**EXHIBIT 10.5****EMPLOYEE STOCK OPTION****APAC CUSTOMER SERVICES, INC.****STOCK OPTION AGREEMENT**     This Agreement is entered into and made effective as of «Option_Date» by and between APACCustomer Services, Inc., an Illinois corporation (the “Company”), and «First_Name» «Middle_Name»«Last_Name» (the “Optionee”).WITNESSETH:     **WHEREAS,**the Compensation Committee of the Board of Directors of the Company desires toencourage and enable the Optionee to acquire or increase his or her proprietary interest in theCompany by granting the Optionee an option to purchase common stock of the Company, par value of$.01 per share (“Shares”), as authorized under the APAC Customer Services, Inc. 2005 IncentiveStock Plan, as amended from time to time (the “Plan”);     **NOW, THEREFORE,**in consideration of the premises and mutual covenants set forth in thisAgreement, the Company and Optionee hereby agree as follows:     **1. ****Grant of Option****.**Subject to the terms and conditions provided in this Agreementand the Plan, the Company hereby grants to the Optionee a nonqualified stock option to purchase allor part of «Shares_Granted» Shares of the Company (the “Option”) at a per share purchase price of«Option_Price», effective as of «Option_Date» (the “Grant Date”). The Option shall not be treatedas an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of1986, as amended (the “Code”).     **2. ****Time of Exercise****.**     (a) Except as provided below in this paragraph, from and after «Vest_Date_Period1», as long asthe Optionee continues to provide Services to the Company or of one of its Subsidiaries, the Optionshall become exercisable, to a maximum cumulative extent, in accordance with the following schedule:     **Exercise Date** **Cumulative Number of Shares** On or after 1st anniversary of Grant Date 20% of SharesOn or after 2nd anniversary of Grant Date 40% of SharesOn or after 3rd anniversary of Grant Date 60% of SharesOn or after 4th anniversary of the GrantDate 80% of SharesOn or after 5th anniversary of the GrantDate 100% of SharesNotwithstanding the foregoing, the Option may not be exercised for fractional Shares and theOption may not be exercised for less than 100 Shares at a time, unless it is for the balance of theShares available under the Option.
 

 
The exercisability of the Option shall not be affected by leaves of absence approved in writing bythe President of the Company or by any change of employment, so long as the Optionee continues toprovide Services to the Company or of one of its Subsidiaries.     (b) Notwithstanding paragraph 2(a), the following provisions shall govern:     (i) *Disability, Death or Retirement.*If the Optionee’s Service is terminated due to“Disability,” death or “Retirement” (as each such capitalized term is defined below inparagraph 4 or in the Plan), the exercisability of the Option shall accelerate and theOption shall become exercisable, to a maximum cumulative extent, in accordance with thefollowing schedule:     **Termination Date** **Cumulative Number of Shares** On or after Grant Date, but before 1stanniversary of Grant Date 20% of SharesOn or after 1st anniversary of Grant Date, butbefore 2nd anniversary of Grant Date 40% of SharesOn or after 2nd anniversary of Grant Date, butbefore 3rd anniversary of Grant Date 60% of SharesOn or after 3rd anniversary of Grant Date 80% of SharesOn or after 4th anniversary of Grant Date 100% of SharesIn the event that the Optionee’s Service terminates due to Optionee’s Retirement, anyShares that first become exercisable as a result of this provision shall hereinafter bereferred to as “Restricted Shares.”     (ii) *Change in Control.*If a “Change in Control” (defined below in paragraph 4) occurswhile the Optionee is providing Services to the Company or one of its Subsidiaries, to theextent that the Option is then not exercisable, its exercisability shall accelerate as tofifty percent (50%) of the previously unexercisable portion, and the Option shall thereafterbecome additionally exercisable (if at all) to the extent it would have been exercisablewithout such acceleration.     (iii) *Termination After Change in Control.*If the Optionee’s Service terminates for“Good Reason” (defined below in paragraph 4) or by the Company other than With Cause, on orwithin twenty-four (24) months following a Change in Control, the Option shall becomeexercisable with respect to all Shares covered by the Option.     (iv) *Other Terminations.*The foregoing provisions of this Section 2(b) to the contrarynotwithstanding, the Committee (as defined below in paragraph 11), in its sole discretion,may at any time cause all or part of Optionee’s unexercisable Option to become exercisableupon a termination of Optionee’s Service, with or without designating all or part of suchexercisable portion of the Option as Restricted Shares.     **3. ****Term of Option****.**Except as provided below, the term of the Option shall be for aten (10) year period, beginning on the Grant Date and ending on «Expiration_Date_Period1» (the“Expiration Date”).     (a) *Termination With Cause.*If the Company terminates the Optionee’s Service With Cause, theOption shall expire immediately and all rights to purchase Shares hereunder shall cease.
