<PAGE>   1
                                                                 EXHIBIT (10)-17












                                 MEDPARTNERS

                  1997 LONG TERM INCENTIVE COMPENSATION PLAN





<PAGE>   2


                                   CONTENTS





<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                    <C>
Article  1.      Establishment, Objectives and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         1.1     Establishment of the Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         1.2     Objectives of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         1.3     Duration of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

Article  2.      Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         2.1     "Affiliate"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         2.2     "Award"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         2.3     "Award Agreement"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         2.4     "Beneficial Owner" or "Beneficial Ownership" . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         2.5     "Board" or "Board of Directors"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         2.6     "Cause"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         2.7     "Change in Control"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         2.8     "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
         2.9     "Committee"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.10    "Company"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.11    "Director" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.12    "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.13    "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.14    "Eligible Person"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.15    "Employee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.16    "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.17    "Fair Market Value"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.18    "Immediate Family Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.19    "Incentive Stock Option" or "ISO"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         2.20    "Insider"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.21    "Non-employee Director". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.22    "Nonqualified Stock Option" or "NQSO"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.23    "Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.24    "Option Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.25    "Participant"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.26    "Period of Restriction"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.27    "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.28    "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.29    "Restricted Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.30    "Retirement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         2.31    "Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         2.32    "Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10



</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>

<S>                                                                                                                    <C>
Article  3.      Administration   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         3.1     The Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         3.2     Authority of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         3.3     Decisions Binding  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
         3.4     Grants to Non-Insiders by Chief Executive Officer  . . . . . . . . . . . . . . . . . . . . . . . . .  10
         3.5     Costs of Plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

Article  4.      Shares Subject to the Plan and Maximum Awards  . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         4.1     Number of Shares Available for Grants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         4.2     Lapsed Awards  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         4.3     Adjustments in Authorized Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

Article  5.      Eligibility and Participation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         5.1     Eligibility  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         5.2     Actual Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Article  6.      Stock Options  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.1     Grant of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.2     Award Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.3     Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.4     Duration of Options  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.5     Exercise of Options  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.6     Payment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         6.7     Restrictions on Share Transferability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         6.8     Termination of Employment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         6.9     Nontransferability of Options  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
                 (a)      Incentive Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
                 (b)      Nonqualified Stock Options  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

Article  7.      Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.1     Grant of Restricted Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.2     Restricted Stock Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.3     Transferability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.4     Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
         7.5     Voting Rights  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         7.6     Dividends and Other Distributions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         7.7     Termination of Employment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

Article  8.      Beneficiary Designation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

Article  9.      Deferrals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

Article  10.     Rights of Employees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         10.1    Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         10.2    Participation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16


</TABLE>

<PAGE>   4

<TABLE>
<CAPTION>
<S>                                                                                                                    <C>
Article  11.     Change in Control  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         11.1    Treatment of Outstanding Awards  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
         11.2    Termination, Amendment, and Modifications of Change-in-Control Provisions  . . . . . . . . . . . . .  16

Article  12.     Amendment, Modification, and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         12.1    Amendment, Modification, and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         12.2    Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events . . . . . . . . .  17
         12.3    Awards Previously Granted  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

Article  13.     Withholding  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         13.1    Tax Withholding  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
         13.2    Share Withholding  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

Article  14.     Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

Article  15.     Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

Article  16.     Legal Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         16.1    Gender and Number  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         16.2    Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         16.3    Requirements of Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         16.4    Securities Law Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         16.5    Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19


</TABLE>

<PAGE>   5

ARTICLE 1.       ESTABLISHMENT, OBJECTIVES AND DURATION

         1.1     ESTABLISHMENT OF THE PLAN.  MedPartners, Inc., a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the "MedPartners 1997 Long Term
Incentive Compensation Plan" (hereinafter referred to as the "Plan"), as set
forth in this document.  The Plan permits the grant of Incentive Stock Options,
Nonqualified Stock Options and Restricted Stock.

         Subject to approval by the Company's stockholders, the Plan shall
become effective as of February 25, 1997 (the "Effective Date") and shall
remain in effect as provided in Section 1.3 hereof.

         1.2     OBJECTIVES OF THE PLAN.  The objectives of the Plan are to
optimize the profitability and growth of the Company through the use of
incentives which are consistent with the Company's objectives and which link
the interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual
performance; and to promote teamwork among Participants.

