                                                ----
<S>       <C>                                                                    <C>
     1         ESTABLISHMENT, PURPOSE, AND DURATION

          1.1  Establishment of the Plan                                            1
          1.2  Purpose of the Plan                                                  1
          1.3  Duration of the Plan                                                 2

     2         DEFINITIONS

     3         ADMINISTRATION

          3.1  The Committee                                                       10
          3.2  Authority of the Committee                                          10
          3.3  Decisions Binding                                                   11

     4         SHARES SUBJECT TO THE PLAN

          4.1  Number of Shares                                                    11
          4.2  Lapsed Awards                                                       12
          4.3  Adjustments in Authorized Shares                                    12

     5         ELIGIBILITY AND PARTICIPATION

          5.1  Eligibility                                                         13
          5.2  Actual Participation                                                13

     6         STOCK OPTIONS

          6.1  Grant of Options                                                    13
          6.2  Option Award Agreement                                              16
          6.3  Option Price                                                        16
          6.4  Duration of Options                                                 17
          6.5  Exercise of Options                                                 17
          6.6  Payment                                                             17
          6.7  Restrictions on Share Transferability                               18
          6.8  Termination of Employment Due to Death, Disability or Retirement    18
          6.9  Termination of Employment for 
               Other Reasons                                                       20
          6.10 Transferability of Options                                          21

     7         STOCK APPRECIATION RIGHTS

          7.1  Grant of SARs                                                       22
          7.2  Exercise of Tandem SARs                                             22
          7.3  Exercise of Affiliated SARs                                         23

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          7.4  Exercise of Freestanding SARs                                       23
          7.5  SAR Agreement                                                       23
          7.6  Term of SARs                                                        23
          7.7  Payment of SAR Amount                                               23
          7.8  Rule 16b-3 Requirements                                             24
          7.9  Termination of Employment Due to Death Disability, or Retirement    24
          7.10 Termination of Employment for Other Reasons                         26
          7.11 Nontransferability of SARs                                          26

     8         RESTRICTED STOCK

          8.1  Grant of Restricted Stock                                           26
          8.2  Restricted Stock Agreement                                          27
          8.3  Transferability                                                     27
          8.4  Other Restrictions                                                  27
          8.5  Certificate Legend                                                  27
          8.6  Removal of Restrictions                                             28
          8.7  Voting Rights                                                       28
          8.8  Dividends and Other Distributions                                   28
          8.9  Termination of Employment Due to Death, Disability, or Retirement   29
          8.10 Termination of Employment for Other Reasons                         29

     9         PERFORMANCE UNITS AND PERFORMANCE SHARES

          9.1  Grant of Performance Units/Shares                                   30
          9.2  Value of Performance Units/Shares                                   30
          9.3  Earning of Performance Units/Shares                                 30
          9.4  Form and Timing of Payment of Performance Units/Shares              30
          9.5  Termination of Employment Due to Death, Disability, Retirement,
               or Involuntary Termination (without Cause)                          31
          9.6  Termination of Employment for Other Reasons                         31
          9.7  Nontransferability                                                  32

     10        BENEFICIARY DESIGNATION

     11        DEFERRALS

     12        RIGHTS OF EMPLOYEES

          12.1 Employment                                                          33
          12.2 Participation                                                       33

     13        CHANGE IN CONTROL

                                       28
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     14        AMENDMENT, MODIFICATION, AND TERMINATION

          14.1 Amendment, Modification, and Termination                            34
          14.2 Awards Previously Granted                                           34

     15        WITHHOLDING

          15.1 Tax Withholding                                                     34
          15.2 Share Withholding                                                   35

     16        INDEMNIFICATION

     17        SUCCESSORS

     18        LEGAL CONSTRUCTION

          18.1 Gender and Number                                                   37
          18.2 Severability                                                        37
          18.3 Requirements of Law                                                 37
          18.4 Securities Law Compliance                                           38
          18.5 Governing Law                                                       38
</TABLE>

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                           UNITED WISCONSIN SERVICES, INC.
                                EQUITY INCENTIVE PLAN

                ARTICLE 1.  ESTABLISHMENT, PURPOSE, AND DURATION

     1.1  ESTABLISHMENT OF THE PLAN.  United Wisconsin Services, Inc. (until 
the Effective Date known as Newco/UWS, Inc.), a Wisconsin corporation 
(hereinafter referred to as the "Company"), hereby establishes an incentive 
compensation plan to be known as the "United Wisconsin Services, Inc. Equity 
Incentive Plan" (hereinafter referred to as the "Plan"), as set forth in this 
document.  The Plan permits the grant of Nonqualified Stock Options, 
Incentive Stock Options, SARs, Restricted Stock, Performance Units, and 
Performance Shares.

     This Plan is being created in connection with the distribution (the
"Distribution"), by the corporation formerly known as United Wisconsin Services,
Inc. of all of the shares in the Company in connection with the spin-off of the
managed care and specialty products business to the Company and the assumption
by the Company of the United Wisconsin Services, Inc. name.   In connection with
the Distribution, options ("Substituted Options") will be issued under this Plan
in substitution for options issued under the equity incentive plan of the
corporation formerly known as United Wisconsin Services, Inc. (the "Prior
Plan").

     Upon approval by the Board of Directors of the Company, subject to
ratification by an affirmative vote of a majority of Shares of the Company, the
Plan shall become effective as of the Distribution Date (the "Effective Date"),
and shall remain in effect as provided in Section 1.3 herein.

     1.2  PURPOSE OF THE PLAN.  The purpose of the Plan is to promote the 
success, and enhance the value, of the Company by linking the personal 
interests of Participants to those of Company shareholders, and by providing 
Participants with an incentive for outstanding performance.

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     The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
is dependent.

     1.3  DURATION OF THE PLAN.  Subject to approval by the Board of 
Directors of the Company and ratification by the shareholders of the Company, 
the Plan shall commence on the Effective Date, as described in Section 1.1 
herein, and shall remain in effect, subject to the right of the Board of 
Directors to terminate the Plan at any time pursuant to Article 14 herein, 
until all Shares subject to it shall have been purchased or acquired 
according to the Plan's provisions.  However, in no event may an Award be 
granted under the Plan more than ten years after the Effective Date.

                          ARTICLE 2.  DEFINITIONS

     Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:

          (a)  "Affiliate" - A company closely related to UWSI such 
               as Blue Cross & Blue Shield United of Wisconsin, or such 
               other company as the Board may designate.  For purposes of 
               options received in connection with the Distribution, American 
               Medical Security Group, Inc. (and its subsidiaries) will be 
               considered Affiliates.

          (b)  "Affiliated SAR" means a SAR that is granted in connection 
               with a related Option, and which will be deemed to 
               automatically be exercised simultaneous with the exercise of 
               the related Option.

