STOCK OPTION/NON-COMPETE AGREEMENT

 

                    STOCK OPTION/NON-COMPETE AGREEMENT

THIS STOCK OPTION/NON-COMPETE AGREEMENT ("the Agreement") is made effective as
of January 10, 1994, by and between Stephen G. Morrison ("Morrison") and
Policy Management Systems Corporation ("PMSC").

                           W I T N E S S E T H:

WHEREAS, Morrison has been employed by PMSC in a position of significant
responsibility and PMSC desires to recognize Morrison's contribution to PMSC
by making Morrison a "Key Employee" as defined in the Policy Management
Systems Corporation 1989 Stock Option Plan ("Plan") and therefor eligible to
be granted Options as defined therein; and

WHEREAS, Morrison has developed and will continue to develop intimate
knowledge of PMSC's business practices, which, if exploited by Morrison in
contravention of this Agreement, could seriously, adversely and irreparably
affect the business of PMSC; and

WHEREAS, Morrison and PMSC each desire to induce the other to enter into this
Agreement; and

WHEREAS, PMSC would not make Morrison a Key Employee in the event that
Morrison refused to agree to the terms and conditions of this Agreement and
thus Morrison would not be eligible to receive Options under the Plan;

NOW, THEREFORE, in consideration of the premises and the mutual promises and
covenants of the parties hereto, Morrison and PMSC agree as follows:

1.   Grant.  Effective January 10, 1994, PMSC grants Morrison "non-qualified"
     Options to purchase up to 25,000 shares of PMSC common stock pursuant to
     the Plan.  Non-qualified options are subject to tax upon exercise as set
     forth in paragraph 5 below.

2.   Price and Expiration.  The option price of the share subject to these
     Options is the closing price of the stock on the New York Stock Exchange
     on the date of grant, i.e., January 10, 1994.  These Options must be
     exercised within ten (10) years of the effective date of this Agreement or
     they expire.

3.   Availability for Exercise.  33 1/3% of the shares subject to the Options
     granted will become available for exercise at the end of each of the three
     (3) years following the effective date of this Agreement.  For example ...
     33 1/3% of the total number of Options granted will be available for
     exercise beginning January 10, 1995; 66 2/3% will be available for
     exercise beginning January 10, 1996; and 100% will be available for
     exercise beginning January 10, 1997.  Once Options become available for
     exercise, they will remain available for exercise unless they expire.

4.   Order of Exercise.  The Options may be exercised without regard to the
     order in which these and any other Options were granted and without regard
     to any unexpired and unexercised qualified, Incentive Stock Options
     ("ISO's") or other non-qualified options.

5.   Tax Liability.  The tax liability which Morrison may incur relating to
     these Options is described below based upon present law and regulations
     which are subject to change.  Taxes incurred are:

     *    when options are granted - none

     *    when options are exercised - the difference between the fair market
          value of the stock at the date of exercise of an Option and the
          option price is a capital gain but generally will be treated as
          ordinary income during the year the Option is exercised.  Such tax
          liability is created at the time Morrison exercises an Option and
          PMSC is required to collect withholding taxes from Morrison. 
          Federal income taxes (computed at a rate of 20% of the above
          described difference) and FICA and state income taxes (computed at
          the applicable rate of the above described difference) are withheld. 
          For example...if the option price is $69.38 and the fair market
          value at the date of the exercise is $74.38, the difference is
          $5.00, and assuming an applicable FICA rate of 7.65% and state
          income tax rate of 7%, along with the 20% federal income tax, the
          Company would collect a tax of $1.73 per share from Morrison

     *    when shares are sold - the difference between the fair market value
          at the date of exercise (the $74.38 in the above example) and the
          price at which Morrison sells the stock is treated the same as above
          described during the year in which Morrison sells stock purchased by
          exercise of his or her options.

6.   Exercise and Payment.  Exercises of Options shall only be handled pursuant
     to the Instructions set forth on the last page of this agreement.  To
     exercise these Options, Morrison shall make payment in full to PMSC for
     the option price of the shares to be purchased...plus the combined
     (federal, FICA and state) tax liability Morrison incurs.  Such taxes paid
     to PMSC will be forwarded to the Internal Revenue Service and appropriate
     state tax commission and credited to Morrison in the same manner as the
     withholding tax on Morrison's salary.  Morrison's actual tax will depend
     upon the overall tax rate calculated when Morrison prepared his tax
     returns.  Morrison should consult a tax professional regarding questions
     about Morrison's actual tax liability.

