**EXHIBIT 10.3****APAC CUSTOMER SERVICES, INC.****AMENDED AND RESTATED 2005 INCENTIVE STOCK PLAN****EFFECTIVE APRIL 4, 2007**
 

 
**APAC CUSTOMER SERVICES, INC.****AMENDED AND RESTATED 2005 INCENTIVE STOCK PLAN**     1. Purpose. APAC Customer Services, Inc. (the “Company”) established the APACCUSTOMER SERVICES, INC. 2005 Incentive Stock Plan (the “Plan”) effective as of June 3,2005, and hereby amends the Plan by this restatement, to provide incentives to attract and retainhighly competent persons as officers and key employees of the Company and its Subsidiaries andmembers of its Board of Directors as well as independent contractors providing consulting oradvisory services to the Company, by providing them opportunities to acquire shares of Common Stockand to receive monetary payments based on the value of such shares pursuant to the Awards describedherein. The Plan is the successor to the Predecessor Plan.     2. Definitions.          (a) “Award” means, Stock Options (including Incentive Stock Options), StockAppreciation Rights, Restricted Stock or Restricted Stock Unit awards, Performance Share orPerformance Unit awards, Dividend or Dividend Equivalent Rights, Stock Awards, MIP Awards, DirectorOptions, or other awards (“Other Incentive Awards”), that are valued in whole or in part byreference to, or are otherwise based on, Common Stock or other factors, all on a stand-alone,combination or tandem basis, as described in or granted under the Plan.          (b) “Award Agreement” means a writing provided by the Company to each Participantsetting forth the terms and conditions of each Award made under the Plan.          (c) “Board” means the Board of Directors of the Company.          (d) “Change of Control” shall be deemed to have occurred upon the happening of any ofthe following events:          (i) A tender offer shall be made and consummated for the ownership of more than 50% ofthe outstanding voting securities of the Company;          (ii) The Company shall be merged or consolidated with another corporation and as aresult of such merger or consolidation less than 50% of the outstanding voting securities ofthe surviving or resulting corporation shall be owned in the aggregate by the formershareholders of the Company, as the same shall have existed immediately prior to such mergeror consolidation;          (iii) The Company shall sell all or substantially all of its assets to anothercorporation which is not a wholly-owned Subsidiary or affiliate;          (iv) As the result of, or in connection with, any contested election for the Board ofDirectors of the Company, 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 theTransaction 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) (as ineffect on the date hereof) of the Securities Exchange Act of 1934 (“Exchange Act”),other than any employee benefit plan then maintained by the Company, shall acquire more than50% of the outstanding voting securities of the Company (whether, directly, indirectly,beneficially or of record). For purposes hereof, ownership of voting securities shall takeinto account and shall include ownership as determined by applying the provisions of Rule13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange Act.     Notwithstanding the foregoing, (A) a Change in Control will not occur for purposes ofthe Plan merely due to the death of Theodore G. Schwartz, or as a result of the acquisitionby Theodore G. Schwartz, alone or with one or more affiliates or associates, as defined inthe Exchange Act, of securities of the Company, as part of a going-private transaction orotherwise, unless Mr. Schwartz or his affiliates, associates, family members or trusts forthe benefit of family members (collectively, the “Schwartz Entities”) do notcontrol, directly or indirectly, at least twenty-seven percent (27%) of the resultingentity, and (B) if the Schwartz Entities control, directly or indirectly, less thantwenty-seven (27%) percent of the Company’s voting securities while it is a public company,then “33 1/3%” shall be substituted for “50%” in clauses (i) and (v) of this Section 1(d),and “66 2/3%” shall be substituted for “50%” in clause (ii) of this Section 1(d).          (e) “Code” means the Internal Revenue Code of 1986, as amended from time to time.          (f) “Committee” means the Compensation Committee of the Board or such other committeeof the Board as may be designated by the Board from time to time to administer the Plan. Unlessthe Board otherwise determines, and such determination is reduced to writing articulating thereasons for such determination, the Committee shall at all times be comprised of not less than twomembers, each of whom shall qualify as (i) a “Non-Employee Director” within the meaning of Rule16b-3(b)(3) (or any successor rule) under the Exchange Act, (ii) an “outside director” within themeaning of Section 162(m) of the Code and the regulations thereunder (or any successor law orregulation), and (iii) an “independent director” as such term is defined or used by the rules ofthe exchange or system on which Common Stock is listed.          (g) “Common Stock” means the Common Stock, $0.01 par value, of the Company.          (h) “Company” means APAC Customer Services, Inc., an Illinois corporation, and anysuccessor thereto.
-2-