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          (c)  "Award" means, individually or collectively, a grant 
               under this Plan of Nonqualified Stock Options, Incentive 
               Stock Options, SARs, Restricted Stock, Performance Units, or 
               Performance Shares.

          (d)  "Award Agreement" means an agreement entered into by 
               each Participant and the Company, setting forth the 
               terms and provisions applicable to Awards granted to 
               Participants under this Plan.

          (e)  "Beneficial Owner" shall have the meaning ascribed to 
               such term in Rule 13d-3 of the General Rules and 
               Regulations under the Exchange Act.

          (f)  "Board" or "Board of Directors" means the Board of Directors 
               of the Company.

          (g)  "Cause" means: (i) willful and gross misconduct 
               on the part of a Participant that is materially and 
               demonstrably detrimental to the Company; or (ii) the 
               commission by a Participant of one or more acts which 
               constitute an indictable crime under United States Federal, 
               state, or local law.  "Cause" under either (i) or (ii) shall 
               be determined in good faith by the Committee.

          (h)  "Change in Control" of the Company shall be deemed to 
               have occurred as of the first day that any one or 
               more of the following conditions shall have been satisfied:

               (i)  Any Person (other than those Persons in control of the
                    Company as of the Effective Date, or other than a trustee or
                    other fiduciary holding securities under an

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                    employee benefit plan of the Company, or a corporation owned
                    directly or indirectly by the stockholders of the Company in
                    substantially the same proportions as their ownership of
                    stock of the Company), becomes the Beneficial Owner,
                    directly or indirectly, of securities of the Company
                    representing twenty-five percent (25%) or more of the
                    combined voting power of the Company's then outstanding
                    securities; or

               (ii) During any period of two (2) consecutive years (not
                    including any period prior to the Effective Date),
                    individuals who at the beginning of such period constitute
                    the Board (and any new Director, whose election by the
                    Company's stockholders was approved by a vote of at least
                    two-thirds (2/3) of the Directors then still in office who
                    either were Directors at the beginning of the period or
                    whose election or nomination for election was so approved),
                    cease for any reason to constitute a majority thereof; or

              (iii) The stockholders of the Company approve: (A) a plan of
                    complete liquidation of the Company; or (B) an agreement for
                    the sale or disposition of all or substantially all the
                    Company's assets; or (C) a merger, consolidation, or
                    reorganization of the Company with or involving any other
                    corporation, other than a merger, consolidation, or
                    reorganization that would result in the voting securities of
                    the

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                    Company outstanding immediately prior thereto continuing
                    to represent (either by remaining outstanding or by being
                    converted into voting securities of the surviving entity),
                    at least fifty percent (50%) of the combined voting power of
                    the voting securities of the Company (or such surviving
                    entity) outstanding immediately after such merger,
                    consolidation, or reorganization.

                    However, in no event shall a "Change in Control" be deemed
                    to have occurred, with respect to a Participant, if the
                    Participant is part of a purchasing group which consummates
                    the Change-in-Control transaction.  A Participant shall be
                    deemed "part of a purchasing group" for purposes of the
                    preceding sentence if the Participant is an equity
                    participant in the purchasing company or group (except for:
                    (i) passive ownership of less than three percent (3%) of the
                    stock of the purchasing company; or (ii) ownership of equity
                    participation in the purchasing company or group which is
                    otherwise not significant, as determined prior to the Change
                    in Control by a majority of the nonemployee continuing
                    Directors).

          (i)  "Code" means the Internal Revenue Code of 1986, as amended 
               from time to time.

          (j)  "Committee" means the Management Review Committee, as 
               specified in Article 3, appointed by the Board 

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               to administer the Plan with respect to grants of Awards.

          (k)  "Company" means United Wisconsin Services, 
               Inc., a Wisconsin corporation, (until the Effective Date known 
               as Newco/UWS, Inc.) or any successor thereto as provided in 
               Article 17 herein.

          (l)  "Director" means any individual who is a 
               Non-Employee member of the Board of Directors of the Company.

          (m)  "Directors Plan" means the 1995 Directors Stock 
               Option Plan of United Wisconsin Services, Inc.

          (n)  "Disability" means a permanent and total 
               disability, within the meaning of Code Section 22(e)(3), as 
               determined by the Committee in good faith, upon receipt of 
               sufficient competent medical advice from one or more 
               individuals, selected by the Committee, who are qualified to 
               give professional medical advice.

          (o)  "Distribution Date" means the date the stock of 
               the Company is distributed by the corporation formerly known 
               as United Wisconsin Services, Inc.

          (p)  "Employee" means any full-time employee of the 
               Company or of the Company's Subsidiaries or Affiliates.  
               Directors who are not otherwise employed by the Company shall 
               not be considered Employees under this Plan.

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          (q)  "Exchange Act" means the Securities Exchange 
               Act of 1934, as amended from time to time, or any successor 
               Act thereto.

          (r)  "Fair Market Value" means the closing price for 
               Shares on the relevant date, or (if there were no sales on 
               such date) the average of closing prices on the nearest day 
               before and the nearest day after the relevant date, on a stock 
               exchange or over the counter, as determined by the Committee.

          (s)  "Freestanding SAR" means a SAR that is granted 
               independently of any Options.

          (t)  "Incentive Stock Option" or "ISO" means an 
               option to purchase Shares, granted under Article 6 herein, 
               which is designated as an Incentive Stock Option and is 
               intended to meet the requirements of Section 422 of the Code.

          (u)  "Insider" shall mean a Participant who is, on 
               the relevant date, an officer, Director or 10% shareholder of 
               the Company, subject to Section 16 of the Exchange Act.

          (v)  "Nonqualified Stock Option" or "NQSO" means an 
               option to purchase Shares, granted under Article 6 herein, 
               which is not intended to be an Incentive Stock Option.

          (w)  "Option" means an Incentive Stock Option or a 
               Nonqualified Stock Option.

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<PAGE>

          (x)  "Option Price" means the price at which a Share 
               may be purchased by a Participant pursuant to an Option, as 
               determined by the Committee.

          (y)  "Participant" means an Employee or a Director 
               who has outstanding an Award granted under the Plan.

          (z)  "Performance Unit" means an Award granted to an 
               Employee, as described in Article 9 herein.

          (aa) "Performance Share" means an Award granted to an Employee,
               as described in Article 9 herein.

          (bb) "Period of Restriction" means the period during 
               which the transfer of Shares of Restricted Stock is limited in 
               some way (based on the passage of time, the achievement of 
               performance goals, or upon the occurrence of other events as 
               determined by the Committee, at its discretion), and the 
               Shares are subject to a substantial risk of forfeiture, as 
               provided in Article 8 herein.

          (cc) "Person" shall have the meaning ascribed to 
               such term in Section 3(a)(9) of the Exchange Act and used in 
               Sections 13(d) and 14(d) thereof, including a "group" as 
               defined in Section 13(d).

