EMPLOYMENT AGREEMENT THIS AGREEMENT, made and entered as of this 8th day of
January,  1999 ("Effective Date"), by and between Mid Atlantic Medical Services,
Inc., a Delaware  corporation  with its  principal  executive  offices at 4 Taft
Court, Rockville, Maryland 20850 ("Company"), and Mark D. Groban, "Executive");

     WHEREAS,  the Company  wishes to assure itself of the services of Executive
for the period provided in this Agreement,  and Executive is willing to serve in
the employ of the Company on a full-time basis for said period;

     WHEREAS,  the Company and Executive desire to set forth the amounts payable
and  benefits  to be  provided  by the  Company to  Executive  in the event of a
termination of Executive's  employment with the Company under the  circumstances
set forth herein;

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
the parties hereto hereby agree as follows:

     1. Employment.  The Company agrees to continue Executive in its employ, and
Executive  agrees  to remain in the full  time  employ of the  Company,  for the
period stated in Section 3 hereof and upon the other terms and conditions herein
provided.

     2.  Position  and  Responsibilities.  The Company  employs  Executive,  and
Executive  agrees to serve,  as interim  Chairman of the Board of the Company on
the conditions  hereinafter set forth. Executive agrees to perform such services
consistent  with his  position  as shall from time to time be assigned to him by
the Company's Board of Directors  ("Board"),  or another executive designated by
the Board.  Such duties may include the  appointment  of Executive as an officer
and/or director of any present or future  subsidiary or affiliate of the Company
without any additional remuneration under this Agreement. Executive shall devote
all  of his  business  time,  attention,  skill,  and  efforts  to the  faithful
performance of the duties hereunder.


     3. Term. The period of Executive's employment under this Agreement with the
Company (i) shall commence as of the Effective Date and remain in effect for one
year after the date of the  approval  by the Board of  Directors  of a permanent
Chairman of the Board and a permanent  Chief  Executive  Officer and  President,
whichever  date is later.  In the event  Executive is approved as the  permanent
Chairman of the Board,  the parties agree to terminate  this agreement and enter
into a new employment agreement.

     4. Compensation and Reimbursement of Expenses. For all services rendered by
Executive in any capacity  during  employment  under this Agreement  (including,
without  limitation,  services  as an  executive,  officer,  or  director of the
Company,  or any  subsidiary or affiliate of the Company,  or as a member of any
committee  of the  Board  of  Directors  of the  Company  or any  subsidiary  or
affiliate of the Company),  the Company shall pay Executive as compensation  (A)
an annual salary ("Base Salary"); (B) such bonus for such period, if any, as may
be awarded to Executive  from time to time pursuant to any Bonus Plan adopted by
the Company for its senior  management or otherwise awarded by the Board or by a
committee  designated by the Board;  and (C) stock options at the  discretion of
the Board or the  appropriate  Committee of the Board. By action of the Board on
February 25, 1999, the Company will grant Executive 85,000 shares of MAMSI stock
options as of that date. Such options will vest on the date of the February 2000
Board meeting on the  following  prorata basis over a period to be determined by
the percentage  increase of 1999 earnings per share over 1998 earnings per share
as adjusted  for one time items and as  determined  by the Board at its February
2000 meeting at which 1999 audited earnings are announced:

                 1999 EPS     % Increase   Vesting    Dates of Vesting 
                   up to          0-16%    5 years     1/5 in  2/2000;  1/5 in 
                   $0.51                               2/2001;  1/5 in 2/2002;
                                                       1/5 in 2/2003; 
                                                       1/5 in 2/2004
                   $0.54           23%     4 years     1/4 in 2/2000;  1/4 in 
                                                       2001; 1/4 in 2/2002; 
                                                       1/4 in 2/2003 
                   $0.57           30%     3 years     1/3 in  2/2000;  1/3 in 
                                                       2/2001; 1/3 in 2002
                   $0.60           36%     2 years     1/2 in 2/2000; 1/2 in 
                                                       2/2001

                   0.63            43%     1 year      All in 2/2000
                   or greater
For the  purposes  of the  above  calculation,  the 1998  earnings  per share is
established  at $.44 per share.  Base Salary  shall be not less than the rate at
which  Executive is  compensated  on the Effective  Date which is $475,000.  The
Company shall also  reimburse  Executive,  in accordance  with such policies and
procedures  as the Board may  establish  from time to time,  for all  reasonable
travel and other  expenses  incurred  by  Executive  in the  performance  of his
obligations   under  this  Agreement.   Executive  shall  also  be  entitled  to
participate  in any benefit plans  established  by the Company for which Company
executives  are  or  shall  become  eligible.

