Document:

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                                                                   EXHIBIT 10.13

                            INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT is made and entered into as of the 27th day
of January, 1999 (the "Agreement"), by and among CustomerONE Holding
Corporation, a Delaware corporation (the "Company"), LCS Industries, Inc., a
Delaware corporation and wholly-owned subsidiary of the Company ("LCS"), Catalog
Liquidators, Inc., a Delaware corporation and wholly owned subsidiary of LCS
("CLI"), LCS Canada, Inc., a Delaware corporation and wholly owned subsidiary of
LCS ("LCS Canada"), Catalog Resources, Inc., a Delaware corporation and wholly
owned subsidiary of LCS ("CRI" and, collectively with CLI, LCS Canada and CRI,
the "Subsidiaries") and the executive officer whose name appears on the
signature page of this Agreement ("Indemnitee"), who is an executive officer of
the entities listed opposite the signature.

     WHEREAS, highly competent persons are becoming more reluctant to serve
publicly held corporations as executive officers or in other capacities unless
they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations.

     WHEREAS, the Board of Directors of the Company, LCS and the Subsidiaries
(each a "Board") have determined that the Company, LCS and the Subsidiaries
should act to assure its executive officers that there will be increased
certainty of such protection in the future.

     WHEREAS, it is reasonable, prudent and necessary for the Company, LCS and
the Subsidiaries to contractually obligate themselves to indemnify such persons
to the fullest extent permitted by applicable law so that they will serve or
continue to serve the Company, LCS and/or the Subsidiaries free from undue
concern that they will not be so indemnified.

     WHEREAS, Indemnitee is willing to serve, to continue to serve and to take
on additional service for or on behalf of the Company, LCS and/or the
Subsidiaries on the condition that Indemnitee be so indemnified.

     WHEREAS, in consideration of the benefits received and to be received by
the Company, LCS and the Subsidiaries in connection with actions taken and to be
taken by the Board and by the officers of the Company, LCS and the relevant
Subsidiaries, the Boards have determined that it is in the best interest of the
Company, LCS and the Subsidiaries for the reasons set forth above to be a party
to this Agreement and to provide indemnification to the executive officers of
the Company, LCS and the Subsidiaries in connection with their service to and
activities on behalf of the Company, LCS and the Subsidiaries.

     WHEREAS, the Company, LCS and the Subsidiaries acknowledge that for
purposes of this Agreement the executive officers of the Company, LCS and/or the
Subsidiaries who enter into this Agreement are serving in such capacities at the
request of the Company, LCS and/or the Subsidiaries, as applicable.

     WHEREAS, the Company, LCS and the Subsidiaries further acknowledge that
such executive officers are willing to serve, to continue to serve and to take
on additional service for or on behalf of the Company, LCS and/or the
Subsidiaries, as applicable, thereby benefiting the Company, LCS and the
Subsidiaries, on the condition that the Company, LCS and the Subsidiaries enter
into, and provide indemnification pursuant to, this Agreement.

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     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company, LCS, the Subsidiaries and Indemnitee do hereby
covenant and agree as follows:

     1. Definitions.

         (a) For purposes of this Agreement:

                    (i) "Affiliate" shall mean any corporation, partnership,
joint venture, trust or other enterprise in respect of which Indemnitee is or
was or will be serving directly or indirectly at the request of the Company, LCS
and/or the Subsidiaries, as applicable.

                    (ii) "Disinterested Director" shall mean a director who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

                    (iii) "Expenses" shall include all attorneys' fees and
costs, retainers, court costs, transcripts, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and all other disbursements or expenses
incurred in connection with asserting or defending claims.

                    (iv) "Independent Counsel" shall mean a law firm or lawyer
that neither is presently nor in the past year has been retained to represent:
(i) the Company or Indemnitee in any matter material to any such party or (ii)
any other party to the Proceeding giving rise to a claim for indemnification
hereunder in any matter material to such other party. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any firm or person
who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing any of the Company, LCS, the
Subsidiaries or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement. All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company, LCS and/or the Subsidiaries, as applicable.