          (dd) "Restricted Stock" means an Award granted to a 
               Participant pursuant to Article 8 herein.

          (ee) "Retirement" shall have the meaning ascribed to 
               it in the tax-qualified defined benefit retirement plan of the 
               Company.

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          (ff) "Shares" means the shares of common stock of 
               the Company.

          (gg) "Subsidiary" means any corporation in which the 
               Company owns directly, or indirectly through subsidiaries, at 
               least fifty percent (50%) of the total combined voting power 
               of all classes of stock, or any other entity (including, but 
               not limited to, partnerships and joint ventures) in which the 
               Company owns at least fifty percent (50%) of the combined 
               equity thereof.

          (hh) "Substituted Option" means an option issued 
               under this Plan in substitution for options issued under 
               another stock option plan, including but not limited to 
               options issued pursuant to the Prior Plan and the Directors 
               Plan.

          (ii) "Stock Appreciation Right" or "SAR" means an 
               Award, granted alone or in connection with a related Option, 
               designated as a SAR, pursuant to the terms of Article 7 herein.

          (jj) "Tandem SAR" means a SAR that is granted in 
               connection with a related Option, the exercise of which shall 
               require forfeiture of the right to purchase a Share under the 
               related Option (and when a Share is purchased under the 
               Option, a SAR shall similarly be cancelled).

          (kk) "Window Period" means the period beginning on 
               the third business day following the date of public release of 
               the Company's quarterly sales and earnings information, and 
               ending on the thirtieth day following such date.

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                           ARTICLE 3.  ADMINISTRATION

     3.1  THE COMMITTEE.  The Plan shall be administered by the Management 
Review Committee of the Board, or by any other Committee appointed by the 
Board consisting of not less than two (2) Directors who are not Employees.  
The members of the Committee shall be appointed from time to time by, and 
shall serve at the discretion of, the Board of Directors. 

     All members of the Committee shall be Non-Employee Directors.  
"Non-Employee Directors," as defined in rule 16b-3 promulgated by the 
Securities and Exchange Commission ("SEC") under the Exchange Act, means a 
director who (i) is not currently an officer or otherwise employed by the 
Company or any affiliate (ii) does not receive compensation for consulting 
service or in any other capacity from the Company in excess of $60,000 in any 
one year, (iii) does not possess an interest in and is not engaged in 
business relationships required to be reported under Items 404(a) or 404(b) 
of Regulation S-K promulgated under the Exchange Act and (iv) is an Outside 
Director as defined in Treas. Reg. 1.162-27.

     3.2  AUTHORITY OF THE COMMITTEE.  The Committee shall have full power 
except as limited by law or by the Articles of Incorporation or Bylaws of the 
Company, and subject to the provisions herein, to determine the size and 
types of Awards with respect to Employees; to determine the terms and 
conditions of such Employee Awards in a manner consistent with the Plan; to 
construe and interpret the Plan and any agreement or instrument entered into 
under the Plan; to establish, amend, or waive rules and regulations for the 
Plan's administration; and (subject to the provisions of Article 14 herein) 
to amend the terms and conditions of any outstanding Award to the extent such 
terms and conditions are within the discretion of the Committee as provided 
in the Plan.  Further, the Committee shall make all other

                                       39
<PAGE>

determinations which may be necessary or advisable for the administration of 
the Plan.  As permitted by law, the Committee may delegate its authority as 
identified hereunder.

     3.3  DECISIONS BINDING.  All determinations and decisions made by the 
Committee pursuant to the provisions of the Plan and all related orders or 
resolutions of the Board of Directors shall be final, conclusive, and binding 
on all persons, including the Company, its stockholders, Employees, 
Directors, Participants, and their estates and beneficiaries.

                     ARTICLE 4.  SHARES SUBJECT TO THE PLAN

     4.1  NUMBER OF SHARES.  Subject to adjustment as provided in Section 4.3 
herein, the total number of Shares available for grant under the Plan may not 
exceed 4,500,000.  These 4,500,000 Shares may be either authorized but 
unissued or reacquired Shares.

     The following rules will apply for purposes of the determination of the
number of Shares available for grant under the Plan:

          (a)  While an Award is outstanding, it shall be counted against the
               authorized pool of Shares, regardless of its vested status.

          (b)  The grant of an Option or Restricted Stock shall reduce the
               Shares available for grant under the Plan by the number of Shares
               subject to such Award.

          (c)  The grant of a Tandem SAR shall reduce the number of Shares
               available for grant by the number of Shares subject to the 
               related Option (i.e., there

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               is no double counting of Options and their related Tandem SARs).

          (d)  The grant of an Affiliated SAR shall reduce the number of Shares
               available for grant by the number of Shares subject to the SAR, 
               in addition to the number of Shares subject to the related 
               Option.

          (e)  The grant of a Freestanding SAR shall reduce the number of Shares
               available for grant by the number of Freestanding SARs granted.

          (f)  The Committee shall in each case determine the appropriate number
               of Shares to deduct from the authorized pool in connection with 
               the grant of Performance Units and/or Performance Shares.

          (g)  To the extent that an Award is settled in cash rather than in
               Shares, the authorized Share pool shall be credited with the 
               appropriate number of Shares represented by the cash settlement 
               of the Award, as determined at the sole discretion of the 
               Committee (subject to the limitation set forth in Section 4.2 
               herein).

     4.2  LAPSED AWARDS.  If any Award granted under this Plan is canceled, 
terminates, expires, or lapses for any reason (with the exception of the 
termination of a Tandem SAR upon exercise of the related option, or the 
termination of a related Option upon exercise of the corresponding Tandem 
SAR), any Shares subject to such Award again shall be available for the grant 
of an Award under the Plan.

     4.3  ADJUSTMENTS IN AUTHORIZED SHARES.  In the event of any merger, 
reorganization, consolidation, recapitalization,

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separation, liquidation, stock dividend, split-up, Share combination, or 
other change in the corporate structure of the Company affecting the Shares, 
such adjustment shall be made in the number and class of Shares which may be 
delivered under the Plan, and in the number and class of and/or price of 
Shares subject to outstanding Options, SARs, and Restricted Stock granted 
under the Plan, as may be determined to be appropriate and equitable by the 
Committee, in its sole discretion, to prevent dilution or enlargement of 
rights; and provided that the number of Shares subject to any Award shall 
always be a whole number.

                 ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

     5.1  ELIGIBILITY.  Persons eligible to participate in this Plan include 
all Employees and Directors.

     5.2  ACTUAL PARTICIPATION.  Subject to the provisions of the Plan, the 
Committee may, from time to time, select from all eligible Employees, those 
to whom Awards shall be granted and shall determine the nature and amount of 
each Award.  Directors shall receive Options as provided in Section 6.1.