 
          (i) “Director” means a member of the Board.          (j) “Director Plan” means the former APAC Teleservices, Inc. Amended and Restated 1995Non-Employee Director Stock Option Plan, which plan previously was merged into the PredecessorPlan.          (k) “Director Option” has the meaning specified in Section 6(i).          (l) “Dividend or Dividend Equivalent Rights” has the meaning specified in Section6(f).          (m) “Effective Date” has the meaning specified in Section 18.          (n) “Employee” means an employee of the Company or a Subsidiary.          (o) “Fair Market Value” means the closing sales price on the NASDAQ Stock Market onthe relevant valuation date or, if there were no sales on the valuation date, on the next precedingdate on which such selling prices were recorded; provided, if Common Stock is not at any timereadily tradable 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 theCommon Stock of the Company.          (p) “Incentive Stock Option” has the meaning specified in Section 6(b).          (q) “Independent Contractor” means an independent contractor providing consulting oradvisory services to the Company at any time or from time to time.          (r) “Other Incentive Award” has the meaning specified in Section 2(a).          (s) “MIP Award” has the meaning specified in Section 6(h).          (t) “Non-Employee Director” means a member of the Board who is not an Employee of theCompany or any Subsidiary.          (u) “Participant” means an Employee, Non-Employee Director or Independent Contractorwho has been granted an Award under the Plan, including the Predecessor Plan.          (v) “Performance-Based Award” has the meaning specified in Section 7.          (w) “Performance Criteria” has the meaning specified in Section 7.          (x) “Performance Share” has the meaning specified in Section 6(d).          (y) “Performance Unit” has the meaning specified in Section 6(e).
-3-

 
          (z) “Plan” means this APAC Customer Services, Inc. Incentive Stock Plan, as amendedfrom time to time.          (aa) “Plan Year” means a twelve-month period beginning on the first day of each fiscalyear of the Company.          (bb) “Predecessor Plan” means the Company’s Second Amended and Restated 1995 IncentiveStock Plan.          (cc) “Previously-Acquired Shares” means shares of Common Stock acquired by theParticipant or any beneficiary of Participant other than pursuant to an Award under the Plan, thePredecessor Plan or any similar plan maintained by the Company, or if so acquired under the Plan,the Predecessor Plan or such other plan, and such shares of Common Stock have been held for aperiod of not less than six months or such shorter period as the Committee may permit (or suchlonger period as may be required to avoid a charge to earnings for financial reporting purposes).          (dd) “Restriction Period” means a period of time beginning as of the date upon whichan Award subject to restrictions or forfeiture provisions is made pursuant to the Plan and endingas of the date upon which the Common Stock subject to such Award is no longer restricted or subjectto forfeiture provisions.          (ee) “Restricted Share” has the meaning specified in Section 6(d).          (ff) “Restricted Unit” has the meaning specified in Section 6(e).          (gg) “Stock Appreciation Right” has the meaning specified in Section 6(c).          (hh) “Stock Award” has the meaning specified in Section 6(g).          (ii) “Stock Option” has the meaning specified in Section 6(a).          (jj) “Subsidiary” means any corporation or other entity, whether domestic or foreign,in which the Company has or obtains, directly or indirectly, a proprietary interest of at least 50%by reason of stock ownership or otherwise.     3. Eligibility. Any Employee, Non-Employee Director or Independent Contractorselected by the Committee is eligible to receive an Award. Designation of a Participant in anyyear shall not require the Committee to designate such person to receive an Award in any other yearor, once designated, to receive the same type or amount of Awards as granted to the Participant inany year.     4. Plan Administration.          (a) Authority. Except as otherwise determined by the Board, the Plan shall beadministered by the Committee. The Committee shall make determinations with respect to theparticipation of Employees, Non-Employee Directors and
-4-

