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                                  EXHIBIT 10.1


                          APAC CUSTOMER SERVICES, INC.

                           SECOND AMENDED AND RESTATED
                            1995 INCENTIVE STOCK PLAN

         1. PURPOSE. The APAC CUSTOMER SERVICES, INC. Second Amended and
Restated 1995 Incentive Stock Plan (the "Plan") is the result of the merger of
the APAC Teleservices, Inc. Amended and Restated 1995 Non-Employee Director
Stock Option Plan (the "Director Plan") and the APAC Teleservices, Inc. Amended
and Restated 1995 Incentive Stock Plan (the "Prior Plan") and is intended to
provide incentives which will attract and retain highly competent persons as
officers and key employees of APAC Customer Services, Inc. (formerly known as
"APAC Teleservices, Inc.") (the "Company") and members of its Board of
Directors, as well as independent contractors providing consulting or advisory
services to the Company, by providing them opportunities to acquire Common
Shares of the Company ("Common Shares") or to receive monetary payments based on
the value of such shares pursuant to the Awards described herein.

         2. ADMINISTRATION. The Plan will be administered by the Compensation
Committee (the "Committee") appointed by the Board of Directors of the Company
from among its members and, with respect to the participation of non-employee
directors, may be administered by a committee consisting of members of the Board
of Directors who are employees (who, for such purpose, will be within the
contemplation of the term "Committee"). As long as Common Shares are registered
under the Securities Exchange Act of 1934, members of the Committee must qualify
as non-employee directors within the meaning of Securities and Exchange
Commission Regulation Section 240.16b-3 and outside directors within the meaning
of Section 162(m) of the Internal Revenue Code . The Committee is authorized,
subject to the provisions of the Plan, to establish such rules and regulations
as it deems necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan and any Awards granted hereunder as it deems necessary or advisable.
All determinations and interpretations made by the Committee shall he binding
and conclusive on all participants and their legal representatives. No member of
the Board, no member of the Committee and no employee of the Company shall be
liable for any act or failure to act hereunder, by any other member or employee
or by any agent to whom duties in connection with the administration of this
Plan have been delegated or, except in circumstances involving his bad faith,
gross negligence or fraud, for any act or failure to act by the member or
employee.

         3. PARTICIPANTS. Participants will consist of such officers and key
employees of the Company, members of its Board of Directors, and independent
contractors providing consulting or advisory services to the Company, as the
Committee in its sole discretion determines to be significantly responsible for
the success and future growth and profitability of the Company and whom the
Committee may designate from time to time to receive Awards under the Plan.
Designation of a participant in any year shall not require the Committee to

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designate such person to receive an Award in any other year or, once
designated, to receive the same type or amount of Awards as granted to the
participant in any year. The Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and
amount of their respective Awards.

         4. TYPES OF AWARDS. Awards under the Plan may be granted in any one or
a combination of (a) Stock Options, (b) Stock Appreciation Rights, (c) Stock
Awards, (d) Performance Shares, and (e) Performance Units, all as described
below (collectively "Awards").

         5. SHARES RESERVED UNDER THE PLAN. There is hereby reserved for
issuance under the Plan a number of Common Shares equal to the aggregate number
of shares reserved under the Director Plan and the Prior Plan reduced by the
number of shares previously used under either Plan, which may be authorized but
unissued shares; provided that no such shares attributable to the Director Plan
may be subject to Incentive Stock Options (defined below). In addition, any
Common Shares subject to options currently outstanding as of the original date
of adoption of the Prior Plan under the Company's agreements with employees of
the Company which lapsed, expired or are terminated shall be available for
Awards hereunder. Any shares subject to Stock Options or Stock Appreciation
Rights or issued under such options or rights or as Stock Awards may thereafter
be subject to new options, rights or awards under this Plan if there is a lapse,
expiration or termination of any such options, or rights prior to issuance of
the shares or the payment of the equivalent or if shares are issued under such
options or rights or as such awards, and thereafter are reacquired by the
Company pursuant to rights reserved by the Company upon issuance thereof;
provided that no such shares attributable to the Director Plan may be subject to
Incentive Stock Options.

