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As filed with the Securities and Exchange Commission on May 24, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POLICY MANAGEMENT SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0723125
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One PMS Center (P.O. Box Ten)
Blythewood, S.C. (Columbia, S.C.) 29016 (29202)
(Address of Principal Executive Offices) (Zip Code)
POLICY MANAGEMENT SYSTEMS CORPORATION
1993 LONG-TERM INCENTIVE PLAN OF EXECUTIVES
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
(Full title of the plans)
Stephen G. Morrison, Secretary
Policy Management Systems Corporation
One PMS Center
Blythewood, South Carolina 29016
(803) 735-4000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of securities Amount Proposed Proposed Amount of
to be registered to be maximum maximum registration
registered offering aggregate fee
price offering
per price (1)
share (1)
Common Stock, par
value $.01 per 4,300,000 $46.000 $197,800,000 $68,206.90
share. . . . .
(1) Pursuant to Rule 457(h), these prices are estimated
solely for the purpose of calculating the registration fee
and are based upon the average of the high and low sales
prices of the Registrant's Common Stock on the New York
Stock Exchange on May 19, 1995.
There are also registered hereunder such additional
indeterminate number of shares as may be issued as a result
of the antidilution provisions of the Plans.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing information specified by Part I of this
Form S-8 Registration Statement (the "Registration Statement") will
be sent or given to participants in the plans listed on the cover
of the Registration Statement (the "Plans") as specified in Rule
428(b)(1) promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Securities Act"). Such documents are not being filed with
the Commission but constitute (along with the documents
incorporated by reference into the Registration Statement pursuant
to Item 3 of Part II hereof) a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Policy Management Systems
Corporation (the "Company") with the Commission are incorporated
herein by reference:
(1) the Annual Report on Form 10-K for the fiscal year ended
December 31, 1994; and
(2) the description of the Common Stock, $.01 par value per
share ("Common Stock"), of the Company which is contained
in the Company's Form 8-A Registration Statement declared
effective by the Commission on [July 6, 1990], including
any amendments or reports filed for the purpose of updating
such description.
All documents and reports subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all
securities offered have been sold or which de-registers such
securities then remaining unsold shall be deemed to be incorporated
herein by reference and to be a part hereof from the date of filing
of such documents or reports. Any statement contained in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded, except as so modified or superseded, shall
not be deemed to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not applicable
Item 5. Interests of Named Experts and Counsel
Stephen G. Morrison, Executive Vice President, General Counsel
and Secretary of the Company, is the record and beneficial owner of
15 shares of Common Stock and holds options to purchase an
additional 66,667 shares of Common Stock.
Item 6. Indemnification of Directors and Officers
The South Carolina Business Corporation Act (the "Act) permits,
and in certain circumstances requires, indemnification of directors
and officers for liability and expenses incurred by them in
connection with any civil, criminal or administrative claim or
proceeding in which they may become involved by reason of being a
director or officer of the Company. The Act applies to both civil
and criminal actions (including civil actions brought as derivative
actions by or in the right of the Company) and permits
indemnification if the director or officer acted in good faith in
what he reasonably believed to be the best interest of the Company
and, in addition, in criminal actions, if he had no reasonable
cause to believe his conduct to be unlawful. If the required
standard of conduct is met, indemnification may include counsel
fees and disbursements of the director or officer, and judgments,
fines, penalties and settlement payments. Directors and officers
who are successful with respect to any claim against them are
entitled to indemnification as a matter of right for reasonable
expenses incurred. On the other hand, if the charges made in any
action are sustained, either the Board of Directors, acting by
disinterested members, independent legal counsel or the holders of
stock entitled to vote will determine if the required standard of
conduct has been met to permit indemnification. If, in an
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action brought by or in the right of the Company, the director or
officer is adjudged to be liable, he will only be entitled to such
indemnity for reasonable expenses incurred as the court conducting
the proceeding finds to be fair and reasonable under the
circumstances.
The Act also provides for indemnification of persons who, at the
request of the Company, act as directors or officers of other
companies. The Company's Articles of Incorporation currently
provide that the Company shall indemnify the persons to the extent
permitted to be indemnified by the Act as summarized outlined
above.
Officers and directors of the Company are presently covered by
insurance which (with certain exceptions and within certain
limitations) indemnifies them against any losses or liabilities
arising from any alleged "wrongful act" including any alleged
breach of duty, neglect, error, misstatement, misleading statement,
omission or other act done or wrongfully attempted. The cost of
such insurance is borne by the Company as permitted by the Articles
of Incorporation of the Company and the laws of the State of South
Carolina.