 
Independent Contractors in the Plan and, except as otherwise required by law or the Plan, thetype and amount of Awards, the terms of Awards, including vesting schedules, price, length ofrelevant performance, Restriction Period, option period, dividend rights, post-retirement andtermination rights, payment alternatives such as cash, stock, contingent awards or other means ofpayment consistent with the purposes of the Plan, and such other terms and conditions as theCommittee deems appropriate. For such purposes, the Committee may reprice or otherwise decreasethe exercise price applicable to any outstanding Stock Option, cancel a Stock Option or StockAppreciation Right when its exercise price exceeds the Fair Market Value of the underlying CommonStock in exchange for another Stock Option or Stock Appreciation Right, or other action that istreated as a repricing under generally accepted accounting principles, whether or not in connectionwith an adjustment contemplated by Section 11.          (b) Determinations.          (i) The Committee shall have authority to supply any omission, correct any defect, orreconcile any inconsistency in the Plan in such manner and to such extent as it shall deemappropriate in its sole discretion to carry the same into effect; to issue administrativeguidelines as an aid to administer the Plan and make changes in such guidelines as it fromtime to time deems proper; to establish such rules and regulations as it deems necessary forthe proper administration of the Plan, to interpret and construe the provisions of the Planand the Award Agreements; to decide all questions of fact arising in its application; to theextent permitted under the Plan, grant waivers of Plan terms, conditions, restrictions, andlimitations; to accelerate the exercisability of any Stock Option, Incentive Stock Option orStock Appreciation Right and the elimination of any restrictions on any Restricted Stock,Restricted Stock Unit, Performance Share or Performance Unit Award, when such action oractions would be in the best interest of the Company; and to make all other determinationspursuant to any Plan provision or Award Agreement which shall be final and binding on allpersons.          (ii) The Committee may act only by a majority of its members. Any determination of theCommittee may be made, without a meeting, by a writing or writings signed by all of themembers of the Committee. In addition, the Committee may authorize any one or more of itsmembers to execute and deliver documents on behalf of the Committee.          (iii) To the extent deemed necessary or advisable for purposes of Section 16 of theExchange Act or Section 162(m) of the Code, a member or members of the Committee may recusehimself or themselves from any action, in which case action taken by the majority of theremaining members shall constitute action by the Committee.          (c) Delegation. To the extent permitted by applicable law, the Committee may, by aresolution adopted by the Committee, authorize one or more officers of the Company to do one ormore of the following: (i) designate officers and
-5-

 
other Employees, Non-Employee Directors, and Independent Contractors of the Company to beParticipants to receive an Award under the Plan, (ii) determine the amount, terms, conditions, andform of any such Awards and (iii) take such other actions which the Committee is authorized to takeunder the Plan; provided, however, that the resolution so authorizing such Participant shallspecify the total number of shares of Common Stock or the amount of cash payable under such Awardswhich such Participant may be so awarded; provided, further, that the Committee may not delegate toany person the authority to grant Awards to, or take other action with respect to, Participants whoat the time of such Awards or action are subject to Section 16 of the Exchange Act or are “coveredemployees” as defined in Section 162(m) of the Code. Further, the Committee may not authorize anofficer to designate himself or herself as a recipient of any such Awards. To the extent deemednecessary or advisable for purposes of Section 16 of the Exchange Act or otherwise, the Board mayact as the Committee hereunder.          (d) Liability; Indemnification. No member of the Board, no member of the Committeeand no Employee shall be liable for any act or failure to act hereunder, except in circumstancesinvolving his bad faith, gross negligence or fraud, or for any act or failure to act hereunder byany other member or employee or by any agent to whom duties in connection with the administrationof the Plan have been delegated. The Company shall indemnify members of the Committee and anyagent of the Committee who is an Employee, against any and all liabilities or expenses to whichthey may be subjected by reason of any act or failure to act with respect to their duties on behalfof the Plan, except in circumstances involving such person’s bad faith, gross negligence or willfulmisconduct.     5. Stock Subject to the Plan.          (a) Available Shares. The stock subject to the provisions of the Plan may be sharesof authorized but unissued Common Stock, treasury shares held by the Company or any Subsidiary, orshares acquired by the Company through open market purchases or otherwise. Subject to adjustmentin accordance with the provisions of Section 11, the total number of shares of Common Stock whichmay be issued under the Plan shall not exceed the number of shares under the Predecessor Planheretofore authorized for issuance and not previously issued and not issued after the EffectiveDate (or which, after the Effective Date, become available as provided herein). To the extent thatshares of Common Stock subject to an outstanding Award or an award under the Predecessor Plan arenot issued by reason of the forfeiture, termination, surrender, cancellation or expiration whileunexercised of such award, by reason of the tendering or withholding of shares (by either actualdelivery or by attestation) to pay all or a portion of the purchase price or to satisfy all or aportion of the tax withholding obligations relating to such an Award under the Plan or award underthe Predecessor Plan, by reason of being settled in cash in lieu of Common Stock or settled in amanner such that some or all of the shares covered by the Award are not issued to a Participant, orbeing exchanged for an Award under the Plan that does not involve Common Stock, then such sharesshall immediately again be available for issuance under the Plan. The foregoing provisions of thisSection 5(a) to the contrary
-6-

