<PAGE>   1


                                                                  EXHIBIT 10.3

                  FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
              UNDER THE COMPDENT CORPORATION 1997 STOCK OPTION PLAN

NAME OF OPTIONEE:

NO. OF OPTION SHARES:

GRANT DATE:

OPTION EXERCISE PRICE:

EXPIRATION DATE:

         Pursuant to the CompDent Corporation 1997 Stock Option Plan (the
"Plan"), CompDent Corporation, a Delaware corporation (the "Company"), hereby
grants to the person named above (the "Optionee"), who is an officer or
full-time employee of the Company or any of its Subsidiaries, an option (the
"Stock Option") to purchase on or prior to the expiration date specified above
(subject to the further provisions hereof, the "Expiration Date") all or any
part of the number of shares of Common Stock, par value $0.01 per share ("Common
Stock"), of the Company indicated above (the "Option Shares"), at the per share
option exercise price specified above, subject to the terms and conditions set
forth herein and in the Plan. All capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Plan.

         1.       VESTING AND EXERCISABILITY.

                  This Stock Option shall be fully vested as of the date hereof
and may be exercised in whole or in part at any time prior to the Expiration
Date, subject to the terms of this Section and Section 6. In the event that the
Optionee's Service Relationship (as hereinafter defined) with the Company and
its Subsidiaries terminates as a result of the Optionee's resignation,
retirement, or termination by the Company, upon the Optionee's death or
disability, or for any other reason, regardless of the circumstances thereof,
this Stock Option may thereafter be exercised by the Optionee until the earlier
of (i) twelve months from the effective date of such termination or (ii) the
Expiration Date, subject to extension in the discretion of the Committee,
whereupon it shall terminate to the extent not exercised. For purposes hereof, a
"Service Relationship" shall mean any relationship as an employee, part-time
employee or consultant of the Company or any Subsidiary of the Company such
that, for example, a Service Relationship shall be deemed to continue without
interruption in the event the Optionee's status changes from full-time employee
to part-time employee or consultant.

         2.       EXERCISE OF STOCK OPTION.

                  (a) The Optionee may exercise only this Stock Option in the
following manner: Prior to the Expiration Date (subject to Sections 1 and 6),
the Optionee may deliver a Stock Option Exercise Notice (an "Exercise Notice")
in the form of Appendix A hereto indicating his or her election to purchase some
or all of the Option Shares. Such notice shall specify the number of shares to
be purchased.

         Payment of the purchase price for the Option Shares may be made by one
or more (if applicable) of the following methods: (a) in cash, by certified or
bank check or other instrument acceptable to the Committee; (b) in the form of
shares of Common Stock that are  not then subject to restrictions under any
Company plan and that have been held by the Optionee for at least six months;
(c) by the Optionee delivering to the Company a properly executed Exercise
Notice together with irrevocable instructions to a broker to promptly deliver to
the Company cash or a check payable and acceptable to the Company to pay the
option purchase price, provided that in the event the Optionee chooses to pay
the option purchase price as so provided, the Optionee and the broker shall
comply with such procedures and enter into such agreements of indemnity and
other agreements as the Committee shall prescribe as a condition of such payment
procedure; or (d) a combination of (a), (b) and (c) above. Payment instruments
will be received subject to collection.

                  (b) Certificates for the Option Shares so purchased will be
issued and delivered to the Optionee upon compliance to the satisfaction of the
Committee with all requirements under applicable laws or regulations in
connection with such issuance. Until the Optionee shall have complied with the
requirements hereof and of the Plan, the Company shall be under no obligation to
issue the Option Shares subject to this Stock Option, and the determination of
the Committee as to such compliance shall be final and binding on the Optionee.
The Optionee shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of stock subject to this Stock
Option unless and until this Stock Option shall have been exercised pursuant to
the terms hereof, the Company shall have issued and delivered the Option Shares
to the Optionee, and the Optionee's name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the Optionee shall
have full dividend and other ownership rights with respect to such Option
Shares, subject to the terms of this Agreement.



