As filed with the Securities and Exchange Commission on May 11, 1999
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
(State or other jurisdiction of incorporation or organization)
57-0723125
(I.R.S. Employer Identification No.)
One PMSC Center (P.O. Box Ten)
Blythewood, S.C. (Columbia, S.C.) 29016 (29202)
(Address of Principal Executive Offices) (Zip Code)
POLICY MANAGEMENT SYSTEMS CORPORATION
1999 STOCK OPTION PLAN
(Full title of the plan)
Stephen G. Morrison, Secretary
Policy Management Systems Corporation
One PMSC Center
Blythewood, South Carolina 29016
(803) 333-4000
(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 1,750,000 $33.688 $58,954,000 $16,389.21
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 5, 1999.
There are also registered hereunder such additional indeterminate number of
shares as may be issued as a result of the antidilution provisions of the Plan.
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 plan listed on the cover of the Registration Statement (the
"Plan") 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.
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,
1998;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 10,757 shares of Common Stock
and holds options to purchase an additional 453,334 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 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
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,
1998 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 31,1998 and incorporated
herein by reference.
4.3 - Policy Management Systems Corporation 1999 Stock Option Plan.
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 - 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).
23.1 - Consent of PricewaterhouseCoopers, LLP
24 - Power of Attorney by the Officers and Directors who signed this
Registration Statement set forth on page 6 herein.
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.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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.
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 11th day
of May,1999.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY (SIGNATURE) /s/ Timothy V. Williams
NAME AND TITLE) Timothy V. Williams,
Executive Vice President,
Principal Financial and Accounting Officer
DATE: May 11, 1999
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description Location
- ------ ----------- --------
<C> <S> <C>
4.1(1) Restated Articles of Incorporation of the Company, as amended.. . . (1)
4.2(1) Restated By-laws of the Company, as amended.. . . . . . . . . . . . (1)
4.3 Policy Management Systems Corporation 1999 Stock Option Plan. . . . 10
5.1 Opinion of Stephen G. Morrison, Executive Vice President, General . 20
Counsel and Secretary of the Company, with respect to the legality
of the securities being registered.
23 Consent of Stephen G. Morrison, Executive Vice President, General . 21
Counsel and Secretary of the Company, (contained in his opinion filed
herewith as Exhibit 5.1).
23.1 Consent of PricewaterhouseCoopers, LLP. . . . . . . . . . . . . . . 21
24 Power of Attorney executed by the officers and directors who signed 22
this Registration Statement set forth on page 7 herein.
(1) Filed as an exhibit to Form 10-K Annual Report for the year ended . (1)
December 31, 1998 and incorporated herein by reference.
</TABLE>
EXHIBIT 4.3
POLICY MANAGEMENT SYSTEMS CORPORATION
1999 STOCK OPTION PLAN
1. PURPOSE
----------
The purpose of this Plan is to enhance the profitability and value of PMSC and
to promote the interest of PMSC and its Subsidiaries by granting options to
purchase Common Stock to certain Eligible Persons in order: (1) to attract and
to retain such persons; (2) to provide an additional incentive to each such
person to work to increase the value of Common Stock; and (3) to provide each
such person with a stake in the future of PMSC which corresponds to the stake of
each of PMSC's shareholders.
2. DEFINITIONS
--------------
Unless the context requires otherwise, capitalized terms used in this Plan shall
have the meaning set forth in the Glossary attached to this Plan.
3. SHARES SUBJECT TO OPTIONS
----------------------------
Subject to adjustment pursuant to the provisions of Article 15 hereof, there
shall be 1,750,000 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. Shares of
Common Stock covered by an Option that shall have been exercised shall not again
be available for an Option grant. If an Option shall terminate or expire for any
reason without being wholly exercised, the number of shares to which such Option
termination relates shall again be available for grant hereunder.
4. EFFECTIVE DATE
-----------------
The effective date of this Plan shall be the date it is approved by the
shareholders of PMSC voting at a duly called meeting of such shareholders.
