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                                                                    Exhibit 10.2

                              EMPLOYMENT AGREEMENT
                              (Kerry D. Walbridge)

     This Employment Agreement (the "Agreement") by and between SOURCECORP,
Incorporated, a Delaware corporation, and SOURCECORP Management, L.P., a Texas
limited partnership and indirect wholly owned subsidiary of SOURCECORP,
Incorporated (collectively, the "Company"), and Kerry D. Walbridge ("Employee")
is hereby entered into on July 15, 2003. This Agreement hereby supersedes any
other employment agreements or understandings, written or oral, between the
Company and Employee.

                                 R E C I T A L S

     The following statements are true and correct:

     As of the date of this Agreement, the Company is engaged primarily in the
business of providing document and information management outsourcing solutions.

     Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company. In consideration for Employee's promises
herein, the Company agrees to provide Employee with such confidential
information; in return, Employee recognizes and acknowledges that such
information must be maintained in confidence, and to further such protection
agrees to the provisions of Section 3 of this Agreement.

     Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:

                               A G R E E M E N T S

     1.   Employment and Duties.

     (a)  The Company hereby employs Employee as a Division President, with the
makeup of such divisions as determined by the Company from time to time. As
such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a Division President and will report directly to the
Company's Chief Operating Officer or such other officer designated by the
Company. Employee hereby accepts this employment upon the terms and conditions
herein contained and, subject to Section 1(b), agrees to devote his working
time, attention and efforts to promote and further the business of the Company.

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     (b)  Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage except to the extent that such activity (i) does not
interfere with Employee's duties and responsibilities hereunder and (ii) does
not violate Section 3 hereof. The foregoing limitations shall not be construed
as prohibiting Employee from (A) serving on the boards of directors of other
companies, provided that the Company is notified of, and consents to, such
potential directorship prior to acceptance, the Company and Employee concur that
acting as such a director is not likely to create an actual or apparent conflict
of interest and so long as no actual or apparent conflict of interest arises
that is not promptly cured or (B) making personal investments in such form or
manner as will neither require his services, other than to a minimal extent, in
the operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 3 hereof.

     2.   Compensation. For all services rendered by Employee, the Company shall
compensate Employee as follows:

     (a)  Base Salary. The base salary payable to Employee shall be $275,000 per
year (effective January 1, 2003), payable on a regular basis in accordance with
the Company's standard payroll procedures, but not less than on a bi-weekly
basis.

     (b)  Incentive Bonus Plan. It is the Company's intent to develop a written
Incentive Bonus Plan setting forth the criteria under which Employee will be
eligible to receive a year-end bonus. Employee's maximum bonus opportunity shall
be up to 75% of his annual base salary. The bonus payment and Employee's
targeted performance shall be determined by, and be subject to the approval of,
the Board or the compensation committee thereof.

     (c)  Executive Perquisites, Benefits and Other Compensation. Employee shall
be entitled to receive additional benefits from the Company in such form and to
such extent as determined by the Company. Such benefits shall be established
concurrently with the execution of this Agreement and shall remain in place
during the term of this Agreement, unless otherwise agreed to in writing by the
Company and Employee.

     3.   Non-Competition Agreement.

     (a)  Subject to Sections 5(d) and (e) and Section 12, Employee will not,
during the period of his employment by or with the Company, and for a Period
(defined below) immediately following the termination of his employment with the
Company, for any reason whatsoever, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, company, partnership,
corporation, business or entity of whatever nature:

          (i)  engage, as an officer, director, shareholder, owner, partner,
     joint venturer, or in a managerial capacity, whether as an employee,
     independent contractor, consultant or advisor, or as a sales
     representative, in any business selling any products or services in direct
     competition with the Company, within 100 miles of (A) the principal
     executive offices of the Company or (B) any place to which the Company
     provides products or services or in which the Company (including the
     subsidiaries thereof) is in the process of

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     initiating business operations during the term of this covenant (the
     "Territory");

          (ii)  call upon, hire, attempt to hire, contact or solicit with
     respect to hiring (for Employee or on behalf of another) any person who is,
     at that time, or who has been within one (1) year prior to that time, an
     employee of the Company (including the subsidiaries thereof) in a
     managerial or sales capacity, provided that Employee shall be permitted to
     call upon and hire any member of his immediate family;

          (iii) call upon, solicit, divert or take away or attempt to call upon,
     solicit, divert or take away any person or entity that is, at that time, or
     that has been, within one (1) year prior to that time, a customer of the
     Company (including the subsidiaries thereof) for the purpose of soliciting
     or selling products or services in direct competition with the Company;

          (iv)  call upon any prospective acquisition candidate, on Employee's
     own behalf or on behalf of any competitor, which candidate was either
     called upon by the Company (including the subsidiaries thereof) or for
     which the Company made an acquisition analysis, for the purpose of
     acquiring such entity; or

          (v)   disclose customers, whether in existence or proposed, of the
     Company (or the subsidiaries thereof) to any person, firm, partnership,
     corporation or business for any reason or purpose whatsoever.

     As used in Section 3(a), "Period" shall mean one (1) year for Section
3(a)(i) and shall mean two (2) years for Section 3(a)(ii)-(v). As used in
Section 3(a), references to the business, customers, Territory, etc. of the
Company refer to the status of the Company prior to any Change in Control (i.e.,
such breadth of business, customers, Territory, etc. shall not automatically be
expanded to include those of a successor to the Company resulting from a Change
in Control). Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit Employee from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business, whose stock is traded
on a national securities exchange or over-the-counter.

     (b)  Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company in the event of breach by him by injunctions and
restraining orders without the necessity of posting any bond therefor.

     (c)  In the course of Employee's employment with the Company, Employee will
become exposed to certain of the Company's confidential information and business
relationships, which the above covenants are designed to protect. It is agreed
by the parties that the foregoing covenants in this Section 3 impose a
reasonable restraint on Employee in light of the activities and business of the
Company (including the Company's subsidiaries) on the date of the execution of
this Agreement and the current plans of the Company (including the Company's
subsidiaries); but it is also the intent of the Company and Employee that such
covenants be construed and

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enforced in accordance with the changing activities, business and locations of
the Company (including the Company's subsidiaries) throughout the term of this
covenant, whether before or after the date of termination of the employment of
Employee, subject to the following paragraph. For example, if, during the Term
of this Agreement, the Company (including the Company's subsidiaries) engages in
new and different activities, enters a new business or established new locations
for its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefor, then Employee will be precluded from soliciting
the customers or employees of such new activities or business or from such new
location and from directly competing with such new business within 100 miles of
its then-established operating location(s) through the term of this covenant.

          It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (a)(i) of
this Section 3, and in any event such new business, activities or location are
not in violation of this Section 3 or of Employee's obligations under this
Section 3, if any, Employee shall not be chargeable with a violation of this
Section 3 solely because the Company (including the Company's subsidiaries)
shall thereafter enter the same, similar or a competitive (i) business, (ii)
course of activities or (iii) location, as applicable.

     (d)  The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent that the court deems reasonable, and the
Agreement shall thereby be reformed to such extent.

     (e)  All of the covenants in this Section 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the Period following Employee's employment set forth at the
beginning of this Section 3, during which the agreements and covenants of
Employee made in this Section 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 3.