         6. STOCK OPTIONS. Stock Options will consist of awards from the
Company, in the form of agreements, which will enable the holder to purchase a
specific number of Common Shares, at set terms and at a fixed purchase price.
Stock Options may be "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code ("Incentive Stock Options") or Stock Options which
do not constitute Incentive Stock Options ("Nonqualified Stock Options"). The
Committee will have the authority to grant to any participant one or more
Incentive Stock Options, Nonqualified Stock Options, or both types of Stock
options (in each case with or without Stock Appreciation Rights). On the date of
each annual meeting of the shareholders of the Company ("Annual Meeting"), each
member of the Board of Directors of the Company who is not a salaried officer or
employee of the Company or any of its direct or indirect subsidiaries (a
"Nonemployee Director") in office on adjournment of the Annual Meeting, will
automatically be awarded a Nonqualified Stock Option to purchase five thousand
(5,000) Common Shares (a "Director Option"). Each Stock option shall be subject
to such terms and conditions consistent with the Plan as the Committee may
impose from time to time, subject to the following limitations:

                  (A) EXERCISE PRICE. Each Stock Option granted hereunder shall
have such per-share exercise price as the Committee may determine at the date of
grant provided, however, that (i) subject to paragraph (E), the per-share
exercise price for Incentive Stock options shall not be less than 100% of the
Fair Market Value of the Common Shares on the date the option is
granted; and (ii) the per-share exercise price for Nonqualified Stock Options
shall not be less than 85% of the Fair Market Value of the Common Shares on
the date the option is

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granted; and (iii) the per-share exercise price for a Director Option shall
be the Fair Market Value of a Common Share on the date of the applicable
Annual Meeting.

                  (B) PAYMENT OF EXERCISE PRICE. The option exercise price may
be paid by check or, in the discretion of the Committee, by the delivery (or
certification of ownership) of Common Shares of the Company then owned by the
participant; provided, however, that option agreements may provide that payment
of the exercise price by delivery of Common Shares of the Company then owned by
the participant may be made only if such payment does not result in a charge to
earnings for financial accounting purposes as determined by the Committee. In
the discretion of the Committee, if Common Shares are readily tradeable on a
national securities exchange or other market system at the time of option
exercise, payment may also be made by delivering a properly executed exercise
notice to the Company together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds to
pay the exercise price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

                  (C) EXERCISE PERIOD. Stock Options granted under the Plan
shall be exercisable at such times and subject to such terms and conditions as
shall be determined by the Committee. Any Director Option may be exercised in
whole or in part, from time to time after the date granted, subject to the
following limitations:

                   i. No Director Option may be exercised during the first year
following the date such option was granted. Thereafter, each Director Option may
be exercised:

                            a.     to a maximum cumulative extent of one-third
                     (1/3) of the total shares covered by the option on or after
                     the first anniversary of the date the option was granted;

                           b. to a maximum cumulative extent of two-thirds (2/3)
                  of the total shares covered by the option on or after the
                  second anniversary of the date the option was granted; and

                           c. to a maximum cumulative extent of 100% of the
                  total option shares on or after the third anniversary of the
                  date the option was granted.

                  ii. Notwithstanding the above limitations, any option granted
under this Plan shall become fully exercisable upon the death of the Nonemployee
Director while serving on the Board or upon the retirement of the Nonemployee
Director if such death or Retirement occurs on or after the first anniversary of
the date such option was issued. For these purposes, "Retirement" means a
Nonemployee Director's termination of service as a member of the Board after age
70 or at any time with the consent of the Board.

                  iii. Any Director Option may not be exercised after the
earliest to occur of any of the following events:

                           a. more than ninety (90) days after termination of
                  any Nonemployee Director's service as a member of the Board
                  for any reason other than death or

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                  Retirement (and, subject to paragraph (D), then only to the
                  extent that the Nonemployee Director could have exercised
                  such option on the date of termination);

                           b. more than one hundred eighty (180) days after a
                  Nonemployee Director's Retirement from the Board (and, subject
                  to paragraph (D), then only to the extent that the Nonemployee
                  Director could have exercised such option on the date of
                  Retirement);

                           c. more than twelve months after death of a
                  Nonemployee Director (and, subject to paragraph (D), then only
                  to the extent that the Nonemployee Director could have
                  exercised such option on the date of death); or

                           d. more than ten (10) years from the date the option
                  is granted.

In addition, Nonqualified Stock Options shall not be exercisable later than
fifteen years after the date they are granted and (subject to paragraph (E))
Incentive Stock Options shall not be exercisable later than ten years after the
date they are granted. All Stock Options shall terminate at such earlier times
and upon such conditions or circumstances as the Committee shall in its
discretion set forth in such option at the date of grant.

