TO:        Paul R. Butare

FROM:      Stephen G. Morrison

DATE:      December 10, 1998

RE:        Date of Resignation

Paul,

As  we  discussed,  this  memorandum  summarizes  our  conversation  and  the
agreements  reached  related  to  the  effective  date  of  your  resignation.

1.     You will continue to be employed by the company until January 13, 1999,
at  which  time  your  employment  will  cease.

2.        Through January 13, 1999, you will continue to receive your life and
health  insurance  benefits  and  all  other employee benefits which employees
receive.

3.      Your salary will cease as of December 4, 1998 and no additional salary
will  be  due for the period December 5, 1998 through January 13, 1999, except
for  any  amounts  needed  to  cover the costs of the above employee benefits.

4.      If the Board approves bonus payments based upon 1998 results under the
1998  Bonus  Plan,  you  will  remain eligible for payment of 10/12 hrs of the
portion  of  such bonus which is payable in cash under the Plan.  You will not
be  entitled  to  any  portion  of  the bonus which would have been payable in
restricted  stock.

5.          The  Company  will  transfer title to you for your current Company
automobile  and  computer.

6.       You will be entitled to exercise any stock options previously granted
to  you which vest on or before January 8, 1999, so long as they are exercised
before  termination  of  your  employment.    You waive any entitlement to any
unvested  stock  options  which  are  scheduled to vest on or after January 9,
1999.

7.       Until January 13, 1999, your time will be utilized on such transition
assistance as may be required and to assisting counsel in matters currently in
litigation.


8.          To the extent that the above agreements are inconsistent with your
November  7,  1996  Employment  Agreement  or  your  Employee  Stock
Option/Non-Compete Agreements, this memorandum will constitute an amendment of
those  agreements,  but only to be extent that this memorandum is inconsistent
with  those  agreements.

Paul,  I believe the above accurately summarize our agreements related to your
resignation  and  the date of your termination.  If you agree, pleas sign both
copies of this memorandum and retain one copy for your records, we will retain
the  other  for  our  records.


                           POLICY  MANAGEMENT  SYSTEMS  CORPORATION


                            By:
     (Date)                              Stephen  G.  Morrison
                                         Executive  Vice  President



     (Date)                                 Paul  R.  Butare