     4.   Place of Performance. Employee's place of employment is the Company's
headquarters in Dallas, Texas, unless otherwise agreed to in writing by the
Company. Employee understands that he may be requested by the Board to relocate
from his present residence to another geographic location in order to more
efficiently carry out his duties and responsibilities under this Agreement or as
part of a promotion or other increase in duties and responsibilities. In the
event the Company determines that such a relocation would significantly benefit
the Company, Employee shall agree to make any such relocation (provided that
Employee's obligation to relocate shall terminate in the event of a Change in
Control). In the event of such a relocation, the Company will pay all reasonable
relocation costs to move Employee, his

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immediate family and their personal property and effects. Such costs may
include, by way of example, but are not limited to, pre-move visits to search
for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for tax
purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use his best efforts to incur only those costs
that are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of the Company and
the personal life of Employee and his family.

     5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue through December 31, 2003 (the
"Term"). Any renewal or extension of this Agreement must be in writing, signed
by both parties hereto (except to the extent that such renewal is an automatic
renewal contemplated by Section 12(b), in which case no writing shall be
required). This Agreement and/or Employee's employment may be terminated earlier
in any one of the following ways:

          (a)  Death. The death of Employee shall immediately terminate the
     Agreement with no severance compensation due to Employee's estate.

          (b)  Disability. If, as a result of incapacity due to physical or
     mental illness or injury, Employee shall have been absent from his
     full-time duties hereunder for four (4) consecutive months, then thirty
     (30) days after receiving written notice (which notice may occur before or
     after the end of such four (4) month period, but which shall not be
     effective earlier than the last day of such four (4) month period), the
     Company may terminate Employee's employment hereunder provided Employee is
     unable to resume his full-time duties at the conclusion of such notice
     period. Also, Employee may terminate his employment hereunder if his health
     should become impaired to an extent that makes the continued performance of
     his duties hereunder hazardous to his physical or mental health or his
     life, provided that Employee shall have furnished the Company with a
     written statement from a qualified doctor to such effect and provided,
     further, that, at the Company's request made within thirty (30) days of the
     date of such written statement, Employee shall submit to an examination by
     a doctor selected by the Company who is reasonably acceptable to Employee
     or Employee's doctor and such doctor shall have concurred in the conclusion
     of Employee's doctor. In the event this Agreement is terminated as a result
     of Employee's disability, Employee shall receive from the Company, in a
     lump sum payment due within ten (10) days of the effective date of
     termination, an amount equal to twelve times Employee's then monthly base
     salary.

          (c)  Good Cause. The Company may terminate the Agreement ten (10) days
     after written notice to Employee for good cause, which shall be: (1)
     Employee's material and irreparable breach of this Agreement; (2)
     Employee's gross negligence in the performance or intentional
     nonperformance (continuing for ten (10) days after receipt of written
     notice of same) of any of Employee's material duties and responsibilities

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     hereunder; (3) Employee's dishonesty, fraud, or misconduct with respect to
     the business or affairs of the Company that materially and adversely
     affects the operations or reputation of the Company; (4) Employee's
     conviction of a felony crime; or (5) chronic alcohol abuse or illegal drug
     abuse by Employee. In the event of a termination for good cause, as
     enumerated above, Employee shall have no right to any severance
     compensation.

          (d)  Without Cause. At any time after the commencement of employment,
     the Company may, without cause, terminate this Agreement and Employee's
     employment, effective thirty (30) days after written notice is provided to
     the Employee. Should Employee be terminated by the Company without cause,
     Employee shall receive from the Company a standard Company executive
     separation agreement providing for a gross lump-sum severance payment
     ("Severance Pay") on or before the effective date of termination, equal to
     the greater of (1) an amount equal to six times Employee's then monthly
     base salary or (2) the then base salary for whatever time period is
     remaining under the Term of this Agreement. Further, any termination
     without cause by the Company shall operate to shorten the Period applicable
     to Section 3(a)(i) to six (6) months or the remaining Term, whichever is
     longer, from the date of termination of employment (with the Period for the
     provisions of Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2)
     years)). In the event Employee is terminated without cause within six
     months following the expiration of the Term and this Agreement has neither
     been renewed nor replaced with another employment agreement, Employee shall
     receive from the Company, on or before the effective date of termination, a
     standard Company executive separation agreement providing for a gross
     lump-sum severance payment equal to six times Employee's monthly base
     salary that was in effect under this Agreement prior to the expiration of
     such Term (or such greater amount at the Company's sole discretion).

          (e)  Termination by Employee for Good Reason. Employee may terminate
     his employment hereunder for "Good Reason." As used herein, "Good Reason"
     shall mean the continuance or failure to cure any material breach of this
     Agreement by the Company after fifteen (15) days' prior written notice by
     Employee to the Company, specifying the basis for such Employee's having
     Good Reason to terminate this Agreement. In the event of any dispute with
     respect to the termination by the Employee for Good Reason, such dispute
     shall be resolved pursuant to the provisions of Section 16 below. Should
     Employee terminate Employee's employment for Good Reason, Employee shall
     receive from the Company, in a lump-sum payment due on the effective date
     of termination, the greater of (1) an amount equal to six times Employee's
     then monthly base salary or (2) the then base salary for whatever time
     period is remaining under the Term. Further, in the event this Agreement is
     terminated by Employee for Good Reason, the Period applicable to Section
     3(a)(i) shall be shortened to six (6) months or the remaining Term,
     whichever is longer (with the Period for the provisions of Section
     3(a)(ii)-(v) remaining unchanged (i.e. two (2) years)).

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     (f)  Termination by Employee Without Good Reason. If Employee resigns or
          otherwise terminates his employment without Good Reason pursuant to
          Section 5(f), Employee shall receive no severance compensation.

     (g)  Change of Control. Refer to Section 12, below.

Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation earned
and all benefits vested and reimbursements due through the effective date of
termination. Additional compensation subsequent to such a termination of this
Agreement, if any, will be due and payable to Employee only to the extent and in
the manner expressly provided above or in Section 16. Except as otherwise
provided in this Section, all other rights and obligations of the Company and
Employee under this Agreement shall cease as of the effective date of
termination of this Agreement; however, the Company's obligations under Sections
5, 9 and 16 (and as the context requires, Section 12) herein and Employee's
obligations under Sections 3, 6, 7, 8, 9, 10 and 16 herein shall survive such
termination in accordance with their terms.

     6.   Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company (including
the Company's subsidiaries) or its representatives, vendors or customers that
pertain to the business of the Company (including the Company's subsidiaries)
shall be and remain the property of the Company and be subject at all times to
its discretion and control. Likewise, all correspondence, reports, records,
charts, advertising materials and other similar data pertaining to the business,
activities or future plans of the Company (including the Company's subsidiaries)
that is collected by Employee shall be delivered promptly to the Company without
request by it upon termination of Employee's employment.

     7.   Inventions. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, that are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and that are directly related to the business or activities
of the Company (including the Company's subsidiaries) and that Employee
conceives as a result of his employment by the Company. Employee hereby assigns
and agrees to assign all his interests therein to the Company or its nominee.
Whenever requested to do so by the Company, Employee shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary to apply for and obtain letters patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.

     8.   Trade Secrets. Employee agrees that he will not, during or after the
term of this Agreement with the Company, disclose the specific terms of the
Company's (including the Company's subsidiaries) relationships or agreements
with its significant vendors or customers or any other significant and material
trade secret of the Company (including the Company's subsidiaries), whether in
existence or proposed, to any person, firm, partnership, corporation or

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business for any reason or purpose whatsoever, except as is disclosed in the
ordinary course of business.

