MID ATLANTIC MEDICAL SERVICES, INC.
              NON-QUALIFIED STOCK OPTION AGREEMENT FOR EMPLOYEES


     AGREEMENT ("Agreement") dated the date indicated on the attached Face Sheet
by and between Mid  Atlantic  Medical  Services,  Inc.,  a Delaware  corporation
("Corporation"),  and the  person  indicated  on the  attached  Face  Sheet,  an
employee of the Corporation and/or one of its subsidiaries ("Optionee").

     WHEREAS,  the Corporation  desires to have Optionee  continue in its employ
and to provide  Optionee  with an  incentive  by  sharing in the  success of the
Corporation;

     WHEREAS,  in order to provide  such an  incentive  to its  officers and key
employees,  the Corporation has adopted the Mid Atlantic Medical Services,  Inc.
2002 Non-Qualified Stock Option Plan ("Plan");

     WHEREAS,  the  Corporation  desires  to grant to  Optionee  under  the Plan
options not intended to qualify as "incentive  stock options" within the meaning
of Section 422 or any successor  provision of the Internal Revenue Code of 1986,
as amended ("Code"); and

     WHEREAS,  unless otherwise provided herein,  capitalized terms used in this
Agreement shall have the meaning given them in the Plan.

     NOW,   THEREFORE,   in   consideration   of  the   mutual   covenants   and
representations  herein contained and intending to be legally bound, the parties
hereto agree as follows:

     1.  Number  of Shares  and  Price.  The  Corporation  hereby  grants to the
Optionee an option  ("Option")  to purchase the number of shares of Common Stock
set forth on the attached Face Sheet of this  Agreement.  The exercise price per
share of Common  Stock of the  Option  shall be as is set forth on the  attached
Face Sheet of this  Agreement,  such price being the Fair Market Value per share
of Common  Stock on the Date of Grant of the Option.  The Option is not intended
to qualify as an "incentive stock option" under Section 422 of the Code.

     2. Term and Exercise.  The Option shall expire five (5) years from the date
hereof, subject to earlier termination as set forth in Section 3. Subject to the
provisions of Section 3, the Option shall become  exercisable in installments as
set forth on the attached Face Sheet of this Agreement.

     3.  Exercise of Option Upon Termination of Employment.

          (a)  Termination  of Vested  Option Upon  Termination  of  Employment.

               (i) Termination.  Upon the Optionee's  Termination of Employment,
          other than by reason of death or Disability,  the Optionee may, within
          90 days from the date of such Termination of Employment,  exercise all
          or any  part  of the  Option  as  were  exercisable  at  the  date  of
          Termination  of  Employment.  In no event may the Option be  exercised
          later than the expiration date described in Section 2.
<PAGE>

               (ii)  Disability.   Upon  the  Optionee's  Disability  Date,  the
          Optionee may, within one year after such Disability Date, exercise all
          or a part of the  Option,  whether or not it was  exercisable  on such
          Disability Date, but only to the extent not previously  exercised.  In
          no  event,  however,  may the  Option  be  exercised  later  than  the
          expiration date described in Section 2.

               (iii)  Death.  In the  event of the death of the  Optionee  while
          employed  by  the   Corporation   or  a  Subsidiary,   the  Optionee's
          Beneficiary  shall  be  entitled  to  exercise  all or any part of the
          Option that was vested at the date of the  Optionee's  death until the
          initial expiration date of such Option determined  pursuant to Section
          2. Notwithstanding the above, if the Optionee at the time of death had
          been an employee of the  Corporation  or a Subsidiary  for a period of
          ten years,  50% of the Optionee's  unvested  Option will become vested
          and subject to exercise  as stated  above and, if the  Optionee at the
          time of death had been an employee of the  Corporation or a Subsidiary
          for a period of fifteen years,  all of the Optionee's  unvested Option
          will become  vested and subject to exercise as stated  above and shall
          expire on the date of expiration of the Option determined  pursuant to
          Section 2.

          (b)  Termination  of Unvested  Option Upon  Termination of Employment.
     Except as provided in Sections 3(a)(ii) and 3(a)(iii), to the extent all or
     any part of the Option was not exercisable as of the date of Termination of
     Employment,  the  unexercisable  portion of the Option  shall expire at the
     date of such Termination of Employment.

          (c) Change of Control.  Notwithstanding  anything  to the  contrary in
     Section 2 or this  Section  3, if one of the  events  specified  in Section
     7.05(d)(i),  (ii), (iii) or (iv) of the Plan occurs, the provisions of such
     Section 7.05(d) shall determine when the Option becomes  exercisable,  when
     it may be exercised and when it expires.

