EMPLOYMENT AGREEMENT

         This Employment  Agreement between Mid Atlantic Medical Services,  Inc.
(Company),  a corporation  organized and existing under the laws of the State of
Delaware  and having its  principal  office and place of business in the City of
Rockville,  Maryland, as the employer, and George T. Jochum (Executive),  as the
employee.

                               W I T N E S S E T H

         WHEREAS,  the Company  desires to employ the Executive as its chairman,
president,  and chief executive  officer and whereas the Executive desires to be
employed in such capacity.

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained, the Company and the Executive agree as follows:

         1.       Term of Employment

                  The Company shall employ the Executive to perform the services
described below,  for the period  beginning  January 1, 1999 and ending December
31, 2001. At the conclusion of the term of this Agreement, the Executive will be
paid any accrued bonus.

         2.       Duties

                  The  Executive  will serve as chairman,  president,  and chief
executive  officer of the  Company  (subject  to the  provisions  of the Company
by-laws).  Executive  also  agrees  to  serve,  for any  period  for which he is
elected, as director, or an officer of the Company, any affiliated or subsidiary
companies and Executive shall not be entitled to any additional compensation for
such service. All services shall be performed in consultation with and under the
supervision of the Board of Directors of the Company.  Executive  shall (a) keep
the Board of Directors of the Company fully informed of the Company  operations,
and (b)  promptly  submit to such  Board of  Directors  any  reasonable  written
reports it may require.  Executive shall have those duties and  responsibilities
customarily  associated  with the  positions of chairman,  president,  and chief
executive officer of comparable  companies,  and such other  responsibilities as
may be  assigned  to  Executive  by the  Board of  Directors  from time to time.
Executive  shall resign from all offices and  directorship of the Company and of
its subsidiaries upon the termination of this contract.

         3.       Compensation

         3.1  Base  Salary.  As  compensation  in full  for all  services  to be
rendered by Executive under this  Agreement,  the Company shall pay to Executive
an annual base salary of $1,350,000.00 in  approximately  equal  installments on
the  regular  pay dates of the  Company.  The base  salary  will not be adjusted
during the term of the Agreement.

         3.2 Incentive Compensation. In addition to the base salary described in
subsection  3.1,Executive  shall  be  entitled  to  participate  in the  Company
Management  Bonus  Program as in effect  from time to time,  and any  subsequent
incentive program adopted by the Company Board for the Company Senior Staff. The
extent of Executive  participation  in the  Management  Bonus  Program  shall be
calculated in a similar manner to the bonus paid to other senior staff, but that
the  minimum  bonus  amount will equal 25 percent of that year's base salary and
the maximum amount will equal 50 percent of base salary.

         3.3 Participation in Benefit Plans.  During the term of this Agreement,
Executive  shall be  entitled to receive  such fringe  benefits as shall be made
generally  available to employees of the Company or to executive officers of the
Company.

         3.4      Tax Indemnity Payments.  Any Income Tax Indemnity Payment
required to be paid pursuant to this Agreement shall be determined by assuming
that the tax due upon any amount is computed by applying to such
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amount the highest marginal  federal,  state, and local income tax rates then in
effect for an individual  with the Executive  filing  status,  as if such amount
were Executive=s only item of taxable income and Executive was entitled to claim
no credits with respect thereto, but such Tax Indemnity Payment shall be the net
of the  maximum  reduction  in federal  income  taxes that could be  obtained by
Executive  from  reduction of the state and local income taxes  applicable  with
respect to such amount. Upon request, the Executive shall provide to the Company
one copy of all individual  federal,  state,  and local income tax returns filed
for the year preceding  that for which the Income Tax Indemnity  Payment is due.
Any Income Tax Indemnity Payment made pursuant to subsection 3.8 hereof shall be
paid on or before the April 15 following the year to which such Payment related.

         3.5 Life  Insurance.  In  addition to any life  insurance  which may be
included as a fringe  benefit  made  generally  available  to  employees  of the
Company, the Company agrees to obtain, pay all premiums for, and maintain during
the term of this  Agreement,  a whole life  insurance  policy on the life of and
payable to a beneficiary  named by the  Executive in the amount of  $200,000.00,
provided,  however,  that the Company  shall have no  obligation to provide such
insurance if the Executive is not insurable at ordinary market rates and without
material cost or other adjustments.