 
notwithstanding, no shares attributable to the Director Plan may be subject to Incentive StockOption Awards under the Plan. The Committee may from time to time adopt and observe suchprocedures concerning the counting of shares against the Plan maximum as it may deem appropriate.Shares of Common Stock issued in connection with awards that are assumed, converted or substitutedpursuant to a merger, acquisition or similar transaction entered into by the Company or any of itsSubsidiaries shall not reduce the number of shares of Common Stock available under the Plan.          (b) Limitations. Subject to Section 11, the maximum number of shares of Common Stockthat may be covered by Awards granted under the Plan to any single Participant during any one PlanYear shall be 1,000,000 shares; provided, any Awards or portion of Awards that are cancelled orrepriced shall continue to be counted in determining such maximum aggregate number of shares ofCommon Stock that may be granted to any single Participant. If an Award is granted in tandem witha Stock Appreciation Right, such that the exercise of the Award right or Stock Appreciation Rightwith respect to a share of Common Stock cancels the tandem Stock Appreciation Right or Award right,respectively, with respect to such share, the tandem Award right and Stock Appreciation Right withrespect to each share of Common Stock shall be counted as covering but one share of Common Stockfor purposes of applying the limitations of this paragraph (b).     6. Awards under the Plan. As the Committee may determine, the following types ofAwards may be granted under the Plan on a stand alone, combination or tandem basis:          (a) *Stock Option*. A right to buy a specified number of shares of Common Stock at a fixedexercise price during a specified time, all as the Committee may determine; provided that theexercise price of any Stock Option shall not be less than 100% of the Fair Market Value of a shareof Common Stock on the date of grant of such Award; and, provided, further, that in no event shallthe term of any Stock Option extend to a date which is more than ten years after the date of grantof such Award.          (b) *Incentive Stock Option*. A right to buy a specified number of shares of Common Stock at afixed exercise price during a specified time, all as the Committee may determine; provided thatIncentive Stock Options shall be awarded only to Participants who are Employees of the Company orone of its subsidiaries (under Section 424(f) of the Code), have an exercise price that is not lessthan 100% Fair Market Value of a share of Common Stock on the date of grant of such Award and aterm that extends to a date that is not more than ten years after the date of grant of such Award.An Award in the form of an Incentive Stock Option shall otherwise comply with all requirements ofSection 422 of the Code or any successor Section of the Code as it may be amended from time totime. Options granted as Incentive Stock Options that at any time fail to satisfy the requirementsof Section 422 of the Code shall thereafter constitute Stock Options other than Incentive StockOptions without action by the Committee.
-7-

 
          (c) *Stock Appreciation Right*. A right to receive the excess of the Fair Market Value of ashare of Common Stock on the date the Stock Appreciation Right is exercised over the Fair MarketValue of a share of Common Stock on the date the Stock Appreciation Right was granted, payable inshares of Common Stock, in cash or a combination of Common Stock and cash, in accordance with theterms of the Award.          (d) *Restricted Shares and Performance Shares*. A transfer of Common Stock to a Participant,subject to such restrictions on transfer or other incidents of ownership, or in the case ofPerformance Shares subject to performance standards established pursuant to Section 7 below, forsuch periods of time as the Committee may determine. The terms of a Performance Share Award alsomay provide for payment in cash or a combination of Common Stock and cash.          (e) *Restricted Units and Performance Units*. A fixed or variable share or dollar denominatedunit subject to such conditions of vesting, and time of payment, or in the case of PerformanceShare Units, performance standards established pursuant to Section 7 below, as the Committee maydetermine, which are valued at the Committee’s discretion in whole or in part by reference to, orotherwise based on, the Fair Market Value of a share of Common Stock and which may be paid inCommon Stock, cash or in a combination of Common Stock and cash.          (f) *Dividend or Dividend Equivalent Right*. A right to receive dividends or their equivalentin value, equal to the amount of the dividend actually paid with respect to one share of CommonStock, which shall be payable in Common Stock, cash or in a combination of Common Stock and cashwith respect to any new or previously existing Award, as the Committee shall determine.          (g) *Stock Award*. An unrestricted transfer of ownership of Common Stock.          (h) *MIP Awards*. A Stock Award, Restricted Stock Award or a Restricted Stock Unit Award,together with or without an Award of Dividend or Dividend Equivalent Rights, or a Stock OptionAward, as payment for an award granted and earned under the Company’s Management Incentive Plan, asamended and restated effective January 3, 2005 and as may be amended thereafter from time to time(subject to shareholder approval as provided thereunder and at Section 14 hereunder).          (i) *Director Options*. As a component of a Non-Employee Director’s compensation for servicesas a member of the Board, a Stock Option Award (other than an Incentive Stock Option), to purchaseshares of Common Stock of the Company at an exercise price equal to the Fair Market Value of CommonStock on the date of the Award, and providing such terms and conditions as determined by theCommittee. Nothing contained in this Section 6(i) shall limit or otherwise prohibit the Committeefrom granting to Directors other Awards, including Stock Option Awards, with terms inconsistentwith the requirements of this Section 6(i). With respect to Director Option Awards granted underthis Section 6(i):
-8-