Item 7. Exemption from Registration Claimed
Not applicable
Item 8. Exhibits
Exhibit
Number Description
4.1 - Restated Articles of Incorporation of the
Company, as amended, filed as an exhibit to
Form 10-K Annual Report for the year ended
December 31, 1994 and incorporated herein
by reference.
4.2 - Restated By-laws of the Company, as
amended, filed as an exhibit to Form 10-K
Annual Report for the year ended December
31, 1994 and incorporated herein by
reference.
4.3 - Policy Management Systems Corporation 1993
Long-Term Incentive Plan of Executives,
filed as an exhibit to Form 10-K Annual
Report for the year ended December 31, 1994
and incorporated herein by reference.
4.4 - Policy Management Systems Corporation 1989
Stock Option Plan, as amended.
5.1 - Opinion of Stephen G. Morrison, Executive
Vice President, General Counsel and
Secretary of the Company, with respect to
the legality of the securities being
registered.
23.1 - Consent of Stephen G. Morrison, Executive
Vice President, General Counsel and
Secretary of the Company, (contained in his
opinion filed herewith as Exhibit 5.1).
23.2 - Consent of Coopers & Lybrand L.L.P.
24 - Power of Attorney by the Officers and
Directors who signed this Registration
Statement set forth on page 6 herein.
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Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Blythewood, State of South Carolina, on this 24th day of May,
1995.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY (SIGNATURE) /s/ Timothy V. Williams
(NAME AND TITLE) Timothy V. Williams,
Executive Vice President,
Chief Financial Officer
DATE May 24, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signatures" constitutes and
appoints Timothy V. Williams, G. Larry Wilson and Stephen G.
Morrison and each of them (with full power to each of them to act
alone) his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities to sign any or all
amendments to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any one of them, or their substitute or
substitutes, may or shall lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons in
the capacities indicated on this 24th day of May, 1995.
BY (SIGNATURE) /s/ G. Larry Wilson
(NAME AND TITLE) G. Larry Wilson, Chairman of the Board
Directors, President and Chief
Executive Officer (Principal
Executive Officer)
DATE May 24, 1995
BY (SIGNATURE) /s/ Timothy V. Williams
(NAME AND TITLE) Timothy V. Williams, Executive Vice
President, Chief Financial Officer
(Principal Financial Officer)
DATE May 24, 1995
BY (SIGNATURE) /s/ Stan F. Stoudenmire
(NAME AND TITLE) Stan F. Stoudenmire, Vice President and
Corporate Controller (Principal
Accounting Officer)
DATE May 24, 1995
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BY (SIGNATURE) /s/ Roy L. Faulks
(NAME AND TITLE) Roy L. Faulks, Vice Chairman of the
Board of Directors
DATE May 24, 1995
BY (SIGNATURE) /s/ Steven A. Denning
(NAME AND TITLE) Steven A. Denning, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ Joe M. Henson
(NAME AND TITLE) Joe M. Henson, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ Frederick B. Karl
(NAME AND TITLE) Frederick B. Karl, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ Dr. John M. Palms
(NAME AND TITLE) Dr. John M. Palms, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ Joseph D. Sargent
(NAME AND TITLE) Joseph D. Sargent, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ John P. Seibels
(NAME AND TITLE) John P. Seibels, Director
DATE May 24, 1995
BY (SIGNATURE) /s/ Richard G. Trub
(NAME AND TITLE) Richard G. Trub, Director
DATE May 24, 1995
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EXHIBIT INDEX
Exhibit
Number Description
4.1(1) Restated Articles of Incorporation of the
Company, as amended.
4.2(1) Restated By-laws of the Company, as amended.
4.3(1) Policy Management Systems Corporation 1993 Long-
Term Incentive Plan of Executives.
4.4 Policy Management Systems Corporation 1989 Stock
Option Plan, as amended.
5.1 Opinion of Stephen G. Morrison, Executive Vice
President, General Counsel and Secretary of the
Company, with respect to the legality of the
securities being registered.
23.1 Consent of Stephen G. Morrison, Executive Vice
President, General Counsel and Secretary of the
Company, (contained in his opinion filed
herewith as Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney executed by the officers and
directors who signed this Registration Statement set
forth on page 6 herein.
(1) Filed as an exhibit to Form 10-K Annual Report for the year
ended December 31, 1994 and incorporated herein by
reference.
