Document:

exv10w6

 

EXHIBIT 10.6

APAC CUSTOMER SERVICES, INC.

RESTRICTED STOCK AWARD AGREEMENT

     THIS AGREEMENT (this “Agreement”) is made this                      (the “Grant
Date”), between APAC Customer Services, Inc., an Illinois corporation (the “Company”),
and                      (the “Participant”).

R E C I T A L:

     WHEREAS, the Company desires to grant to the Participant certain Restricted Shares under the
Company’s 2005 Incentive Stock Plan, as amended from time to time (the “Plan”), which has
been approved by its shareholders.

     NOW THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as
follows:

     1. Grant of the Restricted Stock Award. Subject to the terms and conditions set forth
in this Agreement and the Plan, the Company hereby grants to the Participant an Award consisting of
                     Restricted Shares, subject to adjustment pursuant to the terms of the Plan.
Capitalized terms not defined herein shall have the same meaning as set forth in the Plan. Each
Restricted Share shall vest and become unrestricted in accordance with Section 2 hereof.

     2. Vesting.

          (a) Except as set forth at Section 2(b), 2(c), 2(d) or 2(e) hereof, the Award shall vest as
follows: (i) 50% of the Restricted Shares on the first anniversary of the Grant Date (the
“First Vesting Date”) and (ii) 50% of the Restricted Shares on the second anniversary of
the Grant Date (the “Second Vesting Date”, and collectively with the First Vesting Date,
the “Vesting Dates”); provided, in each case, that Participant has uninterrupted Service
from the Grant Date to and including the applicable Vesting Date. “Service” shall mean
(i) an employee-employer relationship between the Participant and the Company or any of its
Subsidiaries, (ii) service to the Company or any of its Subsidiaries provided by the Participant
as a member of the Company’s or such Subsidiary’s Board of Directors, or (iii) service by
Participant as a consultant or independent contractor. Participant will not be treated as
terminating Service (A) where there is a simultaneous reemployment or continuing employment of
Participant by the Company or any of its Subsidiaries, (B) where there is a simultaneous
establishment of a consulting relationship or continuing consulting relationship between the
Participant and the Company or any of its Subsidiaries, or (C) if Participant continues to serve
as a member of the Board of Directors of the Company or any of its Subsidiaries after the
termination of an employee-employer or consulting relationship, in which case, the Participant’s
Service will cease on the date Participant no longer is employed by the Company or any of its
Subsidiaries, no longer performs services as a consultant, and is

 

 

no longer a member of the Board of Directors of the Company or any of its Subsidiaries. The
Committee, in its sole discretion, shall determine the effect of all matters and questions
relating to terminations of Service, including, but not by way of limitation, the question of
whether a particular leave of absence constitutes a termination of Service.

          (b) If a Change in Control occurs while the Participant is providing Services to the Company
or one of its Subsidiaries, the Restricted Shares shall immediately fully vest.

          (c) If Participant’s Service is terminated due to the Participant’s death or Disability, the
Restricted Shares shall immediately fully vest upon the occurrence of such termination.
“Disability” shall mean a disability as determined under the Company’s long term
disability benefit plan then in effect covering the Participant.

          (d) If the Participant’s Service terminates prior to the date of vesting under Section 2(a)
and 2(b), for any reason other than as provided in Section 2(c) hereof, any unvested portion of
the Award shall be forfeited by the Participant and cancelled by the Company. The Participant
irrevocably grants to the Company the power of attorney to transfer any unvested Restricted
Shares forfeited to the Company and agrees to execute any document required by the Company in
connection with such forfeiture and transfer.

          (e) Section 2(d) to the contrary notwithstanding, the Committee, in its sole discretion, may
at any time cause all or part of the Participant’s Restricted Shares to vest upon a termination
of the Participant’s Service.

          (f) Upon the vesting of Restricted Shares pursuant to Section 2(a), 2(b), 2(c) or 2(e)
hereof, all restrictions on such vested Restricted Shares shall lapse and such Restricted Shares
shall become unrestricted and freely transferable.

     3. Rights as a Shareholder. The Company will issue the Restricted Shares by
registering the Restricted Shares in book entry form with the Company’s transfer agent in the
Participant’s name and the applicable restrictions will be noted in the records of the Company’s
transfer agent and in the book entry system. No certificate(s) representing all or a part of the
Restricted Shares will be issued until the Restricted Shares become vested. The Participant may
exercise all voting rights with respect to the Restricted Shares. Dividends (as they may be
declared and paid on Common Stock to shareholders from time to time) shall not be payable on any
Restricted Shares that are not vested.