5. COMMITTEE
------------
5.1 COMMITTEE MEMBERS. The Plan shall be administered by a Committee
comprised of no fewer than two persons selected by the Board. Solely to the
extent deemed necessary or advisable by the Board, each Committee member shall
meet the definition of a "non-employee director" for purposes of such Rule 16b-3
under the Exchange Act and of an "outside director" under section 162(m) of the
Code. The Board shall also have the authority to exercise the powers and duties
of the Committee under this Plan.
5.2 ADMINISTRATION BY THE 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. The
Committee shall have the power to interpret this Plan and (subject to the terms
of this Plan) to take such other action in the administration and operation of
this Plan as the Committee deems equitable under the circumstances. All actions
of the Committee shall be binding on PMSC, on each affected Optionee, and on
each other person directly or indirectly affected by such action.
5.3 GRANTS TO NON-EMPLOYEE DIRECTORS. Awards of Options to non-employee
directors shall be approved by the Board. With respect to awards to
non-employee directors, all rights, powers and authorities vested in the
Committee under this Plan shall instead be exercised by the Board, and all
provisions of this Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a
reference to the Board for such purpose.
6. ELIGIBILITY
--------------
Only Eligible Persons shall be eligible for the grant of Options under this
Plan.
7. GRANT OF OPTIONS
-------------------
7.1 COMMITTEE ACTION. The Committee, in its absolute discretion, may, from
time to time, grant Options to those Eligible Persons selected by the Committee,
pursuant to the terms of this Plan. The grant of an Option shall be effective
upon the date the grant is approved by the Committee, except to the extent the
Committee shall specify a later date, then that later date shall be the
effective date of the grant. At the election of the Committee, each grant of an
Option shall be evidenced by an Option Agreement incorporating such terms and
conditions as the Committee acting in its absolute discretion deems consistent
with the terms of this Plan. The Option Agreement may include additional
provisions and restrictions which are not inconsistent with this Plan. Each
Option shall be designated, at the discretion of the Committee, as an ISO or a
Non-ISO; provided, however, that ISO's may only be granted to Eligible Persons
who are employees of PMSC.
7.2 ANNUAL INDIVIDUAL LIMIT. 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 this Plan for
changes in capital structure and other corporate transactions.
8. OPTION PRICE
---------------
The Option Price for each share of Common Stock subject to an Option shall be no
less than Fair Market Value of a share of Common Stock on the effective date of
the grant of the Option
9. EXERCISE PERIOD
------------------
9.1 TERM OF OPTION. Subject to the terms of this Plan and any further
restrictions which may be contained in an Option Agreement, an Option may be
exercised in whole or in part, with respect to whole shares only, during the
Term commencing on the date one (1) year after the effective date such Option is
granted and ending on the earlier of: (1) the date such Option is exercised in
full; or (2) the date which is one day prior to the tenth anniversary of the
date such Option is granted.
9.2 EXERCISABILITY SCHEDULE. At the time of grant, the Committee shall
establish a schedule for the Options to become exercisable, but in no event
shall an Option be scheduled at the effective date of grant to become
exercisable earlier than in three (3) equal installments on the first, second,
and third anniversary dates of the effective date of the grant of the Option.
9.3 OPTION EXERCISE; WITHHOLDING. Subject to such terms and conditions as
shall be specified in an Option Agreement, an otherwise exercisable Option may
be exercised in whole or in part at any time, with respect to whole shares only,
within the period permitted for the exercise thereof, and shall be exercised by
written notice of intent to exercise the Option with respect to a specified
number of shares delivered to PMSC at its principal office, and payment in full
to PMSC at said office of the amount of the Option Price for the number of
shares of the Common Stock with respect to which the Option is then being
exercised. Payment of the Option Price shall be made: (i) in cash or by cash
equivalent; (ii) at the discretion of the Committee, in Common Stock that has
been held by the Optionee for at least six (6) months (or such other period as
the Committee may deem appropriate for purposes of applicable accounting rules),
valued at the Fair Market Value of such shares determined on the date of
exercise; (iii) at the discretion of the Committee, by a delivery of a notice
that the Optionee has placed a market sell order (or similar instruction) with a
broker with respect to shares of Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to PMSC in satisfaction of the Option Price
(conditioned upon the payment of such net proceeds); (iv) at the discretion of
the Committee, by a combination of the methods described above; or (v) by such
other method as may be approved by the Committee and set forth in the Option
Agreement. In addition to and at the time of payment of the Option Price, the
Optionee shall pay to PMSC the full amount of all federal and state withholding
and other employment taxes required to be withheld in connection with such
exercise, in any manner consistent with the foregoing that is approved by the
Committee and set forth in the Option Agreement.