     4. Exercise  Procedures.  The Option shall be exercisable by written notice
to the  Corporation,  which must be received by the Secretary of the Corporation
not later than 5:00 P.M.  local time at the  principal  executive  office of the
Corporation on the expiration date of the Option.  Such written notice shall set
forth (a) the number of shares of Common  Stock being  purchased,  (b) the total
exercise  price for the shares of Common  Stock being  purchased,  (c) the exact
name as it should appear on the stock certificate(s) to be issued for the shares
of  Common  Stock  being  purchased,  and (d) the  address  to which  the  stock
certificate(s)  should be sent.  The  exercise  price of shares of Common  Stock
purchased  upon exercise of the Option shall be paid in full (a) in cash, (b) by
delivery to the  Corporation  of shares of Common Stock (which  shares of Common
Stock must have been held for at least six months),  (c) in any  combination  of
cash and shares of Common Stock, or (d) by delivery of such other  consideration
as the  Committee  deems  appropriate  and in  compliance  with  applicable  law
(including  payment in accordance with a cashless  exercise  program approved by
the  Committee).  If any  shares of Common  Stock  shall be  transferred  to the
Corporation  to satisfy all or any part of the exercise  price,  the part of the

<PAGE>

exercise  price  deemed to have been  satisfied  by such  transfer  of shares of
Common  Stock  shall be equal to the  product  derived by  multiplying  the Fair
Market  Value as of the date of  exercise  times the  number of shares of Common
Stock  transferred  to the  Corporation.  Any shares of Common Stock tendered in
payment  shall be duly  endorsed in blank or  accompanied  by stock  powers duly
endorsed  in  blank.  The  Optionee  may  not  transfer  to the  Corporation  in
satisfaction of the exercise price any fraction of a share of Common Stock,  and
any portion of the exercise price that would represent less than a full share of
Common Stock must be paid in cash by the  Optionee.  Subject to Sections 8 and 9
hereof, certificates for the purchased shares of Common Stock will be issued and
delivered  to the  Optionee  as soon as  practicable  after the  receipt of such
payment of the exercise  price;  provided,  however,  that  delivery of any such
shares of Common Stock shall be deemed  effected  for all purposes  when a stock
transfer agent of the Corporation  shall have deposited such certificates in the
United States mail, addressed to Optionee,  at the address set forth on the Face
Sheet of this  Agreement  or to such other  address as Optionee may from time to
time designate in a written notice to the Corporation. The Optionee shall not be
deemed for any purpose to be a shareholder of the  Corporation in respect of any
shares of Common Stock as to which the Option shall not have been exercised,  as
herein provided,  until such shares of Common Stock have been issued to Optionee
by the Corporation hereunder.

     5. Plan  Provisions  Control  Option  Terms;  Modifications.  The Option is
granted  pursuant  and  subject  to the terms and  conditions  of the Plan,  the
provisions of which are  incorporated  herein by reference.  If any provision of
this Agreement conflicts with any of the terms in the Plan as constituted on the
Date of Grant,  the terms of the Plan as  constituted on the Date of Grant shall
control.  Except as provided in Sections  7.03 and 7.05 of the Plan,  the Option
shall  not be  modified  after  the  Date of Grant  except  by  express  written
agreement between the Corporation and the Optionee;  provided, however, that any
such  modification (a) shall not be inconsistent with the terms of the Plan, and
(b) shall be approved by the Committee. In addition, the repricing of any Option
granted under this Plan shall require shareholder approval.

     6.  Limitations on Transfer.  The Option may not be assigned or transferred
other than by will,  by the laws of descent  and  distribution  or pursuant to a
domestic relations order.

     7. Taxes. The Corporation  shall be entitled to withhold (or secure payment
from the Optionee in lieu of withholding) the amount of any withholding or other
tax  required by law to be withheld or paid by the  Corporation  with respect to
any shares of Common Stock issuable under this  Agreement,  and the  Corporation
may defer  issuance  of shares of Common  Stock upon the  exercise of the Option
unless the Corporation is indemnified to its satisfaction  against any liability
for any such  tax.  The  amount  of such  withholding  or tax  payment  shall be
determined by the Committee or its delegate and shall be payable by the Optionee
at such time as the  Committee  determines.  The Optionee may satisfy his or her
tax  withholding  obligation  by (a) having cash  withheld  from the  Optionee's
salary or other compensation payable by the Corporation or a Subsidiary, (b) the
payment of cash to the  Corporation,  (c) the payment in shares of Common  Stock
already  owned by the  Optionee  valued at Fair  Market  Value,  and/or  (d) the
withholding from the Option,  at the appropriate  time, of a number of shares of
Common  Stock  sufficient,  based upon the Fair  Market  Value of such shares of
Common Stock, to satisfy such tax withholding requirements.  The Committee shall
be authorized,  in its sole and absolute discretion, to establish such rules and
procedures  relating to any such  withholding  methods as it deems  necessary or
appropriate,  including,  without  limitation,  rules and procedures relating to
elections to have shares of Common Stock withheld upon exercise of the Option to
meet such withholding obligations.
<PAGE>