     9.   Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or with the
Company against Employee), by reason of the fact that he is or was performing
services under this Agreement, then the Company shall indemnify Employee against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Employee in connection
therewith, except as prohibited by law or as against public policy. In the event
that both Employee and the Company are made a party to the same third-party
action, complaint, suit or proceeding, the Company agrees to engage competent
legal representation, and Employee agrees to use the same representation,
provided that if counsel selected by the Company shall have a conflict of
interest that prevents such counsel from representing Employee, Employee may
engage separate counsel and the Company shall pay all attorneys' fees of such
separate counsel. Further, while Employee is expected at all times to use his
best efforts to faithfully discharge his duties under this Agreement, Employee
cannot be held liable to the Company for errors or omissions made in good faith
where Employee has not exhibited gross, willful and wanton negligence and
misconduct or performed criminal and fraudulent acts that materially damage the
business of the Company.

     10.  No Prior Agreements. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
that was in existence as of the date of this Agreement.

     11.  Assignment; Binding Effect. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement and the
Company agrees not to assign all or any portion of its obligations under this
Agreement (other than to a successor as a result of a Change in Control).
Subject to the preceding two (2) sentences and the express provisions of Section
12 below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.

     12.  Change in Control.

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     (a)  Employee understands and acknowledges that the Company may be merged
or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.

     (b)  (i)   In the event of a pending Change in Control wherein the Employee
has not received written notice at least fifteen (15) business days prior to the
anticipated closing date of the transaction giving rise to the Change in Control
from the successor to all or a substantial portion of the Company's business
and/or assets that such successor is willing as of the closing to assume and
agree to perform the Company's obligations under this Agreement in the same
manner and to the same extent that the Company is hereby required to perform,
such Change in Control shall be deemed to be a termination of this Agreement by
the Company and the amount of the lump-sum severance payment due to Employee
shall be 1.15 times the sum of Employee's annual salary plus maximum annual
bonus opportunity immediately prior to the Change in Control and the Period
applicable to Section 3(a)(i) shall be reduced to six (6) months or the
remaining Term, whichever is longer (with the Period for the provisions of
Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2) years)). Payment shall be
made at the closing of the transaction.

     (ii) In the event of a Change in Control wherein Employee has received the
written notice contemplated by Section 12(b)(i), the Term shall be automatically
extended to one year following such Change in Control (provided that in no case
shall such extension operate to shorten any previously existing Term) and if
during the eleventh month of such twelve-month extension, Employee has not
entered into an employment agreement with such successor for at least an
additional year on terms acceptable to Employee, such failure shall be deemed to
be a termination of this Agreement by the Company and the amount of the lump-sum
severance payment due to Employee shall be 1.15 times the sum of Employee's
annual salary plus maximum annual bonus opportunity immediately prior to the
Change in Control and the Period applicable to Section 3(a)(i) shall be reduced
to six (6) months or the remaining Term, whichever is longer (with the Period
for the provisions of Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2)
years)). The Company, or its successor, shall during the tenth month of such
twelve-month extension provide Employee with a reminder notice, which notice
shall reference this Section and clearly indicate what dates constitute the
first and last dates of such eleventh month of such twelve-month extension.
Further, in the event of a Change in Control wherein Employee has received the
written notice contemplated by Section 12(b)(i), the severance compensation
Employee would thereafter (during the remainder of the Term, as extended) be
entitled as a result of a termination of employment by the Company without cause
(Section 5(d)), or by Employee for Good Reason (Section 5(e)) shall be 1.15
times the sum of Employee's annual salary plus maximum annual bonus opportunity
immediately prior to the Change in Control and the Period applicable to Section
3(a)(i) shall be reduced to six (6) months or the remaining Term, whichever is
longer (with the Period for the provisions of Section 3(a)(ii)-(v) remaining
unchanged (i.e. two (2) years)); it being the intention that the Company or its
successor not circumvent its Change in Control payment obligations by
terminating Employee "Without Cause" or forcing a termination by Employee for
"Good Reason". In addition, in the event of a Change in Control wherein Employee
has received the written notice contemplated by Section 12(b)(i), a reduction in
annual salary or maximum annual bonus opportunity following such

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Change in Control (during the remainder of the Term, as extended) shall be
additional grounds for Employee to terminate this Agreement for "Good Reason."

     (c)  For purposes of applying Section 5 under the circumstances described
in the first sentence of Section 12(b) above, the effective date of termination
will be the closing date of the transaction giving rise to the Change in
Control, and all compensation, reimbursements and lump-sum payments due Employee
must be paid in full by the Company at such time. Further, Employee will be
given sufficient time in order to comply with then Securities and Exchange
Commission's regulations to elect whether to exercise and sell all or any of his
vested options to purchase Common Stock of the Company, including any options
with accelerated vesting under the provisions of the Company's stock option
plan, as amended (and as modified by the related option agreement/certificate in
accordance with such Plan) or any warrants, such that he may convert such
options or warrants to shares of Common Stock of the Company at or prior to the
closing of the transaction giving rise to the Change in Control, if he so
desires.

     (d)  A "Change in Control" shall be deemed to have occurred if:

          (i)   any person, other than the Company or an employee benefit plan
     of the Company, acquires directly or indirectly the Beneficial Ownership
     (as defined in Section 13(d) of the Securities Exchange Act of 1934, as
     amended) of any voting security of the Company and immediately after such
     acquisition such Person is, directly or indirectly, the Beneficial Owner of
     voting securities representing 30% or more of the total voting power of all
     of the then-outstanding voting securities of the Company;

          (ii)  the individuals (A) who, as of the closing date of the Company's
     initial public offering, constitute the Board of Directors of the Company
     (the "Original Directors") or (B) who thereafter are elected to the Board
     of Directors of the Company and whose election, or nomination for election,
     to the Board of Directors of the Company was approved by a vote of at least
     two-thirds (2/3) of the Original Directors then still in office (such
     directors becoming "Additional Original Directors" immediately following
     their election) or (C) who are elected to the Board of Directors of the
     Company and whose election, or nomination for election, to the Board of
     Directors of the Company was approved by a vote of at least two-thirds
     (2/3) of the Original Directors and Additional Original Directors then
     still in office (such directors also becoming "Additional Original
     Directors" immediately following their election), cease for any reason to
     constitute a majority of the members of the Board of Directors of the
     Company;

          (iii) the consummation of a merger, consolidation, recapitalization,
     or reorganization of the Company, a reverse stock split of outstanding
     voting securities of the Company, or consummation of any such transaction
     if stockholder approval is not sought or obtained, other than any such
     transaction which would result in at least 75% of the total voting power
     represented by the voting securities of the surviving entity outstanding
     immediately after such transaction being Beneficially Owned by holders of
     at least 75% of the outstanding voting securities of the Company
     immediately prior to the transaction, with the voting power of each such
     continuing holder relative to other such continuing holders not
     substantially altered in the transaction; or

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          (iv) the consummation of a plan of complete liquidation of the Company
     or an agreement for the sale or disposition by the Company of all or a
     substantial portion of the Company's assets (i.e., 50% or more of the total
     assets of the Company).