                  (D) CHANGE IN CONTROL. Notwithstanding the provisions of
paragraph (C), if (i) there is a Change in Control of the Company, and (ii)
the Committee does not declare, by resolution, that the pooling treatment of
a transaction to which the Company is a party would be adversely affected by
application of the following, then all Stock Options granted under the Plan
that have not previously terminated (including those granted before the date
that this Second Amended and Restated Plan was adopted, but not including
those subject to provisions that would result in the Stock Option's becoming
exercisable to a greater extent) shall be subject to the following: (i) as of
the date of the Change in Control, to the extent any such Stock Option is not
exercisable, it shall become exercisable as to one-half of the shares subject
to the unexercisable portion of the Stock Option; and (ii) if the employment
of the holder of the Stock Option is terminated by the Company other than
With Cause or such holder terminates such employment with Good Reason (or, in
the case of a Nonemployee Director, his service as a member of the Board
terminates for any reason), then such Stock Option, to the extent not
previously terminated and not exercisable at the date such employment (or
service) terminates, shall become fully exercisable. For purposes of the
foregoing:

              (a)    A "Change in Control" shall be deemed to have occurred if
                     (I) a tender offer shall be made and consummated for the
                     ownership of more than 50% of the outstanding voting
                     securities of the Company, (II) the Company shall be merged
                     or consolidated with another corporation and as a result of
                     such merger or consolidation less than 50% of the
                     outstanding voting securities of the surviving or resulting
                     corporation shall be owned in the aggregate by the former
                     shareholders of the Company, as the same shall have existed
                     immediately prior to such merger or consolidation, (III)
                     the Company shall sell all or substantially all of its
                     assets to another corporation which is not a wholly-owned
                     subsidiary or affiliate, (IV) as

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                     the result of, or in connection with, any contested
                     election for the Board of Directors, or any tender or
                     exchange offer, merger or business combination or sale
                     of assets, or any combination of the foregoing (a
                     "Transaction"), the persons who were Directors of the
                     Company before the Transaction shall cease to constitute
                     a majority of the Board of Directors of the Company, or
                     any successor thereto, or (V) a person, within the
                     meaning of Section 3(a)(9) or of Section 13(d)(3) of the
                     Securities and Exchange Act of 1934 ("Exchange Act"),
                     other than any employee benefit plan then maintained by
                     the Company, shall acquire more than 50% of the
                     outstanding voting securities of the Company (whether
                     directly, indirectly, beneficially or of record). For
                     purposes hereof, ownership of voting securities shall
                     take into account and shall include ownership as
                     determined by applying the provisions of Rule
                     13d-3(d)(1)(i) pursuant to the Exchange Act.
                     Notwithstanding the foregoing, (I) a Change in Control
                     will not occur for purposes of the Plan merely due to
                     the death of Theodore G. Schwartz, or as a result of the
                     acquisition, by Theodore G. Schwartz, alone or with one
                     or more affiliates or associates, as defined in the
                     Exchange Act, of securities of the Company, as part of a
                     going-private transaction or otherwise, unless Mr.
                     Schwartz or his affiliates, associates, family members
                     or trusts for the benefit of family members
                     (collectively, the "Schwartz Entities") do not control,
                     directly or indirectly, at least twenty-seven percent
                     (27%) of the resulting entity, and (II) if the Schwartz
                     Entities control, directly or indirectly, less than
                     twenty-seven percent (27%) of the Company's voting
                     securities while it is a public company, then "33-1/3%"
                     shall be substituted for "50%" in clauses (I), (II) and
                     (V) of the first sentence of this paragraph.

              (b)    Termination with "Good Reason" means termination of the
                     Stock Option holder's employment by the Stock Option holder
                     within twelve (12) months following a Change in Control, as
                     defined above, but only if, after notice by the Stock
                     Option holder to the Company and a fifteen (15) day
                     opportunity by the Company to cure, (I) the Stock Option
                     holder's principal place of work (not including regular
                     business travel) is relocated by more than fifty (50)
                     miles, (II) the Stock Option holder's duties,
                     responsibilities or authority as an executive employee are
                     materially reduced or diminished without the Stock Option
                     holder's written consent; provided that any reduction or
                     diminishment in any of the foregoing resulting merely from
                     the acquisition of the Company and its existence as a
                     subsidiary or division of another entity shall not be
                     sufficient to constitute Good Reason, (III) the
                     compensation received by the Stock Option holder is reduced
                     in the aggregate, and such reduction is not remedied within
                     thirty (30) days of the Stock Option holder's notice to the
                     Company thereof, (IV) a determination is made by the Stock
                     Option holder in good faith that as a result of the Change
                     in Control, and a change in circumstances thereafter,
                     significantly affecting his position, he is unable to carry
                     out the authorities, powers, functions or duties attached
                     to his position and the situation is not remedied within
                     thirty (30) days after