         The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract, and retain the services of Participants who
make significant contributions to the Company's success and to allow
Participants to share in the success of the Company.

         1.3     DURATION OF THE PLAN.  The Plan shall commence on the
Effective Date, as described in Section 1.1 hereof, and shall remain in effect,
subject to the right of the Board of Directors or the Committee to amend or
terminate the Plan at any time pursuant to Article 12 hereof, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions.  However, in no event may an Incentive Stock Option be granted
under the Plan on or after February 25, 2007.


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 shall be capitalized:

         2.1     "AFFILIATE" means a "parent corporation" or "subsidiary
corporation" as defined in Section 424 of the Code.

         2.2     "AWARD" means, individually or collectively, a grant under
this Plan of Incentive Stock Options, Nonqualified Stock Options or Restricted
Stock.

         2.3     "AWARD AGREEMENT" means an agreement entered into by the
Company and each Participant setting forth the terms and provisions applicable
to Awards granted under this Plan.





                                      5
<PAGE>   6


         2.4     "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.

         2.5     "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.

         2.6     "CAUSE" shall be determined by the Committee, exercising good
faith and reasonable judgment, and shall mean the occurrence of any one or more
of the following:

                 (i)      The willful and continued failure by the Participant
         to substantially perform his duties (other than any such failure
         resulting from the Participant's Disability) after a written demand
         for substantial performance is delivered by the Committee to the
         Participant that specifically identifies the manner in which the
         Committee believes that the Participant has not substantially
         performed his duties, and the Participant has failed to remedy the
         situation within 30 calendar days of receiving such notice; or

                 (ii)     The Participant's conviction for committing an act of
         fraud, embezzlement, theft or another act constituting a felony; or

                 (iii)    The willful engaging by the Participant in gross
         misconduct materially and demonstrably injurious to the Company, as
         determined by the Committee.  However, no act or failure to act on the
         Participant's part shall be considered "willful" unless done, or
         omitted to be done, by the Participant not in good faith and without
         reasonable belief that his action or omission was in the best interest
         of the Company.

         2.7     "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)      The acquisition by any Person of Beneficial Ownership
         of 20% or more of either (A) the then outstanding shares of Common
         Stock of the Company, or (B) the combined voting power of the
         outstanding voting securities of the Company entitled to vote
         generally in the selection of Directors; provided, however, that for
         purposes of this subsection, the following transactions shall not
         constitute a Change of Control:  (1) any acquisition directly from the
         Company through a public offering of shares of Common Stock of the
         Company, (2) any acquisition by the Company, (3) any acquisition by
         any employee benefit plan (or related trust) sponsored or maintained
         by the Company or any corporation controlled by the Company, or (4)
         any acquisition by any corporation pursuant to a transaction which
         complies with clauses (A), (B) and (C) of subsection (iii);

                 (ii)     The cessation, for any reason, of the individuals who
         constitute the Company's Board of Directors as of the date hereof
         ("Incumbent Board") to





                                      6
<PAGE>   7

         constitute at least a majority of the Company's Board of Directors;
         provided, however, that any individual becoming a Director following
         the date hereof whose election, or nomination for election by the
         Company's stockholders, was approved by a vote of at least a majority
         of the Directors then comprising the Incumbent Board shall be
         considered as though such individual was a member of the Incumbent
         Board, but excluding, for this purpose, any such individual whose
         initial assumption of office occurs because of an actual or threatened
         election contest with respect to the election or removal of Directors
         or other actual or threatened solicitation of proxies or consents by
         or on behalf of a Person other than the Company's Board of Directors;

                 (iii)    The consummation of a reorganization, merger or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company ("Business Combination") unless,
         following such Business Combination, (A) all or substantially all of
         the individuals and entities who were the Beneficial Owners,
         respectively, of the outstanding shares of Common Stock of the Company
         and the outstanding voting securities of the Company immediately
         before such Business Combination beneficially own, directly or
         indirectly, more than 50% of, respectively, the then outstanding
         shares of Common Stock and the combined voting power of the then
         outstanding voting securities entitled to vote generally in the
         election of Directors, as the case may be, of the Company resulting
         from such Business Combination (including, without limitation, a
         corporation which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries) in substantially the same
         proportions as their ownership immediately before such Business
         Combination of the outstanding shares of Common Stock and the
         outstanding voting securities of the Company, as the case may be; (B)
         no party (excluding any corporation resulting from such Business
         Combination or any employee benefit plan (or related trust) of the
         Company or such corporation resulting from such Business Combination)
         beneficially owns, directly or indirectly, 20% or more of,
         respectively, the then outstanding shares of common stock of the
         corporation resulting from such Business Combination or the combined
         voting power of the then outstanding voting securities of such
         corporation except to the extent that such ownership existed before
         the Business Combination; and (C) at least a majority of the members
         of the board of directors of the corporation resulting from such
         Business Combination were members of the Company's Board of Directors
         at the time of the execution of the initial agreement, or of the
         action of the Company's Board of Directors, providing for such
         Business Combination; or