                      ARTICLE 6.  STOCK OPTIONS

     6.1  GRANT OF OPTIONS.  Subject to the terms and provisions of the Plan, 
options may be granted to Employees at any time and from time to time as 
shall be determined by the Committee.  The Committee shall have discretion in 
determining the number of Shares subject to Options granted to each Employee 
except that no Employee may receive options (other than Substituted Options) 
with respect to more than 250,000 Shares in any year.  The Committee may 
grant ISOs, NQSOs, or a combination thereof to Employees. Directors may 
receive only NQSOs.  Substituted Options may be issued under the Plan.  The 
number of Substituted Options

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shall be the number of options immediately before the substitution, adjusted 
to prevent dilution or enlargement of the Participant's rights.  The grant 
date of such substituted options shall be the grant date under the plan 
through which the options were originally granted.  Substituted Options shall 
be issued to Directors and Employees who participated in the Prior Plan and 
in the Directors Plan in accordance with the terms of the Employee Benefits 
Agreement executed in connection with the Distribution, and such substituted 
Options shall be subject to the same grant date, exercise price (as adjusted 
pursuant to Section 6.3), vesting and exercise period such Options were 
subject to under the Prior Plan and the Directors Plan.

          To the extent Shares are available for grant under the Plan, each
Director who is first elected as a Director subsequent to the Effective Date (a
"Subsequent Director") shall be granted, as of the date on which such Subsequent
Director is qualified and first begins to serve as a Director, an Option to
purchase 6,000 shares, subject to adjustment pursuant to Section 4.3 or to
purchase such lesser number of Shares as remain available for grant under the
Plan.  In the event that the number of Shares available for grant under the Plan
is insufficient to make all grants hereby specified on the relevant date, then
all Directors who are entitled to a grant on such date shall share ratably in
the number of Shares then available for grant under the Plan.  The Option Price
of such Option shall equal the Fair Market Value of a Share on the date the
grant of this Option is effective.

          If sufficient Shares are not available under the Plan to fulfill the
grant of Options to any Subsequent Director first elected after the Effective
Date, and thereafter additional Shares become available, such Subsequent
Director receiving an Option for fewer than 6,000 Shares shall then receive an
Option to purchase an amount of Shares, determined by dividing the number of
Shares available pro-rata among each Subsequent

                                       43
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Director receiving an Option for fewer than 6,000 Shares, then available 
under the Plan, not to exceed 6,000 Shares, subject to adjustment as to any 
one Subsequent Director.  The date of grant shall be the date such additional 
Shares become available.  The Option Price of an Option shall equal the Fair 
Market Value of a Share on the date the Option is granted.

          If a Subsequent Director receives an Option to purchase fewer than
6,000 Shares, subject to adjustment pursuant to Section 4.3 hereof, and
additional Shares subsequently become available under the Plan, an Option to
purchase such Shares shall first be allocated as of the date of availability to
any Subsequent Director who has not previously been granted an Option.  Such
Options shall be granted to purchase a number of Shares no greater than the
number of Shares covered by Options granted to other Subsequent Directors first
elected subsequent to the Effective Date, but who have received Options to
purchase fewer than 6,000 Shares (subject to adjustment pursuant to Section
4.3).  Thereafter, Options for any remaining Shares shall be granted pro-rata
among all Subsequent Directors granted Options to purchase fewer than 6,000
Shares.  No Director first elected after the Effective Date shall receive an
Option to purchase more than 6,000 Shares (subject to adjustment under Section
4.3).
     
     The Option Price of the Shares purchasable under each Option granted to a
Director shall be equal to one hundred percent (100%) of the Fair Market Value
per Share on the date of grant of such Option.

     Subject to acceleration as provided below, Options granted to Directors 
shall vest annually at the rate of thirty-three and one third percent 
(33-1/3%) of the aggregate number of Shares granted annually beginning on the 
first anniversary of the date of grant and on each subsequent anniversary of 
the date of grant

                                       44
<PAGE>

thereafter.  If a Director's tenure ends during the applicable three-year 
period due to Death, Disability or Retirement or following a Change in 
Control, however, such Director's Options shall become immediately 
exercisable as to one hundred percent (100%) of the Shares covered thereby as 
of the Director's last day of service as a Director with the Company to the 
extent such Option may be exercised pursuant to Section 6.5 of this Plan.  
Retirement with respect to a Director shall mean the date of the Company's 
annual shareholders' meeting at which he or she would otherwise, but for said 
retirement, be a nominee for election to the Board, or the date on which the 
Director attains seventy (70) years of age.

     Once any portion of an Option issued to a Director becomes exercisable, it
shall remain exercisable for the shortest period of (1) twelve years from the
date of grant; or (2) two (2) years following the date on which the Director
ceases to serve in such capacity for any reason other than removal for Cause. 
If a Director is removed for Cause, all outstanding Options held by the Director
shall immediately be forfeited to the Company and no additional exercise period
shall be allowed, regardless of the vested status of the Options.

     6.2  OPTION AWARD AGREEMENT.  Each Option grant shall be evidenced by an 
Option Award Agreement that shall specify the Option Price, the duration of 
the Option, the number of Shares to which the Option pertains, and such other 
provisions as the Committee shall determine.  The Option Award Agreement also 
shall specify whether the Option is intended to be an ISO within the meaning 
of Section 422 of the Code, or a NQSO whose grant is intended not to fall 
under the Code provisions of Section 422.

     6.3  OPTION PRICE.  The Option Price for each grant of an option to an 
Employee shall be determined by the Committee; provided that the Option Price 
shall not be less than one hundred

                                       45
<PAGE>

percent (100%) of the Fair Market Value of a Share on the date the Option is 
granted.  The Option Price for a Substituted Option shall be the Option Price 
immediately before the substitution, adjusted to prevent dilution or 
enlargement of the Participant's rights.

     6.4  DURATION OF OPTIONS.  Each Option granted shall expire at such time 
as the Committee shall determine at the time of grant; provided, however, 
that no ISO shall be exercisable later than the tenth (10th) anniversary date 
of its grant, and no NQSO shall be exercisable later than the twelfth (12th) 
anniversary date of its grant.  Substituted Options shall expire on the 
earlier of the date provided in this Section 6.4 or the date such options 
would have expired under the plan and agreement pursuant to which they were 
originally granted.

     6.5  EXERCISE OF OPTIONS.  Options granted to Employees under the Plan 
shall be exercisable at such times and be subject to such restrictions and 
conditions as the Committee shall in each instance approve, which need not be 
the same for each grant or for each Employee. However, in no event may any 
Option granted under this Plan to an Employee or Director become exercisable 
prior to six (6) months following the date of its grant.

     6.6  PAYMENT.  Options shall be exercised by the delivery of a written 
notice of exercise to the Secretary of the Company, setting forth the number 
of Shares with respect to which the Option is to be exercised, accompanied by 
full payment for the Shares.