         3.6      Stock Options.

         Should the Executive  continue to perform at current levels, and should
the Company and its subsidiaries  continue to develop their financial  strength,
it would be the present intention of the Company to grant, through action by the
Company=s  Stock  Option  Committee,  with an  exercise  price equal to the fair
market value on the date of grant,  to the Executive  options to acquire 200,000
shares of Company  stock as a one time signing  bonus.  It is  anticipated  that
50,000 options would be granted from the 1995  Non-Qualified  Stock Option Plan,
upon Board approval, which is anticipated to occur at the November 1997 Meeting,
and that  150,000  shares  would be granted  from the 1998  Non-Qualified  Stock
Option Plan in April 1998. Notwithstanding the above, it is anticipated that the
Stock Option Committee would grant an additional 200,000 shares in April 1998 as
the Executive annual stock option grant.

         Assuming continued performance, Executive will be granted an additional
200,000 shares with an exercise price equal to the fair market value on the date
of  grant  each  April  that  contract  continues  prior to its  termination  or
expiration. Such grants will start in April, 1999.

         All option grants issued pursuant to this Agreement will vest on grant.
In all other respects  option grants will be similar to those available to other
employees of the Company.

         3.7  Expenses.  During the term of this  Agreement,  the Company  shall
reimburse  Executive  for all  reasonable  items of travel and related  lodging,
entertainment,  business  promotion,  community  activities,  and  miscellaneous
expenses  incurred  that are  related to the Company or any  subsidiary  company
business and executive employment by the Company or any subsidiary company, with
reimbursement  to be made to the Executive  upon  submission to the Company of a
signed statement  itemizing the expenses so incurred in accordance with policies
adopted by the Company for reimbursement of their executives.

         3.8 Business Automobile.  The Company shall provide through purchase or
lease for Executive use an automobile  appropriate for Executive position in the
Company.  Upon the presentation of receipts or other documentation,  the Company
shall on a regular basis reimburse the Executive for normal up-keep,  insurance,
fuel, and related  expenses  associated  with the use of such automobile for the
business purposes of the Company or any subsidiary  company.  To the extent that
the Company  expenditures  for such  automobile are determined by the Company to
result in taxable  income to Executive,  the Company will also pay to Executive,
as an Income Tax  Indemnity  Payment,  to be computed  and paid as  described in
subsection 3.4 hereof, an amount of cash equal to the sum of all federal, state,
and local  income taxes upon (a) such  taxable  income,  and (b) such Income Tax
Indemnity  Payment.  The Executive  may elect to receive a new  automobile on an
annual basis.




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         3.9  Retirement.  The  Executive  shall  be  entitled  to  supplemental
retirement  benefit which will provide an annual benefit of $450,000.00 per year
for  15  years.  However,  the  Company  shall  not  be  obligated  to  pay  any
supplemental  retirement  benefit under this  subsection 3.9 if the Executive is
terminated for cause by the Company.

                  Payment,  if any, of the supplemental  retirement benefit will
be made in the  form of an  annuity  for a fixed  term of years  payable  to the
Executive,  or his estate,  heirs,  or assignees as determined by the Executive.
Should Executive die prior to retirement, but during the term of this Agreement,
payments will be made as designated by the  Executive,  or in the absence of any
such  designation,  to the  Executive=s  estate.  The  parties may enter in to a
separate  agreement to make more  particular  the terms and  conditions  of this
supplemental  retirement benefit including but not limited to the use of a Rabbi
Trust. If a Rabbi Trust is to be used, the Executive must elect its use no later
than January 1, 1999.

         3.10  Health  Insurance.  Either  the  Executive  or the  spouse of the
Executive at the time of retirement  or death of the Executive  will be eligible
for health  coverage from the company or its successor  during the term of their
respective lives. Such health coverage to be paid for by Executive or the spouse
of the Executive.

         3.11 Split Dollar.  Executive,  at Executive=s  option,  has a one time
election to reduce the  supplemental  retirement  payment provided under Section
3.9. Such  election must be made by January 1, 1999. If Executive  makes such an
election  prior to January 1, 1999,  Company  shall fund an amount  equal to the
actual equivalent of the retirement benefit in the form of premium advances on a
split dollar life policy on the life of the Executive,  or on the joint lives of
the  Executive  and his spouse.  Under the terms of the split  dollar  coverage,
Company  will be repaid,  either by loan on the policy or from policy  proceeds,
for all premiums advanced by the Company.