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                     receipt of the Company of written notice from the Stock
                     Option holder of such determination, (V) if the Stock
                     Option holder and the Company have entered into a
                     written Employment Agreement, the Company violates the
                     material terms of such Employment Agreement, or (VI)
                     there is a liquidation, dissolution, consolidation or
                     erger of the Company or transfer of all or a
                     significant portion of its assets unless a successor or
                     successors (by merger, consolidation or otherwise) to
                     which all or a significant portion of its assets have
                     been transferred shall have assumed all duties and
                     obligations of the Company under such Employment
                     Agreement, if any.

              (c)    Termination "With Cause" means termination of the Stock
                     Option holder's employment by the Board of Directors acting
                     in good faith by written notice by the Company to the Stock
                     Option holder specifying the event relied upon for such
                     termination, due to (I) gross misconduct or gross
                     negligence in the performance of the Stock Option holder's
                     employment duties, (II) willful disobedience by the Stock
                     Option holder of the lawful directions received from or
                     policies established by the Board of Directors, which
                     continues for more than seven (7) days after the Company
                     notifies the Stock Option holder of its intention to
                     terminate his employment on account of such disobedience,
                     or (III) commission by the Stock Option holder of a crime
                     involving fraud or moral turpitude that can reasonably be
                     expected to have an adverse effect on the business,
                     reputation or financial situation of the Company.

                  (E) LlMITATIONS ON INCENTIVE STOCK OPTIONS. Incentive Stock
Options may be granted only to participants who are employees of the Company or
one of its subsidiaries (within the meaning of Section 424(f) of the Internal
Revenue Code) at the date of grant. The aggregate Fair Market Value (determined
as of the time the option is granted) of the Common Shares with respect to which
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under all option plans of the Company) shall not
exceed $100,000. Incentive Stock Options may not be granted to any participant
who, at the time of grant, owns stock possessing (after the application of the
attribution rules of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company, unless the option
price is fixed at not less than 110% of the Fair Market Value of the Common
Shares on the date of grant and the exercise of such option is prohibited by its
terms after the expiration of five years from the date of grant of such option.

                  (F) REDESIGNATION AS NONQUALIFIED STOCK OPTIONS. Options
designated as "incentive stock options" that fail to continue to meet the
requirements of Section 422 of the Internal Revenue Code shall be redesignated
as nonqualified options for Federal income tax purposes automatically without
further action by the Committee on the date of such failure to continue to meet
the requirements of Section 422 of the Code.

                  (G) LIMITATION OF RIGHTS IN SHARES. The recipient of a Stock
Option shall not be deemed for any purpose to be a shareholder of the Company
with respect to

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any of the shares subject thereto except to the extent that the Stock Option
shall have been exercised and, in addition, a certificate shall have been
issued and delivered to the participant.

                  (H) INDIVIDUAL LIMITATION ON NUMBER OF SHARES. The number of
shares subject to Stock Options which may he granted during any calendar year to
any one participant shall not exceed one million one hundred thousand
(1,100,000) shares.

         7. STOCK APPRECIATION RIGHTS. The Committee may, in its discretion,
grant Stock Appreciation Rights to the holders of any Stock Options granted
hereunder. In addition, Stock Appreciation Rights may be granted
independently of and without relation to options. The number of shares
subject to Stock Appreciation Rights which may be granted during any calendar
year to any one participant shall not exceed seven hundred seventy thousand
(770,000) shares. Each Stock Appreciation Right shall be subject to such
terms and conditions consistent with the Plan as the Committee shall impose
from time to time, including the following:

                  (A) A Stock Appreciation Right relating to a Nonqualified
Stock Option may be made part of such option at the time of its grant or at
any time thereafter up to six months prior to its expiration, and a Stock
Appreciation Right relating to an Incentive Stock Option may be made part of
such option only at the time of its grant.