                 (iv)     The approval by the stockholders of the Company of a
         complete liquidation or dissolution of the Company.





                                      7
<PAGE>   8

         2.8     "CODE" means the Internal Revenue Code of 1986, as amended
from time to time.

         2.9     "COMMITTEE" means the Compensation Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the Board
to administer the Plan with respect to grants of Awards.

         2.10    "COMPANY" means MedPartners, Inc., and also means any
corporation of which a majority of the voting capital stock is owned directly
or indirectly by MedPartners, Inc. or by any of its Subsidiaries, and any other
corporation designated by the Committee as being a Company hereunder (but only
during the period of such ownership or designation).

         2.11    "DIRECTOR" means any individual who is a member of the Board
           of Directors of the Company.

         2.12    "DISABILITY", as applied to a Participant, means that the
Participant (i) has established to the satisfaction of the Committee that the
Participant is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than 12 months (all within
the meaning of Section 22(e)(3) of the Code), and (ii) has satisfied any
requirement imposed by the Committee in regard to evidence of such disability.

         2.13    "EFFECTIVE DATE" shall have the meaning ascribed to such term
in Section 1.1 hereof.

         2.14    "ELIGIBLE PERSON" shall mean all Employees, Directors or
consultants of the Company or any Affiliate; provided, however, that no Award
may be granted to anyone who is not an "employee" as that term is defined in
General Instruction A.(1)(a) of Form S-8, as such definition may be amended
from time to time, without first receiving advice and guidance from the
Company's outside counsel as to the effect of such grant.

         2.15    "EMPLOYEE" means any key officer or employee of the Company.

         2.16    "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.

         2.17    "FAIR MARKET VALUE" shall be determined on the basis of the
closing sale price on the principal securities exchange on which the Shares are
traded or, if there is no such sale on the relevant date, then on the last
previous day on which a sale was reported.

         2.18    "IMMEDIATE FAMILY MEMBERS" means the spouse, children and
           grandchildren of a Participant.





                                      8
<PAGE>   9

         2.19    "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase
Shares granted under Article 6 herein and which is designated as an Incentive
Stock Option and which is intended to meet the requirements of Code Section
422.

         2.20    "INSIDER" shall mean an individual who is, on the relevant
date, a Director, a 10% Beneficial Owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the Exchange Act or an
officer of the Company, as defined under Section 16 of the Exchange Act and as
determined by the Board of Directors from time to time.

         2.21    "NON-EMPLOYEE DIRECTOR" means an individual who is a member of
the Board of Directors of the Company but who is not an Employee of the
Company.

         2.22    "NONQUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Shares granted under Article 6 herein and which is not intended to
meet the requirements of Code Section 422.

         2.23    "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.

         2.24    "OPTION PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.

         2.25    "PARTICIPANT" means an  Eligible Person who has outstanding an
Award granted under the Plan.

         2.26    "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 objectives, or upon the
occurrence of other events as determined by the Committee, at its discretion),
and the Shares of Restricted Stock are subject to a substantial risk of
forfeiture, as provided in Article 7 herein.

         2.27    "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) thereof.

         2.28    "PLAN" means the MedPartners 1997 Long Term Incentive
Compensation Plan.

         2.29    "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Article 8 herein.

         2.30    "RETIREMENT" as applied to a Participant, means the
Participant's termination of employment in a manner which qualifies the
Participant to receive immediately payable retirement benefits under the
applicable retirement plan maintained by the Company (the "Retirement Plan"),





                                      9
<PAGE>   10

under the successor or replacement of such Retirement Plan if it is then no
longer in effect, or under any other retirement plan maintained or adopted by
the Company which is determined by the Committee to be the functional
equivalent of such Retirement Plan; or, with respect to a Participant who may
not or has not participated in a retirement plan maintained by the Company or
an Affiliate, "Retirement" shall have the meaning determined by the Committee
from time to time.

