DIRECTOR STOCK OPTION AGREEMENT





     THIS AGREEMENT, dated ___________________, is made by and between

PacifiCare Health Systems, Inc., a Delaware corporation (the "Company"), and

_______________________ (the "Optionee"):



     WHEREAS, the Company wishes to afford the Optionee the opportunity to

purchase shares of its Common Stock;



     WHEREAS, the Optionee is a non-officer director of the Company; and



     WHEREAS, the Company has determined that it would be to the advantage and

best interest of the Company and its stockholders that the Optionee receive the

Stock Options provided for herein as an incentive for the Optionee to continue

to work for the best interests of the Company and its stockholders and has

instructed the undersigned officers to issue said Option;



     NOW, THEREFORE, in consideration of the mutual covenants herein contained

and other good and valuable consideration, receipt of which is hereby

acknowledged, the parties hereto do hereby agree as follows:





                                    ARTICLE I

                                   DEFINITIONS



     Whenever the following terms are used in this Agreement, they shall have

the meaning specified below unless the context clearly indicates to the

contrary.



Section 1.1 -- Board



     "Board" shall mean the Company's Board of Directors.



Section 1.2 -- Chief Financial Officer



     "Chief Financial Officer" shall mean the Chief Financial Officer of the

Company.



Section 1.3 -- Committee



     "Committee" shall mean a committee of the Board of Directors authorized to

administer the Company's stock option plans.



                                      -1-

{PAGE}   2



Section 1.4 -- Common Stock



     "Common Stock" shall mean the common stock, par value $.01 per share, of

the Company.



Section 1.5 -- Exchange Act



        "Exchange Act" shall mean the Securities Exchange Act of 1934, as

amended.



Section 1.6- Option



     "Option" shall mean the Stock Option to purchase shares of the Common Stock

granted under this Agreement.



Section 1.7 -- Pronouns



     The masculine pronoun shall include the feminine and neuter, and the

singular the plural, where the context so indicates.



Section 1.8 -- Secretary



     "Secretary" shall mean the Secretary of the Company.



Section 1.9 -- Subsidiary



     "Subsidiary" shall mean any corporation in an unbroken chain of

corporations beginning with the Company if each of the corporations other than

the last corporation in the unbroken chain then owns stock possessing 50 percent

or more of the total combined voting power of all classes of stock in one of the

other corporations in such chain.



Section 1.10 -- Termination of Directorship



     "Termination of Directorship" shall mean eight months from the time the

Optionee voluntarily or involuntarily ceases to serve as a director of the

Company, unless Optionee ceases to be a director as a result of his/her death or

disability.



                                      -2-

{PAGE}   3



                                   ARTICLE II

                                 GRANT OF OPTION



Section 2.1 -- Grant of Option



     In consideration of the Optionee's agreement to render services to the

Company and for other good and valuable consideration, the Company irrevocably

grants to the Optionee the option to purchase any part or all of an aggregate of

______ shares of its Common Stock upon the terms and conditions set forth in

this Agreement. The date of grant of this Option is ____________.



Section 2.2 -- Purchase Price



     The purchase price of the shares of stock covered by the Option shall be

$_____ per share without commission or other charge.



Section 2.3 -- Consideration to Company



     This Option is being granted in consideration of the Optionee's agreement

to render services to the Company as a member of the Company's board of

directors.



Section 2.4 -- Adjustments in Option



     (a) In the event that the outstanding shares of the Common Stock subject

are changed into or exchanged for a different number or kind of shares of the

Company or other securities of the Company or of another corporation by reason

of reorganization, merger, consolidation, recapitalization, reclassification,

stock split, stock dividend or combination of shares, or in the event of

extraordinary cash or non-cash dividends being declared with respect to

outstanding shares of Common Stock or similar transactions, proportionate

adjustments shall be made by the Committee in the number and kind of shares as

to which the Option, or portions thereof then unexercised, shall be exercisable,

to the end that after such event the Optionee's proportionate interest shall be

maintained as before the occurrence of such event. Such adjustment in the Option

shall be made without change in the total price applicable to the unexercised

portion of the Option (except for any change in the aggregate price resulting

from rounding-off of share quantities or prices) and with any necessary

corresponding adjustment in the exercise price per share. Any such adjustment

made by the Committee shall be final and binding upon the Optionee, the Company

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