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     (b) *Disability or Death.*If the Optionee’s Service with the Company or one of itsSubsidiaries terminates due to the Optionee’s Disability or death, the Option shall expire one (1)year after the date of such termination. In such circumstance, the Option shall only beexercisable to the extent it was exercisable as of such termination date (as determined above underparagraph 2) and shall not be exercisable with respect to any additional Shares.     (c) *Other Termination.*If the Optionee’s Service with the Company or one of its Subsidiariesterminates for any reason other than Disability, death, or With Cause, the Option shall expire 90days after such termination. In such circumstance, the Option shall only be exercisable to theextent it was exercisable as of such termination date (as determined above under paragraph 2) andshall not be exercisable with respect to any additional Shares.     Notwithstanding the foregoing provisions of this paragraph 3, in no event may the Option beexercised later than the Expiration Date.     **4. ****Definitions****.**For purposes of this Agreement, the following definitions shallapply:     (a) A “Change in Control” shall be deemed to have occurred if (i) a tender offer shall be madeand consummated for the ownership of more than 50% of the outstanding voting securities of theCompany, (ii) the Company shall be merged or consolidated with another corporation and as a resultof such merger or consolidation less than 50% of the outstanding voting securities of the survivingor 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 Companyshall sell all or substantially all of its assets to another corporation which is not awholly-owned subsidiary or affiliate, (iv) as the result of, or in connection with, any contestedelection for the Board of Directors, or any tender or exchange offer, merger or businesscombination or sale of assets, or any combination of the foregoing (a “Transaction”), the personswho were Directors of the Company before the Transaction shall cease to constitute a majority ofthe Board of Directors of the Company, or any successor thereto, or (v) a person, within themeaning 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, shallacquire 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 shalltake into account and shall include ownership as determined by applying the provisions of Rule13d-3(d)(1)(i) pursuant to the Exchange Act. Notwithstanding the foregoing, (i) a Change inControl will not occur for purposes of this Agreement 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 moreaffiliates or associates, as defined in the Exchange Act, of securities of the Company, as part ofa going-private transaction or otherwise, unless Mr. Schwartz or his affiliates, associates, familymembers or trusts for the benefit of family members (collectively, the “Schwartz Entities”) do notcontrol, 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 besubstituted for “50%” in clauses (i) and (v) of the first sentence of this paragraph, and “66-2/3%”shall be substituted for “50%” in clause (ii) of the first sentence of this paragraph.
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     (b) “Disability” shall mean disability as determined under the Company’s long term disabilitybenefit plan then in effect covering the Optionee.     (c) “Good Reason” shall mean termination of the Optionee’s Service by the Optionee (I) inaccordance with such term as it may be defined under the employment agreement or employmentsecurity agreement between Optionee and the Company, if any, and (II) as hereinafter provided inthe absence of such agreement providing for termination for “Good Reason,” but only if, withoutOptionee’s consent and after notice by the Optionee to the Company and a fifteen (15) dayopportunity by the Company to cure: (i) the Optionee’s principal place of work (not includingregular business travel) is relocated by more than fifty (50) miles, (ii) the Optionee’s duties,responsibilities or authority as an executive employee are materially reduced or diminished;provided that any reduction or diminishment in any of the foregoing resulting merely from theacquisition of the Company and its existence as a subsidiary or division of another entity shallnot be sufficient to constitute Good Reason, (iii) the rate of base salary or bonus opportunity (asa percentage of base salary) due to the Optionee is reduced, and such reduction is not remediedwithin thirty (30) days of the Optionee’s notice to the Company thereof, or (iv) there is aliquidation, dissolution, consolidation or merger of the Company or transfer of all or asignificant portion of its assets unless a successor or successors (by merger, consolidation orotherwise) to which all or a significant portion of its assets have been transferred shall haveassumed all duties and obligations of the Company under such Employment Agreement, if any.     (d) “Retirement” shall mean a termination of Optionee’s Service(other than due to Optionee’sDisability, death or With Cause) in which (i) Optionee has completed at least ten (10) years ofcontinuous active Service with the Company (including authorized leaves of absence) and (ii) thesum of Optionee’s age and Service on the date of termination of Service is equal to or greater thanseventy (70).     (e) “Service” shall mean (i) an employee-employer relationship between the Optionee and theCompany or any of its Subsidiaries, (ii) service to the Company or any of its Subsidiaries providedby the Optionee as a member of the Company’s or such Subsidiary’s Board of Directors, or (iii)service by the Optionee as a consultant or independent contractor. Optionee will not be treated asterminating Service (A) where there is a simultaneous reemployment or continuing employment of theOptionee by the Company or any of its Subsidiaries, (B) where there is a simultaneous establishmentof a consulting relationship or continuing consulting relationship between the Optionee and theCompany or any of its Subsidiaries, or (C) if the Optionee continues to serve as a member of theBoard of Directors of the Company or any of its Subsidiaries after the termination of anemployee-employer or consulting relationship, in which case, the Optionee’s Service will cease onthe date the Optionee no longer is employed by the Company or any of its Subsidiaries, no longerperforms services as a consultant, and is no longer a member of the Board of Directors of theCompany or any of its Subsidiaries. The Committee, in its sole discretion, shall determine theeffect of all matters and questions relating to terminations of Service, including, but not by wayof limitation, the question of whether a particular leave of absence constitutes a termination ofService.     (f) Termination “With Cause” shall mean termination of the Optionee’s Service by the Company(I) in accordance with such term as it may be defined under the employment agreement betweenOptionee and the Company, if any, and (II) as hereinafter provided in the absence of suchagreement, due to (i) gross misconduct or gross negligence in the performance
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of the Optionee’s employment duties; (ii) willful disobedience by the Optionee of the lawfuldirections received from the Company or from the person to whom the Optionee directly reports or ofestablished policies of the Company; or (iii) commission by the Optionee of a crime involving fraudor moral turpitude that can reasonably be expected to have an adverse effect on the business,reputation or financial situation of the Company.     **5. ****Method of Exercise****.**     (a) The Option may be exercised only by delivering written notice to the Treasurer of theCompany. Contemporaneously with such delivery, the Optionee shall tender the full purchase priceof the Shares by any of the following methods or combination thereof:     (i) A certified or cashier’s check payable to the order of the Company;     (ii) Certificates of Shares of the Company that have been held by the Optionee for atleast (6) six months (or such longer period as may be required to avoid a charge to earningsfor financial reporting purposes) that have a fair market value equal to such purchase priceor the portion thereof so paid on the date of exercise, or delivery by the Optionee of awritten attestation of the same; and/or     (iii) A copy of irrevocable instructions to a broker to promptly deliver to the Companythe amount of proceeds from a sale of Shares equal to the exercise price. To facilitate theforegoing, the Company may enter into agreements for coordinated procedures with one or morebrokerage firms. Exercise of the Option pursuant to this subparagraph (a)(iii) shall besubject to compliance with federal and state securities laws and trading policiesestablished by the Company and applicable to the Optionee.     (b) In addition to tendering payment,     (i) the Optionee shall be required to execute a Restricted Stock Purchase Agreementsubstantially in the form of Exhibit A hereto, if the Optionee purchased Restricted Shares;and     (ii) the Optionee (or the purchaser under paragraph 7 below) shall furnish such otherdocuments or representations (including, without limitation, representations as to theintention of the Optionee, or the purchaser under paragraph 7 below, to acquire Shares forinvestment) as the Company may reasonably request in order to comply with securities, tax orother laws then applicable to the exercise of the Option.     **6. ****Repayment of Option Gain****.**Subject to the provisions of a Restricted Stock PurchaseAgreement, if applicable pursuant to paragraph 5(b)(i), which shall apply with respect to theShares subject thereto, if prior to the occurrence of a Change of Control: (i) the Companyterminates the Optionee’s Service With Cause during the six month period after the Optionee’sexercise of all or any portion of the Option, or (ii) the Optionee violates any promise, covenant,or agreement relating to (A) restrictions on the Optionee’s ability to compete with the Company orsolicit its customers or employees; or (B) the Optionee’s duty to keep information about theCompany confidential, prior to or during the six month period after the Optionee exercises all orany portion of the Option, then the Company may rescind the Optionee’s exercise of the Optionwithin two years of the exercise. In the event of such rescission, the Optionee shall pay to the
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Company, with respect to each Share purchased pursuant to the Option, an amount equal to theexcess of the Fair Market Value of such Share on the date of exercise over the per share purchaseprice of such Share, in such manner and on such terms and conditions as may be required, and theCompany shall be entitled to a right of set-off against any amount owed to the Optionee by theCompany.     **7. ****Non-Transferability; Death****.**The Option is not transferable by the Optionee otherthan by will or the laws of descent and distribution and is exercisable during the Optionee’slifetime only by him. If the Optionee dies while in Service to the Company or of one of itsSubsidiaries, the Option may be exercised during the period described above in paragraph 3(b) (butin no event later than the Expiration Date) by his estate or the person to whom the Option passesby will or the laws of descent and distribution, but only to the extent that the Optionee couldhave exercised the Option on the date of his death as determined above under paragraph 2.Notwithstanding the foregoing, the Option may be transferred to members of the Optionee’s immediatefamily (which for purposes of this Option shall be limited to the Optionee’s spouse, children andgrandchildren), or to one or more trusts for the benefit of the Optionee’s family members (asdefined above) or to one or more partnerships in which such family members and/or trusts are theonly partners.     **8. ****Registration****.**Any Shares issued pursuant to the Optionee’s exercise of the Optionhereunder shall be Shares that are listed on The NASDAQ Stock Market or other nationally recognizedstock exchange, and registered under the Securities Act of 1933, as amended.     **9. ****Adjustments****.**     (a) If the Company shall at any time change the number of issued Shares without newconsideration to the Company (such as by stock dividend, stock split, recapitalization,reorganization, exchange of shares, liquidation, combination or other change in corporate structureaffecting the Shares) or make a distribution of cash or property which has a substantial impact onthe value of issued Shares, the total number of Shares hereunder and the per share purchase priceshall be adjusted pursuant to the terms of the Plan.     (b) In the case of any sale of assets, merger, consolidation, combination or other corporatereorganization or restructuring of the Company with or into another corporation which results inthe outstanding Shares being converted into or exchanged for different securities, cash or otherproperty, or any combination thereof (an “Acquisition”), subject to the terms of the Plan, theOptionee shall have the right thereafter and during the term of the Option (subject however to allof the terms and conditions set forth herein), to receive upon exercise thereof the AcquisitionConsideration (as defined below) receivable upon the Acquisition by a holder of the number ofShares which might have been obtained upon exercise of the Option or portion thereof, as the casemay be, immediately prior to the Acquisition. The term “Acquisition Consideration” shall mean thekind and amount of securities, cash or other property or any combination thereof receivable inrespect of one Share upon consummation of an Acquisition.     **10. ****Subject to Plan****.**The Option is subject to all of the terms and conditions setforth in the Plan. Any capitalized terms not defined herein shall be subject to the definitionsset forth in the Plan. This Agreement hereby incorporates the Plan by reference. In the event thatthe Agreement is silent on any term or condition that is contained in the Plan, such term orcondition
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shall be governed by and administered in accordance with the terms and conditions of the Plan.In the event of any discrepancy between the express terms and conditions of this Agreement andthose of the Plan, the terms and conditions of the Plan shall control.     **11. ****Administration and Interpretation****.**The Compensation Committee of the Board ofDirectors of the Company (the “Committee”) shall administer and interpret the terms and provisionsof this Agreement. Any interpretation and construction by the Committee of any term or provisionof the Plan, this Agreement, or other matters related to the Plan shall be final, conclusive andbinding upon the Optionee and his or her heirs.     **12. ****Compliance with Code Section 409A.** To the extent that any Award under thisAgreement becomes subject to Code Section 409A, it is intended that such Award be in compliancewith Code Section 409A and the terms of the Plan and this Agreement shall be construed, to thefullest extent possible, to be in compliance with Code Section 409A.     **13. ****Enforceability****.**This Agreement shall be binding upon the Optionee and his estate,assignee, transferee, personal representative and beneficiaries.     **14. ****Governing Law; Severability****.**This Agreement shall be construed, interpreted andenforced in accordance with the laws of the State of Illinois. If any one provision of thisAgreement shall be determined invalid or unenforceable, such determination shall have no effect onthe remaining provisions.     **15. ****Withholding****.**The Company shall have the right to require, prior to the issuanceor delivery of any Shares hereunder, payment by the Optionee of any federal, state or local incometaxes required by law to be withheld upon the exercise of all or any part of the Option. TheCompany may, in its discretion and subject to such rules as it may adopt as are necessary toprevent the withholding from being subject to Section 16(b) of the Exchange Act, permit theOptionee to satisfy any tax withholding obligation associated with the exercise of the Option, inwhole or in part, by electing to have the Company withhold from the Shares otherwise deliverable asa result of such exercise Shares having a value (based on their fair market value on the date ofdelivery) equal to the amount required to be withheld.     **16. ****No Employment Rights****.**Nothing contained herein shall confer upon the Optionee anyright to continue in the Service of the Company or any of its Subsidiaries, or to interfere with orlimit the right of the Company or of such Subsidiary to terminate the Optionee’s Service at anytime.     **17. ****Shareholders Rights****.**The Optionee or other person or entity exercising the Optionshall have no rights as a shareholder of record of the Company with respect to Shares issuable uponthe exercise of the Option until such Shares have been issued.     **18. ****Entire Agreement****.**This Agreement contains the entire understanding of the Companyand the Optionee with respect to the terms of the Option granted hereunder, and shall not bemodified or amended on or after the Grant Date, except in writing, signed by both parties. Awaiver by either party under this Agreement shall not be deemed to be a waiver of any laterdefault.
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     **19. ****Notices****.**All notices under this Agreement shall be in writing and shall be deemedto have been made when delivered or mailed by registered, or certified mail, or by a nationallyrecognized overnight delivery service, postage or charges prepaid. All notices to the Company shallbe sent to:APAC Customer Services, Inc.