         2.31    "SHARES" means Common Stock of MedPartners, Inc., par value
$.001 per share.

         2.32    "SUBSIDIARY" means any corporation, partnership, joint venture
or other entity in which the Company has a majority voting interest.


ARTICLE  3.      ADMINISTRATION

         3.1     THE COMMITTEE.  The Plan shall be administered by the
Committee, or by any other committee appointed by the Board, which Committee
shall consist solely of two or more "Non-Employee Directors" within the meaning
of Rule 16b-3 under the Exchange Act, or any successor provision.  The members
of the Committee shall be appointed from time to time by, and shall serve at
the discretion of, the Board of Directors.

         3.2     AUTHORITY OF THE COMMITTEE.  Except as limited by law or by
the Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, including Section 3.4, the Committee shall have full power
to select Employees who shall participate in the Plan; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any agreement or
instrument entered into under the Plan as they apply to Employees; establish,
amend, or waive rules and regulations for the Plan's administration as they
apply to Employees; alter, amend, suspend or terminate the Plan in whole or in
part; and (subject to the provisions of Article 12 herein) 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 determinations which may be necessary or
advisable for the administration of the Plan, as the Plan applies to Employees.
As permitted by law, the Committee may delegate its authority as identified
herein.

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

         3.4     GRANTS TO NON-INSIDERS BY CHIEF EXECUTIVE OFFICER.  To the
extent permissible under governing rules and regulations, and, in particular,
Section 141(C) of the General Corporation Law of Delaware, the Chief Executive
Officer of the Company shall have the authority to make





                                     10
<PAGE>   11

and administer grants of Awards under this Plan to non-Insiders upon such terms
and conditions as the Chief Executive Officer shall determine; provided,
however, that the total number of Awards granted by the Chief Executive Officer
each year shall be subject to approval by the Committee.

         3.5     COSTS OF PLAN.  The costs and expenses incurred in the
operation and administration of the Plan shall be borne by the Company.


ARTICLE  4.      SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

         4.1     NUMBER OF SHARES AVAILABLE FOR GRANTS.  Subject to adjustment
as provided in Section 4.3 herein, the number of Shares hereby reserved for
issuance to Participants under the Plan shall be five million.

         The number of Shares reserved for issuance under the Plan shall
automatically increase on the first day of each calendar year during the term
of this Plan, beginning with the 1998 calendar year, by an amount equal to 1%
of the Shares outstanding on December 31 of the immediately preceding year.
However, such additional Shares shall not be available for grants of Incentive
Stock Options, unless and until the increase in the number of Shares provided
for herein is subsequently approved by the stockholders of the Company in
accordance with Section 422 of the Code.

         Notwithstanding the foregoing, the maximum number of Shares of
Restricted Stock granted pursuant to Article 7 herein shall be an amount equal
to one-fifth of the total number of Shares reserved for issuance under the
Plan.

         4.2     LAPSED AWARDS.  If any Award granted under this Plan is
canceled, terminates, expires or lapses for any reason, 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 change
in corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Code
Section 368) or any partial or complete liquidation of the Company, such
adjustment shall be made in the number and class of Shares which may be
delivered under Section 4.1, in the number and class of and/or price of Shares
subject to outstanding Awards granted under the Plan, and in the Award limits
set forth in Section 4.1, as may be determined to be appropriate and equitable
by the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.





                                     11
<PAGE>   12



ARTICLE 5.       ELIGIBILITY AND PARTICIPATION

         5.1     ELIGIBILITY.  All Eligible Persons are eligible to
participate in this Plan.

         5.2     ACTUAL PARTICIPATION.  Subject to the provisions of the Plan,
the Committee may, from time to time, select from all Eligible Persons, those
to whom Awards shall be granted and shall determine the nature and amount of
each Award.


ARTICLE  6.      STOCK OPTIONS

         6.1     GRANT OF OPTIONS.  Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.

         6.2     AWARD AGREEMENT.  Each Option grant shall be evidenced by an
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 Award Agreement also shall
specify whether the Option is intended to be an ISO within the meaning of Code
Section 422, or an NQSO whose grant is intended not to fall under the
provisions of Code Section 422.