                    (v) "Losses" shall mean all liabilities, losses and claims
(including judgments, fines, penalties and amounts to be paid in settlement)
incurred in connection with any Proceeding.

                    (vi) "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, mediation, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative.

     2. Service by Indemnitee. Indemnitee agrees to begin or continue to serve
the Company, LCS and/or the Subsidiaries, as applicable, or any Affiliate as an
executive officer. Notwithstanding anything contained herein, this Agreement
shall not create a contract of employment between the Company, LCS or the
Subsidiaries and Indemnitee, and the termination of Indemnitee's relationship
with the Company, LCS or the Subsidiaries or an Affiliate by either party hereto
shall not be restricted by this Agreement.

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     3. Indemnification. The Company, LCS and/or the Subsidiaries, as
applicable, agree to indemnify Indemnitee for, and hold Indemnitee harmless from
and against, any Losses or Expenses at any time incurred by or assessed against
Indemnitee arising out of or in connection with the service of Indemnitee as an
officer of the Company, LCS and/or the Subsidiaries or in any capacity for an
Affiliate at the request of the Company, LCS or the Subsidiaries (collectively
referred to as an "Officer of the Company") to the fullest extent permitted by
the laws of the State of Delaware in effect on the date hereof or as such laws
may from time to time hereafter be amended to increase the scope of such
permitted indemnification. Without diminishing the scope of the indemnification
provided by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4. Action or Proceeding Other Than an Action by or in the Right of the
Company. Indemnitee shall be entitled to the indemnification rights provided
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to or is involved (including, without limitation, as a witness)
in any Proceeding, other than an action by or in the right of the Company, LCS
or a Subsidiary, as the case may be, by reason of (a) the fact that Indemnitee
is or was an Officer of the Company, or (b) anything done or not done by
Indemnitee in any such capacity.

     5. Actions by or in the Right of the Company. Indemnitee shall be entitled
to the indemnification rights provided herein if Indemnitee is a person who was
or is a party or is threatened to be made a party to or is involved (including,
without limitation, as a witness) in any Proceeding brought by or in the right
of the Company, LCS or a Subsidiary to procure a judgment in its favor by reason
of (a) the fact that Indemnitee is or was an Officer of the Company, or (b)
anything done or not done by Indemnitee in any such capacity. Pursuant to this
Section, Indemnitee shall be indemnified against Losses or Expenses incurred or
suffered by Indemnitee or on Indemnitee's behalf in connection with the defense
or settlement of any Proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, LCS or the Subsidiaries, as applicable.
Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Delaware law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company, LCS or a Subsidiary
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such Losses and Expenses which the Court of Chancery or such other
court shall deem proper.

     6. Indemnification for Losses and Expenses of Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee has been wholly successful on the merits or otherwise in any
Proceeding referred to in Section 3, 4 or 5 hereof on any claim, issue or matter
therein, Indemnitee shall be indemnified against all Losses and Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company, LCS and/or the Subsidiaries, as
applicable, agree to indemnify Indemnitee to the maximum extent permitted by law
against all Losses and Expenses incurred by Indemnitee in connection with each
successfully resolved claim, issue or matter. In any review or Proceeding to
determine the extent of indemnification, the Company, LCS and/or the
Subsidiaries, as applicable,

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shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved. For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7. Payment for Expenses of a Witness. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer of the Company, a witness in any Proceeding, the
Company, LCS and the Subsidiaries agree to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8. Advancement of Expenses. All Expenses incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding shall be paid by the
Company, LCS or a Subsidiary, as applicable, in advance of the final disposition
of such Proceeding within twenty days after the receipt by the Company, LCS or
the applicable Subsidiary of a statement or statements from Indemnitee
requesting from time to time such advance or advances, whether or not a
determination to indemnify has been made under Section 9. Indemnitee's
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award in
arbitration pursuant to this Agreement. The financial ability of Indemnitee to
repay an advance shall not be a prerequisite to the making of such advance. Such
statement or statements shall reasonably evidence such Expenses incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