     5. Termination of Employment.  Executive's  employment under this Agreement
may be terminated by the Company or Executive as follows:
         (a)      Disability.
                  (i) If  Executive  fails to  perform  his  duties  under  this
         Agreement  on account  of  Disability  (as  hereinafter  defined),  the
         Company may give notice to Executive to terminate  this  Agreement on a
         date not less than thirty (30) days thereafter  ("Notice  Period") and,
         if Executive has not resumed full  performance of his duties under this
         Agreement within such Notice Period, then Executive's  employment under
         this  Agreement  will  terminate  on the date  provided  in the  notice
         ("Disability Termination Date").
                  (ii)  During  any  period of  Disability,  the  Company  shall
         maintain and pay for health and other insurance  benefits for Executive
         at least equal to those he had at the commencement of such Disability.
                  (iii) As used in this Agreement,  the term "Disability"  shall
         mean the  inability  of  Executive  to perform  his  duties  under this
         Agreement  by reason of his medical  disability,  as  determined  by an
         independent  physician  selected  with the  approval  of the  Board and
         Executive.  

          (b) Death. If Executive dies while employed under this Agreement,  his
     employment  under this Agreement will terminate as of the date of his death
     ("Date of Death").  Within  thirty  (30) days after the Date of Death,  the
     Company shall pay to  Executive's  legal  representative  Executive's  Base
     Salary as then in effect  that has  accrued to the last day of the month in
     which the Date of Death  occurs.  If the  Executive  dies  while  receiving
     payments  pursuant to Section 5(c) below,  said payment shall  continue for
     the period remaining and shall be paid to the estate of the Executive.

          (c) Certain  Other  Events of  Termination.  In the event that (i) the
     Company  terminates  Executive's  employment  for any  reason  (other  than
     because of death,  Disability,  or "just cause" (as  hereinafter  defined),
     (ii) Executive  terminates his employment  with the Company  because of the
     Company's material breach of this Agreement, (iii) Executive terminates his
     employment  with the Company because the Company  requires  Executive to be
     based  anywhere  other  than   Executive's   current   location  or  within
     seventy-five  (75) miles round trip of the  Company's  principal  executive
     offices  (except for required  travel on the Company's  business),  or (iv)
     Executive   terminates  his  employment  with  the  Company  because  of  a
     substantial  reassignment of duties and  responsibilities  not related to a
     change in control as defined  herein,  then the Company shall pay Executive
     an amount equal to 12 months Base Salary paid in equal  bi-weekly  payments
     over a period of one year commencing on the Executive  Termination Date and
     in  accordance  with the regular  payroll  practices  of the  Company.  The
     Company  shall also pay  Executive  any pro-rata  bonus that the  Executive
     would have been entitled to had he been employed until the end of the year.
     In addition,  all stock  options  which  Executive  has been granted  shall
     immediately vest and become  exercisable  under the terms of the applicable
     plan.  For the purposes of the time period  available for  exercising  such
     stock  options,  Executive  shall be  considered an employee of the Company
     unless terminated  pursuant to subsection (e) below.  Payment made pursuant
     to this paragraph  shall be the exclusive  remedy provided to Executive and
     Executive  shall not be entitled to any other  severance  benefit  that the
     Company may provide or adopt unless  approved by the Board of the Directors
     of the Company.


          (d)   Retirement.   Executive  shall  be  entitled  to  terminate  his
     employment with the Company on, or at any date after, a date on which he is
     at least  sixty-five (65) years old. Any date on which Executive  elects to
     retire  shall be  referred  to as the  "Retirement  Termination  Date." The
     Company  shall pay to Executive  his Base Salary as then in effect that has
     accrued  to the last day of the month in which the  Retirement  Termination
     Date occurs.

          (e)  Termination  by the Company  for Just Cause.

