[LETTERHEAD]

May 7, 1997

Mr. John J. Wider, Jr.
10482 Fair Oaks
Columbia, MD  21044

Dear John:

On behalf of Green Spring Health Services, Inc., I am pleased to offer you the
position of Executive Vice President and Chief Operating Officer reporting
directly to me. The salary accompanying this position is $240,000 annually.
Additionally, you will receive a $40,000 sign-on bonus. You will receive $30,000
of the signing bonus with your first paycheck and the remaining $10,000 three
months later. We will also provide you with a $1,000 per month car allowance. We
will pay for any storage of furniture and any relocation reimbursement you may
owe to your previous employer. The combined amount for storage and relocation
will not exceed $50,000. We are willing to pay this amount to either you or your
current employer.

Additionally, you will participate in the Short-Term Incentive Program. Target
funding for this grade 28 position is 25% of the $233,372 mid-point with the
potential of increasing to 56.25%, based on individual and financial
performance. (The Short-Term Incentive Program is reviewed yearly and may be
revised as the business environment dictates.) We will guarantee that during
your first 12 months of employment, you will receive $85,000 in short-term
incentive. You will receive the guaranteed amount in two separate payments.
First, as part of our normal Short-Term Incentive Program, you will receive a
short-term incentive for fiscal year 1997 that will be paid upon the
finalization of the 1997 bonuses around November or December 1997. You will
receive the balance of your short-term incentive guarantee 12 months after you
begin employment.

Annually, you will receive 23 days of Paid Time Off, (PTO). This amount will be
prorated for 1997, based on your date of hire. Employees participate in a
benefits program called Flexible Compensation. The program includes Medical,
Dental, Vision, Prescription Drug, Life Insurance, Disability, Paid Time Off and
Flexible Spending Accounts. Benefits begin on the first of the month following
thirty days of employment. A benefits summary is attached for your review.
Medical insurance will start on the first day of the month following thirty days
of employment. Through your current employer, you have 60 days to elect COBRA
retroactively. Many employees defer the decision to elect COBRA coverage until
the end of that 60 day period. At that time, your coverage with Green Spring
will have begun. In the event you need to access your health insurance prior to
your Green Spring insurance becoming effective, you may elect COBRA.

As a member of Green Spring's executive management team, you will be issued
25,000 stock options with your participation in the Magellan Stock Options
Program. The strike price of the stock will be determined upon your arrival.
Last years program provided for a four year vesting period. We anticipate that
your options will be issued through the new program which we believe will have a
three year vesting period. You will also be eligible for future grants of
additional options.

Green Spring also offers a 401(k) and 401(k) Plus Plan that you may participate
in on January 1, 1998. Through this program, you may defer up to 12% (currently,
highly compensated employees are limited to 6% for discrimination testing
purposes) and receive a 3% match, based upon 50% of your contribution up to 6%.
A 401(k) Plus company contribution of 2%- 4% of salary is also made based on
year-end profitability.

Finally, in the event of involuntary separation of employment, Green Spring will
provide you with twelve months of salary and some benefits continuation through
the Transition Support Program.

It is a pleasure to offer you this opportunity at Green Spring Health Services.
I hope that you will find this offer agreeable. If so, please sign and return
this letter by Monday, May 12, 1997. I look forward to you joining the Green
Spring team. If you have any questions, please call me at (410) 964-1007.

Sincerely,                         Agreed :

/s/Henry Harbin, M.D.              /s/John J. Wider, Jr.              5/12/97
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Henry Harbin, M.D.                 Signature                         Date
President, CEO