     9. Procedure for Determination of Entitlement to Indemnification.

         (a) When seeking indemnification under this Agreement (which shall not
include in any case the right of Indemnitee to receive payments pursuant to
Section 7 and Section 8 hereof, which shall not be subject to this Section 9),
Indemnitee shall submit a written request for indemnification to the Company.
Determination of Indemnitee's entitlement to indemnification shall be made
promptly, but in no event later than 30 days after receipt by the Company, LCS
or the applicable Subsidiary of Indemnitee's written request for
indemnification. The Secretary of the Company, LCS or the applicable Subsidiary
shall, promptly upon receipt of Indemnitee's request for indemnification, advise
the relevant Board that Indemnitee has made such request for indemnification.

         (b) The entitlement of Indemnitee to indemnification under this
Agreement shall be determined in the specific case (1) by the relevant Board by
a majority vote of the Disinterested Directors, even though less than a quorum,
or (2) if there are no Disinterested Directors, or if such Disinterested
Directors so direct, by Independent Counsel, or (3) by the stockholders.

         (c) In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee. Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve, such Independent Counsel
shall be selected by the American Arbitration Association of

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New York, New York or such other person as such Association shall designate to
make such selection.

         (d) If the determination made pursuant to Section 9(b) is that
Indemnitee is not entitled to indemnification to the full extent of Indemnitee's
request, Indemnitee shall have the right to seek entitlement to indemnification
in accordance with the procedures set forth in Section 11 hereof.

         (e) If the person or persons empowered pursuant to Section 9(b) to make
a determination with respect to entitlement to indemnification shall have failed
to make the requested determination within 30 days after receipt by the Company,
LCS or a Subsidiary, as applicable, of such request, the requisite determination
of entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be absolutely entitled to such indemnification, absent (i)
misrepresentation by Indemnitee of a material fact in the request for
indemnification or (ii) a final judicial determination that all or any part of
such indemnification is expressly prohibited by law.

         (f) The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the rights of Indemnitee to indemnification hereunder
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company, LCS
and/or a Subsidiary, as the case may be, or create a presumption that (with
respect to any criminal action or proceeding) Indemnitee had reasonable cause to
believe that Indemnitee's conduct was unlawful.

         (g) For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking such action
Indemnitee relied on the records or books of account of the Company or an
Affiliate, including financial statements, or on information supplied to
Indemnitee by the officers of the Company or an Affiliate in the course of their
duties, or on the advice of legal counsel for the Company or an Affiliate or on
information or records given or reports made to the Company or an Affiliate by
an independent certified public accountant or by an appraiser or other expert
selected with reasonable care to the Company or an Affiliate. The Company, LCS
or the relevant Subsidiary shall have the burden of establishing the absence of
good faith. The provisions of this Section 9(g) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which Indemnitee may
be deemed to have met the applicable standard of conduct set forth in this
Agreement.

         (h) The knowledge and/or actions, or failure to act, of any other
director, officer, agent or employee of the Company or an Affiliate shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
Expenses.

         (a) In the event that (i) a determination is made that Indemnitee is
not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek a final adjudication either through an

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arbitration proceeding or in an appropriate court of the State of Delaware or
any other court of competent jurisdiction of Indemnitee's entitlement to such
indemnification or advance.

         (b) In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in Section 10(a) shall be de novo and Indemnitee shall not be
prejudiced by reason of any such prior determination that Indemnitee is not
entitled to indemnification, and the Company, LCS or the relevant Subsidiary
shall bear the burdens of proof specified in Sections 6 and 9 hereof in such
proceeding.

         (c) If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company, LCS and/or the Subsidiaries, as applicable, shall
be bound by such determination in any judicial proceeding or arbitration in the
absence of (i) a misrepresentation of a material fact by Indemnitee or (ii) a
final judicial determination that all or any part of such indemnification is
expressly prohibited by law.

