POLICY MANAGEMENT SYSTEMS CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
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Award Agreement, dated as of August 11, 1998 (the "Date of Grant")
between POLICY MANAGEMENT SYSTEMS CORPORATION, a South Carolina corporation
(the "Company"), and (the "Participant"). This Award Agreement is pursuant
to the terms of the Company's Restricted Stock Ownership Plan (the "Plan").
The applicable terms of the Plan are incorporated herein by reference,
including the definition of terms contained in the Plan.
Section 1. Restricted Stock Award. The Company grants to the
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Participant, on the terms and conditions hereinafter set forth, a Restricted
Stock award with respect to 306 SHARES of the Common Stock of the Company (the
"Restricted Stock").
Section 2. Vesting of Restricted Stock. Subject to Sections 3
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and 4 hereof, the Restricted Stock shall become vested and nonforfeitable in
five equal annual installments based on the continued service of the
Participant on the Board in accordance with the following vesting schedule:
Vesting Date Number of Shares
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1. January 1, 1999 61
2. January 1, 2000 61
3. January 1, 2001 61
4. January 1, 2002 61
5. January 1, 2003 62
Section 3. Termination of Service. If the Participant's service
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on the Board is terminated by reason of Retirement, Disability or Death, all
unvested shares of Restricted Stock shall become immediately vested and
nonforfeitable. If the Participant's service on the Board is terminated by
the Company without Cause prior to any applicable vesting date, two-thirds
(2/3) of the remaining unvested shares of Restricted Stock shall become
immediately vested and nonforfeitable, and one-third (1/3) of the remaining
unvested shares shall be forfeited to the Company (in each case rounded upward
or downward to the nearest whole share, as applicable). If the Participant is
nominated but is not reelected as a member of the Board by the shareholders of
the Company, the restrictions imposed on any unvested portion of the
Restricted stock shall immediately lapse. If the Participant's service on the
Board is terminated for any reason other than as provided above in this
Section 3 (including, without limitation, voluntary termination by the
Participant or termination by the Company for Cause) prior to any applicable
vesting date, the Participant shall forfeit his interest in all shares of
Restricted Stock that have not become vested as of the date of termination.
Any shares of Restricted Stock that are forfeited by the Participant hereunder
shall be returned and transferred to the Company or the Plan Trust, as
determined by the Company, and the Participant shall cease for all purposes to
be a shareholder of such shares as of the date of termination of service.
Section 4. Change of Control. All shares of Restricted Stock
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shall become fully and immediately vested and nonforfeitable upon the
occurrence of a Change of Control of the Company prior to any scheduled
vesting date as provided in Section 2 hereof, provided that the Participant
remains an Independent Director of the Company on the date of the Change in
Control.
Section 5. Rights as a Shareholder. Subject to the otherwise
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applicable provisions of the Plan and this Award Agreement, the Participant
will have all rights of a shareholder with respect to shares of Restricted
Stock granted to the Participant hereunder, including the right to vote the
shares and receive all dividends and other distributions paid or made with
respect thereto.
Section 6. Restrictions on Transfer. Neither this Award nor any
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shares of the Restricted Stock covered hereby may be sold, assigned,
transferred, encumbered, hypothecated or pledged by the Participant, otherwise
than to the Company, unless as of the date of any such sale, assignment,
transfer, encumbrance, hypothecation or pledge, such shares of Restricted
Stock to be thus disposed of have become vested in accordance with this Award
Agreement. The certificate or certificates representing shares delivered
pursuant to the Award shall bear a legend referring to the nontransferability
or assignability of such shares pursuant to this Section, and a stop-transfer
order against such certificate or certificates will be placed by the Company
with its transfer agents and registrars. At the discretion of the Committee,
in lieu of issuing a stock certificate to the Participant, the Company or its
designated agent may hold the shares of Restricted Stock in escrow during the
period such shares remain subject to the vesting restrictions and other
restrictions provided hereunder.
Section 7. Award Subject to Plan. This Award and the Restricted
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Stock acquired hereunder are subject to the Plan, the terms and provisions of
which, as it may be amended from time to time, are hereby incorporated herein
by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan will govern and prevail.
Section 8. Section 83(b) Election. The Participant shall
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promptly (and not later than 30 days of the date hereof) notify the Company if
the Participant makes an election under section 83(b) of the Internal Revenue
Code.
Section 9. Investment Representation. Upon acquisition of
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Restricted Stock under the Plan at a time when there is not in effect a
registration statement under the Securities Act of 1933 relating to the shares
of Common Stock, the Participant hereby represents and warrants, and by virtue
of such acquisition shall be deemed to represent and warrant, to the Company
that the shares of Restricted Stock shall be acquired for investment and not
with a view to the distribution thereof, and not with any present intention of
distributing the same, and the Participant shall provide the Company with such
further representations and warranties as the Company may require in order to
ensure compliance with applicable federal and state securities, blue sky and
other laws. No shares of Restricted Stock shall be acquired unless and until
the Company and/or the Participant shall have complied with all applicable
federal or state registration, listing and/or qualification requirements and
all other requirements of law or of any regulatory agencies having
jurisdiction, unless the Committee has received evidence satisfactory to it
that the Participant may acquire such shares pursuant to an exemption from
registration under the applicable securities laws. Any determination in this
connection by the Committee shall be final, binding, and conclusive. The
Company reserves
the right to legend any certificate for shares of Common Stock, conditioning
sales of such shares upon compliance with applicable federal and state
securities laws and regulations.
Section 10. Changes in Common Stock. Any right of the
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Participant or the Company hereunder with respect to the Restricted Stock
shall also apply to any other shares of stock of the Company which such
Restricted Stock has been exchanged or converted into, or which were issued in
respect thereof, pursuant to any recapitalization or other event referred to
in Section 3.2 of the Plan, as determined by the Committee in accordance with
the Plan.
Section 11. No Right of Service. Nothing in this Award
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Agreement shall confer upon the Participant any right to continue as an
Independent Director of the Company or to interfere in any way with the right
of the Company or the shareholders of the Company to terminate the
Participant's service on the Board at any time.
Section 12. Notices. Any notice hereunder by the Participant
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shall be given to the Company in writing and such notice shall be deemed duly
given only upon receipt thereof at the Company's office at One PMSC Center,
Blythewood, South Carolina, 29016, or at such other address as the Company may
designate by notice to the President and General Counsel. Any notice
hereunder by the Company shall be given to the Participant in writing and such
notice shall be deemed duly given only upon receipt thereof at such address as
the Participant may have on file with the Company.
Section 13. Construction. The Committee shall have the
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discretionary authority for the interpretation and construction of this Award
Agreement, as and in the manner set forth in Section 4.2 of the Plan.
Section 14. Governing Law. This Award Agreement shall be
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construed and enforced in accordance with the laws of the State of South
Carolina, without giving effect to the choice of law principles thereof.
POLICY MANAGEMENT SYSTEMS CORPORATION
By: ____________________
Name: Stephen G. Morrison
Title: Executive Vice President, Secretary &
General Counsel
PARTICIPANT
Name: