<PAGE>


                                                                    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 be 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
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



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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 (i) prior to
January 1, 1997, five thousand (5,000) Common Shares, and (ii) from and after
January 1, 1997, a number of Common Shares determined by the Board of Directors
prior to such Annual Meeting. Effective as of May 18, 1999, on the date of each
regular meeting of the Board of Directors, each Nonemployee Director who attends
such meeting in person shall receive a Nonqualified Stock Option to purchase
1,000 Common Shares, and each Nonemployee Director who attends such meeting by
telephone shall receive a Nonqualified Stock Option to purchase 500 Common
Shares. The Stock Options granted in the preceding two sentences shall be
referred to as "Director Options." 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:



                                       2
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           (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 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 or regular meeting of the Board of Directors.

           (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,




                                       3
<PAGE>

"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 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


                                       4
<PAGE>


                 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 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


                                       5
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                 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 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
                 merger 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


                                       6
<PAGE>

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 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).



                                       7
<PAGE>

     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 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.


                                       8
<PAGE>

     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
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


                                       9
<PAGE>

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,
           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:


                                       10
<PAGE>

     (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

     (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


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<PAGE>

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.

     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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