     (e)  If any portion of the severance benefits, Change in Control benefits
or any other payment under this Agreement, or under any other agreement with, or
plan of the Company, including but not limited to stock options, warrants and
other long-term incentives (in the aggregate "Total Payments") would be subject
to the excise tax imposed by Section 4999 of the Code, as amended (or any
similar tax that may hereafter be imposed) or any interest or penalties with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
Employee shall be entitled to receive from the Company an additional payment
(the "Gross-up Payment") in an amount such that the net amount of Total Payments
and Gross-up Payment retained by the Employee, after the calculation and
deduction of all Excise Tax on the Total Payments and all federal, state and
local income tax, employment tax and Excise Tax on the Gross-up Payment, shall
be equal to the Total Payments.

     For purposes of this Section Employee's applicable Federal, state and local
taxes shall be computed at the maximum marginal rates, taking into account the
effect of any loss of personal exemptions resulting from receipt of the Gross-Up
Payment.

     All determinations required to be made under this Section 12, including
whether a Gross-Up Payment is required under this Section, and the assumptions
to be used in determining the Gross-Up Payment, shall be made by the Company's
current independent accounting firm, or such other firm as the Company may
designate in writing prior to a Change in Control (the "Accounting Firm"), which
shall provide detailed supporting calculations both to the Company and Employee
within twenty business days of the receipt of notice from Employee that there
will likely be a Change in Control, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the party effecting the Change in Control or is otherwise
unavailable, Employee (together with all other employees with comparable
appointment rights in their respective employment agreements such that all such
employees may collectively select a single accounting firm) may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm with respect to
such determinations described above shall be borne solely by the Company.

     Employee agrees (unless requested otherwise by the Company) to use
reasonable efforts to contest in good faith any subsequent determination by the
Internal Revenue Service that Employee owes an amount of Excise Tax greater than
the amount determined pursuant to this Section; provided, that Employee shall be
entitled to reimbursement by the Company (on an after tax basis) of all fees and
expenses reasonably incurred by Employee in contesting such determination. In
the event the Internal Revenue Service or any court of competent jurisdiction
determines that Employee owes an amount of Excise Tax that is greater than the
amount previously taken into account and paid under this Agreement (such
additional Excise Tax being

                                       11

<PAGE>

the "Additional Excise Tax"), the Company shall promptly pay to Employee the
amount of such shortfall. In the case of any payment that the Company is
required to make to Employee pursuant to the preceding sentence (a "Later
Payment"), the Company shall also pay to Employee an additional amount such that
after payment by Employee of all of Employee's applicable Federal, state and
local taxes, including any interest and penalties assessed by any taxing
authority, on the Later Payment, Employee will retain from the Later Payment an
amount equal to the Additional Excise Tax, which Employee shall use to pay the
Additional Excise Tax.

     13.  Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Employee and of all the terms of this Agreement, and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written agreements. This Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and Employee,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such term.

     14.  Notice. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:

     To the Company:      SOURCECORP, Incorporated
                          3232 McKinney Avenue
                          Suite 1000
                          Dallas, Texas 75204
                          Attn: Chief Operating Officer

     with a copy to:      SOURCECORP, Incorporated
                          3232 McKinney Avenue
                          Suite 1000
                          Dallas, Texas 75204
                          Attn: General Counsel

     with a copy to:      Locke Liddell & Sapp LLP
                          2200 Ross Avenue
                          Suite 2200
                          Dallas, Texas 75201
                          Attn: Charles C. Reeder, Esq.

     To Employee:         Kerry D. Walbridge
                          5335 Willow Wood Lane
                          Dallas, Texas 75252

Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when

                                       12

<PAGE>

actually received, whichever is earlier. Hand delivery shall also constitute
effective notice and shall be deemed given and effective upon receipt. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 14.

     15.  Severability; Headings. If any portion of this Agreement is held
invalid or inoperative in any circumstance, (i) such portion shall remain valid
and operative in all other circumstances; (ii) the other portions of this
Agreement shall be deemed valid and operative; and (iii) so far as is reasonable
and possible, effect shall be given to the intent manifested by the portion held
invalid or inoperative. The Section headings herein are for reference purposes
only and are not intended in any way to describe, interpret, define or limit the
extent or intent of the Agreement or of any part hereof.

     16.  Arbitration. Any unresolved dispute or controversy arising under or in
connection with this Agreement or Employee's employment shall be settled
exclusively by arbitration, conducted before a panel of three (3) arbitrators in
Dallas, Texas, in accordance with the rules of the American Arbitration
Association then in effect. The arbitrators shall not have the authority to add
to, detract from, or modify any provision hereof nor to award punitive damages
to any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in
lieu of vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in Sections 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The costs of any
arbitration proceeding shall be borne by the party or parties not prevailing in
such proceeding as determined by the arbitrators. This Section shall survive any
termination of this Agreement.

     17.  Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.

                   [Balance of sheet intentionally left blank]

                                       13

<PAGE>

                                            EMPLOYEE:

                                              /s/ Kerry D. Walbridge
                                            -----------------------------------
                                            Kerry D. Walbridge

                                            SOURCECORP, Incorporated

                                            By:  /s/ Ed H. Bowman, Jr.
                                               --------------------------------
                                            Title: President & CEO

                                            SOURCECORP Management, L.P.

                                            By: SRCP Management, Inc.,
                                                  General Partner

                                                  By: /s/ Thomas C. Walker
                                                     --------------------------
                                                  Title: Chairman & CDO

                                       14

<PAGE>

                              Schedule of Benefits
                              (Kerry D. Walbridge)

Executive Perquisites, Benefits and Other Compensation. The following are the
benefits that the above named Employee may receive from the Company; provided,
that the Company may modify from time to time such benefits at its discretion.

          (i)   Payment of all premiums for coverage for Employee and his
     dependent family members under health, hospitalization, disability, dental,
     life and other insurance plans that the Company may have in effect from
     time to time, and not less favorable than the benefits provided to other
     Company executives.

          (ii)  Reimbursement for all business travel and other out-of-pocket
     expenses reasonably incurred by Employee in the performance of his services
     pursuant to this Agreement. All reimbursable expenses shall be
     appropriately documented in reasonable detail by Employee upon submission
     of any request for reimbursement, and in a format and manner consistent
     with the Company's expense reporting policy.

          (iii) Four (4) weeks paid vacation for each year during the period of
     employment (prorated for any year in which Employee is employed for less
     than the full year).

          (iv)  An automobile allowance in the amount of $1,000 per month.

          (v)   Participation in the Company's 401(k) Plan and Non-Qualified
     Plan.

          (vi)  The Company shall reimburse Employee up to $6,000 per year for
     expenditures on health, insurance, financial planning or tax planning
     benefits (or similar benefits at the discretion of the Company) or club
     dues selected by Employee.

                                       15<PAGE>

                                                                    Exhibit 10.3

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                                (Michael S. Rupe)

         This Amended and Restated Employment Agreement (the "Agreement") by and
between SOURCECORP, Incorporated, a Delaware corporation, and SOURCECORP
Management, L.P., a Texas limited partnership and indirect wholly owned
subsidiary of SOURCECORP, Incorporated (collectively, the "Company"), and
Michael S. Rupe ("Employee") is hereby entered into on July 31, 2003. This
Agreement hereby supersedes any other employment agreements or understandings,
written or oral, between the Company and Employee.