                  (B) Each Stock Appreciation Right will entitle the holder
to elect to receive the appreciation in the Fair Market Value of the shares
subject thereto up to the date the right is exercised. In the case of a right
issued in relation to a Stock Option, such appreciation shall be measured
from not less than the option price and in the case of a right issued
independently of any Stock Option, such appreciation shall be measured from
not less than 85% of the Fair Market Value of the Common Shares on the date
the right is granted. Payment of such appreciation shall be made in cash or
in Common Shares, or a combination thereof, as set forth in the award, but no
Stock Appreciation Right shall entitle the holder to receive, upon exercise
thereof, more than the number of Common Shares (or cash of equal value) with
respect to which the right is grant.

                  (C) Each Stock Appreciation Right will be exercisable at
the times and to the extent set forth therein, but no Stock Appreciation
Right may be exercisable earlier than six months after the date it was
granted or later than the earlier of (i) the term of the related option, if
any, or (ii) fifteen years after it was granted. Exercise of a Stock
Appreciation Right shall reduce the number of shares issuable under the Plan
(and the related option, if any) by the number of shares with respect to
which the right is exercised. Each Stock Appreciation Right shall also be
subject to the terms of Section 6(D).

         8. STOCK AWARDS. Stock Awards will consist of Common Shares transferred
to participants without other payment therefor as additional compensation for
services to the Company. Stock Awards shall be subject to such terms and
conditions as the Committee determines appropriate, including, without
limitation, restrictions on the sale or other disposition of such shares and
rights of the Company to reacquire such shares for no consideration upon
termination of the participant's employment within specified periods. The
Committee may require the participant to deliver a duly signed stock power,
endorsed in blank, relating to the

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Common Shares covered by such an Award. The Committee may also require that
the stock certificates evidencing such shares be held in custody until the
restrictions thereon shall have lapsed. The participant shall have, with
respect to the Common Shares subject to a Stock Award, all of the rights of a
holder of Common Shares of the Company, including the right to receive
dividends and to vote the shares.

         9. PERFORMANCE SHARES.

            (A)   Performance Shares may be awarded either alone or in addition
to other Awards granted under this Plan and shall consist of the right to
receive Common Shares or cash of an equivalent value at the end of a
specified Performance Period (defined below). The Committee shall determine
the participants to whom and the time or times at which Performance Shares
shall be awarded, the number of Performance Shares to be awarded to any
person, the duration of the period (the "Performance Period") during which,
and the conditions under which, receipt of the Common Shares will be
deferred, and the other terms and conditions of the Award in addition to
those set forth in this Section 9. The Committee may condition the grant of
Performance Shares upon the attainment of specified performance goals or such
other factors or criteria as the Committee shall determine.

            (B)   Performance Shares awarded pursuant to this Section 9 shall
be subject to the following terms and conditions:

         (I)      Unless otherwise determined by the Committee at the time of
                  the grant of the Award, amounts equal to any dividends
                  declared during the Performance Period with respect to the
                  number of Common Shares covered by a Performance Share Award
                  will not be paid to the participant.

         (II)     Subject to the provisions of the Performance Share Award and
                  this Plan, at the expiration of the Performance Period, share
                  certificates and/or cash of an equivalent value (as the
                  Committee may determine) shall be delivered to the
                  participant, or his or her legal representative, in a number
                  equal to the vested shares covered by the Performance Share
                  Award.

         (III)    Subject to the applicable provisions of the Performance Share
                  Award and this Plan, upon termination of a participant's
                  employment with the Company for any reason during the
                  Performance Period for a given Performance Share Award, the
                  Performance Shares in question will vest or be forfeited in
                  accordance with the terms and conditions established by the
                  Committee.

         10.      PERFORMANCE UNITS.

                  (A)  Performance Units may be awarded either alone or in
addition to other Awards granted under this Plan and shall consist of the right
to receive a fixed dollar amount payable in cash or Common Shares or a
combination of both. The Committee shall determine the participants to whom and
the time or times at which Performance Units shall be awarded, the number of
Performance Units to be awarded to any person, the duration of the period (the
"Performance Cycle") during which, and the conditions under which, a
participant's right to

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Performance Units will be vested, the ability of participants to defer the
receipt of payment of such Performance Units, and the other terms and
conditions of the Award in addition to those set forth in Section 10. The
Committee may condition the vesting of Performance Units upon the attainment
of specified performance goals or such other factors or criteria as the
Committee shall determine.