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EXHIBIT 4.4
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
1.
PURPOSE
The purpose of this Plan is to promote the interest of PMSC
and its Subsidiaries by granting Options to purchase Common Stock
to certain Key Employees in order (1) to attract and retain said
Key Employees, (2) to provide an additional incentive to each such
Key Employee to work to increase the value of Common Stock and (3)
to provide each such Key Employee with a stake in the future of
PMSC which corresponds to the stake of each of PMSC's shareholders.
2.
DEFINITIONS
Each term set forth in this Section 2 shall have the meaning
set forth opposite such term for purposes of this Plan and, for
purposes of such definitions, the singular shall include the plural
and the plural shall include the singular.
2.1. Board -- means the Board of Directors of PMSC.
2.2. Code -- means the Internal Revenue Code of 1986, as
amended.
2.3. Committee -- means the Compensation Committee of the
Board.
2.4. Common Stock -- means the common stock of PMSC.
2.5. Fair Market Value -- means the closing price on any date
for a share of Common Stock on the national securities exchange on
which the Common Stock is listed. In the event the Common Stock is
listed on
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NASDAQ, "Fair Market Value" shall mean the average of the closing
bid and asked prices of the Common Stock on such date or, in the
absence of bid and asked prices on such day on NASDAQ, such average
on the first preceding day the Common Stock was traded. If no such
price quotation is available, "Fair Market Value" shall mean the
price which the Committee acting in good faith determines through
any reasonable valuation method that a share of Common Stock would
change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell and both having
reasonable knowledge of the relevant facts.
2.6. ISO -- means an option granted under this Plan to
purchase Common Stock which satisfies the requirements of Section
422A of the Code.
2.7. Key Employee -- means a full time, salaried employee or
a director of PMSC or any Subsidiary who, in the judgment of the
Committee acting in its absolute discretion, is a key to the
success of PMSC or such Subsidiary and who is not a Ten Percent
Shareholder. With respect to grants of ISO's Key Employee shall
not include any director who is not otherwise also an employee of
PMSC or a Subsidiary.
2.8. Non-ISO -- means an option granted under this Plan to
purchase stock which is not intended to qualify as an ISO pursuant
to Section 422A of the Code.
2.9. Option -- means an ISO or a Non-ISO.
2.10. Option Agreement -- means the written agreement or
instrument which sets forth the terms of an Option granted to a Key
Employee under this Plan.
2.11. Option Price -- means the price which shall be paid to
purchase one share of stock upon the exercise of an Option granted
under this Plan.
2.12. Parent Corporation -- means any corporation which is a
parent of PMSC within the meaning of Section 425(e) of the Code.
2.13. Plan -- means this PMSC 1989 Stock Option Plan, as
amended from time to time.
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2.14. PMSC -- means Policy Management Systems Corporation, a
South Carolina corporation, and any successor to such corporation.
2.15. Predecessor Corporation -- means any corporation which
is a predecessor corporation (within the meaning of Section
422(b)(7) of the Code) of PMSC, any Subsidiary or Parent
Corporation.
2.16. Subsidiary -- means any corporation which is a
subsidiary corporation (within the meaning of Section 425(f) of the
Code) of PMSC.
2.17. Ten Percent Shareholder -- means a person who owns
(after taking into account the attribution rules of Section 425(d)
of the Code) more than ten percent (10%) of the total combined
voting power of all classes of stock of either PMSC, a subsidiary
or a parent corporation.
3.
SHARES SUBJECT TO OPTIONS
There shall be 1,200,000 shares of Common Stock reserved for
use under this Plan, and such shares of Common Stock shall be
reserved to the extent that PMSC deems appropriate from authorized
but unissued shares of Common Stock or from shares of Common Stock
which have been reacquired by PMSC. Furthermore, any shares of
Common Stock subject to an Option which remain after the
cancellation, expiration or exchange of such Option thereafter
shall again become available for use under this Plan.
4.
EFFECTIVE DATE
The effective date of this Plan shall be the date it is
adopted by the Board, provided that the shareholders representing
a majority of the shares of PMSC voting at a duly called meeting of
such shareholders approve this Plan within twelve (12) months after
such effective date. If such effective date comes before such
shareholder approval, any Options granted under this Plan before
the date of such approval automatically shall be granted subject to
such approval.
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5.