 
          (i) No Director Option may be exercised during the first year following the date suchoption was granted. Thereafter, each Director Option may be exercised:          (A) to a maximum cumulative extent of one-third (1/3) of the total sharescovered by the option on or after the first anniversary of the date the option wasgranted;          (B) to a maximum cumulative extent of two-thirds (2/3) of the total sharescovered by the option on or after the second anniversary of the date the option wasgranted; and          (C) to a maximum cumulative extent of 100% of the total option shares on orafter the third anniversary of the date the option was granted.Notwithstanding the above limitations, any Director Option granted under the Plan shallbecome fully exercisable upon the death of the Non-Employee Director while serving on theBoard or upon the retirement of the Non-Employee Director. For these purposes,“retirement” means a Non-Employee Director’s termination of Service on or after thedate on which the Non-Employee Director’s age plus service as a member of the Board equalsor exceeds 62, provided that the Non-Employee Director has attained age 50 and has served asa member of the Board for not less than six years, or at any time with the consent of theBoard. “Service” shall mean (i) an employee-employer relationship between the Non-EmployeeDirector and the Company or any of its subsidiaries, (ii) service to the Company or any ofits subsidiaries provided by the Non-Employee Director as a member of the Company’s or suchSubsidiary’s Board of Directors, or (iii) service by the Non-Employee Director as aconsultant or independent contractor. Non-Employee Director will not be treated asterminating Service (A) where there is a simultaneous reemployment or continuing employmentof the Non-Employee Director by the Company or any of its subsidiaries, (B) where there is asimultaneous establishment of a consulting relationship or continuing consultingrelationship between the Non-Employee Director and the Company or any of its subsidiaries,or (C) if the Non-Employee Director continues to serve as a member of the Board of Directorsof the Company or any of its subsidiaries after the termination of an employee-employer orconsulting relationship, in which case, the Non-Employee Director’s Service will cease onthe date the Non-Employee Director no longer is employed by the Company or any of itssubsidiaries, no longer performs services as a consultant, and is no longer a member of theBoard of Directors of the Company or any of its subsidiaries. The Committee, in its solediscretion, shall determine the effect of all matters and questions relating to terminationsof Service, including, but not by way of limitation, the question of whether a particularleave of absence constitutes a termination of Service.
-9-

 
          (ii) Any Director Option may not be exercised after the earliest to occur of thefollowing events: (A) after the fifth anniversary of the termination of the Non-EmployeeDirector’s Service (as defined above) for any reason (and, subject to Section 15(d), thenonly to the extent that the Non-Employee Director could have exercised such option on thedate of termination); or (B) more than ten (10) years after the date the option is granted.          (j) *Other Incentive Awards*. Other Incentive Awards which are related to or serve a similarfunction to those Awards set forth in this Section 6, including, but not limited to, OtherIncentive Awards related to the establishment or acquisition by the Company or any Subsidiary of anew or start-up business or facility.     7. Performance-Based Awards. The Committee may from time to time, establishPerformance Criteria with respect to an Award (a “Performance-Based Award”). ThePerformance Criteria or standards for an Award shall be determined by the Committee in writing,shall be measured for achievement or satisfaction during the period in which the Committeepermitted such Participant to satisfy or achieve such Performance Criteria and may be absolute intheir terms or measured against or in relationship to other companies comparably, similarly orotherwise situated or other external or internal measure and may be based on or adjusted for anyother objective goals, events, or occurrences established by the Committee, provided that suchcriteria or standards relate to one or more of the following: (a) earnings before interest, taxes,depreciation and amortization, (b) revenue, (c) sales, (d) earnings per share, (e) funds fromoperations, (f) pretax income before allocation of corporate overhead and bonus, (g) budget, (h)cash flow, (i) net income, (j) division, group or corporate financial goals, (k) appreciation in ormaintenance of the price of the Stock or any other publicly traded securities of the Company, (l)dividends, (m) total shareholder return, (n) return on shareholders’ equity, (o) return on assets,(p) return on investment, (q) internal rate of return, (r) attainment of strategic and operationalinitiatives, (s) market share, (t) operating margin, (u) profit margin, (v) gross profits, (w)earnings before interest and taxes, (x) economic value-added models, (y) comparisons with variousstock market indices, (z) increase in number of customers, and (aa) reductions in costs, asdetermined by the Committee. Such Performance Criteria may be particular to a line of business,Subsidiary or other unit or the Company generally, and may, but need not be, based upon a change oran increase or positive result. In interpreting Plan provisions applicable to Performance Criteriaand to Performance-Based Awards to Participants who are “covered employees” under Section 162(m) ofthe Code, it is the intent of the Plan to conform with the standards of Section 162(m) of the Codeand the regulations thereunder. The Committee in establishing Performance Criteria applicable tosuch Performance-Based Awards, and in interpreting the Plan, shall be guided by such standards,including, but not limited to providing that the Performance-Based Award shall be paid, vested orotherwise delivered solely as a function of attainment of objective Performance Criteria based onone or more of the specific factors set forth in this Section 7 established by the Committee notlater than 90 days after the period of service applicable to the Award has commenced (or, if suchperiod of service is less than one year, not later than the date on which 25% of such period haselapsed).
-10-