     4. No
Employment Rights. Nothing contained herein shall confer upon the Participant the
right to continue in the Service of the Company or any of its Subsidiaries, or to interfere with or
limit the right of the Company or such Subsidiary to terminate Participant’s Service at any time.

     5. Transferability. The Restricted Shares subject to the Award and not then vested
may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of
(whether by operation of law or otherwise) or be subject to execution, attachment or similar

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process, (collectively referred to as a “Transfer”) and any attempt to so Transfer
such Restricted Shares shall be null and void, other than a Transfer by will or the laws of descent
and distribution.

     6. Repayment of Restricted Shares or Proceeds. The Company may rescind the Award, to
the extent vested, if prior to (a) the occurrence of a Change of Control and (b) six (6) months
after the date of vesting of the Restricted Shares, the Participant violates any promise, covenant,
or agreement relating to (i) restrictions on the Participant’s ability to compete with the Company
or solicit its customers or employees or (ii) the Participant’s duty to keep information about the
Company confidential. The Company may exercise such rescission right at any time within two years
after the occurrence of an event under the foregoing clauses (i) or (ii). In the event of such
rescission, the Participant shall either tender to the Company the then-vested Restricted Shares
or, if the Restricted Shares are not within the Participant’s possession or control, shall pay to
the Company an amount in cash equal to the proceeds of any Transfer thereof by the Participant (or,
if no proceeds were received, a cash amount equal to the Fair Market Value of the Restricted Shares
on the date of Transfer), in such manner and on such terms and conditions as may be required by the
Company, and the Company shall be entitled to a right of set-off against any amount owed to the
Participant by the Company.

     7. Withholding. By accepting the Award, the Participant agrees to make appropriate
arrangements with the Company for the satisfaction of any applicable federal, state or local income
tax withholding requirements, including the payment to the Company of all such taxes and
requirements in connection with the distribution or delivery of the vested Restricted Shares, or
other settlement in respect of the Restricted Shares upon vesting, and the Company shall be
authorized to take such action as may be necessary (including, without limitation, at the election
of the Participant, (a) withholding vested Restricted Shares otherwise deliverable to the
Participant hereunder, except that this election shall not apply in the case of withholding
required upon the filing of an election under Section 83(b) of the Internal Revenue Code of 1986,
as amended (the “Code”) pursuant to Section 15 hereof, or (b) withholding amounts from any
compensation or other amount owing from the Company to the Participant) to satisfy all obligations
for the payment of such taxes; provided, however, that in no event shall the value of vested
Restricted Shares so withheld by the Company exceed the minimum withholding rates required by
applicable statutes.

     8. Notices. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given (a)
on the date of delivery if delivered by hand, (b) on the date of transmission, if delivered by
confirmed facsimile, (c) on the first business day following the date of deposit if delivered by
guaranteed overnight delivery service, or (d) on the fourth business day following the date
delivered or mailed by United States registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company in care of its General Counsel and to the Participant at
the address (or to the facsimile number) shown on the records of the Company.

     9. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any time
any provision of this Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.

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     10. Authority of Committee. The Committee shall have full authority to interpret and
construe the terms of this Agreement. The determination of the Committee as to any such matter of
interpretation or construction shall be final, conclusive and binding.

     11. Choice of Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Illinois without regard to its conflicts of law
principles.

     12. Counterparts. This Agreement may be executed in two counterparts each of which
shall be deemed an original and both of which together shall constitute one and the same
instrument. Any facsimile of this Agreement shall be considered an original document.

     13. Complete Agreement; Inconsistencies. The Award is made pursuant to the Plan, the
terms of which are incorporated herein by reference. The Plan and this Agreement embody the
complete agreement and understanding among the parties respecting the subject hereof and supersede
and preempt any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way. In the event of
any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall prevail.

     14. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by the Participant, the Company and their respective permitted
successors and assigns (including personal representatives, heirs and legatees), and is intended to
bind all successors and assigns of the respective parties, except that the Participant may not
assign any of the Participant’s rights or obligations under this Agreement except to the extent and
in the manner expressly permitted hereby.

     15. Compliance with Code Section 409A. To the extent that any Award under this
Agreement becomes subject to Code Section 409A, it is intended that such Award be in compliance
with Code Section 409A and the terms of the Plan and this Agreement shall be construed, to the
fullest extent possible, to be in compliance with Code Section 409A.