         4.       Acceptance.

                  The  Executive  accepts the  aforementioned  employment at the
compensation  and upon  the  terms  specified  herein.  During  the term of this
Agreement,  the  Executive  agrees to serve  the  Company  and its  subsidiaries
faithfully  and to the  best  of  his  ability  and to  devote  his  full  time,
attention,  and efforts to the business of the Company and its  subsidiaries and
shall  not  during  the term of this  Agreement  engage  in any  other  business
activity  that  would  interfere  with  his  employment  or  be  in  any  manner
competitive with the Company or any of its subsidiaries.

                  Contract  will not be  effective  until  approved  by Board of
Directors  which is  expected  to occur in November  1997.  Notwithstanding  the
above,  the  parties   acknowledge  that  the  contract  will  be  submitted  to
shareholders  vote at the April 1998  Shareholders  Meeting.  Such  approval  is
expected to occur at the 1998 Annual Shareholders meeting. In the event that the
shareholders do not approve the contract,  the parties agree to renegotiate this
Agreement with the intention of reaching and receiving shareholder approval..

         5.       Vacation and Sick Leave.

                  The  Executive  shall be  entitled  to four weeks paid  annual
vacation  and paid sick leave in  accordance  with the  policies of the Company.
Vacation  days shall be taken at such time or times as the Company and Executive
may agree.

                  The Company shall  provide paid sick leave in accordance  with
existing  benefit  policies;  however,  in the event of the Executive  physical,
mental, or emotional disability or incapacity,  the Company shall provide to the
Executive  any financial  remuneration  difference  between that amount  allowed
under  existing  benefit  policy  and the base  salary  in effect at the time of
Executive  disability or incapacity  for a period of up to 90 days.  Thereafter,
for an  additional  period of up to 90 days,  the Company  shall  provide to the
Executive  any financial  remuneration  difference  between that amount  allowed
under then existing  benefit  policy and 60 percent of the Executive base salary
in effect at the time of such disability. However, such salary benefits shall be
cumulative  and may be used only for a maximum  of 180 days as herein  provided.
Thereafter, the Executive shall be entitled to receive such


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benefits as shall be made generally  available to any employee of the Company or
executive employee of Company.

         6.       Death or Incapacity.

                  In the event of the  death of the  Executive  during  the term
hereof,  this Agreement  shall terminate and the Company shall not be subject to
any further  obligation  to such  deceased  Executive  hereunder,  or his estate
except for any accrued unpaid salary,  reimbursements,  and other  compensation,
including  without  limitation any vested  benefits  under the Company  employee
benefit  programs  and  any  incentive  payment  which  may be due  pursuant  to
subsections 3.2 and 3.9 hereof.

                  If, on account of physical, mental, or emotional disability or
incapacity,  the Executive shall fail or be unable to substantially  perform the
duties  contemplated by this Agreement for a total of 90 days or more within any
12 consecutive  calendar months, the Company may, upon 30 days written notice to
the Executive, reassign the Executive in accordance with Section 10.

         7.       Covenant Not to Compete.

                  In carrying out his duties under this Agreement, the Executive
may have  access to  confidential  information  and  trade  secrets  related  to
business  activities  of the Company  and its  subsidiaries  including,  without
limitation,  financial  projections and models,  cost and sales data,  marketing
plans  and  programs,  and  methods  of  operation.  In  order  to  protect  the
confidentiality  of information  acquired by the Executive  heretofore or in the
future in the course of his employment, the Executive hereby agrees that, during
the term of this  Agreement  and for a period of one year after any  termination
hereof,  he will not,  in any area of service  by the  Company or in any area in
which the Executive knows the Company,  or any direct or indirect  subsidiary or
affiliate  (including  but not  limited to the  Company,  or any  subsidiary  or
affiliate thereof) intends to extend its service, unless acting as an officer or
employee  of the  Company,  or with the prior  written  consent  of the Board of
Directors or the Company,  directly or indirectly manage,  operate,  control, or
own a 5 percent or more interest in or serve as an officer, director,  employee,
or partner  of, any  managed  health  care  business  entity  that  directly  or
indirectly competes with the Company as it then conducts its business.  The term
Amanaged  health care  business  entity@  refers to any business  entity  which,
directly or indirectly,  provides or arranges for the provision of comprehensive
medical  care,  including  physician  and  hospital  care,  to  participants  or
enrollees  for a  fixed,  prepaid  premium  or  fee  which  is not  adjusted  in
accordance with the amount of care actually provided. This covenant by Executive
shall be construed as an agreement  independent  of any other  provision of this
Agreement;  and the  existence of any claim or cause of action of the  Executive
against the Company or any of its subsidiaries whether or not predicated on this
Agreement,  shall not constitute a defense to the  enforceability by the Company
or any of its  subsidiaries  of this  Section 7. Any  violation  of this Section
would constitute a basis for termination with cause by the Company.