                  (B)  The Performance Units awarded pursuant to this Section 10
shall be subject to the following terms and conditions:

         (I)      At the expiration of the Performance Cycle, the Committee
                  shall determine the extent to which the performance goals have
                  been achieved, and the percentage of the Performance Units of
                  each participant that have vested.

         (II)     Subject to the applicable provisions of the Performance Unit
                  Award and this Plan, at the expiration of the Performance
                  Cycle, cash and/or share certificates of an equivalent value
                  (as the Committee may determine) shall be delivered to the
                  participant, or his or her legal representative, in payment of
                  the vested Performance Units covered by the Performance Unit
                  Award.

         (III)    Subject to the applicable provisions of the Performance Unit
                  Award and this Plan, upon termination of a participant's
                  employment with the Company for any reason during the
                  Performance Cycle for a given Performance Unit Award, the
                  Performance Units in question will vest or be forfeited in
                  accordance with the terms and conditions established by the
                  Committee.

         11.      ADJUSTMENT PROVISIONS.

                  (A) If the Company shall at any time change the number of
issued Common Shares without new consideration to the Company (such as by stock
dividend, stock split, recapitalization, reorganization, exchange of shares,
liquidation, combination or other change in corporate structure affecting the
Common Shares) or make a distribution of cash or property which has a
substantial impact on the value of issued Common Shares, the total number of
shares available for Awards under this Plan shall be appropriately adjusted and
the number of shares covered by each outstanding Award and the reference price
or Fair Market Value for each outstanding Award shall be adjusted so that the
net value of such Award shall not be changed.

                  (B) In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding Common Shares
being converted into or exchanged for different securities, cash or other
property, or any combination thereof (an "Acquisition"), subject to the
provisions of this Plan and any limitation applicable to the Award:

         (I)      any participant to whom a Stock Option has been granted shall
                  have the right thereafter and during the term of the Stock
                  Option, to receive upon exercise thereof the Acquisition
                  Consideration (as defined below) receivable upon the
                  Acquisition by a holder of the number of Common Shares which
                  might have been obtained upon exercise of the Stock Option or
                  portion thereof, as the case may be,

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<PAGE>

                  immediately prior to the Acquisition;


         (II)     any participant to whom a Stock Appreciation Right has been
                  granted shall have the right thereafter and during the term of
                  such right of the Acquisition Consideration receivable upon
                  such acquisition by a holder of the number of Common Shares
                  which are covered by such right and the aggregate reference
                  price of such right; and

         (III)    any participant to whom Performance Shares or Performance
                  Units have been awarded shall have the right thereafter and
                  during the term of the Award, upon fulfillment of the terms of
                  the Award, to receive on the date or dates set forth in the
                  Award, the Acquisition Consideration receivable upon the
                  Acquisition by a holder of the number of Common Shares which
                  are covered by the Award.

                  The term "Acquisition Consideration" shall mean the kind and
                  amount of securities, cash or other property or any
                  combination thereof receivable in respect of one Common Share
                  upon consummation of an Acquisition.

                  (C) Notwithstanding any other provision of this Plan, the
Committee may authorize the issuance, continuation or assumption of Awards or
provide for other equitable adjustments after changes in the Common Shares
resulting from any other merger, consolidation, sale of assets, acquisition of
property or stock, recapitalization, reorganization or similar occurrence upon
such terms and conditions as it may deem equitable and appropriate.

                  (D) In the event that another corporation or business entity
is being acquired by the Company, and the Company assumes outstanding employee
stock options and/or stock appreciation rights and/or the obligation to make
future grants of options or rights to employees of the acquired entity, the
aggregate number of Common Shares available for Awards under this Plan shall be
increased accordingly.

         12.      NONTRANSFERABILITY.

                  (A) Each Award granted under the Plan to a participant shall
not be transferable by him otherwise than by law or by will or the laws of
descent and distribution, and shall be exercisable, during his lifetime, only by
him. In the event of the death of a participant while the participant is
rendering services to the Company, each Stock Option or Stock Appreciation Right
theretofore granted to him shall be exercisable during such period after his
death as the Committee shall in its discretion set forth in such option or right
at the date of grant (but not beyond the stated duration of the option or right)
and then only:

         (I)      By the executor or administrator of the estate of the deceased
                  participant or the person or persons to whom the deceased
                  participant's rights under the Stock Option or Stock
                  Appreciation Right shall pass by will or the laws of descent
                  and distribution; and

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         (II)     Subject to Section 6(D), to the extent that the deceased
                  participant was entitled to do so at the date of his death.