7.   Non-competition.  In consideration of the Options hereby granted, Morrison
     covenants and agrees that Morrison shall devote his best efforts to
     furthering the best interests of PMSC and that for the one (1) year period
     from the effective date hereof, and if Morrison separates from employment
     with PMSC for any reason within said one (1) year period, then for one (1)
     year period from the date of such separation from employment, Morrison
     shall not "Compete" with PMSC.  The region within which Morrison agrees

     not to Compete with PMSC is the United States, Canada and those countries
     in which PMSC has customers or clients as of the date of Morrison's
     separation from employment.  For the purpose of this Agreement, the term
     "Compete" shall have its commonly understood meaning which shall include,
     but not be limited by, the following items with respect to PMSC"s
     insurance application software licensing, data processing, consulting and
     information services businesses and any other businesses carried on by
     PMSC at the time of Morrison's separation from employment:

     (i)  soliciting or accepting as a client or customer any
          individual, partnership, corporation, trust or
          association that was a client, customer or actively
          sought after prospective client or customer of PMSC
          during the twelve (12) calendar month period immediately
          preceding the date of Morrison's separation from
          employment;

     (ii) acting as an employee, independent contractor, agent,
          representative, consultant, officer, director, or
          otherwise affiliated party of any entity or enterprise
          which is competing with PMSC in offering similar
          application software or services to parties described in
          (i) above; or

     (iii)     participating in any such competing entity or enterprise
               as an owner, partner, limited partner, joint venturer,
               creditor or stockholder (except as an equity holder
               holding less than a one percent (1%) interest).

Notwithstanding any other provision of this Agreement, nothing in this provision
or Agreement shall prohibit Morrison from returning to the practice of law at
any time or any place.

8.   Non-Hiring.  During Morrison's employment with PMSC and for a period of
     three (3) years after separation from such employment, Morrison agrees
     that Morrison shall under no circumstances hire, attempt to hire or assist
     or be involved in the hiring of any employee of PMSC, with the exception
     of Carol Collier-Plexico, either on Morrison's behalf or on behalf of any
     other person, entity or enterprise unless otherwise agreed to in writing. 
     Also, for a similar period of time, Morrison agrees to not communicate to
     any such person, entity or enterprise the names, addresses or any other
     information concerning any employee of PMSC or any past, present or
     prospective client or customer of PMSC unless otherwise agreed to in
     writing.

9.   Equitable Relief.  Morrison acknowledges (i) that Morrison's skill,
     knowledge, ability and expertise in the business described herein is of a
     special unique, unusual, extraordinary, and/or intellectual character
     which gives said skill, etc. a peculiar value; (ii) that PMSC could not
     reasonably or adequately be compensated in damages in an action at law for
     breach of this Agreement; and (iii) that a breach of any of the provisions
     contained in this Agreement could be extremely detrimental to PMSC and
     could cause PMSC irreparable injury and damage.  Therefore, Morrison

     agrees that PMSC shall be entitled, in addition to any other remedies it
     may have under this Agreement or otherwise, to preliminary and permanent
     injunctive and other equitable relief to prevent or curtail any breach of
     this agreement; provided, however, that no specification in this agreement
     of a specific legal or equitable remedy shall be construed as a waiver of
     or prohibition against the pursuing of other legal or equitable remedies
     in the event of such a breach.  Notwithstanding any other provision of
     this Agreement, nothing in this provision or this Agreement shall prohibit
     Morrison from the practice of law at any time or any place.

10.  Breach of Agreement.  Morrison agrees that in the event Morrison breaches
     any provision of this Agreement, PMSC shall be entitled, in addition to
     any other remedies it may have under this Agreement, to offset, to the
     extent of any liability, loss, damage or injury from such breach, any
     payments due to Morrison pursuant to his employment with PMSC.

11.  Employment Understanding.  This Agreement and the Employment Agreement
     between Morrison and PMSC constitute the entire agreement between the
     parties with regard to the subject matter hereof, and there are no
     agreements, understandings, restrictions, warranties or representations
     between the parties relating to said subject matter other than those set
     forth or provided for herein or in any Agreement Not To Divulge or
     employment agreement between PMSC and Morrison.