COMMITTEE
This Plan shall be administered by the Committee. The
Committee acting in its absolute discretion shall exercise such
powers and take such action as expressly called for under this Plan
and, further, the Committee shall have the power to interpret this
Plan and (subject to Section 13, Section 14 and Section 15) to take
such other action in the administration and operation of this Plan
as the Committee deems equitable under the circumstances, which
action shall be binding on PMSC, on each affected Key Employee and
on each other person directly or indirectly affected by such
action.
6.
ELIGIBILITY
Only Key Employees shall be eligible for the grant of Options
under this Plan.
7.
GRANT OF OPTIONS
(a) Committee Action. The Committee acting in its absolute
discretion shall grant Options to certain Key Employees under this
Plan from time to time to purchase shares of Common Stock and,
further, shall have the right to grant new Options in exchange for
outstanding Options. Each grant of an Option shall be evidenced by
an Option Agreement, and each Option Agreement shall incorporate
such terms and conditions as the Committee acting in its absolute
discretion deems consistent with the terms of this Plan; provided,
however, if the Committee grants an ISO and a Non-ISO to a Key
Employee on the same date, the right of the Key Employee to
exercise
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or surrender one such Option shall not be conditioned on his or her
surrender of or failure to exercise the other such Option.
(b) Directors. The Committee shall not grant Options for
more than fifteen percent (15%) of the number of shares reserved
hereunder to the members of the Board who are not also employees of
PMSC or its subsidiaries. The Committee shall not grant Options
for more than twenty-five percent (25%) of the number of shares
reserved hereunder to members of the Board who are also employees
of PMSC or its subsidiaries.
(c) Limitation on Grant. The aggregate fair market value
(determined at the time of Option grant) of stock with respect to
which ISOs are exercisable for the first time by a Key Employee
during any calendar year (under all stock option plans of PMSC and
any parent or subsidiary corporation of such Key Employee's
employer corporation) shall not exceed One Hundred Thousand Dollars
($100,000.00). In the event of an acceleration of an Option
pursuant to the terms of Section 14, only such portion of such
Option as may be accelerated, consistent with the provisions of the
preceding sentence, shall be accelerated and treated as an ISO and
any remaining portion of such Option shall be accelerated but shall
be redesignated a non-ISO.
8.
OPTION PRICE
The Option Price for each share of Common Stock subject to an
Option shall be no less than the Fair Market Value of a share of
Common Stock on the date the Option is granted. The Option Price
shall be payable in cash in full upon the exercise of any Option,
or the Key Employee may pay all or part of the Option Price upon
exercise of the Option in shares of Common Stock already held by
the Key Employee. In the event that all or part of the Option
Price is paid in shares of Common Stock, the value of such shares
shall be equal to the Fair Market Value of such shares on the date
of exercise of the Option.
9.
EXERCISE PERIOD
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Each Option granted under this Plan may be exercised in whole
or in part only during a term (the "Term") commencing on the date
one (1) year after the date such Option is granted and ending on
the earlier of:
(1) the date such Option is exercised in full,
(2) the date which is the tenth anniversary of the date such
Option is granted, if such Option is an ISO, or
(3) the date which is one day after the tenth anniversary of the
date such Option is granted, if such Option is a Non-ISO.
An Option Agreement shall provide that Options may only be
exercised in annual installments as follows:
(1) During the first year of the Term, the Option shall be
exercisable as to one-third (1/3) of the number of shares subject
to the Option;
(2) During the second year of the Term, the Option shall be
exercisable as to two-thirds (2/3) of the number of shares subject
to the Option, minus the number of shares, if any, as to which the
Option was exercised during the first year of the Term; and
(3) During the third and following years of the Term, the Option
shall be exercisable as to all of the shares subject to the Option,
minus the number of shares, if any, as to which the Option was
exercised during the first and second years of the Term.
An Option Agreement shall provide that an Option may not be
exercised after the termination of employment or term as director
of a Key Employee with the Company or its Subsidiaries, except that
in the event of retirement with the consent of the Company or any
of its Subsidiaries such a Key Employee may exercise their Option
for a period of three (3) months from said retirement, and in the
event of the death of a Key Employee, during their employment or
term as director or within three (3) months after retirement, said
Option may be exercised during a period of one (1) year from the
date of death, as described in Section 10 below. In no event shall
any such extended period result in the exercise of an Option later
than the date which is the tenth anniversary of the date such
Option is granted, however, nor shall any
<PAGE> 6
Options be exercisable to any greater extent than they may have
been at the date of said retirement or death.
10.
