POLICY MANAGEMENT SYSTEMS CORPORATION
M E M O R A N D U M
TO: [NAME]
FROM: [MANAGER]
CC: GIL JOHNSON
DATE:
SUBJECT: 2000 BONUS PLAN - NOTICE OF ELIGIBILITY
I. BONUS PLAN ELIGIBILITY
------------------------
You will have the potential to receive a bonus of:
[Bonus %] of salary (based upon your annual salary as of 30 September
2000).
II. BONUS CRITERIA AND WEIGHTING
-------------------------------
Each of the following criteria represents a portion of the above bonus and are
weighted as follows:
[INDIVIDUAL WEIGHTING] --- Operating Income
[INDIVIDUAL WEIGHTING] --- Revised Profit Plan For Applicable
Business Unit
[INDIVIDUAL WEIGHTING] --- Customer Satisfaction
[INDIVIDUAL WEIGHTING] --- Employee Satisfaction
Business Unit means [Business Group].
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III. BONUS CRITERIA AND OPERATION
-------------------------------
A. OPERATING INCOME- [Target Operating Income]
-----------------
The 2000 target to earn 100% of this bonus criterion is [TARGET] company wide
Operating Income based on year end audited results and before special one time
charges and discontinued Banking Operations. A pro-rata portion of this bonus
criterion is earned in excess [MINIMUM] and up to [TARGET].
B. PROFIT PLAN -- Target 100% or greater of plan
------------
The 2000 target to earn 100% of this bonus criterion is achieving 100% or
greater of your revised business unit profit plan. There is no pro-rata portion
of this criterion.
C. CLIENT AND EMPLOYEE SATISFCATION IMPROVEMENT
------------------------------------------------
The 2000 target to earn 100% of these bonus criterion is the achievement of a
[TARGET] score based on a 1 to 5 scale at the lowest client/employee survey
level. A pro-rata portion of each client and employee satisfaction criterion
will be paid according to the following schedule. All scores are computed to
one decimal point, rounded down.
[TARGET - 0.5] = 50% [TARGET - 0.2] = 80%
[TARGET - 0.4] = 60% [TARGET - 0.1] = 90%
[TARGET - 0.3] = 70% [TARGET] = 100%
IV. ADDITIONAL BONUS QUALIFICATIONS
---------------------------------
A. Your bonus, as well as all other bonuses under this 2000 Bonus Plan, is
subject to the discretion and authorization of the Board of Directors and
management based upon their evaluation of your and the Company's 2000
performance. The amount of any bonus may be adjusted, in whole or in part,
prior to payment.
B. You must be employed by the Company on the date of bonus payment approval
by the Board of Directors.
C. Bonuses for employees who join the Company after 1 January 2000 and
before 30 September 2000 will be prorated.
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V. BONUS OPPORTUNITY
------------------
Your bonus opportunity is affected by a variety of factors including your
management level, the level of manager you report to, as well as the
margin/budget level of your organization. For that reason your bonus
opportunity may be different from others and it is important that you treat your
specific bonus opportunity, as presented in this memorandum, as private and
confidential information.
VI. RESTRICTED STOCK PLAN
-----------------------
The Policy Management Systems Corporation Restricted Stock Plan ("Plan") will
apply in the payment of all management bonuses under the 2000 Bonus Plan.
Participation in the Plan is required for all employees holding the office of
Vice President and above and is voluntary for all other bonus eligible
management. Application of the Plan to international personnel varies depending
upon the international location.
The Plan and its Prospectus and a current list of the countries participating
under the Restricted Stock Ownership Plan may be found on the intranet at the
Legal Department's web page.
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SCHEDULE OF PARTICULARS
FOR NAMED EXECUTIVE OFFICERS
RE: 2000 BONUS PLAN
<TABLE>
<CAPTION>
SECTION II - INDIVIDUAL WEIGHTING
-------------------------------------
<S> <C> <C> <C> <C>
NAMED EXECUTIVE . . OPERATING BUSINESS UNIT CUSTOMER EMPLOYEE
------------------- -------------- ------------- -------------
OFFICER . . . . . . INCOME PROFIT PLAN SATISFACTION SATISFACTION
------------------- ---------- -------------- ------------- -------------
DAVID T. BAILEY . . 50% 40% 5% 5%
STEPHEN MORRISON. . 70 20 5% 5%
MICHAEL W. RISLEY . 50 40 5% 5%
TIMOTHY V. WILLIAMS 70 20 5% 5%
G. LARRY WILSON 100 --- --- ---
</TABLE>
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