 
Pursuant to such standards, the Committee may reduce, but not increase, the amount so vested,paid or delivered.     8. Award Agreements. Each Award under the Plan shall be evidenced by an AwardAgreement. Delivery of an Award Agreement to each Participant shall constitute an agreement,subject to Section 9 hereof, between the Company and the Participant as to the terms and conditionsof the Award; provided, that, in the event of any conflict between a provision of the Plan and anyprovision of an Award Agreement, the provision of the Plan shall prevail.     9. Other Terms and Conditions.          (a) *No Assignment; Limited Transferability of Stock Options*. Except as provided below, noAward granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated orhypothecated, otherwise than by will or by the laws of descent and distribution. Notwithstandingthe foregoing, the Committee may, in its discretion, authorize all or a portion of the StockOptions (other than Incentive Stock Options) granted to a Participant to be on terms which permittransfer by such Participant to:          (i) the spouse, children or grandchildren of the Participant (“Immediate FamilyMembers”);          (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; or          (iii) a partnership in which such Immediate Family Members are the only partners, provided that:          (A) there may be no consideration for any such transfer;          (B) the Award Agreement pursuant to which such Stock Options are grantedexpressly provides for transferability in a manner consistent with this Section9(a); and          (C) subsequent transfers of transferred Stock Options shall be prohibitedexcept those in accordance with this Section 9(a).          Following transfer, any such Stock Options shall continue to be subject to the same terms andconditions as were applicable immediately prior to transfer, provided that for purposes of thisSection 9(a) hereof the term “Participant” shall be deemed to refer to the transferee. Theprovisions of the Stock Option relating to the period of exercisability and expiration of the StockOption shall continue to be applied with respect to the original Participant, and the Stock Optionsshall be exercisable or received by the transferee only to the extent, and for the periods, setforth in said Stock Option.
-11-

 
          (b) *Beneficiary Designation*. Each Participant under the Plan may name, from time to time, anybeneficiary or beneficiaries (who may be named contingently or successively) to whom any benefitunder the Plan is to be paid in case of his death before he receives any or all of such benefit.Each designation will revoke all prior designations by the same Participant, shall be in a formprescribed by the Committee, and will be effective only when filed by the Participant in writingwith the Committee during his lifetime. In the absence of any such designation, benefits remainingunpaid at the Participant’s death shall be paid to his estate.          (c) *Termination of Employment*. The disposition of the grant of each Award in the event of theretirement, disability, death or other termination of a Participant’s employment or service to theCompany as an Independent Contractor or Director shall be as determined by the Committee and setforth in the Award Agreement.          (d) *Predecessor Plan Awards*. Unless expressly provided otherwise by the Committee, referencesto the “Plan” set forth in any agreement representing an award granted under the Predecessor Planprior to the Effective Date shall refer to the terms of the Predecessor Plan.          (e) *Rights as a Shareholder*. A Participant shall have no rights as a stockholder with respectto shares covered by an Award until the date the Participant or his nominee, guardian or legalrepresentative is the holder of record; provided, however, that Participants holding RestrictedShares may exercise full voting rights with respect to those shares during the Restriction Period.Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or beconstrued to create a trust of any kind, or a fiduciary relationship between the Company and anyParticipant, beneficiary, legal representative or any other person. To the extent that any personacquires a right to receive payments from the Company under the Plan, such right shall be nogreater than the right of an unsecured general creditor of the Company. All payments to be madehereunder shall be paid from the general funds of the Company and no special or separate fund shallbe established and no segregation of assets shall be made to assure payment of such amounts exceptas expressly set forth in the Plan. The Plan is not intended to be subject to the EmployeeRetirement Income Security Act of 1974, as amended.          (f) *Dividends and Dividend Equivalents*. Dividend and Dividend Equivalent Rights may beextended to and made a part of any Award, subject to such terms, conditions and restrictions as theCommittee may establish. The Committee may also establish rules and procedures for the creditingof Dividend Equivalents for Awards.          (g) *Payments by Participants*. The Committee may determine that Awards for which a payment isdue from a Participant may be payable: (i) via personal check, bank draft, money order, certifiedcheck, or cashier’s check payable to the order of the Company or by money transfers or directaccount debits; (ii) through the delivery or deemed delivery based on attestation to the ownershipof Previously Acquired Shares of Common Stock with a Fair Market Value equal to the total paymentdue from
-12-