NONTRANSFERABILITY
No Option granted under this Plan shall be transferable by a
Key Employee other than by will or by the laws of descent and
distribution, and such Option shall be exercisable during a Key
Employee's lifetime only by the Key Employee. The estate of a
deceased Key Employee or the person or persons to whom an Option is
transferred by will or by the laws of descent and distribution
thereafter shall be treated as the Key Employee.
11.
SECURITIES REGISTRATION
Each Option Agreement shall provide that, upon the receipt of
shares of Common Stock as a result of the surrender or exercise of
an Option, the Key Employee shall, if so requested by PMSC, hold
such shares of Common Stock for investment and not with a view of
resale or distribution to the public and, if so requested by PMSC,
shall deliver to PMSC a written statement satisfactory to PMSC to
that effect. As for Common Stock issued pursuant to this Plan,
PMSC at its expense shall take such action as it deems necessary or
appropriate to register the original issuance of such Common Stock
to a Key Employee under the Securities Act of 1933 and under any
other applicable securities laws or to qualify such Common Stock
for an exemption under any such laws prior to the issuance of such
Common Stock to a Key Employee; however, PMSC shall have no
obligation whatsoever to take any such action in connection with
the transfer,
<PAGE> 7
resale or other disposition of such Common Stock by a Key Employee.
12.
LIFE OF PLAN
No Option shall be granted under this Plan on or after the
earlier of:
(1) the tenth anniversary of the effective date of this Plan
(as determined under Section 4 of this Plan), in which event this
Plan otherwise thereafter shall continue in effect until all
outstanding Options have been surrendered or exercised in full or
no longer are exercisable, or
(2) the date on which all of the Common Stock reserved under
Section 3 of this Plan has (as a result of the surrender or
exercise of Options granted under this Plan) been issued or no
longer is available for use under this Plan, in which event this
Plan also shall terminate on such date.
13.
ADJUSTMENT
The number of shares of Common Stock reserved under Section 3
of this Plan, the number of shares of Common Stock subject to
Options granted under this Plan, and the Option Price, as defined
in Section 8 hereof, in each Option Agreement outstanding at said
time, shall all be adjusted by the Board in an equitable manner to
reflect any change in the capitalization of PMSC including, but not
limited to, such changes as stock dividends or stock splits.
Furthermore, the Board shall have the right to adjust (in a manner
which satisfies the requirements of Section 425(a) of the Code) the
number of shares of Common Stock reserved under Section 3 of this
Plan, the number of
<PAGE> 8
shares subject to Options granted under this Plan and the Option
Price, as defined in Section 8 hereof, in each Option Agreement
outstanding at said time, in the event of any corporate transaction
described in Section 425(a) of the Code which provides for the
substitution or assumption of such Options. If any adjustment
under this Section 13 would create a fractional share of Common
Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares
of Common Stock reserved under this Plan and the number subject to
any Options granted under this Plan shall be the next lower number
of shares of Common Stock, rounding all fractions downward. An
adjustment made under this Section 13 by the Board shall be
conclusive and binding on all affected persons and, further, shall
not constitute an increase in "the number of shares reserved under
Section 3" within the meaning of Section 15(1) of this Plan.
14.
SALE OR MERGER OF PMSC
In the event of dissolution or liquidation of PMSC or any
merger or combination in which PMSC is not a surviving corporation,
each outstanding Option granted hereunder shall terminate, but the
Optionee shall have the right, immediately prior to such
dissolution, liquidation, merger or combination, to exercise his or
her Option, in whole or in part, to the extent that it shall not
have been exercised, without regard to any installment exercise
provisions.
15.
AMENDMENT TO PLAN
This Plan may be amended by the Board from time to time to the
extent that the Board deems necessary or appropriate; provided,
however, no such amendment shall be made absent the approval of the
shareholders of PMSC (1) to increase the number of shares reserved
under Section 3, (2) to extend the maximum life of the Plan under
Section 12 or the maximum exercise period under Section 9, (3) to
<PAGE> 9
decrease the minimum Option Price under Section 8, (4) to change
the class of persons eligible for Options as Key Employees under
Section 6 or to otherwise materially modify (within the meaning of
Rule 16b-3 of the Securities Exchange Act of 1934, as amended) the
requirements as to eligibility for participation in this Plan or
(5) to otherwise materially increase (within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, as amended) the
benefits accruing under this Plan. The Board also may suspend the
granting of Options under this Plan at any time and may terminate
this Plan at any time; provided, however, PMSC shall not have the
right to modify, amend or cancel any Option granted before such
suspension or termination unless (1) the Key Employee consents in
writing to such modification, amendment or cancellation or (2)
there is a dissolution or liquidation of PMSC or a transaction
described in Section 13 or Section 14 of this Plan.