                                      33
<PAGE>   2

            (c) Notwithstanding any other provision hereof or of the Plan,
no portion of this Stock Option shall be exercisable after the Expiration Date
hereof or such earlier expiration date as is specified in Section 1 or 6 hereof.

         3. INCORPORATION OF PLAN. Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan.

         4. TRANSFERABILITY. This Stock Option or any portion thereof may be
transferred, without consideration for such transfer, to members of the
Optionee's immediate family, to trusts for the benefit of such family members,
to partnerships in which such family members are the only partners, or to
charitable organizations, provided that the transferee agrees in writing with
the Company to be bound by all of the terms and conditions of this Agreement
including without limitation termination of the Stock Option on the date which
is twelve months following termination of the Optionee's Service Relationship as
provided in Section 1. Further this Stock Option shall be transferable by the
laws of descent and distribution. This Agreement is personal to the Optionee and
is not otherwise transferable by the Optionee in any manner other than by will
or by the laws of descent and distribution and may be exercised during the
Optionee's lifetime only by the Optionee. The Optionee may elect to designate a
beneficiary by providing written notice of the name of such beneficiary to the
Company, and may revoke or change such designation at any time by filing written
notice of revocation or change with the Company; such beneficiary may exercise
the Optionee's Stock Option in the event of the Optionee's death to the extent
provided herein. If the Optionee does not designate a beneficiary, or if the
designated beneficiary predeceases the Optionee, the Optionee's personal
representative, heirs or legatees to whom ownership has passed may exercise this
Stock Option to the extent provided herein in the event of the Optionee's death.

         5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to Section 6
hereof, if the shares of Common Stock as a whole are increased, decreased,
changed or converted into or exchanged for a different number or kind of shares
or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, an appropriate and proportionate adjustment shall be made in the number
and kind of shares and in the per share exercise price of shares subject to any
unexercised portion of this Stock Option. Subject to Section 6 hereof, in the
event of any such adjustment in this Stock Option, the Optionee thereafter shall
have the right to purchase the number of shares under this Stock Option at the
per share price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to this Stock Option immediately prior to such
adjustment. Adjustments under this Section 5 shall be determined by the Option
Committee of the Company and such determination shall be final, binding and
conclusive.

         6. EFFECT OF CERTAIN TRANSACTIONS. In the case of (a) the dissolution
or liquidation of the Company, (b) a merger, reorganization or consolidation in
which the Company is acquired by another person or entity (other than a holding
company formed by the Company), (c) the sale of all or substantially all of the
assets of the Company to another person or entity, or (d) the sale of all of the
stock of the Company to an unrelated person or entity, this Stock Option shall
terminate on the effective date of such transaction or event, unless provision
is made in such transaction in the sole discretion of the parties thereto for
the assumption of this Stock Option or the substitution for this Stock Option of
a new stock option of the successor person or entity or a parent or subsidiary
thereof, with such adjustment as to the number and kind of shares and the per
share exercise price as such parties


                                      34
<PAGE>   3

shall agree to. In the event of any transaction which will result in such
termination, the Company shall give to the Optionee written notice thereof at
least thirty (30) days prior to the closing or anticipated consummation date, or
the record date for such transaction, if earlier. Until the earlier to occur of
such effective date or record date, the Optionee may exercise all or any portion
of this Stock Option, but after such effective date or record date, as the case
may be, the Optionee may not exercise this Stock Option unless it is assumed or
substituted by the successor as provided above.