                                 R E C I T A L S

         The following statements are true and correct:

         As of the date of this Agreement, the Company is engaged primarily in
the business of providing document and information management outsourcing
solutions.

         Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company. In consideration for Employee's promises
herein, the Company agrees to provide Employee with such confidential
information; in return, Employee recognizes and acknowledges that such
information must be maintained in confidence, and to further such protection
agrees to the provisions of Section 3 of this Agreement.

         Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:

                               A G R E E M E N T S

         1.    Employment and Duties.

         (a)   The Company hereby employs Employee as a Division President, with
the makeup of such divisions as determined by the Company from time to time. As
such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a Division President and will report directly to the
Company's Chief Operating Officer or such other officer designated by the
Company. Employee hereby accepts this employment upon the terms and conditions
herein contained and, subject to Section 1(b), agrees to devote his working
time, attention and efforts to promote and further the business of the Company.

                                       1

<PAGE>

         (b)    Employee shall not, during the term of his employment hereunder,
be engaged in any other business activity pursued for gain, profit or other
pecuniary advantage except to the extent that such activity (i) does not
interfere with Employee's duties and responsibilities hereunder and (ii) does
not violate Section 3 hereof. The foregoing limitations shall not be construed
as prohibiting Employee from (A) serving on the boards of directors of other
companies, provided that the Company is notified of, and consents to, such
potential directorship prior to acceptance, the Company and Employee concur that
acting as such a director is not likely to create an actual or apparent conflict
of interest and so long as no actual or apparent conflict of interest arises
that is not promptly cured or (B) making personal investments in such form or
manner as will neither require his services, other than to a minimal extent, in
the operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 3 hereof.

         2.     Compensation. For all services rendered by Employee, the Company
shall compensate Employee as follows:

         (a)    Base Salary. The base salary payable to Employee shall be
$275,000 per year (effective January 1, 2003), payable on a regular basis in
accordance with the Company's standard payroll procedures, but not less than on
a bi-weekly basis.

         (b)    Incentive Bonus Plan. It is the Company's intent to develop a
written Incentive Bonus Plan setting forth the criteria under which Employee
will be eligible to receive a year-end bonus. Employee's maximum bonus
opportunity shall be up to 75% of his annual base salary. The bonus payment and
Employee's targeted performance shall be determined by, and be subject to the
approval of, the Board or the compensation committee thereof.

         (c)    Executive Perquisites, Benefits and Other Compensation. Employee
shall be entitled to receive additional benefits from the Company in such form
and to such extent as determined by the Company. Such benefits shall be
established concurrently with the execution of this Agreement and shall remain
in place during the term of this Agreement, unless otherwise agreed to in
writing by the Company and Employee.

         3.     Non-Competition Agreement.

         (a)    Subject to Sections 5(d) and (e) and Section 12, Employee will
not, during the period of his employment by or with the Company, and for a
Period (defined below) immediately following the termination of his employment
with the Company, for any reason whatsoever, directly or indirectly, for himself
or on behalf of or in conjunction with any other person, company, partnership,
corporation, business or entity of whatever nature:

                (i)    engage, as an officer, director, shareholder, owner,
         partner, joint venturer, or in a managerial capacity, whether as an
         employee, independent contractor, consultant or advisor, or as a sales
         representative, in any business selling any products or services in
         direct competition with the Company, within 100 miles of (A) the
         principal executive offices of the Company or (B) any place to which
         the Company provides products or services or in which the Company
         (including the subsidiaries thereof) is in the process of

                                       2

<PAGE>

         initiating business operations during the term of this covenant (the
         "Territory");

                (ii)   call upon, hire, attempt to hire, contact or solicit with
         respect to hiring (for Employee or on behalf of another) any person who
         is, at that time, or who has been within one (1) year prior to that
         time, an employee of the Company (including the subsidiaries thereof)
         in a managerial or sales capacity, provided that Employee shall be
         permitted to call upon and hire any member of his immediate family;

                (iii)  call upon, solicit, divert or take away or attempt to
         call upon, solicit, divert or take away any person or entity that is,
         at that time, or that has been, within one (1) year prior to that time,
         a customer of the Company (including the subsidiaries thereof) for the
         purpose of soliciting or selling products or services in direct
         competition with the Company;

                (iv)   call upon any prospective acquisition candidate, on
         Employee's own behalf or on behalf of any competitor, which candidate
         was either called upon by the Company (including the subsidiaries
         thereof) or for which the Company made an acquisition analysis, for the
         purpose of acquiring such entity; or

                (v)    disclose customers, whether in existence or proposed, of
         the Company (or the subsidiaries thereof) to any person, firm,
         partnership, corporation or business for any reason or purpose
         whatsoever.

         As used in Section 3(a), "Period" shall mean one (1) year for Section
3(a)(i) and shall mean two (2) years for Section 3(a)(ii)-(v). As used in
Section 3(a), references to the business, customers, Territory, etc. of the
Company refer to the status of the Company prior to any Change in Control (i.e.,
such breadth of business, customers, Territory, etc. shall not automatically be
expanded to include those of a successor to the Company resulting from a Change
in Control). Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit Employee from acquiring as an investment not more than three
percent (3%) of the capital stock of a competing business, whose stock is traded
on a national securities exchange or over-the-counter.

         (b)    Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
it would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by the Company in the event of breach by him by
injunctions and restraining orders without the necessity of posting any bond
therefor.

         (c)    In the course of Employee's employment with the Company,
Employee will become exposed to certain of the Company's confidential
information and business relationships, which the above covenants are designed
to protect. It is agreed by the parties that the foregoing covenants in this
Section 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company (including the Company's subsidiaries) on the date
of the execution of this Agreement and the current plans of the Company
(including the Company's subsidiaries); but it is also the intent of the Company
and Employee that such covenants be construed and

                                       3

<PAGE>

enforced in accordance with the changing activities, business and locations of
the Company (including the Company's subsidiaries) throughout the term of this
covenant, whether before or after the date of termination of the employment of
Employee, subject to the following paragraph. For example, if, during the Term
of this Agreement, the Company (including the Company's subsidiaries) engages in
new and different activities, enters a new business or established new locations
for its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefor, then Employee will be precluded from soliciting
the customers or employees of such new activities or business or from such new
location and from directly competing with such new business within 100 miles of
its then-established operating location(s) through the term of this covenant.

                It is further agreed by the parties hereto that, in the event
that Employee shall cease to be employed hereunder, and shall enter into a
business or pursue other activities not in competition with the Company
(including the Company's subsidiaries), or similar activities or business in
locations the operation of which, under such circumstances, does not violate
clause (a)(i) of this Section 3, and in any event such new business, activities
or location are not in violation of this Section 3 or of Employee's obligations
under this Section 3, if any, Employee shall not be chargeable with a violation
of this Section 3 solely because the Company (including the Company's
subsidiaries) shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.

         (d)    The covenants in this Section 3 are severable and separate, and
the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent that the court deems reasonable, and the
Agreement shall thereby be reformed to such extent.

         (e)    All of the covenants in this Section 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the Period following Employee's employment set forth at the
beginning of this Section 3, during which the agreements and covenants of
Employee made in this Section 3 shall be effective, shall be computed by
excluding from such computation any time during which Employee is in violation
of any provision of this Section 3.