16.
MISCELLANEOUS
16.1 No Shareholder Rights. No Key Employee shall have any
right as a shareholder of PMSC as a result of the grant of an
Option under this Plan or the exercise of such Option, pending the
actual delivery of the Common Stock subject to such Option to such
Key Employee.
16.2 No Contract of Employment. The grant of an Option to a
Key Employee under this Plan shall not constitute a contract of
employment and shall not confer on a Key Employee any rights upon
his or her termination of employment in addition to those rights,
if any, expressly set forth in the Option Agreement which evidences
his or her Option.
16.3 Withholding. The exercise of any Option granted under
this Plan shall constitute a Key Employee's full and complete
consent to whatever action the Committee directs to satisfy the
federal and state tax withholding requirements, if any, which the
Committee in its discretion deems applicable to such exercise.
16.4 Construction. This Plan shall be construed under the
laws
<PAGE> 10
of the State of South Carolina.
IN WITNESS WHEREOF, PMSC has caused its duly authorized
officer to execute this Plan effective as of October 18, 1988 to
evidence its adoption of this Plan.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY (SIGNATURE) /s/ G. Larry Wilson
(NAME AND TITLE) G. Larry Wilson, President
DATE October 18, 1988
<PAGE> 1
FIRST AMENDMENT
TO THE
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
THIS AMENDMENT to the Policy Management Systems Corporation 1989
Stock Option Plan (the "Plan") is made by POLICY MANAGEMENT SYSTEMS
CORPORATION (the "Company") and entered into as of this 21st day of
July, 1992, to be effective as of the date this amendment is
approved by a majority of the stockholders of the Company at a
meeting duly called and held.
W I T N E S S E T H:
WHEREAS, the Company sponsors and maintains the Plan and, pursuant
to Section 15 thereof, the Company has the right to amend the Plan
subject to stockholders approving certain amendments; and
WHEREAS, the Company desires to amend the Plan to authorize
additional shares of the Company's stock to be reserved for use
under the Plan;
NOW, THEREFORE, the Plan is hereby amended, effective as set forth
above, as follows:
I. The first sentence of Section 3 is amended to read as
follows:
There shall be 2,500,000 shares of Common Stock reserved for
use under this Plan, and such shares of Common Stock shall be
reserved to the extent that PMSC deems appropriate from authorized
but unissued shares of Common Stock.
<PAGE> 2
IN WITNESS WHEREOF, this First Amendment has been executed on the
day and year first above written.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY (SIGNATURE) /s/ G. Larry Wilson
(NAME AND TITLE) G. Larry Wilson, President
DATE July 21, 1992
<PAGE> 1
EXHIBIT A
SECOND AMENDMENT
TO THE
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
THIS AMENDMENT to Policy Management Systems Corporation 1989 Stock
Option Plan (the "Plan) is made by POLICY MANAGEMENT SYSTEMS
CORPORATION (the "Company") and entered into as of this 13th day of
October, 1994, to be effective as of the date this amendment
is approved by the stockholders of the Company at a meeting duly
called and held.
W I T N E S S E T H:
WHEREAS, the Company sponsors and maintains the Plan and, pursuant
to Section 15 thereof, the Company has the right to amend the Plan
subject to stockholders approving certain amendments; and
WHEREAS, the Company desires to amend the Plan to authorize
additional shares of the Company's stock to be reserved for use
under the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as set forth
above, as follows:
1. The first sentence of Section 3 is amended to read as follows:
There shall be 2,750,000 shares of Common Stock reserved
for use under this Plan, and such shares of Common Stock
shall be reserved to the extent that PMSC deems
appropriate from authorized but unissued shares of Common
Stock.
2. The first sentence in the second paragraph of Section 3 is
amended to read as follows:
An Option Agreement shall provide when the Option shall
become exercisable, but in no event shall an Option
become exercisable earlier than in installments as
follows:
(1) During the first year of the Term, the
Option shall be exercisable as to one-third
(1/3) of the number of shares subject to the
Option;
(2) During the second year of the Term, the
Option shall be exercisable as to two-thirds
(2/3) of the number of shares subject to the
Option, minus the number of shares, if any,
as to which the Option was exercised during
the first year of the Term; and
<PAGE> 2
(3) During the third and following years of the
Term, the Option shall be exercisable as to
all of the shares subject to the Option,
minus and number of shares, if any, as to
which the Option was exercised during the
first and second years of the Term.
