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POLICY MANAGEMENT SYSTEMS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
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Article I
Definitions
1.01 Affiliate . . . . . . . . . . . . . . . . . . . . . 1
1.02 Base Earnings . . . . . . . . . . . . . . . . . . . 1
1.03 Board . . . . . . . . . . . . . . . . . . . . . . . 1
1.04 Committee . . . . . . . . . . . . . . . . . . . . . 1
1.05 Effective Date. . . . . . . . . . . . . . . . . . . 1
1.06 Employer. . . . . . . . . . . . . . . . . . . . . . 1
1.07 Employee. . . . . . . . . . . . . . . . . . . . . . 2
1.08 Employee Contribution . . . . . . . . . . . . . . . 2
1.09 Employer Matching Contribution. . . . . . . . . . . 2
1.10 Participant . . . . . . . . . . . . . . . . . . . . 2
1.11 Participating Affiliate . . . . . . . . . . . . . . 2
1.12 Pay Period, Payday. . . . . . . . . . . . . . . . . 2
1.13 Payroll Authorization Form. . . . . . . . . . . . . 2
1.14 Plan Administrator. . . . . . . . . . . . . . . . . 2
1.15 Prevailing Market Price . . . . . . . . . . . . . . 2
1.16 Service . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Stock . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 Termination of Service. . . . . . . . . . . . . . . 3
Article II
Participation
2.01 Eligibility . . . . . . . . . . . . . . . . . . . . 3
2.02 Voluntary, Non-Discriminatory Plan. . . . . . . . . 3
2.03 Election to Participate . . . . . . . . . . . . . . 3
2.04 Participation of Executive Officers . . . . . . . . 3
2.05 Termination of Service. . . . . . . . . . . . . . . 4
2.06 Rehire. . . . . . . . . . . . . . . . . . . . . . . 4
Article III
Contributions
3.01 Employee Contributions. . . . . . . . . . . . . . . 4
3.02 Employer Matching Contributions . . . . . . . . . . 5
3.03 Limits on Contributions . . . . . . . . . . . . . . 5
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3.04 Change or Suspension of Contribution. . . . . . . . 5
3.05 Tax Withholding . . . . . . . . . . . . . . . . . . 5
Article IV
Purchase of Stock
4.01 Investment in PMSC Stock. . . . . . . . . . . . . . 5
4.02 No Interest to be Paid. . . . . . . . . . . . . . . 5
4.03 Dividends . . . . . . . . . . . . . . . . . . . . . 5
4.04 Shares Not Transferable . . . . . . . . . . . . . . 6
4.05 Voting Rights . . . . . . . . . . . . . . . . . . . 6
Article V
Distributions
5.01 Distributions During Participation. . . . . . . . . 6
5.02 Method of Distribution. . . . . . . . . . . . . . . 6
Article VI
Administration and Modification
6.01 Board of Directors. . . . . . . . . . . . . . . . . 7
6.02 Committee . . . . . . . . . . . . . . . . . . . . . 7
6.03 Plan Administrator. . . . . . . . . . . . . . . . . 8
6.04 Cost of the Plan. . . . . . . . . . . . . . . . . . 8
6.05 Brokerage Costs . . . . . . . . . . . . . . . . . . 8
6.06 Exculpation . . . . . . . . . . . . . . . . . . . . 8
Article VII
Miscellaneous Provisions
7.01 No Contract of Employment . . . . . . . . . . . . . 9
7.02 Plan Year . . . . . . . . . . . . . . . . . . . . . 9
7.03 Rules of Construction . . . . . . . . . . . . . . . 9
7.04 Governing Law . . . . . . . . . . . . . . . . . . . 9
7.05 Stockholder Ratification of Plan. . . . . . . . . . 9
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POLICY MANAGEMENT SYSTEMS CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
The purpose of the Policy Management Systems Corporation
Employee Stock Purchase Plan (the "Plan") is to provide the
eligible employees of Policy Management Systems Corporation
("PMSC") and its Participating Affiliates a convenient and
economical way to acquire shares of PMSC's Common Stock. By
simplifying and providing an additional financial incentive for the
purchase of PMSC Common Stock, the Company will obtain the benefit
of the added incentive inherent in the ownership of Common Stock by
such employees.