         6.3     OPTION PRICE.  The Option Price for each grant of an Option
under this Plan shall be at least equal to 100% of the Fair Market Value of a
Share on the date the Option is granted.

         6.4     DURATION OF OPTIONS.  Each Option granted to an Employee shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Incentive Stock Option shall be exercisable later
than the tenth anniversary date of its grant.

         6.5     EXERCISE OF OPTIONS.  Options granted under this Article 6
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 Participant.

         6.6     PAYMENT.  Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to 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) if permitted in
the governing Award Agreement, by tendering previously acquired Shares having
an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been held
by the Participant for at least six months prior to their tender to satisfy the
Option Price), or (c) if permitted in the governing Award Agreement, by a
combination of (a) and (b).





                                     12
<PAGE>   13


         The Committee also may allow cashless exercise 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 granted under this Article 6 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.  Each Option, to the extent it has
not been previously exercised, shall terminate upon the earliest to occur of:
(i) the expiration of the Option period set forth in the Option Award
Agreement; (ii) for ISOs, the expiration of three months following the
Participant's Retirement (following the Participant's Retirement, NQSOs shall
terminate upon the expiration of the Option period set forth in the Option
Award Agreement); (iii) the expiration of 12 months following the Participant's
death or Disability; (iv) immediately upon termination for Cause; or (v) the
expiration of 90 days following the Participant's termination of employment for
any reason other than Cause, Change in Control, death, Disability, or
Retirement.  Upon a termination of employment related to a Change in Control,
options shall be treated in the manner set forth in Article 11.

         6.9     NONTRANSFERABILITY OF OPTIONS.

         (a)     INCENTIVE STOCK 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.

         (b)     NONQUALIFIED STOCK OPTIONS.  The Committee may, in its
discretion, authorize all or a portion of NQSOs granted to a Participant to be
on terms which permit transfer by such Participant to (i) Immediate Family
Members, (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, provided that (x) there may be no consideration for any
such transfer, (y) the Award Agreement pursuant to which such Options are
granted must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section, and (z) subsequent
transfers of transferred Options shall be prohibited except those by will or
the laws of descent and distribution.  Following transfer, any such Options
shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that





                                     13
<PAGE>   14

for purposes of this Plan, the term "Participant" shall be deemed to refer to
the transferee.  The events of termination of employment shall continue to be
applied with respect to the original Participant, following which the Options
shall be exercisable by the transferee only to the extent, and for the periods
specified at Section 6.9.  Notwithstanding the foregoing, should the Committee
provide that Options granted be transferable, the Company by such action incurs
no obligation to notify or otherwise provide notice to a transferee of early
termination of the Option.  In the event of a transfer, as set forth above, the
original Participant is and will remain subject to and responsible for any
applicable withholding taxes upon the exercise of such Options.


ARTICLE  7.      RESTRICTED STOCK

         7.1     GRANT OF RESTRICTED STOCK.  Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock to Participants in such amounts as the
Committee shall determine.  Without limiting the generality of the foregoing,
Restricted Shares may be granted in connection with payouts under other
compensation programs of the Company.

         7.2     RESTRICTED STOCK AGREEMENT.  Each Restricted Stock grant shall
be evidenced by a Restricted Stock Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock granted, and
such other provisions as the Committee shall determine.

         7.3     TRANSFERABILITY.  Except as provided in this Article 7, 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 Award 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 Award Agreement.  All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be available
during his or her lifetime only to such Participant.

         7.4     OTHER RESTRICTIONS.  Subject to Article 8 herein, the
Committee shall impose such other conditions and/or restrictions on any Shares
of Restricted Stock granted pursuant to the Plan as it may deem advisable
including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock, restrictions based upon the
achievement of specific performance objectives (Company-wide, business unit,
and/or individual), time-based restrictions on vesting following the attainment
of the performance objectives, and/or restrictions under applicable federal or
state securities laws.

         At the discretion of the Committee, the Company may retain the
certificates representing Shares of Restricted Stock in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied.





                                     14
<PAGE>   15

         Except as otherwise provided in this Article 7, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.

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

         7.6     DIVIDENDS AND OTHER DISTRIBUTIONS.  During the Period of
Restriction, Participants holding Shares of Restricted Stock granted hereunder
may be credited with regular cash dividends paid with respect to the underlying
Shares while they are so held.  Such dividends may be paid currently, accrued
as contingent cash obligations, or converted into additional shares of
Restricted Stock, upon such terms as the Committee establishes.