                  In  consideration  of  the  Executive=s  covenant  under  this
Section  7.1 not to compete for a period of one year after  termination  of this
Agreement,  as set forth  above,  the Company  shall  retain the  Executive as a
Consultant  for a  period  beginning  at the  conclusion  of the  term  of  this
Agreement  and not to exceed  one year.  The  Executive  shall be paid an amount
equal to the  Executive  pre-termination  base salary in  consideration  of this
covenant. The Company shall enforce this Section 7.1 through all available legal
means.

         8.       Termination.

                  Either of the employers or the  Executive  may terminate  this
Agreement in the event of a material  breach  thereof by the Executive or either
of the  employers,  respectively,  and the Executive may also be terminated  for
cause by either employer;  provided, however, that termination of this Agreement
by the  Company  for  either  material  breach  or cause  shall not  affect  any
obligation  arising under this  Agreement.  Termination by any party shall be by
notice  in  writing  specifying  such  material  breach  or cause  and  shall be
effective  on the date of such  notice,  without  prejudice to the rights of the
party to whom such notice is given to contest such  termination  by  appropriate
judicial means.



<PAGE>



                  For purposes of  termination of this Agreement by the Company,
the following  events shall be considered  cause under the preceding  subsection
8.1 for which Executive may be terminated:

         (a)  failure  or  refusal  by   Executive  to  perform  his  duties  in
              accordance with this Agreement,  including without  limitation the
              duty to keep the  Board of  Directors  of the  Company  adequately
              informed  and to  submit  to it  such  written  reports  as it may
              reasonably require;
         (b)  any material act of  self-dealing  between the  Executive  and the
              Company=s  business that is not disclosed in full to, and approved
              by, the Board of Directors of the Company;
         (c)  misrepresentation  of the  performance  and affairs of the Company
              and other matters affecting the Company;
         (d)  deliberate  falsification  by  the  Executive  of any  records  or
              reports; (e) fraud on the part of the Executive;
         (f)  theft, embezzlement, or misappropriation by the Executive of any
              funds of the Company, or conviction of the Executive for any
              felony;
         (g)  execution  by  the  Executive  or  any  document  transferring  or
              creating any material lien or  encumbrance  on any property of the
              Company without authorization of its Board of Directors.
         (h)  such other act as should  cause  material  harm to the business or
              property of the Company unless action was taken in good faith such
              as with a reasonable belief that such act was in the best interest
              of the Company.

All  references  to the Company in this Section 8 shall be deemed to include any
parent, subsidiaries, and affiliates of the Company.

                  At the  meeting  of the  Board of  Directors  of the  Company,
occurring during the fourth quarter of each year at what has been referred to as
the Planning  Session the Board shall, in the absence of the Executive,  discuss
the Executive performance, and take an affirmative vote to retain the Executive.
Should the Executive fail to receive the  affirmative  vote of more than half of
the  Directors  present and voting,  the Executive  duties under this  Agreement
shall  terminate,  and the  Executive  shall be entitled to  compensation  in an
amount equal to that determined under Section 10 of this Agreement,  however the
Executive  stock option vesting will not accelerate as described in Section 10.3
in such a situation.

                  Executive  should have the right to terminate  the contract by
providing  to the  Board of  Directors  notice of such  termination  6 months in
advance of such  termination or such other period of time as may be agreed to by
the parties. Termination pursuant to this Section 8.4 is not considered a change
in contract and no payments  will be made under  Section 10 after such notice is
provided by Executive.

         9.       Reassignment.

                   The Company may with cause  reassign the  Executive  from the
position of chairman, president, and chief executive officer to another position
in the Company.  Upon  reassignment,  Executive shall be entitled to continue to
receive his salary and any current bonus accrued, but no incentive  compensation
unless such position to which Executive is assigned is otherwise  covered by the
Company Management Bonus Program or any subsequent  incentive program adopted by
the  Company.  Should  such  reassignment  be  unacceptable  to  the  Executive,
Executive may elect to treat such  reassignment as a change in control under the
provision of Section 10.