         4.     Place of Performance. Employee's place of employment is the
Company's headquarters in Dallas, Texas, unless otherwise agreed to in writing
by the Company. Employee understands that he may be requested by the Board to
relocate from his present residence to another geographic location in order to
more efficiently carry out his duties and responsibilities under this Agreement
or as part of a promotion or other increase in duties and responsibilities. In
the event the Company determines that such a relocation would significantly
benefit the Company, Employee shall agree to make any such relocation (provided
that Employee's obligation to relocate shall terminate in the event of a Change
in Control). In the event of such a relocation, the Company will pay all
reasonable relocation costs to move Employee, his

                                       4

<PAGE>

immediate family and their personal property and effects. Such costs may
include, by way of example, but are not limited to, pre-move visits to search
for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for tax
purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use his best efforts to incur only those costs
that are reasonable and necessary to effect a smooth, efficient and orderly
relocation with minimal disruption to the business affairs of the Company and
the personal life of Employee and his family.

         5.     Term; Termination; Rights on Termination. The term of this
Agreement shall begin on the date hereof and continue through December 31, 2003
(the "Term"). Any renewal or extension of this Agreement must be in writing,
signed by both parties hereto (except to the extent that such renewal is an
automatic renewal contemplated by Section 12(b), in which case no writing shall
be required). This Agreement and/or Employee's employment may be terminated
earlier in any one of the following ways:

                (a)    Death. The death of Employee shall immediately terminate
         the Agreement with no severance compensation due to Employee's estate.

                (b)    Disability. If, as a result of incapacity due to physical
         or mental illness or injury, Employee shall have been absent from his
         full-time duties hereunder for four (4) consecutive months, then thirty
         (30) days after receiving written notice (which notice may occur before
         or after the end of such four (4) month period, but which shall not be
         effective earlier than the last day of such four (4) month period), the
         Company may terminate Employee's employment hereunder provided Employee
         is unable to resume his full-time duties at the conclusion of such
         notice period. Also, Employee may terminate his employment hereunder if
         his health should become impaired to an extent that makes the continued
         performance of his duties hereunder hazardous to his physical or mental
         health or his life, provided that Employee shall have furnished the
         Company with a written statement from a qualified doctor to such effect
         and provided, further, that, at the Company's request made within
         thirty (30) days of the date of such written statement, Employee shall
         submit to an examination by a doctor selected by the Company who is
         reasonably acceptable to Employee or Employee's doctor and such doctor
         shall have concurred in the conclusion of Employee's doctor. In the
         event this Agreement is terminated as a result of Employee's
         disability, Employee shall receive from the Company, in a lump sum
         payment due within ten (10) days of the effective date of termination,
         an amount equal to twelve times Employee's then monthly base salary.

                (c)    Good Cause. The Company may terminate the Agreement ten
         (10) days after written notice to Employee for good cause, which shall
         be: (1) Employee's material and irreparable breach of this Agreement;
         (2) Employee's gross negligence in the performance or intentional
         nonperformance (continuing for ten (10) days after receipt of written
         notice of same) of any of Employee's material duties and
         responsibilities

                                       5

<PAGE>

         hereunder; (3) Employee's dishonesty, fraud, or misconduct with respect
         to the business or affairs of the Company that materially and adversely
         affects the operations or reputation of the Company; (4) Employee's
         conviction of a felony crime; or (5) chronic alcohol abuse or illegal
         drug abuse by Employee. In the event of a termination for good cause,
         as enumerated above, Employee shall have no right to any severance
         compensation.

                (d)    Without Cause. At any time after the commencement of
         employment, the Company may, without cause, terminate this Agreement
         and Employee's employment, effective thirty (30) days after written
         notice is provided to the Employee. Should Employee be terminated by
         the Company without cause, Employee shall receive from the Company a
         standard Company executive separation agreement providing for a gross
         lump-sum severance payment ("Severance Pay") on or before the effective
         date of termination, equal to the greater of (1) an amount equal to six
         times Employee's then monthly base salary or (2) the then base salary
         for whatever time period is remaining under the Term of this Agreement.
         Further, any termination without cause by the Company shall operate to
         shorten the Period applicable to Section 3(a)(i) to six (6) months or
         the remaining Term, whichever is longer, from the date of termination
         of employment (with the Period for the provisions of Section
         3(a)(ii)-(v) remaining unchanged (i.e. two (2) years)). In the event
         Employee is terminated without cause within six months following the
         expiration of the Term and this Agreement has neither been renewed nor
         replaced with another employment agreement, Employee shall receive from
         the Company, on or before the effective date of termination, a standard
         Company executive separation agreement providing for a gross lump-sum
         severance payment equal to six times Employee's monthly base salary
         that was in effect under this Agreement prior to the expiration of such
         Term (or such greater amount at the Company's sole discretion).

                (e)    Termination by Employee for Good Reason. Employee may
         terminate his employment hereunder for "Good Reason." As used herein,
         "Good Reason" shall mean the continuance or failure to cure any
         material breach of this Agreement by the Company after fifteen (15)
         days' prior written notice by Employee to the Company, specifying the
         basis for such Employee's having Good Reason to terminate this
         Agreement. In the event of any dispute with respect to the termination
         by the Employee for Good Reason, such dispute shall be resolved
         pursuant to the provisions of Section 16 below. Should Employee
         terminate Employee's employment for Good Reason, Employee shall receive
         from the Company, in a lump-sum payment due on the effective date of
         termination, the greater of (1) an amount equal to six times Employee's
         then monthly base salary or (2) the then base salary for whatever time
         period is remaining under the Term. Further, in the event this
         Agreement is terminated by Employee for Good Reason, the Period
         applicable to Section 3(a)(i) shall be shortened to six (6) months or
         the remaining Term, whichever is longer (with the Period for the
         provisions of Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2)
         years)).

                                       6

<PAGE>

                (f)    Termination by Employee Without Good Reason. If Employee
         resigns or otherwise terminates his employment without Good Reason
         pursuant to Section 5(f), Employee shall receive no severance
         compensation.

                (g)    Change of Control. Refer to Section 12, below.

Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation earned
and all benefits vested and reimbursements due through the effective date of
termination. Additional compensation subsequent to such a termination of this
Agreement, if any, will be due and payable to Employee only to the extent and in
the manner expressly provided above or in Section 16. Except as otherwise
provided in this Section, all other rights and obligations of the Company and
Employee under this Agreement shall cease as of the effective date of
termination of this Agreement; however, the Company's obligations under Sections
5, 9 and 16 (and as the context requires, Section 12) herein and Employee's
obligations under Sections 3, 6, 7, 8, 9, 10 and 16 herein shall survive such
termination in accordance with their terms.

         6.     Return of Company Property. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company
(including the Company's subsidiaries) or its representatives, vendors or
customers that pertain to the business of the Company (including the Company's
subsidiaries) shall be and remain the property of the Company and be subject at
all times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company (including the Company's
subsidiaries) that is collected by Employee shall be delivered promptly to the
Company without request by it upon termination of Employee's employment.

         7.     Inventions. Employee shall disclose promptly to the Company any
and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, that are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and that are directly related to the business or
activities of the Company (including the Company's subsidiaries) and that
Employee conceives as a result of his employment by the Company. Employee hereby
assigns and agrees to assign all his interests therein to the Company or its
nominee. Whenever requested to do so by the Company, Employee shall execute any
and all applications, assignments or other instruments that the Company shall
deem necessary to apply for and obtain letters patent of the United States or
any foreign country or to otherwise protect the Company's interest therein.