               (i) The Company may terminate  Executive's  employment  for "just
          cause" at any time by giving  written  notice  thereof  to  Executive.
          (Except as provided below,  the date of such notice is the "Just Cause
          Termination  Date" unless  otherwise  provided in the notice).  Within
          thirty (30) days after the Just Cause  Termination  Date,  the Company
          shall pay to  Executive  his Base  Salary  as then in effect  that has
          accrued to the Just Cause  Termination  Date. For the purposes of this
          subparagraph,   "just  cause"  shall  mean   termination   because  of
          Executive's  personal  dishonesty,   willful  misconduct,   breach  of
          fiduciary duty,  intentional failure to perform stated duties, willful
          violation  of  any  law,  rule  or  regulation   (other  than  traffic
          violations or similar  offenses),  or material breach of any provision
          of this Agreement. Unless otherwise determined by the Board, Executive
          shall have no right to receive  compensation  or other  benefits under
          this Agreement after a termination for just cause.

               (ii) Notwithstanding the foregoing, Executive shall not be deemed
         to have been  terminated  for just cause  pursuant to this Section 5(e)
         unless and until he shall have  received  a copy of a  resolution  duly
         adopted  by the  affirmative  vote of a  majority  of the  Board,  at a
         meeting held for that purpose, declaring that in the good faith opinion
         of the Board one or more of the  conditions  set forth in clause (i) of
         this Section 5(e) has occurred and specifying the particulars  thereof.

         (f)  Termination by Executive  Without  Cause.  Executive may terminate
         this  Agreement  without  cause upon the  provision of two weeks' prior
         written notice to the Company.  Upon such a termination,  the following
         payments will be made by the Company to the Executive:

                    1. If  Executive  elects  such  a  termination  between  the
                       Effective  Date of this  Agreement  and the first date of
                       work of either the permanent  Chairman of the Board,  the
                       permanent Chief Executive or the permanent President, the
                       Executive would receive no benefits under this Agreement.
                    2. If the  Executive  elects  such a  termination  after the
                       first  date of work of  either  the  permanent  Chairman,
                       permanent  Chief  Executive   Officer  or  the  permanent
                       President,  the Executive  would receive the same payment
                       as a termination pursuant to Section 5(c) above.

     6. Change in Control.  Notwithstanding any other provision to the contrary,
the  following  provisions  will  govern in the event of a change in  control as
defined herein.

          a. A change in  control  shall be deemed to have  occurred  if, at any
     time, (I)  substantially all the assets of the Company shall have been sold
     or  transferred by sale,  merger or otherwise,  or if any "person" (as such
     term is used in Sections  13(d) or 14(d) of the Exchange Act) is or becomes
     the beneficial owner, directly or indirectly,  of securities of the Company
     representing 50% or more of the combined voting power of the  then-existing
     outstanding securities of the Company; and (ii) the Executive is reassigned
     without his concurrence to another  position in the Company within 6 months
     of such sale,  merger or other event.  No change in control shall be deemed
     to  have  occurred  if the  reassignment  is on a  temporary  basis  and is
     attributable  to the  Executive's  illness  or other  physical,  mental  or
     emotional disability or incapacity.

          b. In the event of a change in control  as  defined  in  Section  6(a)
     above,  Executive  shall be  entitled to the  compensation  as set forth in
     Section 5(c) above except for the provision  regarding  stock options which
     will be compensated in accordance with subsection 6(c) below.

          c. In the event of a change in control as defined in subsection  6(a),
     all stock options to which  Executive  has been granted  shall  immediately
     vest and become  exercisable.  Such  acceleration  of the  vesting of stock
     options  shall be in addition to, and shall have no affect on, any payments
     accrued pursuant to subsection 6(b).

          d.  The  value  of all  payments,  benefits  and  other  consideration
     received pursuant to subsections 6(b) and 6(c) and contingent upon a change
     in  control,  and any  additional  payments  in the nature of  compensation
     described by Section  280G(b)(2) of the Internal  Revenue  Code,  shall not
     exceed  an  amount  which  is  equal to three  times  the  average  taxable
     compensation from the Company for the "base period" as that term is defined
     in Section  280G(d)(2) of the Internal  Revenue Code.  The parties agree to
     review the impact of the  termination of the Agreement  pursuant to Section
     6, and to negotiate  modifications,  if mutually acceptable,  in situations
     where the results to the Executive and to the Company are not compatible.