         10.      Change in Control.

                  For purposes of this Agreement, a Achange in control@ shall be
deemed to have occurred if, at any time (a)  substantially all the assets of the
Company 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 percent or more of the combines voting power of the then
issued and  outstanding  securities  of the  Company;  and (b) the  Executive is
reassigned pursuant to subsection 9.1 within six months of such sale, merger, or
other event; provided, however, that no Achange in control


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shall be deemed to have  occurred  unless such  reassignment  is coupled  with a
significant diminution of the duties,  compensation and/or privileges previously
attaching to the Executive position as president,  chairman, and chief executive
officer of the Company. No change in control shall be deemed to have occurred if
the  reassignment   under  subsection  9.1  is  on  a  temporary  basis  and  is
attributable to the Executive  illness or other physical,  mental,  or emotional
disability or incapacity.

                  In the event of a change in control  as defined in  subsection
10.1  Executive  shall be entitled to a lump sum payment which shall be equal to
two times the Executive base salary for the year in which such change in control
occurs.  Upon payment of the lump sum provided under this  subsection  10.2, the
obligations of the Company to employ Executive under this Agreement shall cease.
However, if the event which triggers the application of this provision occurs in
calendar year 2001, the Executive shall receive, under this Section 10.2 no more
than the number of months remaining under the terms of the Agreement  multiplied
by an amount equal to two months base  salary.  Notwithstanding  the above,  the
Company shall continue to be responsible for the payment of life insurance under
Section 3.5 and payment of the Company retirement obligations under Section 3.9.

                  In the event of a change in control  as defined in  subsection
10.1, all stock options to which  Executive is entitled shall  immediately  vest
and become exercisable.  Such acceleration of the vesting of stock options shall
be in  addition  to,  and shall  have no effect on,  any  payments  pursuant  to
subsection.

                  The value of all payments,  benefits,  and other consideration
received  pursuant to subsections  10.2 and 10.3 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 this  Agreement  pursuant to Section 10, and to negotiate  modifications,  if
mutually  acceptable in situations where the results to the Executive and to the
Company are not compatible.

         11.      Notices.

                  All notices pursuant to this Agreement shall be in writing and
shall be effective  when  delivered to the recipient or sent to the recipient by
certified mail, return receipt requested, addressed as follows:

         (a)      If to the  Company, to:

                  Mid Atlantic Medical Services, Inc.
                  4 Taft Court
                  Rockville, MD  20850
                  ATTN:  Secretary

         (b)      If to the Executive, address to:

                  Mr. George T. Jochum
                  7810 Warfield Road
                  Gaithersburg, MD  20882

or to such other persons or addresses as may be specified in writing by the
appropriate party.

         12.      Interpretation.

                   This Agreement shall be interpreted,  performed, and enforced
in accordance  with the laws (other than those  relating to conflicts of law) of
the State of Delaware.

                   Should the parties be unable to agree upon the interpretation
of the Agreement, the matter will be referred to arbitration, under the rules of
the American Arbitration Association.


<PAGE>


         13.      Successors and Assigns.

                  This Agreement shall be binding upon the parties hereto, their
respective  heirs,  legal  representatives,  successors,  and assigns,  but this
Agreement may not be assigned by any party without the express  written  consent
of the other party hereto, and any assignment without such consent shall be void
and of no effect.

         14.      Entire Understanding:  Amendments and Waiver.

                  This Agreement  constitutes the entire  understanding  between
the parties concerning the subject matter hereof. No party shall be bound in any
manner related to employment by any warranties,  representations, or guarantees,
except as specifically set forth in this Agreement.

                  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.

         15.      Impact of Previous Contract.

                  This  Agreement  shall become  operational on January 1, 1999.
However, each party waives all rights and responsibilities under this Employment
Agreement, and this Employment Agreement will be without force and effect if the
Employment  Agreement executed by the parties on December 18, 1990 is terminated
for any reason prior to December 31, 1998.

                   Salary to be paid to the Executive for the calendar year 1998
will be set at $1,350,000.00.

                   The vote of  confidence  which  would  occur in January  1998
under the terms of the 1990  agreement  will  occur at the  November  1997 Board
Meeting.

                  Signed and delivered this  21st day of November, 1997, in
Rockville, Maryland, by Mid Atlantic Medical Services, Inc., and George T.
Jochum.


/s/ George T. Jochum
_______________________________________For:  Mid Atlantic Medical Services, Inc.
George T. Jochum

                                           BY:  /s/  Joseph L. Guarriello
                                          _____________________________________
                                               Joseph L. Guarriello
                                               Executive Vice-President
                                               and General Counsel