         8.     Trade Secrets. Employee agrees that he will not, during or after
the term of this Agreement with the Company, disclose the specific terms of the
Company's (including the Company's subsidiaries) relationships or agreements
with its significant vendors or customers or any other significant and material
trade secret of the Company (including the Company's subsidiaries), whether in
existence or proposed, to any person, firm, partnership, corporation or

                                       7

<PAGE>

business for any reason or purpose whatsoever, except as is disclosed in the
ordinary course of business.

         9.     Indemnification. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or with the
Company against Employee), by reason of the fact that he is or was performing
services under this Agreement, then the Company shall indemnify Employee against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Employee in connection
therewith, except as prohibited by law or as against public policy. In the event
that both Employee and the Company are made a party to the same third-party
action, complaint, suit or proceeding, the Company agrees to engage competent
legal representation, and Employee agrees to use the same representation,
provided that if counsel selected by the Company shall have a conflict of
interest that prevents such counsel from representing Employee, Employee may
engage separate counsel and the Company shall pay all attorneys' fees of such
separate counsel. Further, while Employee is expected at all times to use his
best efforts to faithfully discharge his duties under this Agreement, Employee
cannot be held liable to the Company for errors or omissions made in good faith
where Employee has not exhibited gross, willful and wanton negligence and
misconduct or performed criminal and fraudulent acts that materially damage the
business of the Company.

         10.    No Prior Agreements. Employee hereby represents and warrants to
the Company that the execution of this Agreement by Employee and his employment
by the Company and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
that was in existence as of the date of this Agreement.

         11.    Assignment; Binding Effect. Employee understands that he has
been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement and the
Company agrees not to assign all or any portion of its obligations under this
Agreement (other than to a successor as a result of a Change in Control).
Subject to the preceding two (2) sentences and the express provisions of Section
12 below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.

         12.    Change in Control.

                                       8

<PAGE>

         (a)    Employee understands and acknowledges that the Company may be
merged or consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.

         (b)    (i) In the event of a pending Change in Control wherein the
Employee has not received written notice at least fifteen (15) business days
prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of the
Company's business and/or assets that such successor is willing as of the
closing to assume and agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent that the Company is hereby
required to perform, such Change in Control shall be deemed to be a termination
of this Agreement by the Company and the amount of the lump-sum severance
payment due to Employee shall be 1.15 times the sum of Employee's annual salary
plus maximum annual bonus opportunity immediately prior to the Change in Control
and the Period applicable to Section 3(a)(i) shall be reduced to six (6) months
or the remaining Term, whichever is longer (with the Period for the provisions
of Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2) years)). Payment shall
be made at the closing of the transaction.

         (ii)   In the event of a Change in Control wherein Employee has
received the written notice contemplated by Section 12(b)(i), the Term shall be
automatically extended to one year following such Change in Control (provided
that in no case shall such extension operate to shorten any previously existing
Term) and if during the eleventh month of such twelve-month extension, Employee
has not entered into an employment agreement with such successor for at least an
additional year on terms acceptable to Employee, such failure shall be deemed to
be a termination of this Agreement by the Company and the amount of the lump-sum
severance payment due to Employee shall be 1.15 times the sum of Employee's
annual salary plus maximum annual bonus opportunity immediately prior to the
Change in Control and the Period applicable to Section 3(a)(i) shall be reduced
to six (6) months or the remaining Term, whichever is longer (with the Period
for the provisions of Section 3(a)(ii)-(v) remaining unchanged (i.e. two (2)
years)). The Company, or its successor, shall during the tenth month of such
twelve-month extension provide Employee with a reminder notice, which notice
shall reference this Section and clearly indicate what dates constitute the
first and last dates of such eleventh month of such twelve-month extension.
Further, in the event of a Change in Control wherein Employee has received the
written notice contemplated by Section 12(b)(i), the severance compensation
Employee would thereafter (during the remainder of the Term, as extended) be
entitled as a result of a termination of employment by the Company without cause
(Section 5(d)), or by Employee for Good Reason (Section 5(e)) shall be 1.15
times the sum of Employee's annual salary plus maximum annual bonus opportunity
immediately prior to the Change in Control and the Period applicable to Section
3(a)(i) shall be reduced to six (6) months or the remaining Term, whichever is
longer (with the Period for the provisions of Section 3(a)(ii)-(v) remaining
unchanged (i.e. two (2) years)); it being the intention that the Company or its
successor not circumvent its Change in Control payment obligations by
terminating Employee "Without Cause" or forcing a termination by Employee for
"Good Reason". In addition, in the event of a Change in Control wherein Employee
has received the written notice contemplated by Section 12(b)(i), a reduction in
annual salary or maximum annual bonus opportunity following such

                                       9

<PAGE>

Change in Control (during the remainder of the Term, as extended) shall be
additional grounds for Employee to terminate this Agreement for "Good Reason."

         (c)    For purposes of applying Section 5 under the circumstances
described in the first sentence of Section 12(b) above, the effective date of
termination will be the closing date of the transaction giving rise to the
Change in Control, and all compensation, reimbursements and lump-sum payments
due Employee must be paid in full by the Company at such time. Further, Employee
will be given sufficient time in order to comply with then Securities and
Exchange Commission's regulations to elect whether to exercise and sell all or
any of his vested options to purchase Common Stock of the Company, including any
options with accelerated vesting under the provisions of the Company's stock
option plan, as amended (and as modified by the related option
agreement/certificate in accordance with such Plan) or any warrants, such that
he may convert such options or warrants to shares of Common Stock of the Company
at or prior to the closing of the transaction giving rise to the Change in
Control, if he so desires.

         (d)    A "Change in Control" shall be deemed to have occurred if:

                (i)    any person, other than the Company or an employee benefit
         plan of the Company, acquires directly or indirectly the Beneficial
         Ownership (as defined in Section 13(d) of the Securities Exchange Act
         of 1934, as amended) of any voting security of the Company and
         immediately after such acquisition such Person is, directly or
         indirectly, the Beneficial Owner of voting securities representing 30%
         or more of the total voting power of all of the then-outstanding voting
         securities of the Company;

                (ii)   the individuals (A) who, as of the closing date of the
         Company's initial public offering, constitute the Board of Directors of
         the Company (the "Original Directors") or (B) who thereafter are
         elected to the Board of Directors of the Company and whose election, or
         nomination for election, to the Board of Directors of the Company was
         approved by a vote of at least two-thirds (2/3) of the Original
         Directors then still in office (such directors becoming "Additional
         Original Directors" immediately following their election) or (C) who
         are elected to the Board of Directors of the Company and whose
         election, or nomination for election, to the Board of Directors of the
         Company was approved by a vote of at least two-thirds (2/3) of the
         Original Directors and Additional Original Directors then still in
         office (such directors also becoming "Additional Original Directors"
         immediately following their election), cease for any reason to
         constitute a majority of the members of the Board of Directors of the
         Company;

                (iii)  the consummation of a merger, consolidation,
         recapitalization, or reorganization of the Company, a reverse stock
         split of outstanding voting securities of the Company, or consummation
         of any such transaction if stockholder approval is not sought or
         obtained, other than any such transaction which would result in at
         least 75% of the total voting power represented by the voting
         securities of the surviving entity outstanding immediately after such
         transaction being Beneficially Owned by holders of at least 75% of the
         outstanding voting securities of the Company immediately prior to the
         transaction, with the voting power of each such continuing holder
         relative to other such continuing holders not substantially altered in
         the transaction; or

                                       10

<PAGE>

                (iv)   the consummation of a plan of complete liquidation of the
         Company or an agreement for the sale or disposition by the Company of
         all or a substantial portion of the Company's assets (i.e., 50% or more
         of the total assets of the Company).