         (d) To the extent deemed appropriate by the court, interest shall be
paid by the Company, LCS or the relevant Subsidiary to Indemnitee at a rate
equal to the rate paid by the Company or its subsidiaries to the principal
senior secured lender thereto for amounts which the Company, LCS or the relevant
Subsidiary indemnifies or is obliged to indemnify Indemnitee for the period
commencing with the date on which Indemnitee requested indemnification (or
reimbursement or advancement of any Expenses) and ending with the date on which
such payment is made to Indemnitee by the Company, LCS or a Subsidiary.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement. All Expenses
incurred by Indemnitee in connection with the preparation and submission of
Indemnitee's request for indemnification hereunder shall be borne by the
Company, LCS or the relevant Subsidiary. In the event that Indemnitee is a party
to or intervenes in any proceeding in which the validity or enforceability of
this Agreement is at issue or seeks an adjudication to enforce Indemnitee's
rights under, or to recover damages for breach of, this Agreement, Indemnitee,
if Indemnitee prevails in whole in such action, shall be entitled to recover
from the Company, LCS or the relevant Subsidiary, and shall be indemnified by
such entity against, any Expenses incurred by Indemnitee. If it is determined
that Indemnitee is entitled to indemnification for part (but not all) of the
indemnification so requested, Expenses incurred in seeking enforcement of such
partial indemnification shall be reasonably prorated among the claims, issues or
matters for which Indemnitee is entitled to indemnification and for claims,
issues or matters for which Indemnitee is not so entitled.

     12. Non-Exclusivity. The rights of indemnification and to receive advances
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under any law, certificate of
incorporation, by-law, other agreement, vote of stockholders or resolution of
directors or otherwise, both as to action in Indemnitee's official capacity and
as to action in another capacity while holding such office. To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or

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any other entity which Indemnitee is or was serving at the request of the
Company, LCS or a Subsidiary prior to such amendment, alteration, rescission or
replacement.

     13. Duration of Agreement. This Agreement shall apply to any claim asserted
and any Losses and Expenses incurred in connection with any claim asserted on or
after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) ten years after Indemnitee has ceased to occupy
any of the positions or have any of the relationships described in Section 3, 4
or 5 hereof; or (b) one year after the final termination of all pending or
threatened Proceedings of the kind described herein with respect to Indemnitee.
This Agreement shall be binding upon the Company, LCS, the Subsidiaries and
their respective successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee's spouse, assigns, heirs, devisee, executors,
administrators or other legal representatives.

     14. Maintenance of D&O Insurance.

         (a) The Company, LCS and the Subsidiaries, as applicable, hereby
covenant and agree with Indemnitee that, so long as Indemnitee shall continue to
serve as an Officer of the Company and thereafter so long as Indemnitee shall be
subject to any possible claim or threatened, pending or completed Proceeding,
whether civil, criminal or investigative, by reason of the fact that Indemnitee
was an Officer of the Company or any other entity which Indemnitee was serving
at the request of the Company, LCS or a Subsidiary, the Company, LCS or a
Subsidiary shall maintain in full force and effect (i) the directors' and
officers' liability insurance issued by the insurer and having the policy amount
and deductible as currently in effect with respect to directors and officers of
the Company, LCS or the Subsidiaries and (ii) any replacement or substitute
policies issued by one or more reputable insurers providing in all respects
coverage at least comparable to and in the same amount as that currently
provided under such existing policy (collectively, "D&O Insurance").

         (b) In all policies of D&O Insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits,
subject to the same limitations, as are accorded to the Company's directors or
officers most favorably insured by such policy.

         (c) Notwithstanding anything to the contrary set forth in (a) above,
the Company, LCS and the Subsidiaries shall have no obligation to maintain D&O
Insurance if the Company determines in good faith that such insurance is not
reasonably available, the premium cost for such insurance is disproportionate to
the amount of coverage provided or the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit.

     15. Severability. Should any part, term or condition hereof be declared
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions hereof shall not be affected thereby, and the
illegal or unenforceable portions hereof shall be and hereby are redrafted to
conform with applicable law, while leaving the remaining portions hereof intact.

     16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

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     17. Headings. Section headings are for convenience only and do not control
or affect meaning or interpretation of any terms or provisions hereof.

     18. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     19. No Duplicative Payment. The Company, LCS and the Subsidiaries shall not
be liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that Indemnitee has otherwise
actually received such payment (net of Expenses incurred in collecting such
payment) under any insurance policy, contract, agreement or otherwise.