10. NONTRANSFERABILITY
----------------------
All Options shall be nontransferable except upon the Optionee's death, by the
Optionee's will or the laws of descent and distribution.
11. ADDITIONAL RULES FOR ISOS
-----------------------------
11.1 ANNUAL LIMITS. No ISO shall be granted to an Optionee as a result of
which the aggregate Fair Market Value (determined as of the date of grant) of
the Common Stock with respect to which ISO's are exercisable for the first time
in any calendar year under this Plan and any other stock option plans of PMSC,
any Subsidiary, or any Parent Corporation, would exceed the maximum amount
permitted under section 422(d) of the Code. This limitation shall be applied by
taking options into account in the order in which granted.
11.2 TERMINATION OF EMPLOYMENT. An ISO may provide that such Option may be
exercised not later than three (3) months following termination of employment of
the Optionee with PMSC and all Subsidiaries, subject to special rules relating
to death, as and to the extent determined by the Committee to be consistent with
the requirements of section 422 of the Code and Treasury Regulations thereunder.
11.3 OTHER TERMS AND CONDITIONS. Any ISO granted hereunder shall contain
such additional terms and conditions, not inconsistent with the terms of this
Plan, as are deemed necessary or desirable by the Committee, which terms,
together with the terms of this Plan, shall be intended and interpreted to cause
such ISO to qualify as an "incentive stock option" under section 422 of the
Code. An Option Agreement for an ISO may provide that such Option shall be
treated as a Non-ISO to the extent that certain requirements applicable to
"incentive stock options" under the Code shall not be satisfied.
11.4 DISQUALIFYING DISPOSITIONS. If shares of Common Stock acquired by
exercise of an ISO are disposed of within two (2) years following the date of
grant or one (1) year following the transfer of such shares to the Optionee upon
exercise, the Optionee shall, promptly following such disposition, notify PMSC
in writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Committee may reasonably require.
<PAGE>
12. TERMINATION OF SERVICE
--------------------------
12.1 DEATH. Unless otherwise provided by the Committee and set forth in an
Agreement, if an Optionee shall die at any time after the date of grant and
while an Eligible Person or prior to expiration of the times set forth in
Sections 11.2 or 12.2, the executor or administrator of the estate of the
decedent, or the person or persons to whom an Option shall have been validly
transferred in accordance with this Plan pursuant to will or the laws of descent
and distribution, shall have the right, during the period ending one (1) year
after the date of the Optionee's death (subject to the term of the Option), to
exercise the Optionee's Option to the extent that it was exercisable at the date
of the Optionee's death and shall not have been previously exercised.
12.2 OTHER TERMINATION OF SERVICE. Unless otherwise provided by the
Committee and set forth in an Option Agreement or as set forth herein, if an
Optionee's employment or other service with PMSC or any Subsidiary shall be
terminated for any reason other than death (including by reason of retirement),
the Optionee shall have the right, during the period ending ninety (90) days
after such termination (subject to the term of the Option), to exercise an
Option to the extent that it was exercisable at the date of such termination and
shall not have been exercised.
12.3 OTHER CIRCUMSTANCES. Notwithstanding any other provision of this Plan
and upon death or a termination of employment or service, the Committee may, but
shall not be required to do so, in its sole and absolute discretion, permit an
Optionee to exercise outstanding Options including Options that have not yet
become exercisable sooner or later than would otherwise be permitted by this
Plan and/or an Option Agreement.