         The Committee may apply any restrictions to the dividends that the
Committee deems appropriate.

         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 remaining vesting
period of the Shares of Restricted Stock with respect to which the dividend is
paid.

         7.7     TERMINATION OF EMPLOYMENT.  Upon a Participant's death,
Disability, or Retirement, all Restricted Shares shall vest immediately.  Each
Restricted Stock Award Agreement shall set forth the extent to which the
Participant shall have the right to retain unvested Restricted Shares following
termination of the Participant's employment with the Company in all other
circumstances.  Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment.


ARTICLE  8.      BENEFICIARY DESIGNATION

         A Participant under the Plan may make written designation of a
beneficiary on forms prescribed by and filed with the Corporate Secretary.
Such beneficiary, or if no such designation of any beneficiary has been made,
the legal representative of such Participant or such other person entitled
thereto as determined by a court of competent jurisdiction, may exercise, in
accordance with and subject to the provisions of Article 6, any unterminated
and unexpired Option granted to such Participant to the same extent that the
Participant himself could have exercised such Option were he alive or able;
provided, however, that no Option granted under the Plan shall be exercisable
for more Shares than the Participant could have purchased thereunder on the
date his employment by, or other relationship with, the Company and its
Subsidiaries was terminated.





                                     15
<PAGE>   16

ARTICLE  9.      DEFERRALS

         The Committee may permit or require 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, the lapse or waiver of restrictions with respect to Restricted Stock,
or the satisfaction of any requirements or objectives with respect to
performance measures, if any.  If any such deferral election is required or
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.


ARTICLE  10.     RIGHTS OF EMPLOYEES

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

         10.2    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  11.     CHANGE IN CONTROL

         11.1    TREATMENT OF OUTSTANDING AWARDS.  Upon the occurrence of a
Change in Control, unless otherwise specifically prohibited under applicable
laws, or by the rules and regulations of any governing governmental agencies or
national securities exchanges:

                 (a)      Any and all Options granted hereunder shall become
         immediately exercisable, and shall remain exercisable throughout their
         entire term; and

                 (b)      Any restriction periods and restrictions imposed on
         Shares of Restricted Stock shall lapse; provided, however, that the
         degree of vesting associated with Restricted Stock which has been
         conditioned upon the achievement of performance conditions pursuant to
         Section 7.4 herein shall be determined in the manner set forth in
         Section 7.7 herein.

         11.2    TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS.  Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 11 may not be terminated,
amended, or modified on or after the date of a Change in Control to affect
adversely any Award theretofore granted under the Plan without the prior
written consent of the Participant with respect to said Participant's
outstanding Awards.





                                     16
<PAGE>   17

ARTICLE  12.     AMENDMENT, MODIFICATION, AND TERMINATION

         12.1    AMENDMENT, MODIFICATION, AND TERMINATION.   Subject to Section
12.2 herein, the Board or the Committee may at any time and from time to time,
alter, amend, suspend or terminate the Plan in whole or in part.

         Neither the Company nor the Board or Committee on its behalf may
cancel outstanding Awards and issue substitute Awards in replacement thereof or
reduce the exercise price of any outstanding Options.

         12.2    ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS.  The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual
or nonrecurring events (including, without limitation, the events described in
Section 4.3 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

         12.3    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  13.     WITHHOLDING

         13.1    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, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan.

         13.2    SHARE WITHHOLDING.  With respect to withholding required upon
the exercise of Options, upon the lapse of restrictions on Restricted Stock, or
upon any other taxable event arising as a result of Awards granted hereunder,
Participants may elect 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 withheld on the transaction.  All such elections shall be made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.





                                     17
<PAGE>   18



ARTICLE 14.      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 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  15.     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, of
all or substantially all of the business and/or assets of the Company, or a
merger, consolidation or otherwise.


ARTICLE  16.     LEGAL CONSTRUCTION

         16.1    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.

         16.2    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.

         16.3    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.

         16.4    SECURITIES LAW COMPLIANCE.  With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act.  To the
extent any provision of the Plan or action by the Committee fails to so





                                     18
<PAGE>   19

comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.

         16.5    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 Delaware.





                                       19