      7. Selection of Permanent Chairman of the Board. If the Board of Directors
elects a permanent Chairman of the Board other than Executive during the term of
this Agreement,  Executive will become a Senior  Executive Vice President of the
Company.
      8. Confidential  Information.  Executive shall fully comply with and abide
by the provisions of the Company's  Employee Manual and other announced policies
in  effect  from  time to  time,  including  those  provisions  relating  to the
protection of the Company's confidential information.  The Company and Executive
agree  that the  foregoing  provision  shall  survive  the  termination  of this
Agreement for any reason whatsoever.
      9.  Indemnification.  Employee shall be entitled to indemnification to the
full extent allowed by the Company's Certificate of Incorporation and Bylaws for
third  party  claims and to advances  for  expenses in  defending  against  such
claims.
     10. General Provisions.
         (a) Entire Agreement.  This Agreement contains the entire understanding
between the parties hereto and supersedes any prior employment agreement between
the Company and Executive.
         (b) No Duty to  Mitigate.  Executive  shall not be required to mitigate
the amount of any  payment  provided  for in this  Agreement  by  seeking  other
employment or otherwise, nor shall any amounts received from other employment or
otherwise  by  Executive  offset in any manner the  obligations  of the  Company
hereunder.
         (c)  Nonassignability.  Neither this  Agreement nor any right,  remedy,
obligation or liability  arising  hereunder or by reason hereof is assignable by
Executive,  his beneficiaries,  or legal  representatives  without the Company's
prior written  consent;  provided,  however,  that nothing in this Section 11(d)
shall  preclude (i) Executive  from  designating  a  beneficiary  to receive any
benefit payable hereunder upon his death, or (ii) the executors, administrators,
or other legal  representatives  of Executive or his estate from  assigning  any
rights hereunder to the person or persons entitled thereto.
         (d) Notices. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been duly  given if  delivered  personally  or sent by  certified  mail,  return
receipt requested, first-class postage prepaid, to the parties to this Agreement
at the following addresses:
                  (i)      if to the Company at:
                           4 Taft Court  
                           Mid Atlantic Medical Service, Inc.  
                           Rockville, MD 20850
                           and
                  (ii) if to Executive at the address set forth on the signature
page. or to such other address as either party to this Agreement shall have last
designated  by notice to the other party.  All such  notices and  communications
shall be deemed to have been  received  on the earlier of the date of receipt or
the third business day after the date of mailing thereof.
         (e) Binding Effect;  Benefits. This Agreement shall be binding upon and
inure to the  benefit of the  parties  to this  Agreement  and their  respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended or shall be construed to give any person,  other than the parties to
this Agreement or their respective successors or permitted assigns, any legal or
equitable  right,  remedy,  or claim under or in respect of any agreement or any
provision contained herein.
         (f) Waiver.  No provision  of this  Agreement  may be amended,  waived,
discharged,  or  terminated  except by an  instrument in writing and executed by
each party.  Any waiver of enforcement of any provision of this Agreement  shall
not  operate or be  construed  as a  continuing  waiver or a waiver of any other
provisions unless expressly stated in such instrument.
         (g) Amendment. This Agreement may be terminated,  amended, modified, or
supplemented only by a written instrument executed by Executive and the Company.
         (h) Governing Law. This Agreement shall be governed by and construed in
accordance  with the law of the State of  Delaware,  regardless  of the law that
might be applied under principles of conflict of laws.
         (i) Severability.  If, for any reason,  any provision of this Agreement
is held invalid,  such  invalidity  shall not affect any other provision of this
Agreement not held so invalid,  and each such other provision shall, to the full
extent  consistent with law, continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect  the rest of such  provision  not held so  invalid,  and the rest of such
provision,  together with all other  provisions of this Agreement,  shall to the
full extent consistent with law continue in full force and effect.
         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed  and its seal to be affixed  hereunto by its  officers  thereunto  duly
authorized,  and  Executive has signed this  Agreement,  all as of the Effective
Date.
ATTEST:                                     MID ATLANTIC MEDICAL SERVICES, INC.
                                             By:/s/Thomas P. Barbera
(Corporate Seal)                              Name:Thomas P. Barbera
                                              Title:President and CEO
WITNESS                                       EXECUTIVE:

                                               /s/ Mark Groban
      
                                           Address: 4 Taft Ct.
                                                    Rockville, MD 20850