13. 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 Optionee 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 an Optionee under the Securities Act
of 1933, as amended, 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 an Optionee; provided, however, PMSC shall have
no obligation whatsoever to take any such action in connection with the
transfer, resale or other disposition of such Common Stock by an Optionee.
14. LIFE OF PLAN
----------------
No Option shall be granted under this Plan on or after the date which is one day
prior to the tenth anniversary of the effective date 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.
15. ADJUSTMENT
--------------
In the event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger or consolidation, or the sale, conveyance, or
other transfer by PMSC of all or substantially all of its property, or any other
change in the corporate structure or shares of PMSC, pursuant to any of which
events the then outstanding shares of Common Stock are split up or combined, or
are changed into, become exchangeable at the holder's election for, or entitle
the holder thereof to cash, other shares of stock or any other consideration, or
in the case of any other transaction described in section 424(a) of the Code,
the Committee may change in the manner that it shall deem to be equitable and
appropriate the number and kind of shares (including by substitution of shares
of another corporation) subject to the Options and/or the Option Price of such
shares. An adjustment made under this Section by the Committee shall be
conclusive and binding on all affected persons and, further, shall not
constitute an increase in the number of shares reserved under Article 3 within
the meaning of Article 17 of this Plan.
16. CHANGE IN CONTROL
---------------------
Unless otherwise provided by the Committee and set forth in an Option Agreement,
upon a Change in Control of PMSC, each outstanding Option, to the extent that it
shall not otherwise have become vested and exercisable, shall automatically
become fully and immediately vested and exercisable, without regard to any
otherwise applicable exercisability schedule or vesting requirement.
17. AMENDMENT TO PLAN
---------------------
The Board may at any time and from time to time and in any respect, amend or
modify this Plan. Solely to the extent deemed necessary or advisable by the
Board, for purposes of complying with sections 422 or 162(m) of the Code or
rules of any securities exchange or for any other reason, the Board may seek the
approval of any such amendment by PMSC's shareholders. Notwithstanding the
foregoing, no amendment or modification of this Plan shall in any manner: (i)
affect any Option theretofore granted without the consent of the Optionee or the
permitted transferee of the Option; (ii) increase the number of shares reserved
under Article 3 without the approval of the shareholders of PMSC; or (iii)
reduce the exercise price at which Options may be granted below the fair market
value of the common stock on the effective date of grant.
18. MISCELLANEOUS
-----------------
18.1 NO SHAREHOLDER RIGHTS. No Optionee shall have any right as a
shareholder of PMSC or any Subsidiary 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 Optionee.
18.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option to an Optionee under
this Plan shall not constitute a contract of employment and shall not confer on
an Optionee any rights upon his or her termination of employment in addition to
those rights, if any, expressly set forth in an Option Agreement which evidences
his or her Option.
18.3 WITHHOLDING. The exercise of any Option granted under this Plan shall
constitute an Optionee'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.
18.4 CONSTRUCTION. This Plan shall be construed under the laws of the State
of South Carolina.
IN WITNESS WHEREOF, PMSC has caused its duly authorized officer to execute this
Plan effective as of _________, 1999 to evidence its adoption of this Plan.
POLICY MANAGEMENT SYSTEMS CORPORATION
BY: ________________________________________
G. Larry Wilson
President
<PAGE>
GLOSSARY
TO THE
1999 STOCK OPTION PLAN
The following definitions apply unless the context requires otherwise.
BOARD - means the Board of Directors of PMSC.