     The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to

                                       46
<PAGE>

the total Option Price (provided that the Shares which are tendered must have 
been held by the Participant for at least six (6) months prior to their 
tender to satisfy the Option Price), or (c) by a combination of (a) and (b).

     The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law.

     As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).

     6.7  RESTRICTIONS ON SHARE TRANSFERABILITY.  The Committee may impose 
such restrictions on any Shares acquired pursuant to the exercise of an 
Option under the Plan, as it may deem advisable, including, without 
limitation, restrictions under applicable Federal securities laws, under the 
requirements of any Stock exchange or market upon which such Shares are then 
listed and/or traded, and under any Blue Sky or state securities laws 
applicable to such Shares.

     6.8  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR RETIREMENT.

          (a)  TERMINATION BY DEATH.  In the event the employment of an Employee
               is terminated by reason of death, all outstanding Options granted
               to that Employee shall immediately vest one hundred percent 
               (100%), and shall remain exercisable at any time prior to their 
               expiration date, or for one (1) year after

                                       47
<PAGE>

               the date of death, whichever period is shorter, by such person
               or persons as shall have been named as the Employee's 
               beneficiary, or by such persons that have acquired the Employee's
               rights under the Option by will or by the laws of descent and 
               distribution.

          (b)  TERMINATION BY DISABILITY.  In the event the employment of an
               Employee is terminated by reason of Disability, all outstanding 
               Options granted to that Employee shall immediately vest one 
               hundred percent (100%) as of the date the Committee determines 
               the definition of Disability to have been satisfied, and shall 
               remain exercisable at any time prior to their expiration
               date, or for one (1) year after the date that the Committee 
               determines the definition of Disability to have been satisfied, 
               whichever period is shorter.

          (c)  TERMINATION BY RETIREMENT.  In the event the employment of an
               Employee is terminated by reason of Retirement, the Committee 
               shall retain discretion over the treatment of Options.

          (d)  EMPLOYMENT TERMINATION FOLLOWED BY DEATH.  In the event that an
               Employee's employment terminates by reason of Disability or 
               Retirement, and within the exercise period allowed by the 
               Committee following such termination the Employee dies, then 
               the remaining exercise period under outstanding Options
               shall equal the longer of: (i) one (1) year following death; or 
               (ii) the remaining portion of the exercise period which was 
               triggered by the employment termination.  Such Options shall be
               exercisable by such person or persons who shall

                                       48
<PAGE>

               have been named as the Employee's beneficiary, or by such persons
               who have acquired the Employee's rights under the Option by will 
               or by the laws of descent and distribution.

          (e)  EXERCISE LIMITATIONS ON ISOS.  In the case of ISOs, the tax
               treatment prescribed under Section 422 of the Internal Revenue 
               Code of 1986, as amended, may not be available if the Options are
               not exercised within the Section 422 prescribed time periods 
               after each of the various types of employment termination.

     6.9  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment of 
an Employee shall terminate for any reason other than the reasons set forth 
in Section 6.8 (and other than for Cause), all Options held by the Employee 
which are not vested as of the effective date of employment termination 
immediately shall be forfeited to the Company (and shall once again become 
available for grant under the Plan). However, the Committee, in its sole 
discretion, shall have the right to immediately vest all or any portion of 
such Options, subject to such terms as the Committee, in its sole discretion, 
deems appropriate.

     Options which are vested as of the effective date of employment 
termination may be exercised by the Employee within the period beginning on 
the effective date of employment termination, and ending six (6) months after 
such date or on such later date as is approved by the Committee.

     If the employment of an Employee shall be terminated by the Company for 
Cause, all outstanding Options held by the Participant immediately shall be 
forfeited to the Company and no additional exercise period shall be allowed, 
regardless of the vested status of the Options.

                                       49
<PAGE>

     For Employees employed by Affiliates, termination shall mean termination of
such Employee's employment with the Affiliate.

     6.10 TRANSFERABILITY OF OPTIONS.  No ISO granted under the Plan may be 
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, 
other than by will or by the laws of descent and distribution.  Further, all 
ISOs granted to a Participant under the Plan shall be exercisable during his 
or her lifetime only by such Participant.

     NQSOs granted hereunder may be exercised only during a Participant's 
lifetime by the Participant, the Participant's guardian or legal 
representative or by a permissible transferee.  NQSOs shall be transferable 
by Participants pursuant to the laws of descent and distribution upon a 
Participant's death, and during a Participant's lifetime, NQSOs shall be 
transferable by Participants to members of their immediate family, trusts for 
the benefit of members of their immediate family, and charitable institutions 
("permissible transferees") to the extent permitted under Section 16 of the 
Exchange Act and subject to federal and state securities laws.  The term 
"immediate family" shall mean any child, stepchild, grandchild, parent, 
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, 
son-in-law, daughter-in-law, sister-in-law, or brother-in-law and shall 
include adoptive relationships.

     NQSOs also shall be transferable by Participants other than to 
permissible transferees with the prior approval of the Committee which shall 
have the authority to approve such transfers of NQSOs on a case-by-case basis 
in its sole discretion.

     The Committee shall have the authority to establish rules and 
regulations specifically governing the transfer of NQSOs granted under this 
Plan as it deems necessary and advisable.

                                       50
<PAGE>

                    ARTICLE 7.  STOCK APPRECIATION RIGHTS

     7.1  GRANT OF SARS.  Subject to the terms and conditions of the Plan, an 
SAR may be granted to an Employee at any time and from time to time as shall 
be determined by the Committee.  The Committee may grant Affiliated SARs, 
Freestanding SARs, Tandem SARs, or any combination of these forms of SAR.

     The Committee shall have complete discretion in determining the number 
of SARs granted to each Employee (subject to Article 4 herein) and, 
consistent with the provisions of the Plan, in determining the terms and 
conditions pertaining to such SARs.  However, the grant price of a 
Freestanding SAR shall be at least equal to one hundred percent (100%) of the 
Fair Market Value of a Share on the date of grant of the SAR.  The grant 
price of Tandem or Affiliated SARs shall equal the Option Price of the 
related Option.  In no event shall any SAR granted hereunder become 
exercisable within the first six (6) months of its grant.

     7.2  EXERCISE OF TANDEM SARS.  Tandem SARs may be exercised for all or 
part of the Shares subject to the related Option upon the surrender of the 
right to exercise the equivalent portion of the related Option.  A Tandem SAR 
may be exercised only with respect to the Shares for which its related Option 
is then exercisable.

     Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be exercised only
when

                                       51
<PAGE>

the Fair Market Value of the Shares subject to the ISO exceeds the Option 
Price of the ISO.

     7.3  EXERCISE OF AFFILIATED SARS. Affiliated SARs shall be deemed to be 
exercised upon the exercise of the related Options.  The deemed exercise of 
Affiliated SARs shall not necessitate a reduction in the number of related 
Options.