         7.       WITHHOLDING TAXES.

                  (a) The Optionee shall, not later than the date as of which
the exercise of this Stock Option becomes a taxable event for federal income tax
purposes, pay to the Company or make arrangements satisfactory to the Committee
for payment of any federal, state, and local taxes required by law to be
withheld on account of such taxable event. The Optionee may elect to have such
tax withholding obligation satisfied, in whole or in part, by authorizing the
Company to withhold from shares of Common Stock to be issued or transferring to
the Company, a number of shares of Common Stock with an aggregate Fair Market
Value that would satisfy the withholding amount due. For purposes of this
Section 7 "Fair Market Value" on any given date means the last reported sale
price at which Common Stock is traded on such date or, if no Common Stock is
traded on such date, the next preceding date on which Common Stock was traded,
as reflected on the principal stock exchange or, if applicable, any other
national stock exchange on which the Common Stock is traded or admitted to
trading. The Optionee acknowledges and agrees that the Company or any subsidiary
of the Company has the right to deduct from payments of any kind otherwise due
to the Optionee, or from the Option Shares to be issued in respect of an
exercise of this Stock Option, any federal, state or local taxes of any 
kind required by law to be withheld with respect to the issuance of Option 
Shares to the Optionee.

         8.       RESTRICTIVE AGREEMENTS.

                  In consideration of the relationship established by the
employment of Optionee by the Company and the benefits being provided pursuant
said employment including, but not by way of limitation, the grant of the Stock
Option to the Optionee pursuant to this Agreement, the Optionee hereby agrees
with that:

                  (a)  Covenant Not to Solicit/Hire.

                           1.  For a period of twenty four (24) consecutive
calendar months following the Termination of Relationship, Optionee shall not,
for himself/herself or on behalf of any other person, persons, firm,
partnership, corporation, or company call upon any Customer(s), and/or Agents of
the Company for the purpose of soliciting, selling, renting, or other business
promotion to any of said Customer(s) and/or Agents, products and/or services
similar to products and/or services sold and/or delivered by the Company; nor
will he/she in any way, directly or indirectly, for himself/herself or on behalf
of, or in conjunction with any other person, persons, firm, partnership,
corporation or company divert, or take away any Customer(s) and/or Agents of the
Company during the twenty four (24) month term following Termination of
Relationship; nor will he/she, directly or indirectly, for himself/herself or on
behalf of, or in conjunction with any other person, persons, firm, partnership,
corporation, or company, induce or attempt to induce any Customer, Agent,
Provider, employee, and/or representative of the Company to sever or otherwise
alter their relationship with the Company for twenty four (24) consecutive
calendar months following Termination of Relationship.


                                      35
<PAGE>   4

                           (2)  For a period of twenty four (24) consecutive
calendar months following the Termination of Relationship, Executive shall not,
for himself/herself or on behalf of any other person, persons, firm,
partnership, corporation, or company, whether or not Executive has any part or
involvement with the foregoing, hire or retain the services of any Employee of
the Company for any purpose.

                  (b)  Non-Disclosure of Trade Secrets and Other Proprietary
 Information.

                           (1)  Optionee acknowledges and understands that,
during his/her association with the Company, he/she may have access to and
become familiar with the various trade secrets, technological expertise and
know-how which are owned by and are the property of the Company, including but
not limited to the Confidential Information (as defined herein).

                           (2)  In perpetuity hereafter, Optionee expressly
agrees that until such time as said Confidential Information lawfully becomes
part of the public domain (including generally known information with the
industry), other than as a result of Optionee's acts or omissions to act, not to
disclose any of the aforesaid trade secrets, technological expertise, know-how
or Confidential Information, directly or indirectly, nor to use same in any way,
except in connection with his/her employment duties hereunder or as expressly
authorized by the Company in writing.

                           (3)  Optionee shall deliver to the Company at the 
Termination of the Relationship, or at any other time the Company may request,
all memoranda, notes, plans, records, reports, computer tapes and software and
other documents and data (and all copies thereof) relating to the Confidential
Information, work product or the business of the Company which he/she may then
possess or have under his/her control.