- -----
CHANGE IN CONTROL - means the occurrence of one of the following events:
- -------------------
(a) any "person" (as such term is defined in section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act') and as used
in sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of PMSC representing 33 1/3% or more of the
combined voting power of PMSC's then outstanding securities eligible to vote
for the election of the Board (the "PMSC Voting Securities"); provided,
however, that the event described in this paragraph shall not be deemed to be a
Change in Control by virtue of any of the following situations: (i) an
acquisition by PMSC of any of its Subsidiaries; (ii) an acquisition by any
employee benefit plan or employee stock plan sponsored or maintained by PMSC
or any of its Subsidiaries or any trustee or fiduciary with respect to such
plan; or (iii) an acquisition by any underwriter temporarily holding PMSC
Voting Securities pursuant to an offering of such securities;
(b) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof; provided however, that any person becoming a director subsequent to
the date hereof, whose election, or nomination for election, by PMSC's
shareholders was approved by a vote of at least two-thirds of the directors
comprising the Incumbent Board who are then on the Board (either by a specific
vote or by approval of the proxy statement of PMSC in which such person is
named as a nominee for director, without objection to such nomination) shall
be, for purposes of this paragraph (b), considered as though such person were a
member of the Incumbent Board, but excluding for this purpose any individual
elected or nominated as a director of PMSC as a result of any actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board;
(c) the consummation of a merger, consolidation, share exchange or similar
form of corporate reorganization of PMSC or any of its Subsidiaries that
requires the approval of PMSC's shareholders, whether for such transactions or
the issuance of securities in connection with the transaction or otherwise (a
"Business Combination"), unless (i) immediately following such Business
Combination: (A) more than 50% of the total voting power of the corporation
resulting from such Business Combination (the "Surviving Corporation") or, if
applicable, the ultimate parent corporation which directly or indirectly has
beneficial ownership of 100% of the voting securities eligible to elect
directors of the Surviving Corporation (the "Parent Corporation"), is
represented by PMSC Voting Securities that were outstanding immediately prior
to the Business Combination (or, if applicable, shares into which such PMSC
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such PMSC Voting Securities among the
holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan or employee stock plan sponsored or
maintained by the Surviving Corporation or Parent Corporation or any trustee
or fiduciary with respect to any such plan) is or becomes the beneficial
owner, directly or indirectly, of 33 1/3% or more of the total voting power of
the outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation), and (C) at least a majority of the members of the Board of
Directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation), following the Business Combination, were members
of the Incumbent Board at the time of the Board's approval of the execution of
the initial agreement providing for such Business Combination or (ii) the
Business Combination is effected by means of the acquisition of PMSC Voting
Securities from PMSC, and prior to such acquisition a majority of the
Incumbent Board approves a resolution providing expressly that such Business
Combination does not constitute a Change in Control under this paragraph (c);
or
(d) the shareholders of PMSC approve a plan of complete liquidation or
dissolution of PMSC or the sale or other disposition of all or substantially
all of the assets of PMSC and its Subsidiaries, other than a sale or
disposition of assets to a Subsidiary of PMSC.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any person acquires beneficial ownership of more than 33
1/3% of PMSC Voting Securities as a result of the acquisition of PMSC Voting
Securities by PMSC which, by reducing the number of PMSC Voting Securities
outstanding, increases the percentage of shares beneficially owned by such
person; provided, that if a Change in Control would occur as a result of such
an acquisition by PMSC (if not for the operation of this sentence), and after
PMSC's acquisition such person becomes the beneficial owner of additional PMSC
Voting Securities that increases the percentage of outstanding PMSC Voting
Securities beneficially owned by such person, a Change in Control shall then
occur.
CODE - means the Internal Revenue Code of 1986, as amended.
- ----
COMMITTEE - means the Compensation Committee of the Board.
- ---------
COMMON STOCK - means the common stock of PMSC.
- -------------
ELIGIBLE PERSON - means any person who is a full-time or part-time employee,
- ----------------
an officer, or a director of PMSC or any Subsidiary, or any person who is
determined by the Committee to be a prospective employee, officer or director
of PMSC or any Subsidiary, but shall not include any person who is a Ten
Percent Shareholder.
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 Nasdaq National Market, "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 National Market, 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.
ISO - means an option granted under this Plan to purchase Common Stock which
- ---
satisfies the requirements of section 422 of the Code.
NON-ISO - means an option granted under this Plan to purchase Common Stock
- -------
which is not intended to qualify as an incentive stock option pursuant to
section 422 of the Code.