IN WITNESS WHEREOF, this Amendment has been executed on the day and
year first above written.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY (SIGNATURE) /s/ G. Larry Wilson
(NAME AND TITLE) G. Larry Wilson, President and
Chairman
DATE October 13, 1994
<PAGE> 3
EXHIBIT B
Insert to Form of Option
THESE OPTIONS MAY BE REVOKED BY THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS IN THEIR ABSOLUTE DISCRETION, PRIOR TO THE
TIME
THEY BECOME EXERCISABLE IN ACCORDANCE WITH THE PLAN IF THEY DEEM
IT
APPROPRIATE TO DO SO BASED UPON SUCH FACTS OR CIRCUMSTANCES AS
THEY
DEEM RELEVANT, INCLUDING, WITHOUT LIMITATION, THE RESULTS OR
FINDINGS, WHETHER PRELIMINARY OR FINAL, OF THE VARIOUS
INVESTIGATIONS INTO THE COMPANY'S PREVIOUSLY ISSUED FINANCIAL
STATEMENTS.
<PAGE> 1
THIRD AMENDMENT
TO THE
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
THIS AMENDMENT to Policy Management Systems Corporation 1989 Stock
Option Plan (the "Plan) is made by POLICY MANAGEMENT SYSTEMS
CORPORATION (the "Company") and entered into as of this ____ day of
____________, 1995, to be effective as of the date this amendment
is approved by the stockholders of the Company at a meeting duly
called and held.
W I T N E S S E T H:
WHEREAS, the Company sponsors and maintains the Plan and, pursuant
to Section 15 thereof, the Company has the right to amend the Plan
subject to stockholders approving certain amendments; and
WHEREAS, the Company desires to amend the Plan to authorize
additional shares of the Company's stock to be reserved for use
under the Plan;
NOW THEREFORE, the Plan is hereby amended, effective as set forth
above, as follows:
1. There shall be an additional 2,250,000 shares of Common Stock
reserved for use under this Plan, and such shares of Common
Stock shall be reserved to the extent that PMSC deems
appropriate from authorized but unissued shares of Common
Stock.
2. Section 14 of the Plan is amended to add the following
Subsection 14.2 and the existing paragraph under Section 14 is
re-numbered as Section 14.1:
14.2 The Committee may, in its sole descretion, include in an
Option Agreement that if there is a Change in Control
(as hereinafter defined) of PMSC prior to the expiration
date of the Options, then, notwithstanding any other
provision of this Plan or the Option Agreement to the
contrary, each Option then outstanding shall become
immediately exercisable in full and shall become
nonforfeitable regardless of whether there is a change in
office or employment status subsequent to such Change in
Control. For purposes of this Section, a "Change in
Control" shall be deemed to have occurred in the event
any person, corporation, partnership or other entity,
either alone or in conjunction with its "affiliates" as
that term is defined in Rule 405 of the General Rules and
Regulations under the Securities Act of 1933, as amended,
or other group of persons, corporations, partnerships or
other entities who are not affiliates, but who are acting
in concert, becomes the owner of record or beneficially
of securities of PMSC which represent thirty-three and
one-third percent (33 1/3%) or more of the combined
voting power of PMSC's then outstanding securities
entitled to elect directors or (3) the Board or a
committee thereof makes a determination in its reasonable
<PAGE> 2
judgment that a Change in Control of PMSC has taken place. In
addition, the Committee may, in its sole descretion, include in an
Option Agreement that notwithstanding any other provision in the
Plan or the Option Agreement to the contrary, following a change
in control of PMSC the Key Employee may exercise the Options for a
period of one (1) year following the date of the change in control
but in no event shall such Options be exercised after the tenth
anniversay date such Options were granted.
"Cause" for the purposes of Section 14.2 is defined to mean:
(1) willful failure to substantially perform prescribed duties
other than as a result of disability; or (2) willful
engagement in misconduct significantly detrimental to PMSC.
"Good Reason" to terminate employment with PMSC occurs if: (1)
duties are assigned that are materially inconsistent with
previous duties; (2) duties and responsibilities are
substantially reduced; (3) base compensation is reduced not as
part of an across the board reduction for all senior officers
or executives; or (4) participation under compensation plans
or arrangements generally made available to persons at Key
Employee's level of responsibility at PMSC is denied.