ARTICLE I
Definitions
1.01 Affiliate shall include all wholly owned subsidiaries of PMSC
and any other entity which may be designated from time to time as
such by the Board of Directors of PMSC.
1.02 Base Earnings shall mean the amount of regular salary or
wages, and excluding overtime payments, commission payments,
discretionary and non-discretionary bonuses, or other irregular
payments made by an Employer to an Employee. Base Earnings for a
fee-paid employee (as defined by the Company from time to time)
shall be his approved annualized administrative pay rate.
1.03 Board shall mean the PMSC Board of Directors.
1.04 Committee shall mean the persons appointed by the Board of
Directors of PMSC as set forth in the Plan.
1.05 Effective Date of the Plan is the later of:
(i) the date this Plan is executed by an authorized officer of
PMSC; or
(ii) the date PMSC has satisfied all the requirements to offer
the sale of Stock under the Plan, as evidenced by written notice to
the Committee from the Company's legal advisors.
1.06 Employer shall mean PMSC and all Participating Affiliates.
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1.07 Employee shall mean any person (including a corporate
officer) who is employed on a full-time basis in the regular
service of PMSC or one of its Participating Affiliates and who is
a permanent United States resident; provided, however, such term
shall not include persons employed for temporary periods or for
temporary jobs. For purposes of this Plan, full-time basis shall
mean regular employment of not less than thirty-five (35) hours per
week.
1.08 Employee Contribution shall mean the amount withheld from a
Participant's biweekly paycheck as directed by his Payroll
Authorization Form.
1.09 Employer Matching Contributions shall have that meaning set
forth in Section 3.02.
1.10 Participant shall mean an eligible Employee who elects to
participate in the Plan.
1.11 Participating Affiliate shall mean an Affiliate which has
adopted the Plan with the consent of the Board of Directors of
PMSC. If an organization which is or has become an Affiliate
ceases to be an Affiliate or a Participating Affiliate, such
organization and its employees shall be deemed to have withdrawn
from participation in the Plan.
1.12 Pay Period, Payday means the interval of time for which an
Employee regularly receives his compensation, and the day on which
the Employee regularly receives his compensation for the applicable
Pay Period respectively.
1.13 Payroll Authorization Form shall be in a form specified by
the Committee which shall authorize the Participant's Employer to
withhold from his paycheck a specified dollar amount to be remitted
to the Plan Administrator for the purchase of Stock under this
Plan. The Company may cancel any or all Payroll Authorization
Forms upon written notice to Participant(s).
1.14 Plan Administrator shall mean the person(s) or entity
appointed as set forth in the Plan to administer the Plan, make
purchases of Stock as agent for the Participants, and act as
custodian of shares purchased under the Plan. The Plan
Administrator shall at all times not be an affiliate (within the
meaning of applicable securities laws and regulations) of PMSC.
1.15 Prevailing Market Price shall mean the actual purchase price
for which shares of the Stock are purchased in the open market.
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1.16 Service shall mean that period of continuous uninterrupted
employment with PMSC or any Affiliates, from the Employee's first
day of employment until his date of Termination of Service with
PMSC and all Affiliates. In the case of an Affiliate which has
been acquired by PMSC through the acquisition of substantially all
of the assets or all of the stock of the Affiliate, Service only
shall include employment subsequent to the later of (i) PMSC's
consummation of the acquisition of the Affiliate or (ii) the date
on which such Affiliate is designated as a Participating Affiliate.
Service with two or more Affiliates during consecutive periods
shall be considered continuous service with one Affiliate.