     7.4  EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised 
upon whatever terms and conditions the Committee, in its sole discretion, 
imposes upon them.

     7.5  SAR AGREEMENT.  Each SAR grant shall be evidenced by an Award 
Agreement that shall specify the grant price, the term of the SAR, and such 
other provisions as the Committee shall determine.

     7.6  TERM OF SARS.  The term of a SAR granted under the Plan shall be 
determined by the Committee, in its sole discretion; provided, however, that 
such term shall not exceed twelve (12) years.

     7.7  PAYMENT OF SAR AMOUNT.  Upon exercise of a SAR, an Employee shall 
be entitled to receive payment from the Company in an amount determined by 
multiplying:

          (a)  The difference between the Fair Market Value of a Share on the
               date of exercise over the grant price; by

          (b)  The number of Shares with respect to which the SAR is exercised.

                                       52
<PAGE>

     At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.

     7.8  RULE 16b-3 REQUIREMENTS. Notwithstanding any other provision of the 
Plan, the Committee may impose such conditions on exercise of a SAR 
(including, without limitation, the right of the Committee to limit the time 
of exercise to specified periods) as may be required to satisfy the 
requirements of Section 16 (or any successor rule) of the Exchange Act.

     For example, if the Participant is an Insider, the ability of the 
Participant to exercise SARs for cash will be limited to Window Periods. 
However, if the Committee determines that the Participant is not an Insider, 
or if the securities laws change to permit greater freedom of exercise of 
SARs, then the Committee may permit exercise at any point in time, to the 
extent the SARs are otherwise exercisable under the Plan.

     7.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.

          (a)  TERMINATION BY DEATH.  In the event the employment of an Employee
               is terminated by reason of death, all outstanding SARs granted to
               that Employee shall immediately vest one hundred percent (100%), 
               and shall remain exercisable at any time prior to their 
               expiration date, or for one (1) year after the date of death, 
               whichever period is shorter, by such person or persons as shall 
               have been named as the Employee's beneficiary, or by such persons
               that have acquired the Employee's rights under the SAR by will or
               by the laws of descent and distribution.

                                       53
<PAGE>

          (b)  TERMINATION BY DISABILITY.  In the event the employment of a
               Participant is terminated by reason of Disability, all 
               outstanding SARs granted to that Employee shall immediately vest
               one hundred percent (100%) as of the date the Committee 
               determines the definition of Disability to have been satisfied, 
               and shall remain exercisable at any time prior to their 
               expiration date, or for one (1) year after the date that the 
               Committee determines the definition of Disability to have been 
               satisfied, whichever period is shorter.

          (c)  TERMINATION BY RETIREMENT.  In the event the employment of an
               Employee is terminated by reason of Retirement, the Committee 
               shall retain discretion over the treatment of SARs.

          (d)  EMPLOYMENT TERMINATION FOLLOWED BY DEATH.  In the event that an
               Employee's employment terminates by reason of Disability or 
               Retirement, and within the exercise period allowed by the 
               Committee following such termination the Employee dies, then the
               remaining exercise period under outstanding SARs shall equal the
               longer of: (i) one (1) year following death; or (ii) the
               remaining portion of the exercise period which was triggered by 
               the employment termination.  Such SARs shall be exercisable by 
               such person or persons who shall have been named as the 
               Employee's beneficiary, or by such persons who have
               acquired the Employee's rights under the SAR by will or by the 
               laws of descent and distribution.

                                       54
<PAGE>

     7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment of 
an Employee shall terminate for any reason other than the reasons set forth 
in Section 7.9 (and other than for Cause), all SARs held by the Employee 
which are not vested as of the effective date of employment termination 
immediately shall be forfeited to the Company (and shall once again become 
available for grant under the Plan). However, the Committee, in its sole 
discretion, shall have the right to immediately vest all or any portion of 
such SARs, subject to such terms as the Committee, in its sole discretion, 
deems appropriate.

     SARs which are vested as of the effective date of employment termination 
may be exercised by the Employee within the period beginning on the effective 
date of employment termination, and ending six (6) months after such date or 
on such later date as is approved by the Committee.

     If the employment of an Employee shall be terminated by the Company for 
Cause, all outstanding SARs held by the Employee immediately shall be 
forfeited to the Company and no additional exercise period shall be allowed, 
regardless of the vested status of the SARs.

     7.11 NONTRANSFERABILITY OF SARS.  No SAR granted under the Plan may be 
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, 
other than by will or by the laws of descent and distribution.  Further, all 
SARs granted to an Employee under the Plan shall be exercisable during his or 
her lifetime only by such Employee.

                           ARTICLE 8.  RESTRICTED STOCK

     8.1  GRANT OF RESTRICTED STOCK.  Subject to the terms and provisions of 
the Plan, the Committee, at any time and from time

                                       55
<PAGE>

to time, may grant Shares of Restricted Stock to eligible Employees in such 
amounts as the Committee shall determine.

     8.2  RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall be 
evidenced by a Restricted Stock Agreement that shall specify the Period of 
Restriction, or Periods, the number of Restricted Stock Shares granted, and 
such other provisions as the Committee shall determine.

     8.3  TRANSFERABILITY.  Except as provided in this Article 8, the Shares 
of Restricted Stock granted herein may not be sold, transferred, pledged, 
assigned, or otherwise alienated or hypothecated until the end of the 
applicable Period of Restriction established by the Committee and specified 
in the Restricted Stock Agreement, or upon earlier satisfaction of any other 
conditions, as specified by the Committee in its sole discretion and set 
forth in the Restricted Stock Agreement.  However, in no event may any 
Restricted Stock granted under the Plan become vested in an Employee prior to 
six (6) months following the date of its grant.  All rights with respect to 
the Restricted Stock granted to an Employee under the Plan shall be available 
during his or her lifetime only to such Participant.

     8.4  OTHER RESTRICTIONS.  The Committee shall impose such other 
restrictions on any Shares of Restricted Stock granted pursuant to the Plan 
as it may deem advisable including, without limitation, restrictions based 
upon the achievement of specific performance goals (Company-wide, divisional, 
and/or individual), and/or restrictions under applicable Federal or state 
securities laws; and may legend the certificates representing Restricted 
Stock to give appropriate notice of such restrictions.

     8.5  CERTIFICATE LEGEND.  In addition to any legends placed on 
certificates pursuant to Section 8.4 herein, each certificate

                                       56
<PAGE>

representing Shares of Restricted Stock granted pursuant to the Plan shall 
bear the following legend:

          "The sale or other transfer of the Shares of stock
          represented by this certificate, whether voluntary,
          involuntary, or by operation of law, is subject to certain
          restrictions on transfer as set forth in the United
          Wisconsin Services, Inc. Equity Incentive Plan, and in a
          Restricted Stock Agreement.  A copy of the Plan and such
          Restricted Stock Agreement may be obtained from the
          Secretary of United Wisconsin Services, Inc."