     20. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed,
enclosed in a registered or certified postpaid envelope, in any general or
branch office of the United States Postal Service, or sent by Federal Express or
other similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

         (a) If to Indemnitee, to the address appearing on the signature page
hereof.

         (b) If to the Company, LCS or a Subsidiary to:

             CustomerONE Holding Corporation
             161 Bay Street, 49th Floor
             Toronto, ON  M5J 2S1
             Attention: Chief Executive Officer

     21. Governing Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of Delaware without regard to its conflicts of law rules.

     22. Entire Agreement. Subject to the provisions of Section 12 hereof, this
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter hereof. This Agreement may not be amended
or otherwise modified except in writing duly executed by all of the parties. A
waiver by any party of any breach or violation of this Agreement shall not be
deemed or construed as a waiver of any subsequent breach or violation thereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

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            IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

                                             CUSTOMERONE HOLDING CORPORATION

                                             By: /s/ THOMAS P. DEA
                                                --------------------------------
                                             Name: Thomas P. Dea
                                                  ------------------------------
                                             Title:
                                                   -----------------------------

                                             LCS INDUSTRIES, INC.

                                             By: /s/ THOMAS P. DEA
                                                --------------------------------
                                             Name: Thomas P. Dea
                                                  ------------------------------
                                             Title:
                                                   -----------------------------

                                             CATALOG LIQUIDATORS, INC.

                                             By: /s/ THOMAS P. DEA
                                                --------------------------------
                                             Name: Thomas P. Dea
                                                  ------------------------------
                                             Title:
                                                   -----------------------------
                                             LCS CANADA, INC.

                                             By: /s/ THOMAS P. DEA
                                                --------------------------------
                                             Name: Thomas P. Dea
                                                  ------------------------------
                                             Title:
                                                   -----------------------------

                                             CATALOG RESOURCES, INC.

                                             By: /s/ THOMAS P. DEA
                                                --------------------------------
                                             Name: Thomas P. Dea
                                                  ------------------------------
                                             Title:
                                                   -----------------------------

                                             INDEMNITEE

                                             Name: /s/ SETH M. MERSKY
                                                  ------------------------------
                                             Address:
                                                     ---------------------------
                                             City and State:
                                                            --------------------
                                             Telecopier Number:
                                                               -----------------
                                             Positions:
                                                       -------------------------

                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------

                                             -----------------------------------

                                       9<PAGE>   1
                                                                   EXHIBIT 10.14

                                                                Joanne Biltekoff

                         CUSTOMERONE HOLDING CORPORATION

                          PHANTOM STOCK UNIT AGREEMENT

         1. Participation. CustomerONE Holding Corporation, a Delaware
corporation (the "Company"), hereby selects Joanne Biltekoff (the "Participant")
to participate in the Company's Deferred Compensation Plan (the "Plan"), subject
to the terms and conditions of this Phantom Unit Agreement, dated as of October
1, 1998 (the "Agreement"), the "Deferral Election" attached as Exhibit A hereto,
and the Plan. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Plan.

         2. Election to Defer Compensation. Upon Participant's execution of this
Agreement and the Deferral Election, and the Committee's approval of the
Deferral Election, the Participant shall commence participation in the Plan.

         3. Phantom Stock Units. All compensation deferred pursuant to a
Deferral Election shall be credited to the Participant's Deferral Account and
shall be deemed to be invested in Phantom Stock Units ("Units").

                  (a) Each Unit credited to Participant's Deferral account in
accordance with the Plan shall be valued at $1.00 per Unit.

         4. Vesting of Units. Participant shall be fully vested in all amounts
deferred under the Plan. Participant shall be fully vested in the Spread
credited to Participant's deferral account; provided, however, that if
Participant's employment is terminated for Cause or if Participant voluntarily
terminates employment without Good Reason, as such terms are defined in Section
1 of the Plan, Participant shall forfeit ten percent (10%) of the Spread
credited to Participant's deferral account.