OPTION - means an ISO or a Non-ISO.
- ------
OPTION AGREEMENT - means the written agreement or instrument which sets forth
- -----------------
the terms of the Option granted to an Optionee under this Plan.
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.
OPTIONEE - means an Eligible Person to whom an Option has been granted under
- --------
this Plan, which Option has not expired, under this Plan.
PARENT CORPORATION - (i) for the purposes of ISO's, means any corporation
- -------------------
which is a parent of PMSC within the meaning of section 424(e) of the Code and
(ii) for the purposes of Change in Control, shall have the meaning set forth
in the definition of Change in Control above.
PLAN - means this Plan, as amended from time to time.
- ----
PMSC - means Policy Management Systems Corporation, a South Carolina
- ----
corporation, and any successor to such corporation.
SUBSIDIARY - (i) means any corporation which is a subsidiary corporation
- ----------
(within the meaning of section 424(f) of the Code) of PMSC and (ii) for
purposes of Change in Control only, means a corporation of which PMSC owns
directly or indirectly 50% or more of the voting power.
TEN PERCENT SHAREHOLDER - means a person who owns (after taking into account
- -------------------------
the attribution rules of section 424(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.
TERM - means the period during which an Option may be exercised as set forth
- ----
in section 9.1 of this Plan.
EXHIBIT 5.1
May 10, 1999
Policy Management Systems Corporation
One PMSC 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
11, 1999 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 1,750,000 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 1999 Stock Option Plan (the "Plan").
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 the Company and of public officials and such other
instruments as I have deemed appropriate as the basis for the opinion set forth
herein, including the Plan. 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 Plan have been duly authorized and, when issued in
accordance with the terms of the 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.
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
EXHIBIT 23
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).
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Policy Management Systems Corporation on Form S-8 of our report dated February
9, 1999, on our audits of the financial statements of Policy Management Systems
Corporation as of December 31, 1998 and 1997, and for the three years in the
period ended December 31, 1998, which report is included in the Company's 1998
Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
Atlanta, Georgia
May 10, 1999
EXHIBIT 24
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 the
dates set forth below.
<TABLE>
<CAPTION>
<S> <C>
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . /s/ G. Larry Wilson
(NAME AND TITLE). . . . . . . . . . . . . . . . . . G. Larry Wilson, Chairman of the Board of
Directors, President and Chief Executive Officer
(Principal Executive Officer)
DATE. . . . . . . . . . . . . . . . . . . . . . . . April 30, 1999
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . /s/ Timothy V. Williams
(NAME AND TITLE). . . . . . . . . . . . . . . . . . Timothy V. Williams, Executive Vice
President, Chief Financial Officer
(Principal Financial and Accounting Officer)
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 11, 1999
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . /s/ Alfred R. Berkeley
(NAME AND TITLE). . . . . . . . . . . . . . . . . . Alfred R. Berkeley, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 4, 1999
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . /s/ Donald W. Feddersen
(NAME AND TITLE). . . . . . . . . . . . . . . . . . Donald W. Feddersen, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 5, 1999
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . ./s/ John M. Palms
(NAME AND TITLE). . . . . . . . . . . . . . . . . . John M. Palms, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 3, 1999
BY (SIGNATURE). . . . . . . . . . . . . . . . . . . /s/ Joseph D. Sargent
(NAME AND TITLE). . . . . . . . . . . . . . . . . . Joseph D. Sargent, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 5, 1999
BY (SIGNATURE). . .. . . . . . . . . . . . . . . . . /s/ John P. Seibels
(NAME AND TITLE). . . . . . . . . . . . . . . . . . John P. Seibels, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 4, 1999
BY (SIGNATURE). . .. . . . . . . . . . . . . . . . . /s/ Richard G. Trub
(NAME AND TITLE). . . . . . . . . . . . . . . . . . Richard G. Trub, Director
DATE. . . . . . . . . . . . . . . . . . . . . . . . May 5, 1999
</TABLE>
