Document:

Exhibit
10.1

 

 

PERSONAL AND CONFIDENTIAL

 

May 19, 2004

 

Mr. James McClenahan

279 Benson Lane

Coppell, Texas 75019

 

Dear James:

 

I am pleased to present this offer of
employment to join APAC Customer Services, Inc. (“APAC” or “the Company”) as
Senior Vice President, Sales and Marketing, reporting to me.  This letter constitutes your Employment
Agreement with APAC.

 

The following terms will apply:

 

1.     Your start date will be no later than May
26, 2004.

 

2.     Your starting base salary will be Two
Hundred Eighty Five Thousand Dollars ($285,000) on an annualized basis payable
bi-weekly.  (This “base salary” is
stated for convenience only and is not intended as an annual contract of
employment.)  Your base salary will be
reviewed each year at the time when increases for executives of APAC are
considered.  At the present time that
occurs on or about April 1 of each year.

 

3.     You will be a participant in APAC’s annual
Management Incentive Compensation Plan (“MIP”) as it exists from year to year
(copy enclosed).  We envision an
opportunity of 10%-40%-80% for threshold-target-maximum performance,
respectively.  The payout of MIP will
depend on APAC’s  meeting its budgeted
financial performance and your meeting your individual and team performance
goals as established each year between you and the executive to whom you
report; provided, however that APAC guarantees that your MIP payout for 2004
will be not less than Twenty Eight Thousand Five Hundred Dollars ($28,500)

 

4.     Subject to the approval of the Compensation
Committee, you will be granted options to purchase 75,000 shares of APAC stock
at an exercise price equal to the mean between the high and low prices at which
APAC’s common stock trades on the day such approval is rendered, as reported by
Bloomberg Financial Markets.  These
options will vest at the rate of 25% per year during the first four years of
your employment.  A copy of our standard
option agreement is provided for your review.

 

5.     You will be entitled to paid vacation of
four (4) weeks and will also be entitled to participate in all employee benefit
plans and programs extended to employees at the executive level (Benefits
Summary enclosed).

 

6.     Upon joining the company, you will receive
an Employment Security Agreement, which outlines additional cash compensation
protection in the event of “Change in Control” of the Company (draft copy
enclosed).

 

7.     As a condition of employment, you will sign
an appropriate Agreement Protecting Company Interests, a copy of which is
enclosed.

 

8.     Other than in the event of  (1.) your termination of employment in
connection with a “Change in Control” as defined in the Employment Security
Agreement referenced above or (2) your termination of employment by APAC “for
cause” (defined as “(i) gross misconduct or gross

 

1

 

negligence
in the performance of your employment duties; (ii) willful disobedience by you
of the lawful directions received from the Company or from the person to whom
you directly report or of established policies of the Company; or (iii)
commission by you 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”), or (3.) your termination as a result of
your resignation from employment with the Company other than for Agreed Reason,
and provided you sign a then-current Waiver & Release Agreement, APAC will
pay you severance equal to the product of twelve times the sum of (i) the
monthly amount of your then-current Base Salary plus (ii) the amount necessary
to reimburse you for payments you make to exercise your rights under COBRA to
continue your and your dependents’ medical and dental coverages as such may be
in effect from time to time under the Company’s welfare plans—such severance to
be paid over the twelve (12) months following such termination.  Resignation for “Agreed Reason” shall mean a
resignation by you prior to any Change in Control if after notice by you to the
Company and a fifteen day opportunity by the Company to cure, (ii) your duties,
responsibilities or authority as an executive employee are materially reduced
or diminished from those in effect on your commencement of employment without
your written consent or you no longer report to the Chief Executive Officer of
the Company, or (ii) your base salary and the incentive compensation
opportunity available to you is reduced in the aggregate and not in accordance
with a compensation reduction applicable to all senior executives’ salaries generally
to which all senior executives of the Company would be subject to an equivalent
percentage reduction in their base salaries. 
Severance payments will be made in accordance with either this agreement
or the prevailing change of control agreement, whichever is more advantageous
to you; but in no event will severance payments be made under both
agreements.  Such payments will be made
on APAC’s customary payroll dates in installments equal to your regular
biweekly salary, less all applicable withholding taxes.  You are not required to mitigate the amount
of any severance payment provided for in this Employment Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Employment Agreement be reduced by any compensation,
income or benefit you may receive from any source.  In addition, no payments to you under this Employment Agreement
may be subject to any offset or setoff due to any claim APAC or its affiliates
may have against you.

 

9.     You will relocate to Deerfield, Illinois
within one year of your date of hire. 
APAC shall pay your relocation costs in accordance with APAC’s Employee
Relocation Policy, Tier IV.  In the
event you leave APAC’s employment within two (2) years of your relocation date,
you shall reimburse APAC for all relocation costs paid by APAC according to the
Employee Reimbursement Agreement (copy enclosed).

 

10.   This offer is extended contingent upon
receipt of a completed Application for Employment, satisfactory references, and
adequate results of a background investigation (Application for Employment and
background check release forms are enclosed).

 

11.   You hereby represent and warrant to and with
APAC Customer Services, Inc. that you are not subject to any covenants,
agreements or restrictions, including, without limitation, any covenants,
agreements or restrictions arising out of your prior employment or independent
contractor relationships, which would be breached or violated by your
acceptance of this offer of employment or by your performance of your duties at
APAC.  You acknowledge that it is APAC’s
express policy and procedure to abstain from the use or disclosure of the trade
secrets and proprietary information of third parties, and you hereby expressly
covenant that you will not, in the performance of your duties at APAC, use or
disclose the trade secrets or proprietary information of third parties.