                  (b) Spread. Spread means, with respect to a Participant as of
any date, the excess, if any (to the extent not yet distributed from such
Account by such date), of: (a) the Fair Market Value of a Unit on the date of
determination over (b) the Fair Market Value of such Unit at the time such Unit
is credited to the Participant's Deferral Account (unless another value is
expressly set forth in Section 3(a) of this Agreement).

         5. Deferral Account Distributions. Except as set forth in paragraph (c)
below, the vested portion of a Participant's deferral account shall not be
distributed until a Distribution Event has occurred, as set forth in the Plan.

                  (a) Acceleration of Distributions. Notwithstanding any
provision contained in the Plan or this Agreement to the contrary, the Committee
may, in its sole discretion, accelerate the distribution in a lump sum of (i)
any or all of the Deferral Accounts to the date of a Change in Control, (ii) any
or all of a Participant's Deferral

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Account following the Participant's resignation without Good Reason or (iii) all
of the Deferral Accounts upon the liquidation or dissolution of the Company.

                  (b) Form of Payment. In the event of a Distribution Event
described in Section 7.1 of the Plan with respect to a Participant, the amount
credited to a Participant's Deferral Account shall be paid in a lump sum unless
the Participant has elected to receive payment of the Deferral Account in
installments in a manner permitted by and subject to the approval of the
Committee. Such lump sum payment or installment payments shall be made in cash,
shares of common stock of the Company ("Common Stock") or any combination
thereof, as determined in the sole discretion of the Company. For purposes of
satisfying payment of a Participant's Deferral Account with Common Stock, (i)
the Fair Market Value of such Common Stock and the Fair Market Value of the
Units credited to such Deferral Account shall each be determined as of the
payment date and (ii) the Company shall withhold from such distribution and pay
to the appropriate tax authorities the amount of applicable federal and state
income taxes that would be imposed on such distribution, as determined using the
highest marginal rate. Any fractional Units credited to a Participant's Deferral
Account shall be paid in cash.

                  (c) Hardship Distributions. Upon a written request of a
Participant and the Participant's demonstration to the Committee that a Hardship
(as defined in Section 7.4 of the Plan) exists, the Committee may permit the
distribution of all or any portion of the Participant's Deferral Account prior
to the date such amount otherwise would be distributed. The receipt of a
Hardship distribution by any Participant shall result in the suspension of the
Participant's deferral election under the Plan for a period of one year
following the date of the distribution.

                  (d) Discharge for Cause; Termination without Good Reason. If
the Participant is discharged by the Company for Cause or if the Participant
terminates employment with the Company without Good Reason (as each such term is
defined in Section 1 of the Plan), the Participant shall forfeit ten percent
(10%) of the Spread credited to Participant's account.

         6. Delivery of Common Stock; Compliance With Securities Laws, Etc. In
accordance with the terms of the Plan, pursuant to Participant's written request
for, and the Committee's approval, in its sole discretion, of, distribution of
all or a portion of his or her Deferral Account in the form of Common Stock, the
Company shall make delivery of such Common Stock to the Participant, provided
that if any law or regulation requires the Company to take any action with
respect to such Common Stock before the issuance thereof, then the date of
delivery of such Common Stock shall be extended for the period necessary to
complete such action.

                  (a) Listing, Qualification, Etc. Requests for distribution of
all or a portion of Participant's Deferral Account in the form of Common Stock
shall be subject to the approval of the Committee and the requirement that if,
at any time, counsel to the Company shall determine that the listing,
registration or qualification of the Common Stock upon any securities exchange
or under any state, federal or foreign law, or the

                                       2
<PAGE>   3

consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance of Common
Stock hereunder, such distribution may not be made, in whole or in part, unless
such listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure, or to satisfy such other condition.

         7. Nontransferability of Units. The Units credited to a Participant's
account shall not be transferable otherwise than by will or the laws of descent
and distribution.

         8. No Special Employment Rights. Nothing contained in the Plan or this
Agreement shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment of the Participant.