1.17 Stock shall mean shares of Common Stock of PMSC.
1.18 Termination of Service shall mean any absence from the
employment of PMSC or any Participating Affiliate (including, but
not limited to, absences by reason of discharge or resignation).
ARTICLE II
Participation
2.01 Eligibility. As of the Effective Date, an Employee who is
actively employed shall be eligible to participate in the Plan
commencing on the first Payday of the first calendar quarter
beginning after the Employee has completed twelve (12) months of
continuous Service.
2.02 Voluntary, Non-Discriminatory Plan. Participation in this
Plan shall be voluntary and, except as required by applicable law,
all Employees who participate in the Plan shall have the same
rights and privileges under the Plan.
2.03 Election to Participate. An eligible Employee may elect to
participate in the Plan by timely execution of a Payroll
Authorization Form prior to the Pay Period in which the Employee
will begin participation. By signing a Payroll Authorization Form
an Employee shall be deemed to have accepted, and does hereby and
thereby accept, the terms of this Plan, and any and all amendments
of this Plan.
2.04 Participation by Executive Officers. Participants under the
Plan who are subject to the reporting and liability provisions of
Section 16 of the Securities and Exchange Act of 1934 (the "1934
Act") and the rules and regulations promulgated thereunder shall be
subject to the following provisions:
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a. Such Participants making withdrawals must cease further
purchases in the Plan for six months after the withdrawal, or the
securities so distributed must be held by such Participant six
months prior to disposition; provided, however, that extraordinary
distributions of all the Stock held by the Plan and distributions
in connection with death, retirement, disability or termination of
employment are not subject to this requirement.
b. Stock purchased under the Plan for such Participants shall be
held for a minimum of six months following the date of such
purchase under the Plan.
c. Such Participants who suspend payroll deductions under the Plan
may not commence future participation under the Plan for at least
six months from the date of such cessation of participation.
d. Reporting to the SEC, and others as required by law,
transactions in Stock under the Plan shall be the responsibility of
such Participants.
2.05 Termination of Service. Upon a Participant's Termination of
Service, the Participant will be deemed to have suspended
contributions to the Plan as of the date of his Termination of
Service. The Participant may request a distribution of his Stock,
or the cash value thereof, by submitting notice acceptable to the
Plan Administrator. Distributions shall be subject to the other
provisions of this Plan.
2.06 Rehire. An Employee who was eligible to participate in the
Plan at the time of his Termination of Service and who is
subsequently rehired may participate on the date of re-employment.
ARTICLE III
Contributions
3.01 Employee Contributions. Employee Contributions may only be
made through biweekly payroll deduction. The execution of a
Payroll Authorization Form by an Employee authorizes the Employer
to withhold such amounts to be remitted to the Plan Administrator
and is effective until revoked by the Participant as provided in
Section 3.04, Section 5.01, or as otherwise provided herein.
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3.02 Employer Matching Contribution. The Employer shall
contribute to the Plan Administrator, on a biweekly basis, an
amount equal to 15% of each Participant's Employee Contribution.
The Employer Matching Contribution will be made in cash and used
for the purchase of Stock.
3.03 Limits on Contribution. All payroll deductions for Employee
Contributions shall be in multiples of $5.00 from a minimum
deduction of $10.00 per Pay Period to a maximum payroll deduction
of the lesser of $900.00 per Pay Period or 10% of Base Earnings.
3.04 Change or Suspension of Contributions. A Participant may
increase, decrease or suspend his contributions under the Plan by
execution of a new Payroll Authorization Form. Such changes will
be effective as soon as administratively feasible and will not
affect the Employee's eligibility to participate.
3.05 Tax Withholding. All withholding taxes payable with respect
to the amount of Employee Contributions and Employer Matching
Contributions under the Plan will be deducted from such
Participant's salary, or other amounts payable to such Participant,
and will not reduce amounts paid to purchase Stock under the Plan
unless such reduction is necessary.