                  (B) Notwithstanding Section 12(A), in the discretion of the
Committee, Awards granted hereunder may be transferred to members of the
participant's immediate family (which for purposes of this Plan shall be
limited to the participant's children, grandchildren and spouse), or to one
or more trusts for the benefit of such family members or partnerships in
which such family members and/or trusts are the only partners, but only if
the Award expressly so provides.

         13. OTHER PROVISIONS. Awards under the Plan may also be subject to such
other provisions (whether or not applicable to any other Awards under the Plan)
as the Committee determines appropriate, including without limitation,
provisions for the installment purchase of Common Shares under Stock Options,
provisions for the installment exercise of Stock Appreciation Rights, provisions
to assist the participant in financing the acquisition of Common Shares,
provisions for the forfeiture of, or restrictions on resale or other disposition
of Shares acquired under any form of Award, provisions for the acceleration of
exercisability or vesting of Awards in the event of a change of control of the
Company, provisions for the payment of the value of Awards to participants in
the event of a change of control of the Company, provisions for the forfeiture
of, or provisions to comply with Federal and state securities laws, or
understandings or conditions as to the participant's employment in addition to
those specifically provided for under the Plan.

         14. FAIR MARKET VALUE. For purposes of this Plan and any Awards
hereunder, Fair Market Value of Common Shares shall be the mean between the
highest and lowest sale prices for the Company's Common Shares as reported on
the NASDAQ National Market System (or such other consolidated transaction
reporting system on which such Common Shares are primarily traded) on the date
of calculation (or on the next preceding trading date if Common Shares were not
traded on the date of calculation), provided, however, that if the Company's
Common Shares are not at any time readily tradeable on a national securities
exchange or other market system, Fair Market Value shall mean the amount
determined in good faith by the Committee as the fair market value of the Common
Shares of the Company.

         15. WITHHOLDING. All payments or distributions made pursuant to the
Plan shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Shares pursuant to the Plan, it may require
the recipient to remit to it an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such
Common Shares. The Committee may, in its discretion and subject to such rules as
it may adopt, permit an optionee or award or right holder to pay all or a
portion of the federal, state and local withholding taxes arising in connection
with (a) the exercise of a Nonqualified Stock Option or a Stock Appreciation
Right, (b) the receipt or vesting of Stock Awards, or (c) the receipt of Common
Shares upon the expiration of the Performance Period or the Performance Cycle,
respectively, with respect to any Performance Shares or Performance Units, by
electing to have the Company withhold Common Shares having a Fair Market Value
equal to the amount to be withheld.

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<PAGE>

         16. TENURE. A participant's right, if any, to continue to serve the
Company as an officer, employee, independent contractor, or otherwise, shall not
be enlarged or otherwise affected by his designation as a participant under the
Plan, nor shall this Plan in any way interfere with the right of the Company,
subject to the terms of any separate employment agreement to the contrary, at
any time to terminate such employment or to increase or decrease the
compensation of the participant from the rate in existence at the time of the
grant of an Award.

         17. DURATION, AMENDMENT AND TERMINATION. No Award shall be granted
after July 1, 2005; provided, however, that the terms and conditions applicable
to any Award granted prior to such date may thereafter be amended or modified by
mutual agreement between the Company and the participant or such other persons
as may then have an interest therein. Also, by mutual agreement between the
Company and a participant hereunder, under this Plan or under any other present
or future plan of the Company, Awards may be granted to such participant in
substitution and exchange for, and in cancellation of, any Awards previously
granted such participant under this Plan, or any other present or future plan of
the Company. The Board of Directors may amend the Plan from time to time or
terminate the Plan at any time. However, no action authorized by this Section 17
shall reduce the amount of any existing Award or change the terms and conditions
thereof without the participant's consent. No amendment of the Plan shall be
made without approval of the shareholders of the Company if such approval is
required by law or regulatory authority.

         18. GOVERNING LAW. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Illinois (regardless of the law that might otherwise govern under applicable
Illinois principles of conflict of laws).

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