         9. Rights as a Stockholder. Unless and until stock certificates
evidencing the Common Stock which may be received pursuant to the Units have
been issued (as evidenced by the appropriate entry on the books of the Company
or a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to such
Common Stock. The Company shall issue (or cause to be issued) such stock
certificates in accordance with the terms of the Plan. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date of the stock certificate is issued, except as provided in the Plan.

         10. Adjustment Event. In the event there is any change in the Common
Stock, through merger, consolidation, reorganization, recapitalization (other
than pursuant to bankruptcy proceedings), stock dividend, stock split, reverse
stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, dividend in kind or other like change in capital structure (each an
"Adjustment Event"), the number of Units subject to the Plan shall be adjusted
by the Committee in its sole judgment so as to give appropriate effect to such
Adjustment Event. Any fractional units resulting from such adjustment may be
eliminated. Each successive Adjustment Event shall result in the consideration
by the Committee of whether any adjustment to the number of Units subject to the
Plan is necessary in the Committee's judgment. Issuance of Common Stock or
securities convertible into Common Stock for value will not be deemed to be an
Adjustment Event unless otherwise expressly determined by the Committee.

         11. Withholding Taxes. By participation in the Plan, any individual who
is an employee of the Company or any Related Entity shall be deemed to (a) agree
to reimburse the Company or any Related Entity by which the Participant is
employed for any taxes required by any governmental regulatory authority to be
withheld or otherwise deducted by such entity in respect of the payment of any
amounts under the Plan, (b) authorize the Company or any Related Entity by which
the Participant is employed to withhold from any cash compensation paid to the
Participant or on the Participant's behalf, an amount sufficient to discharge
such taxes and which otherwise has not been

                                       3
<PAGE>   4

reimbursed by the Participant in respect of the payment of any amounts
hereunder, or (c) authorize the Company or any Related Entity to, in its
discretion, effect any required withholding by retaining Common Stock issuable
to the Participant, having a Fair Market Value on the date of issuance which is
equal to the amount to be withheld.

         12. Investment Representations. The Participant represents, warrants
and covenants that:

                           (i) Any Common Stock received upon distribution of
         Participant's Deferral Account shall be acquired for the Participant's
         account for investment only and not with a view to, or for sale in
         connection with, any distribution of the shares in violation of the
         Securities Act of 1933 (the "Securities Act") or any rule or regulation
         under the Securities Act; and

                           (ii) If any Common Stock shall be registered under
         the Securities Act, no public offering (otherwise than on a national
         securities exchange, as defined in the Exchange Act) of any Common
         Stock acquired hereunder shall be made by the Participant (or any other
         person) under such circumstances that Participant (or such person) may
         be deemed an underwriter, as defined in the Securities Act; and

                           (iii) The Participant agrees that the Company shall
         have the authority to endorse upon the certificate or certificates
         representing the Common Stock acquired hereunder such legends referring
         to the foregoing restrictions, and any other applicable restrictions,
         as it may deem appropriate.

13.      Miscellaneous.

                  (a) Amendment or Termination of Plan. The Committee may amend,
suspend or terminate the Plan at any time with or without prior notice;
provided, however, that no such action shall materially impair any rights or
benefits (other than the right to effect Compensation deferrals under a previous
election) which theretofore accrued under the Plan without the consent of
affected Participants. If the Committee determines to accelerate distribution in
a lump sum pursuant to Section 7.2(i) of the Plan, each deferral election of a
Participant receiving payment as a result thereof shall be deemed to be
terminated on the date of the Change in Control.

                  (b) Amendment or Termination of Agreements. The Committee may
amend or modify any Agreement at any time, provided, however, that no such
action shall materially impair any rights or benefits (other than the right to
effect Compensation deferrals under a previous election) which theretofore
accrued under the Plan without the consent of affected Participants, and may
amend or modify any Agreement at any time by mutual agreement between the
Committee and the Participant or such other persons as may then have an interest
therein.

                                       4
<PAGE>   5

                  (c) All notices under this Agreement shall be mailed or
delivered by hand to the parties at their respective addresses set forth beneath
their names below or at such other address as may be designated in writing by
either of the parties to one another.

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                                       5
<PAGE>   6

                  (d) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principals.