     8.6  REMOVAL OF RESTRICTIONS.  Except as otherwise provided in this 
Article 8, Shares of Restricted Stock covered by each Restricted Stock grant 
made under the Plan shall become freely transferable by the Employee after 
the last day of the Period of Restriction.  Once the Shares are released from 
the restrictions, the Employee shall be entitled to have the legend required 
by Section 8.5 removed from his or her Share certificate.

     8.7  VOTING RIGHTS.  During the Period of Restriction, Employees holding 
Shares of Restricted Stock granted hereunder may exercise full voting rights 
with respect to those Shares.

     8.8  DIVIDENDS AND OTHER DISTRIBUTIONS.  During the Period of 
Restriction, Employees holding Shares of Restricted Stock granted hereunder 
shall be entitled to receive all dividends and other distributions paid with 
respect to those Shares while they are so held.  If any such dividends or 
distributions are paid in Shares, the Shares shall be subject to the same 
restrictions on transferability and forfeitability as the Shares of 
Restricted Stock with respect to which they were paid.

                                       57
<PAGE>

     In the event that any dividend constitutes a "derivative security" or an 
"equity security" pursuant to Rule 16(a) under the Exchange Act, such 
dividend shall be subject to a vesting period equal to the longer of: (i) the 
remaining vesting period of the Shares of Restricted Stock with respect to 
which the dividend is paid; or (ii) six months.  The Committee shall 
establish procedures for the application of this provision.

     8.9  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.  
In the event the employment of an Employee is terminated by reason of death 
or Disability, all outstanding Shares of Restricted Stock shall immediately 
vest one hundred percent (100%) as of the date of employment termination (in 
the case of Disability, the date employment terminates shall be deemed to be 
the date that the Committee determines the definition of Disability to have 
been satisfied).  The Committee retains discretion over the treatment of 
Restricted Stock upon Retirement.  In the event of full vesting, the holder 
of the certificates of Restricted Stock shall be entitled to have any 
nontransferability legends required under Sections 8.4 and 8.5 of this Plan 
removed from the Share certificates.

     8.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  If the employment of 
an Employee shall terminate for any reason other than those specifically set 
forth in Section 8.9 herein, all Shares of Restricted Stock held by the 
Employee which are not vested as of the effective date of employment 
termination immediately shall be forfeited and returned to the Company (and, 
subject to Section 4.2 herein, shall once again become available for grant 
under the Plan).

     With the exception of a termination of employment for Cause, the Committee,
in its sole discretion, shall have the right to provide for lapsing of the
restrictions on Restricted Stock

                                       58
<PAGE>

following employment termination, upon such terms and provisions as it deems 
proper.

            ARTICLE 9.  PERFORMANCE UNITS AND PERFORMANCE SHARES

     9.1  GRANT OF PERFORMANCE UNITS/SHARES.  Subject to the terms of the 
Plan, Performance Units and Performance Shares may be granted to eligible 
Employees at any time and from time to time, as shall be determined by the 
Committee.  The Committee shall have complete discretion in determining the 
number of Performance Units and Performance Shares granted to each Employee.

     9.2  VALUE OF PERFORMANCE UNITS/SHARES.  Each Performance Unit shall 
have an initial value that is established by the Committee at the time of 
grant.  Each Performance Share shall have an initial value equal to the Fair 
Market Value of a Share on the date of grant.  The Committee shall set 
performance goals in its discretion which, depending on the extent to which 
they are met, will determine the number and/or value of Performance 
Units/Shares that will be paid out to the Employee.  The time period during 
which the performance goals must be met shall be called a "Performance 
Period."  Performance Periods shall, in all cases, exceed six (6) months in 
length.

     9.3  EARNING OF PERFORMANCE UNITS/SHARES.  After the applicable 
Performance Period has ended, the holder of Performance Units/Shares shall be 
entitled to receive payout on the number of Performance Units/Shares earned 
by the Employee over the Performance Period, to be determined as a function 
of the extent to which the corresponding performance goals have been achieved.

     9.4  FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/ SHARES.  Payment 
of earned Performance Units/Shares shall be made

                                       59
<PAGE>

in a single lump sum, within forty-five (45) calendar days following the 
close of the applicable Performance Period.  The Committee, in its sole 
discretion, may pay earned Performance Units/Shares in the form of cash or in 
Shares (or in a combination thereof), which have an aggregate Fair Market 
Value equal to the value of the earned Performance Units/Shares at the close 
of the applicable Performance Period.

     Prior to the beginning of each Performance Period, Participants may elect
to defer the receipt of Performance Unit/Share payout upon such terms as the
Committee deems appropriate.

     9.5  TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT, OR 
INVOLUNTARY TERMINATION (WITHOUT CAUSE).  In the event the employment of an 
Employee is terminated by reason of death or Disability or involuntary 
termination without Cause during a Performance Period, the Employee shall 
receive a prorated payout of the Performance Units/Shares. The Committee 
retains discretion over the treatment of Performance Units/Shares upon 
Retirement.  Any prorated payout shall be determined by the Committee, in its 
sole discretion, and shall be based upon the length of time that the Employee 
held the Performance Units/Shares during the Performance Period, and shall 
further be adjusted based on the achievement of the preestablished 
performance goals.

     Timing of payment of earned Performance Units/Shares shall be determined by
the Committee at its sole discretion.

     9.6  TERMINATION OF EMPLOYMENT FOR OTHER REASONS.  In the event that an 
Employee's employment terminates for any reason other than those reasons set 
forth in Section 9.5 herein, all Performance Units/Shares shall be forfeited 
by the Employee to

                                       60
<PAGE>

the Company, and shall once again be available for grant under the Plan.

     9.7  NONTRANSFERABILITY.  Performance Units/Shares may not be sold, 
transferred, pledged, assigned, or otherwise alienated or hypothecated, other 
than by will or by the laws of descent and distribution. Further, an 
Employee's rights under the Plan shall be exercisable during the Employee's 
lifetime only by the Employee or the Employee's legal representative.

                  ARTICLE 10.  BENEFICIARY DESIGNATION

     Each Participant under the Plan may, from time to time, name any 
beneficiary or beneficiaries (who may be named contingently or successively) 
to whom any benefit under the Plan is to be paid in case of his or her death 
before he or she receives any or all of such benefit.  Each such designation 
shall revoke all prior designations by the same Participant, shall be in a 
form prescribed by the Company, and will be effective only when any necessary 
spousal consent is obtained and filed by the Participant in writing with the 
Secretary of the Company during the Participant's lifetime.  In the absence 
of any such designation, benefits remaining unpaid at the Participant's death 
shall be paid to the Participant's estate.

