Amendment of 1996 Non-Qualified Stock Option Plan
After a motion was made and seconded, and with a majority of the Board voting,
it was

         FURTHER  RESOLVED,  that  Section  2.05  of the  Mid  Atlantic  Medical
Services,  Inc.  1996  Non-Qualified  Stock  Option  Plan (1996 Plan) be, and it
hereby is, amended to read in its entirety as follows:

         2.05 Committee means a committee of the Board as may be appointed, from
     time to time, by the Board.

                  (a)  The  Board  may  appoint  more  than  one   Committee  to
     administer the Plan. If it appoints more than one Committee,  one Committee
     (the Stock Option Committee) shall have the authority to grant Options to a
     Participant  who is either,  at the Date of Grant of the Option,  a covered
     employee  as defined  in Section  162(m) or who is subject to Section 16 of
     the Exchange Act; however,  such Committee shall also have the authority to
     grant Options to other  Participants.  The Stock Option  Committee shall be
     composed  of at  least  two  directors  of the  Company,  each of whom is a
     "non-employee  director" as defined in Rule 16b-3 and an "outside director"
     within the  meaning of Section  162(m).  If,  however,  at least two of the
     Company's  directors  are  not  both  non-employee  directors  and  outside
     directors,  the Board may grant  Options to a  Participant  who is either a
     covered  employee  or subject to Section 16 of the  Exchange  Act, in which
     case the Board may also  administer the Plan and the term Committee as used
     herein  shall also  include  the Board.  The other  Committee  (the  Select
     Committee)  shall be  composed  of at  least  one  director,  who may be an
     officer of the Company.  The Select Committee shall have authority to grant
     Options to a  Participant  who is not,  at the Date of Grant of the Option,
     either a covered  employee  as  defined  in  Section  162(m) or  subject to
     Section 16 of the Exchange Act.

                  (b) The Board may, from time to time,  appoint members of each
     Committee in substitution  for those members who were previously  appointed
     and may fill vacancies, however caused, in the Committee.

                  (c) The Stock Option  Committee and the Select Committee shall
     each have the power and authority to administer the Plan in accordance with
     Article  III  with  respect  to  particular  classes  of  Participants  (as
     specified in Section  2.05(a))  and, when used herein,  the term  Committee
     shall mean either the Stock Option Committee or the Select Committee if the
     Board appoints more than one Committee to administer the Plan. If, however,
     there is a conflict  between the  determinations  made by the Stock  Option
     Committee and the Select Committee,  the  determinations  made by the Stock
     Option Committee shall control.

and it was


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         FURTHER RESOLVED,  that Section 2.08 of the 1996 Plan be, and it hereby
is, amended to read in its entirety as follows:

         2.08 Date of Grant means the date  designated  by the  Committee as the
     date as of which it grants an Option,  which shall not be earlier  than the
     date on which the Committee approves the granting of such Option.

and it was

         FURTHER RESOLVED,  that Sections 2.24 and 2.25 be, and they hereby are,
added to the 1996 Plan in the following form:

         2.24 Rule 16b-3 means Rule 16b-3  promulgated  by the SEC under Section
     16 of the Exchange Act and any successor rule.

         2.25     Section 162(m) means Section 162(m) of the Code and the
     regulations thereunder.

and it was

         FURTHER RESOLVED,  that Section 3.02 of the 1996 Plan be, and it hereby
is, amended to read in its entirety as follows:

         3.02 Actions of the  Committee.  Except when the Committee is the Board
     in the  circumstance  described in the last sentence of Section  2.05,  all
     determinations  of the  Committee  shall be made by a majority  vote of its
     members.  A majority of a Committee member shall  constitute a quorum.  Any
     decision  or  determination  reduced  to  writing  and signed by all of the
     members  shall be fully as  effective  as if it had been made by a majority
     vote at a meeting  duly  called  and held.  The  Committee  shall also have
     express  authorization to hold Committee meetings by conference  telephone,
     or  similar   communication   equipment  by  means  of  which  all  persons
     participating in the meeting can hear each other.

and it was

FURTHER  RESOLVED,  that  Section  8.11 of the 1996 Plan be,  and it hereby  is,
 amended to read in its entirety as follows:

         8.11 Compliance with Rule 16b-3 and Section 162(m). It is intended that
     the Plan be applied and administered in compliance with Rule 16b-3 and with
     Section  162(m).  If any  provision  of the Plan would be in  violation  of
     Section 162(m) if applied as written,  such provision shall not have effect
     as written and shall be given effect so as to comply with Section 162(m) as
     determined by the Committee in its sole and absolute discretion.  The Board
     is authorized to amend the Plan and the Committee is authorized to make any
     such modifications to Option Agreements to


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     comply with Rule 16b-3 and Section 162(m), as they may be amended from time
     to time,  and to make any other such  amendments  or  modifications  deemed
     necessary or appropriate  to better  accomplish the purposes of the Plan in
     light  of  any   amendments   made  to  Rule  16b-3  and  Section   162(m).
     Notwithstanding the foregoing,  the Board may amend the Plan so that it (or
     certain of its  provisions)  no longer  comply  with either or both of Rule
     16b-3 or  Section  162(m) if the Board  specifically  determines  that such
     compliance is no longer desired and the Committee may grant Options that do
     not  comply  with  Rule  16b-3  and/or  Section  162(m)  if  the  Committee
     determines, in its sole and absolute discretion, that it is in the interest
     of the Company to do so.

and it was

         FURTHER RESOLVED,  that Section 8.16 of the 1996 Plan be, and it hereby
is, amended to read in its entirety as follows:

         8.16     Amendment and Termination.

                  (a)  Amendment.  The  Board  shall  have  complete  power  and
     authority  to  amend  the  Plan  at any  time  it is  deemed  necessary  or
     appropriate;  provided,  however,  that the Board  shall not,  without  the
     affirmative  approval of a simple  majority of the holders of Common Stock,
     represented,  by person or by proxy,  and  entitled to vote at an annual or
     special  meeting of the holders of Common Stock,  make any  amendment  that
     requires  stockholder  approval under  applicable  law or rule,  unless the
     Board determines that compliance with such law or rule is no longer desired
     with  respect to the Plan as a whole or the  provision  to be  amended.  No
     termination  or  amendment  of the Plan may,  without  the  consent  of the
     Participant  to whom any Option shall  theretofore  have been granted under
     the Plan,  adversely affect the right of such individual under such Option;
     provided,  however,  that the  Committee  may,  in its  sole  and  absolute
     discretion, make provision in an Option Agreement for such amendments that,
     in its sole and absolute discretion, it deems appropriate.

                  (b) Termination.  The Board shall have the right and the power
     to terminate  the Plan at any time.  No Option  shall be granted  under the
     Plan after the  termination  of the Plan,  but the  termination of the Plan
     shall not have any other effect and any Option  outstanding  at the time of
     the termination of the Plan may be amended and exercised and may vest after
     termination  of the Plan at any time prior to the  expiration  date of such
     Option to the same extent such Option could have been amended or would have
     been exercisable or vest had the Plan not terminated.