                                    Submitted by:

                                     /s/ JOANNE BILTEKOFF
                                    --------------------------------------------
                                    Joanne Biltekoff

                                    Address:

                                    Accepted by:

                                    CUSTOMERONE HOLDING CORPORATION

                                    By: /s/ MARK R. BRIGGS
                                       -----------------------------------------
                                             Mark R. Briggs
                                             President

<PAGE>   7

                                                                Joanne Biltekoff

                                    EXHIBIT A

                         CUSTOMERONE HOLDING CORPORATION

                           DEFERRED COMPENSATION PLAN
                                DEFERRAL ELECTION

CustomerONE Holding Corporation (the "Company")
Attention:     Treasurer

         Deferral Election. Effective as of the date of this election the
undersigned ("Participant") hereby elects to defer $55,000 of Participant's
December 1998 bonus compensation pursuant to the Company's Deferred Compensation
Plan (the "Plan") and the Phantom Stock Unit Agreement dated as of October 1,
1998, (the "Phantom Unit Agreement").

         1. Timing of Deferral. The deferral of compensation hereunder shall be
made effective as of October 1, 1998.

         2. Representations of Participant. Participant acknowledges that
Participant has received, read and understood the Plan, the Phantom Unit
Agreement, and this Deferral Agreement and agrees to abide by and be bound by
the terms and conditions of such documents.

         3. Compliance with Securities Laws. Notwithstanding any other provision
of the Phantom Unit Agreement or the Plan to the contrary, the exercise of any
rights under the Plan is expressly conditioned upon compliance with the
Securities Act of 1933, as amended, all applicable state securities laws and all
applicable requirements of any stock exchange or over-the-counter market on
which the Company's Common Stock may be listed or traded. Participant agrees to
cooperate with the Company to ensure compliance with such laws.

         4. Tax Consultation. Participant understands that Participant may
suffer adverse tax consequences as a result of Participant's participation in
the Plan. Participant represents that Participant has consulted with any tax
consultants Participant deems advisable in connection with participating in and
receiving benefits under the Plan and that Participant is not relying on the
Company for any tax advice.

         5. Definitions; Interpretation. Capitalized terms used and not
otherwise defined herein shall have the respective meanings assigned thereto in
the Plan and the Phantom Unit Agreement. Any dispute regarding the
interpretation of this Deferral Election shall be submitted by Participant or by
the Company forthwith to the Company's Board of Directors or the Committee
thereof that administers the Plan, which shall review such dispute at its next
regular meeting. The resolution of such a dispute by the Board or Committee
shall be final and binding on the Company and on Purchaser.

<PAGE>   8

         6. No Employment or Service Contract. Nothing in this Deferral
Election, the Plan or in the Phantom Unit Agreement shall confer upon
Participant any right to continue in service of the Company for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Related Entity employing or retaining Participant) or of
Participant, which rights are hereby expressly reserved by each, to terminate
Participant's service at any time for any reason, with or without cause.

         7. Governing Law; Severability. This Deferral Election shall be
governed by an construed in accordance with the laws of the State of New York,
without regard to conflicts of law principles. Should any provision of this
Deferral Election be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

         8. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Deferral Election.

         9. Entire Agreement. The Plan and Phantom Unit Agreement are
incorporated herein by reference. This Deferral Election, the Plan and the
Phantom Unit Agreement constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof.

         10. Participant Undertaking. Participant hereby agrees to take whatever
additional action and execute whatever additional documents the Company may deem
necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed on either Participant or the Common Stock
pursuant to the provisions of the Plan, the Phantom Unit Agreement or applicable
law.

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                                       8
<PAGE>   9
                                                                Joanne Biltekoff

         11. Counterparts. This Deferral Election may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

                                   Submitted by:

                                   /s/ JOANNE BILTEKOFF
                                   ---------------------------------------------
                                   Joanne Biltekoff

                                   Address:

                                   Accepted by:

                                   CUSTOMERONE HOLDING CORPORATION

                                   By: /s/ MARK R. BRIGGS
                                      ------------------------------------------
                                         Mark R. Briggs
                                         President

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