                         ARTICLE 11.  DEFERRALS

     The Committee may permit a Participant to defer such Participant's 
receipt of the payment of cash or the delivery of Shares that would otherwise 
be due to such Participant by virtue of the exercise of an Option or SAR, the 
lapse or waiver of restrictions with respect to Restricted Stock, or the 
satisfaction of any requirements or goals with respect to Performance 
Units/Shares.  If any such deferral election is required or

                                       61
<PAGE>

permitted, the Committee shall, in its sole discretion, establish rules and 
procedures for such payment deferrals.

                       ARTICLE 12.  RIGHTS OF EMPLOYEES

     12.1 EMPLOYMENT.  Nothing in the Plan shall interfere with
or limit in any way the right of the Company to terminate any Employee's
employment at any time, nor confer upon any Employee any right to continue in
the employ of the Company.

     For purposes of the Plan, transfer of employment of a Participant between
the Company and any one of its Subsidiaries (or between Subsidiaries) or Blue
Cross & Blue Shield United of Wisconsin shall not be deemed a termination of
employment.

     12.2 PARTICIPATION.  No Employee shall have the right to be selected to 
receive an Award under this Plan, or, having been so selected, to be selected 
to receive a future Award.

                        ARTICLE 13.  CHANGE IN CONTROL

     Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Section 18 herein:

          (a)  Any and all Options and SARs granted hereunder shall become
               immediately exercisable;

          (b)  Any restriction periods and restrictions imposed on Restricted
               Shares shall lapse, and within ten (10) business days after the
               occurrence of a Change in Control, the stock certificates 
               representing Shares of Restricted Stock, without any restrictions
               or legend thereon, shall be delivered to the applicable 
               Participants;

                                       62
<PAGE>

          (c)  The target value attainable under all Performance Units and
               Performance Shares shall be deemed to have been fully earned
               for the entire Performance Period as of the effective date of
               the Change in Control, and shall be paid out in cash to 
               Participants within thirty (30) days following the effective 
               date of the Change in Control; provided, however, that there 
               shall not be an accelerated payout with respect to Performance
               Units or Performance Shares which were granted less than six 
               (6) months prior to the effective date of the Change in Control;

          (d)  Subject to Article 14 herein, the Committee shall have the
               authority to make any modifications to the Awards as determined 
               by the Committee to be appropriate before the effective date of 
               the Change in Control.

                    ARTICLE 14.  AMENDMENT, MODIFICATION, AND TERMINATION

     14.1 AMENDMENT, MODIFICATION, AND TERMINATION.  With the approval of the 
Board, at any time and from time to time, the Committee may terminate, amend, 
or modify the Plan.

     14.2 AWARDS PREVIOUSLY GRANTED.  No termination, amendment, or 
modification of the Plan shall adversely affect in any material way any Award 
previously granted under the Plan, without the written consent of the 
Participant holding such Award.

                             ARTICLE 15.  WITHHOLDING

     15.1 TAX WITHHOLDING.  The Company shall have the power and the right to 
deduct or withhold, or require a Participant to remit to the Company, an 
amount sufficient to satisfy Federal, 

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<PAGE>

state, and local taxes (including the Participant's FICA obligation) required 
by law to be withheld with respect to any taxable event arising or as a 
result of this Plan.

     15.2 SHARE WITHHOLDING.  With respect to withholding required upon the 
exercise of Options or SARs, upon the lapse of restrictions on Restricted 
Stock, or upon any other taxable event hereunder, Participants may elect, 
subject to the approval of the Committee, to satisfy the withholding 
requirement, in whole or in part, by having the Company withhold Shares 
having a Fair Market Value on the date the tax is to be determined equal to 
the minimum statutory total tax which could be imposed on the transaction.  
All elections shall be irrevocable, made in writing, signed by the 
Participant, and elections by Insiders shall additionally comply with the 
applicable requirement set forth in (a) or (b) of this Section 15.2.

          (a)  AWARDS HAVING EXERCISE TIMING WITHIN INSIDERS' DISCRETION.  The
               Insider must either:

               (i)  Deliver written notice of the stock withholding election to
                    the Committee at least six (6) months prior to the date
                    specified by the Insider on which the exercise of the Award
                    is to occur; or

               (ii) Make the stock withholding election in connection with an
                    exercise of an Award which occurs during a Window Period.

          (b)  AWARDS HAVING A FIXED EXERCISE/PAYOUT SCHEDULE WHICH IS OUTSIDE
               INSIDERS' CONTROL.  The Insider must either:

                                       64
<PAGE>

               (i)  Deliver written notice of the stock withholding election to
                    the Committee at least six (6) months prior to the date on
                    which the taxable event (e.g., exercise or payout) relating
                    to the Award is scheduled to occur; or

               (ii) Make the stock withholding election during a Window Period
                    which occurs prior to the scheduled taxable event relating
                    to the Award (for this purpose, an election may be made
                    prior to such a Window Period, provided that it becomes
                    effective during a Window Period occurring prior to the
                    applicable taxable event).

                              ARTICLE 16.  INDEMNIFICATION

     Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf.  The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's

                                       65
<PAGE>

Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or 
any power that the Company may have to indemnify them or hold them harmless.

                             ARTICLE 17.  SUCCESSORS

     All obligations,of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

                            ARTICLE 18.  LEGAL CONSTRUCTION

     18.1 GENDER AND NUMBER.  Except where otherwise indicated by the 
context, any masculine term used herein also shall include the feminine; the 
plural shall include the singular and the singular shall include the plural.

     18.2 SEVERABILITY.  In the event any provision of the Plan shall be held 
illegal or invalid for any reason, the illegality or invalidity shall not 
affect the remaining parts of the Plan, and the Plan shall be construed and 
enforced as if the illegal or invalid provision had not been included.

     18.3 REQUIREMENTS OF LAW.  The granting of Awards and the issuance of 
Shares under the Plan shall be subject to all applicable laws, rules, and 
regulations, and to such approvals by any governmental agencies or national 
securities exchanges as may be required.

     Notwithstanding any other provision set forth in the Plan, if required by
the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant

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to the Plan to any Insider may not be sold or transferred for at least six 
(6) months after the date of grant of such Award. The terms "equity security" 
and "derivative security" shall have the meanings ascribed to them in the 
then-current Rule 16(a) under the Exchange Act.

     18.4 SECURITIES LAW COMPLIANCE.  With respect to Insiders, transactions 
under this Plan are intended to comply with all applicable conditions or Rule 
16b-3 or its successors under the 1934 Act.  To the extent any provision of 
the plan or action by the Committee fails to so comply, it shall be deemed 
null and void, to the extent permitted by law and deemed advisable by the 
Committee.

     18.5 GOVERNING LAW.  To the extent not preempted by Federal law, the 
Plan, and all agreements hereunder, shall be construed in accordance with and 
governed by the laws of the State of Wisconsin.

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