 
the Participant, or delivery by the Participant of a written attestation of the same; or (iii)a copy of irrevocable instructions to a broker to promptly deliver to the Company the amount ofproceeds from a sale of Shares equal to the exercise price. To facilitate the foregoing, theCompany may enter into agreements for coordinated procedures with one or more brokerage firms;provided, such payment pursuant to clause (iii) shall be subject to compliance with Federal ReserveBoard Regulation T, federal and state securities laws and trading policies established by theCompany and applicable to the Participant.          (h) *Withholding*. Except as otherwise provided by the Committee in the Award Agreement orotherwise (i) the deduction of withholding and any other taxes required by law shall be made fromall amounts paid in cash, and (ii) in the case of the exercise of Stock Options or payments ofAwards in shares of Common Stock, the Participant shall be required to pay the amount of any taxesrequired to be withheld in cash prior to receipt of such stock, or alternatively, to elect to havea number of shares the Fair Market Value of which equals the amount required to be withhelddeducted from the shares to be received upon such exercise or payment or deliver such number ofPreviously-Acquired Shares of Common Stock. In no event shall such withholding amount exceed theminimum amount required by law to be withheld.          (i) *Other Restrictions*. The Committee shall impose such other restrictions on any Awardsgranted pursuant to the Plan as it may deem advisable, including, without limitation, restrictionsunder applicable Federal or state securities laws, post-vesting or exercise holding periods, orrequirements to comply with restrictive covenants, and may legend the certificates issued inconnection with an Award to give appropriate notice of any such restrictions.          (j) *Compliance with Code Section 409A*. To the extent that any Awards become subject to CodeSection 409A, it is intended that such Awards be in compliance with Code Section 409A and the termsof the Plan and any Award Agreement shall be construed, to the fullest extent possible, to be incompliance with Code Section 409A.     10. Amendments, Modification and Termination.          (a) The Plan. The Board may at any time and from time to time, alter, amend, suspendor terminate the Plan in whole or in part, subject to any requirement of shareholder approvalimposed by applicable law, rule or regulation. No termination, amendment, or modification of thePlan shall adversely affect in any material way any Award previously granted under the Plan,without the written consent of the Participant holding such Award.          (b) Award Agreements. The Committee may amend or modify any Award Agreement at anytime, provided that if the amendment or modification adversely affects the Participant, suchamendment or modification shall be by mutual agreement between the Committee and the Participant orsuch other persons as may then have an interest therein. In addition, and subject to shareholderapproval in accordance with
-13-

 
Section 14(c), by mutual agreement between the Committee and a Participant or such otherpersons as may then have an interest therein, Awards may be granted to a Participant insubstitution and exchange for, and in cancellation of, any Awards previously granted to suchParticipant under the Plan, or any award previously granted to such Participant under any otherpresent or future plan of the Company or any present or future plan of an entity which (i) ispurchased by the Company, (ii) purchases the Company, or (iii) merges into or with the Company.     11. Adjustment. The aggregate number of shares of Common Stock as to which Awards maybe granted to Participants, the number of shares of Common Stock set forth in the limitations inSection 5(b), the number of shares of Common Stock covered by each outstanding Award, and the priceper share of Common Stock in each such Award, shall all be proportionately adjusted for anyincrease or decrease in the number of issued shares of Common Stock resulting from a subdivision,consolidation or split of shares or other capital adjustment, or the payment of a stock dividend orother increase or decrease in such shares, effected without receipt of consideration by theCompany, or other change in corporate or capital structure; provided, however, that:          (a) any fractional shares resulting from any such adjustment shall be eliminated;          (b) that with respect to Awards that may be subject to Section 162(m) of the Code, suchmodifications and/or changes do not disqualify compensation attributable to such Awards as“performance-based compensation” under Section 162(m) of the Code; and          (c) any adjustment with respect to an Incentive Stock Option due to a change or distributiondescribed in this Section 11 shall comply with the rules of Section 424(a) of the Code, and in noevent shall any adjustment be made which would render any Incentive Stock Option granted hereunderother than an incentive stock option for purposes of Section 422 of the Code. The Committee mayalso make the foregoing changes and any other changes, including changes in the classes ofsecurities available, to the extent it is deemed necessary or desirable to preserve the intendedbenefits of the Plan for the Company and the Participants in the event of any other reorganization,recapitalization, merger, consolidation, spinoff, extraordinary dividend or other distribution orsimilar transaction.     12. Rights as Employees, Directors or Independent Contractors. No person shall haveany claim or right to be granted an Award, and the grant of an Award shall not be construed asgiving a Participant the right to be retained in the employ of, as a Director of, or as anIndependent Contractor of the Company or a Subsidiary. Further, the Company and each Subsidiaryexpressly reserve the right at any time to dismiss a Participant free from any liability, or anyclaim under the Plan, except as provided herein or in any Award Agreement issued hereunder.     13. Listing of Shares and Related Matters. If at any time the Committee shalldetermine that the listing, registration or qualification of the shares of Common Stock
-14-