ARTICLE IV
Purchase of Stock
4.01 Investment in PMSC Stock. As soon as practical after receipt
of Employee Contributions and Employer Matching Contributions
remitted biweekly under the Plan, the Plan Administrator, or its
designated representative, shall purchase on behalf of the
Participants shares of Stock in the open market at Prevailing
Market Prices. The maximum amount of Stock will be purchased.
Monthly each Participant's account will be credited with his pro
rata share (computed to four decimal places) of the Stock
purchased.
4.02 No Interest to be Paid. During the interim between the
Employer's deduction of funds from the Participant's pay on a
biweekly basis and purchase of the Stock, no interest or other
earnings will be paid to or accrued for the benefit of
Participants, former Participants or personal representatives of
the foregoing.
4.03 Dividends to be Used to Purchase Additional Shares. Any cash
dividends received with respect to Stock held under the Plan shall
be used to purchase additional Stock for Participants in proportion
to their specified interest in the Stock upon which the dividends
were paid. Provided, however, that the Plan Administrator shall
pay
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dividends received which are attributable to Stock allocable to
Participants who have, or who have been deemed to have, withdrawn
from the Plan directly to such Participants on an annual basis.
Stock dividends, warrants and rights of any kind received with
respect to such Stock shall be held and/or distributed in the
manner provided under the Plan.
4.04 Shares Held Not Transferable. A Participant's undivided
interest in the Stock held under the Plan may not be assigned,
sold, pledged or alienated except in the event of death, (i)
pursuant to a Participant's valid last will and testament or by
applicable statutes of descent and distribution or (ii) pursuant to
a valid election of a Joint Account with rights of survivorship
with the Plan Administrator, as the case may be. In addition, such
undivided interest may not be encumbered by a lien, pledge or other
security interest of any kind, shall not be liable for or available
for the satisfaction of the debts of the Participant or any
judgment rendered against the Participant, and shall not be subject
to attachment or to the process of any court in aid or execution of
any judgement. However, a Participant shall be entitled to
withdraw Stock from the Plan in accordance with the applicable
provisions of this Plan.
4.05 Voting Rights. Each Participant shall have the power to
direct the vote of whole shares of Stock held for such
Participant's benefit under the Plan. In connection with any such
vote, the proxy of each such Participant shall be solicited and the
Plan Administrator shall cast its votes only in accordance with
such proxies. No discretion or direction may be exercised by the
Plan Administrator, Committee, PMSC or any Affiliate, with respect
to Stock voting. A Participant shall not be entitled to vote any
fraction of Stock held for such Participant's benefit under the
Plan.
ARTICLE V
Distributions
5.01 Distributions During Participation. A Participant may
withdraw Stock, or the cash value thereof, purchased under the Plan
by submitting notice acceptable to the Plan Administrator. The
Plan Administrator will make distributions as soon as
administratively feasible after receipt of proper notice. The Plan
Administrator will notify the Employer as soon as administratively
feasible when a Participant receives a distribution. A Participant
withdrawing Stock, or the cash value thereof, within two years of
the date of purchase shall be ineligible to make further
contributions to the Plan for twelve months following written
notice from the Employer to the Participant of the cancellation of
his Payroll Authorization Form. Participants may withdraw any whole
shares, or the cash value thereof, after two years of the date of
purchase of that Stock. Such withdrawals will not affect
participation in the Plan.
5.02 Method of Distribution. Distribution of Stock will be made
in whole shares. Fractional shares and any uninvested payroll
deductions shall be distributed in
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cash. The Participant will have the option to receive the entire
distribution in cash.
ARTICLE VI
Administration and Modification of the Plan
6.01 Board of Directors.
a. The Board shall have the following powers and duties with
respect to the Plan:
(i) to appoint and remove members of the Committee;
(ii) to amend the Plan; and/or
(iii) to terminate the Plan in whole or in part.
b. The Board shall have no other responsibilities with respect to
the Plan.