3. Section 9 is amended to add to the end of the Section the
following:
Notwithstanding the foregoing, the Committee may, but
shall not be required to do so, in its sole and absolute
discretion, permit a Key Employee to exercise outstanding
options sooner than would otherwise be permitted by the
foregoing and as set forth in the Option Agreement in the
event the Key Employee retires or otherwise leaves the
employ of the PMSC.
IN WITNESS WHEREOF, this Amendment has been executed on the day and
year first above written.
POLICY MANAGEMENT SYSTEMS
CORPORATION
BY: __________________________
G. Larry Wilson
President and Chairman
<PAGE> 1
FOURTH AMENDMENT
TO THE
POLICY MANAGEMENT SYSTEMS CORPORATION
1989 STOCK OPTION PLAN
THIS AMENDMENT to Policy Management Systems Corporation 1989 Stock
Option Plan (the "Plan") is made by POLICY MANAGEMENT SYSTEMS
CORPORATION ("PMSC") and entered into as of this 26th day of March,
1995.
W I T N E S S E T H:
WHEREAS, PMSC sponsors and maintains the Plan and, pursuant to
Section 15 thereof, PMSC has the right to make certain amendments
to the Plan, such as the one set forth herein, without the
stockholders approving such amendments; and
WHEREAS, under Section 162(m) of the Internal Revenue Code, for
PMSC to receive certain tax treatment relating to the Plan, the
Plan must set forth the maximum amount of Options which can be
granted to individuals in a specified period pursuant to the Plan;
and
WHEREAS, PMSC now desires to amend the Plan to satisfy the
requirements of Section 162(m).
NOW THEREFORE, the Plan is hereby amended, effective as set forth
above, as follows:
A new subsection (d) is added to Section 7 of the Plan as follows:
(d) The maximum number of Options which may be granted under
this Plan during any calendar year to any individual shall
not exceed 500,000, subject to adjustment in the manner
provided in the Plan for changes in capital structure and
other corporate transactions.
IN WITNESS WHEREOF, this Amendment has been executed on the day and
year first above written.
POLICY MANAGEMENT SYSTEMS
CORPORATION
BY (SIGNATURE) /s/ G. Larry Wilson
(NAME AND TITLE) G. Larry Wilson, President and
Chairman
DATE March 26, 1995
<PAGE> 1
EXHIBIT 5.1
May 24, 1995
Policy Management Systems Corporation
One PMS Center
Blythewood, South Carolina 29016
Gentlemen:
I am Executive Vice President, General Counsel and Secretary of
Policy Management Systems Corporation, a South Carolina
corporation (the Company ). This opinion is given in connection
with the preparation and filing by the Company with the
Securities and Exchange Commission (the Commission ) on May 24,
1995 of a Registration Statement on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, (the
Act ), for the registration of 4,300,000 shares of the common
stock, $.01 par value per share, of the Company (the "Shares")
which are reserved for issuance under the Policy Management
Systems Corporation Long-Term Incentive Plan for Executives and
the Policy Management Systems Corporation 1989 Stock Option Plan
(collectively, the "Plans").
I have examined and am familiar with originals or copies,
certified or otherwise authenticated to my satisfaction, of such
corporate records of the Company, certificates of officers of and
Company and of public officials and and such other instruments as
I have deemed appropriate as the basis for the opinion set forth
herein, including the Plans. In my examination, I have assumed
the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to me as
originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies.
Based upon the foregoing, I am of the opinion that the Shares
reserved for issuance under the Plans have been duly authorized
and, when issued in accordance with the terms of the applicable
Plan upon due exercise of stock options granted thereunder,
including payment of the option exercise price specified therein,
will be validly issued, fully paid and non-assessable under the
South Carolina Business Corporation Act of 1988 as in effect on
this date.
My opinion herein is limited to matters governed by the laws of
the state of South Carolina, and I express no opinion as to the
laws of any other jurisdiction.
<PAGE> 2
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not thereby
admit that I come within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations
of the Commission thereunder.
Very truly yours,
Stephen G. Morrison
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-8 of our report, which includes an
explanatory paragraph related to litigation and investigations into
possible security law violations, dated February 9, 1995, on our
audits of the financial statements of Policy Management Systems
Corporation which report is included in Form 10-K. We also consent
to the reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
May 24, 1995
Atlanta, Georgia