         (e)    If any portion of the severance benefits, Change in Control
benefits or any other payment under this Agreement, or under any other agreement
with, or plan of the Company, including but not limited to stock options,
warrants and other long-term incentives (in the aggregate "Total Payments")
would be subject to the excise tax imposed by Section 4999 of the Code, as
amended (or any similar tax that may hereafter be imposed) or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Employee shall be entitled to receive from the Company an
additional payment (the "Gross-up Payment") in an amount such that the net
amount of Total Payments and Gross-up Payment retained by the Employee, after
the calculation and deduction of all Excise Tax on the Total Payments and all
federal, state and local income tax, employment tax and Excise Tax on the
Gross-up Payment, shall be equal to the Total Payments.

         For purposes of this Section Employee's applicable Federal, state and
local taxes shall be computed at the maximum marginal rates, taking into account
the effect of any loss of personal exemptions resulting from receipt of the
Gross-Up Payment.

         All determinations required to be made under this Section 12, including
whether a Gross-Up Payment is required under this Section, and the assumptions
to be used in determining the Gross-Up Payment, shall be made by the Company's
current independent accounting firm, or such other firm as the Company may
designate in writing prior to a Change in Control (the "Accounting Firm"), which
shall provide detailed supporting calculations both to the Company and Employee
within twenty business days of the receipt of notice from Employee that there
will likely be a Change in Control, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as accountant or
auditor for the party effecting the Change in Control or is otherwise
unavailable, Employee (together with all other employees with comparable
appointment rights in their respective employment agreements such that all such
employees may collectively select a single accounting firm) may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm with respect to
such determinations described above shall be borne solely by the Company.

         Employee agrees (unless requested otherwise by the Company) to use
reasonable efforts to contest in good faith any subsequent determination by the
Internal Revenue Service that Employee owes an amount of Excise Tax greater than
the amount determined pursuant to this Section; provided, that Employee shall be
entitled to reimbursement by the Company (on an after tax basis) of all fees and
expenses reasonably incurred by Employee in contesting such determination. In
the event the Internal Revenue Service or any court of competent jurisdiction
determines that Employee owes an amount of Excise Tax that is greater than the
amount previously taken into account and paid under this Agreement (such
additional Excise Tax being

                                       11

<PAGE>

the "Additional Excise Tax"), the Company shall promptly pay to Employee the
amount of such shortfall. In the case of any payment that the Company is
required to make to Employee pursuant to the preceding sentence (a "Later
Payment"), the Company shall also pay to Employee an additional amount such that
after payment by Employee of all of Employee's applicable Federal, state and
local taxes, including any interest and penalties assessed by any taxing
authority, on the Later Payment, Employee will retain from the Later Payment an
amount equal to the Additional Excise Tax, which Employee shall use to pay the
Additional Excise Tax.

         13.    Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Employee and of all the terms of this Agreement, and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written agreements. This Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and Employee,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such term.

         14.    Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:

         To the Company:                SOURCECORP, Incorporated
                                        3232 McKinney Avenue
                                        Suite 1000
                                        Dallas, Texas 75204
                                        Attn:  Chief Operating Officer

         with a copy to:                SOURCECORP, Incorporated
                                        3232 McKinney Avenue
                                        Suite 1000
                                        Dallas, Texas 75204
                                        Attn:  General Counsel

         with a copy to:                Locke Liddell & Sapp LLP
                                        2200 Ross Avenue
                                        Suite 2200
                                        Dallas, Texas 75201
                                        Attn:  Charles C. Reeder, Esq.

         To Employee:                   Michael S. Rupe
                                        4569 Belfort Place
                                        Dallas, Texas 75205

Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when

                                       12

<PAGE>

actually received, whichever is earlier. Hand delivery shall also constitute
effective notice and shall be deemed given and effective upon receipt. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 14.

         15.    Severability; Headings. If any portion of this Agreement is held
invalid or inoperative in any circumstance, (i) such portion shall remain valid
and operative in all other circumstances; (ii) the other portions of this
Agreement shall be deemed valid and operative; and (iii) so far as is reasonable
and possible, effect shall be given to the intent manifested by the portion held
invalid or inoperative. The Section headings herein are for reference purposes
only and are not intended in any way to describe, interpret, define or limit the
extent or intent of the Agreement or of any part hereof.

         16.    Arbitration. Any unresolved dispute or controversy arising under
or in connection with this Agreement or Employee's employment shall be settled
exclusively by arbitration, conducted before a panel of three (3) arbitrators in
Dallas, Texas, in accordance with the rules of the American Arbitration
Association then in effect. The arbitrators shall not have the authority to add
to, detract from, or modify any provision hereof nor to award punitive damages
to any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in
lieu of vesting of options), reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in Sections 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The costs of any
arbitration proceeding shall be borne by the party or parties not prevailing in
such proceeding as determined by the arbitrators. This Section shall survive any
termination of this Agreement.

         17.    Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.

                   [Balance of sheet intentionally left blank]

                                       13

<PAGE>

                                             EMPLOYEE:

                                                   /s/ Michael S. Rupe
                                             -----------------------------------
                                             Michael S. Rupe

                                             SOURCECORP, Incorporated

                                             By:      /s/ Ed H. Bowman, Jr.
                                                --------------------------------
                                             Title: President & CEO

                                             SOURCECORP Management, L.P.

                                             By: SRCP Management, Inc.,
                                                   General Partner

                                                   By:     /s/ Thomas C. Walker
                                                      --------------------------
                                                   Title: Chairman & CDO

                                       14

<PAGE>

                              Schedule of Benefits
                                (Michael S. Rupe)

Executive Perquisites, Benefits and Other Compensation. The following are the
benefits that the above named Employee may receive from the Company; provided,
that the Company may modify from time to time such benefits at its discretion.

                (i)    Payment of all premiums for coverage for Employee and his
         dependent family members under health, hospitalization, disability,
         dental, life and other insurance plans that the Company may have in
         effect from time to time, and not less favorable than the benefits
         provided to other Company executives.

                (ii)   Reimbursement for all business travel and other
         out-of-pocket expenses reasonably incurred by Employee in the
         performance of his services pursuant to this Agreement. All
         reimbursable expenses shall be appropriately documented in reasonable
         detail by Employee upon submission of any request for reimbursement,
         and in a format and manner consistent with the Company's expense
         reporting policy.

                (iii)  Four (4) weeks paid vacation for each year during the
         period of employment (prorated for any year in which Employee is
         employed for less than the full year).

                (iv)   An automobile allowance in the amount of $1,000 per
         month.

                (v)    Participation in the Company's 401(k) Plan and
         Non-Qualified Plan.

                (vi)   The Company shall reimburse Employee up to $6,000 per
         year for expenditures on health, insurance, financial planning or tax
         planning benefits (or similar benefits at the discretion of the
         Company) or club dues selected by Employee.

                                       15

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