6.02 Committee.
a. Committee of not less than three or more than five individuals
may be appointed and serve at the pleasure of the Board to
administer the Plan. Committee members shall serve without
compensation.
b. The Committee shall appoint a Chairman and a Secretary from
among its members. All resolutions, determinations and other
actions shall be by majority vote of all members of the Committee.
Acts of the Committee at which at least a majority of the Committee
members are present, or acts reduced to or approved in writing by
a majority of the members of the Committee, shall be valid acts of
the Committee.
c. The Committee shall have the following specific powers and
responsibilities:
(i) To amend the Plan;
(ii) To appoint and remove the Plan Administrator and/or other
such agents as it deems necessary for the effective performance of
the duties so delegated;
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(iii) To construe the Plan and to determine all questions arising
in the administration, interpretation and operation of the Plan;
(iv) To decide all questions relating to the eligibility of
Employees to participate in the benefits of the Plan;
(v) To determine the benefits of the Plan to which any Participant
shall be entitled;
(vi) To delegate, in its sole discretion, all or any portion of
its duties hereunder to other individuals or entities.
d. No member or former member of the Committee shall be liable for
any action or determination made in good faith with respect to the
Plan or any benefits, shares or other awards bought or granted
hereunder.
6.03 Plan Administrator. The Plan Administrator shall keep a
continuous record of each Participant's Stock under the Plan. The
Plan Administrator shall issue to each Participant a statement of
account following each allocation transaction and each sell
transaction. Each inactive Participant will receive a statement of
his account on at least a quarterly basis. The Plan Administrator
shall also hold and act as custodian of Stock purchased or held
under the Plan. Certificates for Stock purchased under the Plan
shall be held by, and in the name of, the Plan Administrator, on
behalf of the Plan, for the benefit of the Participants as their
interests may appear from time to time. The Plan Administrator may
rely on the authority and correctness of information received from
PMSC, the Committee, or the delegate of either of the foregoing, in
performing its duties under the Plan.
6.04 Cost of the Plan. The cost of maintaining records and
executing transfers under the Plan shall be paid by the Employer.
The cost of receiving a distribution from the Plan shall be paid by
the Participant, former Participant, or personal representative of
the foregoing.
6.05 Brokerage Costs. Brokerage expenses incurred in the purchase
of Stock shall be paid by the Employer.
6.06 Exculpation. Neither PMSC, the Committee and its delegates,
any Affiliate, nor any broker through whom purchase orders are
executed pursuant to this Plan or the Plan Administrator shall have
any responsibility or liability for any action, omission or
determination in good faith, including, without limiting the
generality of the foregoing, any action with respect to price,
time, quantity or other conditions and circumstances of the
purchase, disposition or distribution of shares
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or funds under the terms of the Plan.
ARTICLE VII
Miscellaneous Provisions
7.01 No Contract of Employment. The granting of any right to an
Employee, pursuant to this Plan, shall not constitute an agreement,
understanding or other arrangement, express or implied, on the part
of PMSC, any Affiliate or any other person or entity to employ or
continue to employ such employee for any period of time.
7.02 Plan Year. The Plan's year and fiscal year shall end on
December 31 of each year.
7.03 Rules of Construction. Throughout this Plan, the masculine
includes the feminine, and the singular and the plural, and vice
versa, where applicable.
7.04 Governing Law. The construction, validity, and operation of
this Plan shall be governed by the laws of the State of South
Carolina, without regard to conflicts of law principles.
7.05 Stockholder Ratification of Plan. It is the intention of
PMSC to submit the Plan for ratification by the stockholders of
PMSC within 12 months of the date of adoption of the Plan. Such
stockholder ratification shall be sought to meet the requirements
of Rule 16b-3 under the 1934 Act. In the event that stockholders
do not ratify the Plan, the Plan will nevertheless remain in
effect.
Adopted this _____ day of _________________, 1995.
By: __________________________________________
Title: __________________________________________
Date: __________________________________________