     8. No Exercise in Violation of Law.  Notwithstanding  any of the provisions
of this  Agreement,  the Optionee hereby agrees that he or she will not exercise
the Option granted  hereby,  and that the  Corporation  will not be obligated to
issue any shares of Common  Stock to the  Optionee  hereunder,  if the  exercise
thereof or the  issuance  of such  shares of Common  Stock  shall  constitute  a
violation  by the  Optionee or the  Corporation  of any  provision of any law or
regulation of any governmental  authority.  Any determination in this connection
by the Committee shall be final, binding and conclusive.

     9. Securities Law Compliance. The Optionee agrees, for the Optionee and his
or her  Beneficiaries,  with  respect  to all  shares of Common  Stock  acquired
pursuant  to the terms and  conditions  of the Plan and the Option (or any other
shares of Common  Stock  issued  pursuant  to a stock  dividend  or stock  split
thereon or any securities  issued in lieu thereof or in substitution or exchange
therefor),  that  the  Optionee  and his or her  Beneficiaries  will not sell or
otherwise  dispose of these shares except pursuant to an effective  registration
statement under the Securities Act of 1933, as amended (the "Act"), or except in
a  transaction  that, in the opinion of counsel for the  Corporation,  is exempt
from registration under the Act. Further,  the Corporation shall not be required
to sell or  issue  any  shares  under  the  Option  if,  in the  opinion  of the
Corporation, (a) the issuance of such shares would constitute a violation by the
Optionee  or  the  Corporation  of  any  applicable  law  or  regulation  of any
government  authority or (b) the consent or approval of any governmental body is
necessary or desirable as condition of, or in connection  with,  the issuance of
such shares.

     10.  Adjustments.  The  existence of the Option shall not affect in any way
the right or power of the  Corporation or its directors or  shareholders to make
or authorize  any or all  adjustments,  recapitalizations,  reorganizations,  or
other changes in the  Corporation's  capital  structure or its business,  or any
merger  or  consolidation  of  the  Corporation,   or  any  issuance  of  bonds,
debentures,  preferred stock or prior preference stock ahead of or affecting the
Common  Stock or the  rights  thereof,  or  dissolution  or  liquidation  of the
Corporation,  or any  sale  or  transfer  of all or any  part of its  assets  or
business,  or any  other  corporate  act or  proceeding,  whether  of a  similar
character or otherwise.

     11. Dispute Resolution. As a condition of granting the Option, the Optionee
agrees,  for the  Optionee  and his or her  Beneficiaries,  that any  dispute or
disagreement  that may arise under or as a result of or pursuant to the Plan and
the  Option  shall be  determined  by the  Committee  in its  sole and  absolute
discretion, and any interpretation by the Committee of the terms of the Plan and
Option shall be final, binding and conclusive.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above specified.
<PAGE>



ATTEST:                             MID ATLANTIC MEDICAL SERVICES, INC.



__________________________ By:
                               ------------------------------------------------
                                    Thomas P. Barbera,
                                    President and Chief Executive Officer


                           By:
                               ------------------------------------------------
                                    Member of the Stock Option Committee

WITNESS:                            OPTIONEE


__________________________
                               ------------------------------------------------
                                                     (Signature)


<PAGE>






                                   FACE SHEET


Notice Addresses:

         Optionee:

                  ------------------------
                  4 Taft Court
                  Rockville, Maryland  20850

         Corporation:

                  Mid Atlantic Medical Services, Inc.
                  4 Taft Court
                  Rockville, Maryland  20850
                  Attention: Secretary

Grant Date:                                                  ___________


Total Options Granted:                                       ___________


Exercise Price Per Share of Common Stock:                    $__________


Vesting Schedule:

                                                     Number of Shares
                  Date                               (Non-Cumulative)


                  06/01/2003                                  ___
                  06/01/2004                                  ___
                  06/01/2005                                  ___


Expiration Date:

     Optioned  shares must be  purchased  within five (5) years from the date of
grant, which is _________. That is, all options must be exercised by __________.