 

12.   The Company will pay attorneys’ fees in an
amount of up to $5,000 incurred by you in connection with the negotiation of this
letter agreement.

 

2

 

13.   Any controversy or claim arising out of or
relating to this letter agreement or a breach of its provisions, other than a
claim for injunctive relief, shall be settled by arbitration in accordance with
the Employment Arbitration Rules of the American Arbitration Association in
effect at the time demand for arbitration is made by either party.  This arbitration shall be conducted before
three (3) arbitrators.  One arbitrator
shall be named by APAC, a second shall be named by you and the third arbitrator
shall be named by the two arbitrators so chosen.  The arbitration will occur in either Cook or Lake County,
Illinois.   In the event of any such
dispute the non-prevailing party shall be responsible for the attorneys’ fees
and costs related to such dispute.

 

14.   This letter agreement shall be binding on
the Company and any successor to its business or to a majority of its business
assets and the Company will require any successor in interest (whether direct
or indirect) to expressly assume and agree to perform this letter
agreement;  provided, however, that no
such assumption shall relieve the Company of its obligations.

 

 

James,
we are excited about your joining APAC.

 

Sincerely,

 

APAC
CUSTOMER SERVICES, INC.

 

 

Robert J. Keller

Chief Executive Officer

 

	
  RJK/kbo

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  cc:       C. Corkery

  	
   

  	
   

  
	
   

  	
  ACCEPTED BY:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James McClenahan

  	
  (Date)  

  

 

3Exhibit
10.2

 

 

PERSONAL
AND CONFIDENTIAL

 

	
  Ms. Susan Menzel

  	
   

  	
  Revised June 4, 2004

  
	
  406 Cove Drive

  	
   

  	
   

  
	
  Cary, Illinois 60014

  	
   

  	
   

  

 

Dear Sue:

 

I am pleased to present this offer of
employment to join APAC Customer Services, Inc. (“APAC”) as Senior Vice
President, Human Resources , reporting to me. 
The following terms will apply:

 

1.               Your start date will be June 14, 2004.

 

2.               Your starting base salary will be $250,000,
on an annualized basis payable bi-weekly. 
(This “base salary” is stated for convenience only and is not intended
as an annual contract of employment.) 
Your base salary will be reviewed each year at the time when increases
for executives of APAC are considered. 
At the present time that occurs on or about April 1 of each year.

 

3.               You will be a participant in APAC’s annual
Management Incentive Compensation Plan (“MIP”) as it exists from year to year
(copy enclosed).  We envision an
opportunity of 10%-40%-80% for threshold-target-maximum
performance, respectively.  The payout
of MIP will depend on APAC’s meeting its budgeted financial performance and
your meeting your individual and team performance goals that will be
established each year between you and the executive to whom you report.  For 2004 you will be guaranteed a minimum
bonus payment equal to $25,000.

 

4.               You will be entitled to paid vacation of
four (4) weeks and will also be entitled to participate in all employee benefit
plans and programs extended to employees at the executive level (Benefits
Summary enclosed).

 

5.               Subject to the approval of the Compensation
Committee, you will be granted options to purchase 75,000 shares of APAC stock
at an exercise price equal to the mean between the high and low prices at which
APAC’s common stock trades on the day such approval is rendered, as reported by
Bloomberg Financial Markets.  These
options will vest at the rate of 25% per year during the first four years of
your employment.  A copy of our standard
option agreement is provided for your review.

 

6.               Upon joining the company, you will receive
an Employment Security Agreement, which outlines additional cash compensation
protection in the event of “Change in Control” of the Company (draft copy
enclosed).

 

7.               As a condition of employment, you will sign
an Agreement Protecting Company Interests, a copy of which is enclosed.

 

8.               Except for (1.) your termination of
employment in connection with a “Change in Control” as defined in the
Employment Security Agreement referenced above or (2.) your termination of
employment by APAC “for cause” (defined as “(i) gross misconduct or gross
negligence in the performance of your employment duties; (ii) willful
disobedience by you of the lawful directions received from the Company or from
the person to whom you directly report or of established policies of the
Company; or (iii) commission by you 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”), and provided you
sign a then-current Waiver & Release Agreement, APAC will pay you severance
equal to the monthly amount of your then-current Base Salary during each of the
following twelve (12) 

 

 

months
following such termination.  Severance
payments will be made in accordance with either this agreement or the
prevailing change of control agreement, whichever is more advantageous to you;
but in no event will severance payments be made under both agreements.  Such payments will be made on APAC’s
customary payroll dates in installments equal to your regular biweekly salary,
less all applicable withholding taxes.

 

9.               This offer is extended contingent upon
receipt of a completed Application for Employment, satisfactory references, and
adequate results of a background investigation.

 

10.         You hereby represent and warrant that you
are not subject to any covenants, agreements or restrictions, including,
without limitation, any covenants, agreements or restrictions arising out of
your prior employment or independent contractor relationships, which would be
breached or violated by your acceptance of this offer of employment or by your
performance of your duties. You acknowledge that it is APAC’s express policy to
abstain from the use or disclosure of the trade secrets and proprietary
information of third parties, and you hereby expressly covenant that you will
not use or disclose the trade secrets or proprietary information of third
parties while working at APAC.

 

Sue,
we are excited about your joining APAC. 
If you have any questions please don’t hesitate to contact me.

 

Sincerely,

 

APAC CUSTOMER SERVICES, INC.

 

 

Robert J. Keller

President and Chief Executive
Officer

LRW/lw

 

	
  cc:           C. Corkery

  	
   

  
	
   

  	
  ACCEPTED BY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Susan Menzel

  	
  June        , 2004

  

 

2

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