 
subject to any Award on any securities exchange or under any applicable law, or the consent orapproval of any governmental regulatory authority, is necessary or desirable as a condition of, orin connection with, the granting of an Award or the issuance of shares of Common Stock thereunder,such Award may not be exercised, distributed or paid out, as the case may be, in whole or in part,unless such listing, registration, qualification, consent or approval shall have been effected orobtained free of any conditions not acceptable to the Committee.     14. Shareholder Approval.          (a) Initial Approval. The Plan shall be approved by the shareholders of the Companyat the first annual meeting following the date adopted by the Board. Approval of the Plan by theshareholders of the Company shall be a condition to the right of each Participant to receive orretain Awards hereunder.          (b) Reapproval. If required by Treasury Regulation Section 1.162-27(e)(4)(vi) or anysuccessor regulation or rule, the material terms of Performance Criteria as described in Section 7shall be disclosed to and reapproved by the shareholders of the Company no later than the firstshareholder meeting that occurs in the 5th year following the year in which the Company’sshareholders previously approved such performance goals.          (c) Repricing. Any amendment, revision, replacement, cancellation and regrant, orother change to an outstanding Award, not otherwise provided herein, that is determined to be a“repricing” (or word(s) of similar effect) under the rules of the exchange or system on whichCommon Stock is listed shall be approved by the shareholders of the Company before such “repriced”Award shall be effective.     15. Change of Control. Unless otherwise specified in a Participant’s Award Agreementat the time of grant, in the event of a Change of Control, the following shall occur with respectto any and all Awards outstanding as of such Change of Control:          (a) To the extent any Stock Option, Incentive Stock Option or Stock Appreciation Right(including any Stock Option, Incentive Stock Option or Stock Appreciation Right granted under thePredecessor Plan) is not exercisable, it shall become exercisable as to one-half of the sharessubject to the unexercisable portion of the Stock Option and one-half of the shares subject to theunexercisable portion of the Stock Appreciation Right;          (b) Any restrictions imposed on Restricted Shares and Restricted Units shall lapse as toone-half of the Restricted Shares and one-half of the Restricted Units subject to suchrestrictions;          (c) Unless otherwise specified in a Participant’s Award Agreement at time of grant, themaximum payout opportunities attainable under all outstanding Awards of Performance Units,Performance Shares and Other Incentive Awards shall be deemed to have been fully earned for theentire performance period(s) as of the effective date of the Change of Control. The vesting of allsuch Awards shall be
-15-

 
accelerated as of the effective date of the Change of Control, and in full settlement of suchAwards, there shall be paid out in cash, or in the sole discretion of the Committee, shares ofCommon Stock with a Fair Market Value equal to the amount of such cash, to Participants withinthirty (30) days following the effective date of the Change of Control the maximum of payoutopportunities associated with such outstanding Awards; and          (d) To the extent that any Director Option (including a Director Option granted under thePredecessor Plan) is not exercisable, it shall become exercisable as to all of the shares subjectto the unexercisable portion of the Director Option.     16. Governing Law. To the extent that federal laws do not otherwise control, the Planand all Award Agreements hereunder shall be construed in accordance with and governed by the law ofthe State of Illinois (without regard for its conflict of laws principles).     17. Construction. The descriptive headings in the Plan are inserted for convenienceof reference only and are not intended to be part of or to affect the meaning or interpretation ofthe Plan. The use of the word “including” in the Plan shall be by way of example rather than bylimitation. Except where otherwise indicated by the context, any masculine term used herein alsoshall include the feminine, the plural shall include the singular, and the singular shall includethe plural.     18. Effective Date and Term. The original effective date of the Plan was June 3, 2005(the “Effective Date”), subject to approval by the shareholders of the Company. Theeffective date of this Amended and Restated Plan is April 4, 2007. No Award shall be granted afterJune 3, 2015; provided, however, that the terms and conditions applicable to any Award grantedprior to such date may thereafter be amended or modified by mutual agreement between the Companyand the Participant or such other persons as may then have an interest therein. Also, by mutualagreement between the Company and a Participant hereunder, under the Plan or under any otherpresent or future plan of the Company, and subject to the limitations under Section 5(b)(ii),Awards may be granted to such Participant in substitution and exchange for, and in cancellation of,any Awards previously granted such participant under the Plan, or any other present or future planof the Company.
-16-