                  (c) No Adverse Action. Executive further agrees not to
knowingly participate in, directly or indirectly, the dissemination, verbal or
otherwise, advertisement or publication of any statement which unfavorably
comments on, unfavorably compares the services or products of the Company to
that of another, or generally holds out in an unfavorable manner the personnel
or management of the Company or the services or products designed, manufactured,
handled, managed or provided by the Company, either along or in cooperation with
others, during the Term of Employment and for a period of twenty four (24)
consecutive calendar months following the Termination of Relationship.

                  (d) The parties acknowledge that the time, scope and other
provisions of this Section 8 are reasonable under the circumstances. In the
event that any covenant contained in this Section 8 shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or by reason of its being too extensive in any
other respect, it shall be interpreted to extend only over the maximum period of
time for which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action. The existence of any claim or cause of action which the Optionee
may have against the Company shall not constitute a defense or bar to the
enforcement of any of the provisions of this Agreement and shall be pursued
through separate court action by the Optionee.

                  (e) Definitions.  For purposes of this paragraph 8 the
following terms shall have the meanings as indicated.

                           (1)  "Affiliates" shall mean all persons or entities
who, at any time during the period of twenty four (24) months beginning on the
date of the Termination of Relationship, are (i) entities or persons
controlling, controlled by or under common control 


                                      36
<PAGE>   5


with the party in question, directly or indirectly, (ii) executive officers or
directors of that party, (iii) 50% beneficial owners of that party's stock, or
(iv) entities or persons for which that party manages or oversees business
operations pursuant to a contract, Agreement or arrangement of any nature.

                           (2)  "Agent" shall mean a person or entity authorized
to act on behalf of the Company or its Affiliates in matters concerning the
business of the Company and its Affiliates, including, but not limited to,
individuals or entities which have contracted with the Company or its Affiliates
as an "Agent", "General Agent", "Regional General Agent", or "Master General
Agreement" as those terms are defined by the custom and usage within the
industry.

                           (3)  "Company" shall mean the American Prepaid
Professional Services, Inc., its subsidiaries, whether wholly or partially
owned, and its affiliates, and CompDent Corporation, parent company of American
Prepaid.

                           (4)  "Confidential Information" shall mean, to the
extent not in the public domain or known generally within the industry; names,
addresses, telephone numbers, contact persons and other identifying information
relating to the Company's operation, Providers, Agents, employees and/or
Customers; information with respect to the needs and requirements of various
Customers of the Company for services, including the dates on which any
contracts held by the Company with such Customers will terminate or be subject
to renewal; all business records and personnel data relating to the Company's
employees, independent contractors, advisors, and consultants, including
compensation arrangements of such persons or entities with the Company.

                           (5)  "Customer" shall mean a natural person or
business entity with which the Company has solicited or established an
advantageous business relationship, either through oral or written contract or
other recognized commitment, to obtain or receive the products or services
(including, but not limited to, the delivery of prepaid dental plans) of the
Company.

                           (6)  "Provider" shall mean any dental facility, 
dental/medical facility, dentist, professional association, partnership,
corporation or other entity or professional with which the Company has
established a contractual or other business relationship for the rendering of
service.

                           (7)  "Termination of Relationship" shall mean the
cessation of the provision of services to the Company by Optionee, for any
reason, with or without cause, voluntary or involuntary, and whether in the
capacity as employee, independent contractor, advisor, consultant or other such
similar paid position.

         Optionee recognizes that the foregoing provisions in this Section 8 are
reasonable and necessary for the protection of the Company, and that the Company
will be irrevocably harmed if same are not specifically enforced, and that the
remedy at law alone would be an inadequate remedy for such breach. Accordingly,
the parties agree that the foregoing restrictive covenants may be enforced by
the Company by means of a preliminary or permanent injunction, without the
necessity of proving actual damages and without prejudice to such damage rights
as may exist. Therefore, if the Company should institute an action or proceeding
to specifically enforce the provisions hereof, Optionee hereby waives the claim
or defense therein that the Company has an adequate remedy at law, and shall not
urge in such action or proceeding the claim or defense that such remedy at law
exists. If the Company is  required to post a bond in connection with obtaining
any temporary or permanent injunctive relief, the parties hereto agree that such
bond shall be limited in amount to $10,000 and that such amount is reasonable
and adequate for such bond.