12.  General.  In the event that any provision of this Agreement or any word,
     phrase, clause, sentence or other portion thereof (including, without
     limitation, the geographical and temporal restrictions contained herein)
     should be held to be unenforceable or invalid for any reason, such
     provision or portion thereof shall be modified or deleted in such a manner
     so as to make this Agreement enforceable to the fullest extent permitted
     under applicable laws.  All references to PMSC shall include its
     subsidiaries as applicable.  This Agreement shall inure to the benefit of
     and be enforceable by PMSC and its successors and assigns.  No provision
     of this Agreement may be changed, modified, waived or terminated, except
     by an instrument in writing signed by the party against whom the
     enforcement of such is sought.  No waiver of any provision or provisions
     of this Agreement shall be deemed or shall constitute a waiver of any
     other provision, whether or not similar, nor shall any waiver constitute
     a continuing waiver.  Headings in this Agreement are inserted solely as a
     matter of convenience and reference and are not a part of this agreement
     in any substantive sense.  This Agreement may be executed in two
     counterparts, each of which will take effect as an original and shall
     evidence one and the same Agreement.

13.  Notwithstanding any other provision of this herein, nothing in this
     Agreement shall prohibit Morrison from returning to the practice of law at
     any time or any place.

14.  Plan Controls.  In the event of any discrepancy between this Agreement and
     the Plan as to the terms and conditions of the Options, the Plan shall
     control.

15.  Governing Law.  The terms of this Agreement shall be governed by and
     construed in accordance with the laws of the State of South Carolina.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date first above written.

                         POLICY MANAGEMENT SYSTEMS CORPORATION
                         "PMSC"

                         By: G. Larry Wilson
                             G. Larry Wilson

                         TITLE:  President

                         "MORRISON"

                         Stephen G. Morrison
                         Stephen G. Morrison

                         Effective Date:  January 10, 1994

               
                         Date Signed:  February 3, 1994

              INSTRUCTIONS FOR EXERCISE OF PMSC STOCK OPTIONS

Contact Person:     Lynn W. Dillard, Ext. 4303
                    2B1
                    Post Office Box Ten, Columbia, SC  29202

An exercise form must be obtained and properly filled out.  The form and
employee's check for the appropriate exercise price and withholding taxes
(federal and state income taxes and FICA) must be delivered to the Contact
Person.  The Company does not deal with third parties concerning employee's
exercise of his or her stock options.  If an employee deals with a brokerage
firm, a bank or any other third party, the employee shall be responsible to keep
such party from impacting on the two-party transaction between the Company and
the employee.  This transaction solely consists of employee bringing Company the
exercise form and his or her own check and after several days the Company giving
employee a certificate for his or her shares of stock.  The Company's stock
transfer agent is located in New York.  If desired, an employee may request and
pay the charges for the certificate to be sent to the Company via Federal
Express.  The certificate will only be issued in the employee's name.  Employees
may only exercise a whole number of options as PMSC shall not direct the
transfer agent to issue fractional shares.

As an optionholder, an employee is entitled to request copies of the Company's
Annual and Quarterly Reports.  An employee will not receive such reports
automatically as an optionholder.  Additionally, reports are available upon
request showing a complete list of employee's options outstanding, options
available for exercise, cost per share, total costs, and expiration dates of
options.  An employee may wish to request these materials or information before
exercising options by calling or writing the Contact Person.

THESE INSTRUCTIONS ARE SUBJECT TO CHANGE WITHOUT NOTICE. 

Basic Info X:

Name: STOCK OPTION/NON-COMPETE AGREEMENT
Type: Non-Compete Agreement
Date: May 9, 1994
Company: MYND CORP
State: South Carolina

Other info:

Date:

  • January 10 , 1995
  • January 10 , 1996
  • January 10 , 1997
  • January 10 , 1994
  • February 3 , 1994

Organization:

  • Policy Management Systems Corporation
  • New York Stock Exchange
  • Internal Revenue Service
  • the State of South Carolina
  • Company via Federal Express

Location:

  • United States
  • Canada
  • New York

Money:

  • $ 69.38
  • $ 5.00
  • $ 1.73
  • $ 74.38

Person:

  • Carol Collier-Plexico
  • G. Larry Wilson G. Larry Wilson
  • Stephen G. Morrison Stephen G. Morrison
  • Lynn W. Dillard

Percent:

  • 13 %
  • 23 %
  • 100 %
  • 7.65 %
  • 7 %
  • 20 %
  • one percent 1 %