                                    37
<PAGE>   6


         9. CONSENT TO JURISDICTION. The Optionee hereby irrevocably submits to
the non-exclusive jurisdiction to enforce the covenants contained in Section 8
of this Agreement of the courts of any state within the geographic scope of such
covenants. In the event that the courts of one or more of such states shall hold
such covenants unenforceable (in whole or in part) by reason of the breadth of
such scope or otherwise, it is the intention of the parties hereto that such
determination shall not bar or in any way affect the right of the Company to the
relief provided for herein in the courts of any other states within the
geographic scope of such covenants, as to breaches of such covenants in such
other respective states, the above covenants as they relate to each state being,
for this purpose, severable into diverse and independent covenants.

         10. MISCELLANEOUS PROVISIONS.

             (a) Equitable Relief. The parties hereto agree and declare that 
legal remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance and injunctive
relief, may be used to enforce the provisions of this Agreement.

             (b) Change and Modifications. This Agreement may not be orally
changed, modified or terminated, nor shall any oral waiver of any of its terms
be effective. This Agreement may be changed, modified or terminated only by an
agreement in writing signed by the Company and the Optionee.



             (c) Governing Law.  This Agreement shall be governed by and 
construed in accordance with the laws of the State of Delaware.

             (d) Headings. The headings are intended only for 
convenience in finding the subject matter and do not constitute part of the
text of this Agreement and shall not be considered in the interpretation of
this Agreement.

             (e) Saving Clause.  If any provision(s) of this Agreement
shall be determined to be illegal or unenforceable, such determination shall in
no manner affect the legality or enforceability of any other provision hereof.

             (f) Notices. All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by telex or facsimile transmission or when received if mailed by
first class registered or certified mail, postage prepaid. Notices to the
Company or the Optionee shall be addressed as set forth underneath their
signatures below, or to such other address or addresses as may have been
furnished by such party in writing to the other.

             (g) Benefit and Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
respective successors, permitted assigns, and legal representatives. The Company
has the right to assign this Agreement, and such assignee shall become entitled
to all the rights of the Company hereunder to the extent of such assignment.

             (h) Counterparts. For the convenience of the parties and to 
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.

                          COMPDENT CORPORATION


                          By:
                             ----------------------------------------------
                                   David R. Klock

                                   Chairman of the Board of Directors and
                          Title:   Chief Executive Officer
                                -------------------------------------------



                                    38
<PAGE>   7


         The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.


Dated as of _______________, 19___                   OPTIONEE:

                                                     --------------------------



                                                     Optionee's Address:

                                                     --------------------------
                                                     --------------------------
                                                     --------------------------



                                                     Designated Beneficiary:


                                                     --------------------------



                                                     Beneficiary's Address:

                                                     --------------------------
                                                     --------------------------




                                    39
<PAGE>   8


                                   APPENDIX A

                          STOCK OPTION EXERCISE NOTICE



CompDent Corporation
Attention:  Chief Financial Officer

----------------
----------------

Dear Sirs:

              Pursuant to the terms of my stock option agreement dated
____________ (the "Agreement") under the CompDent Corporation 1997 Stock Option
Plan, I, [INSERT NAME] ___________________, hereby [CIRCLE ONE] partially/fully
exercise such option by including herein payment in the amount of $_______
representing the purchase price for [FILL IN NUMBER OF OPTION SHARES] __________
option shares. I have chosen the following form(s) of payment:

    [ ]      1.  Cash
    [ ]      2.  [CERTIFIED OR BANK] Check payable to CompDent Corporation
    [ ]      3.  Other (as described in the Agreement (please describe) _______.


                                                     Sincerely yours,




                                                     Please Print Name:



                                    40