     16. Section 83(b) Election.

          (a) The Participant understands that under Section 83(a) of the Code, the excess of the fair
market value of unvested Restricted Shares on the date that forfeiture restrictions lapse (the
vesting date) over the amount paid for such Restricted Shares on the Grant Date will be taxed, on
the date such forfeiture restrictions lapse, as ordinary income subject to withholding tax and
tax reporting. For this purpose, the term “forfeiture restrictions” means the right of the
Company to receive back any unvested Restricted Shares upon a failure of the Company to attain
the performance condition set forth in Section 2(a)(i) or, to the extent such performance
condition is so attained, the termination of the Participant’s Service with the Company prior to
the date of vesting provided in Section 2(a)(ii) and other than as provided in Section 2(b), 2(c)
and 2(e) hereof. The Participant understands that the Participant may elect under Section 83(b)
of the Code to be taxed at ordinary income rates on the fair market value of the unvested
Restricted Shares at the time they are acquired, rather than when and as the Restricted Shares
cease to be subject to the forfeiture restrictions. Such

4

 

election (an “83(b) Election”) must be filed with the Internal Revenue Service within 30
days following the Grant Date of the Award. The Participant understands that (a) the Participant
will not be entitled to a deduction for any ordinary income previously recognized as a result of
the 83(b) Election if the unvested Restricted Shares are subsequently forfeited to the Company
and (b) the 83(b) Election may cause the Participant to recognize more compensation income than
the Participant would have otherwise recognized if the value of the Restricted Shares
subsequently declines.

          (b) THE FORM FOR MAKING AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT B. THE
PARTICIPANT UNDERSTANDS THAT FAILURE TO FILE SUCH AN ELECTION WITHIN THE 30-DAY PERIOD MAY RESULT
IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE RESTRICTIONS LAPSE.

          (c) The Participant further understands that an additional copy of such election form should
be filed with the Participant’s federal income tax return for the calendar year in which the date
of this Agreement occurs. The Participant acknowledges that the foregoing is only a general
summary of the federal income tax laws that apply to the Award of the Restricted Shares under
this Agreement and does not purport to be complete.

          (d) THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE COMPANY HAS DIRECTED THE PARTICIPANT TO
SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF
ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE, AND THE TAX
CONSEQUENCES OF THE PARTICIPANT’S DEATH.

          (e) The Participant agrees to execute and deliver to the Company with this Agreement a copy
of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election attached hereto
as Exhibit A. The Participant further agrees that the Participant will execute and deliver to
the Company with this Agreement a copy of the 83(b) Election attached hereto as Exhibit B if
Participant chooses to make such an election.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the
Participant has hereunto set his hand, effective as of the Grant Date.

	 	 	 	 	 	 	 
	 	 	APAC CUSTOMER SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	Senior Vice President and Chief	 	 
	 

	 	 	 	 	 	 
	 

	 	 	Financial Officer	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Participant:	 	 

5

 

EXHIBIT A

ACKNOWLEDGMENT AND STATEMENT OF DECISION REGARDING

SECTION 83(b) ELECTION

     The undersigned, a recipient of                      shares of Common Stock of APAC Customer Services,
Inc., an Illinois corporation (the “Company”), pursuant to a restricted stock award granted
under the terms of the Company’s 2005 Incentive Stock Plan, as amended from time to time (the
“Plan”), hereby states as follows:

     1. The undersigned acknowledges receipt of a copy of the Restricted Stock Award Agreement and
Plan relating to the offering of such shares. The undersigned has carefully reviewed the Plan and
the Restricted Stock Award Agreement pursuant to which the award was granted.

     2. The undersigned either (check and complete as applicable):

	 	 	 	 	 	 	 
	 

	 	(a)
	 	 	 	has consulted, and has been fully advised by, the undersigned’s own tax advisor,                     , whose business address is
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	                    , regarding the federal, state and local tax
consequences of receiving shares under the Plan, and particularly regarding the
advisability of making an election pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”), and pursuant to the
corresponding provisions, if any, of applicable state law, or
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	 	 	has knowingly chosen not to consult such a tax advisor.
	 

	 	 	 	 	 	 

     3. The undersigned hereby states that the undersigned has decided (check as applicable):

	 	 	 	 	 	 	 
	 

	 	(a)
	 	 	 	to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company, together with the
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	undersigned’s executed Restricted Stock Award Agreement, an executed form entitled “Election
Under Section 83(b) of the Internal Revenue Code of 1986”, or
	 
	 	 	 	 	 	 
	 

	 	(b)
	 	 	 	not to make an election pursuant to Section 83(b) of the Code.
	 

	 	 	 	 	 	 

     4. Neither the Company nor any Subsidiary or representative of the Company has made any
warranty or representation to the undersigned with respect to the tax consequences of the
undersigned’s acquisition of shares under the Plan or of the making or failure to make an election
pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state
law.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Participant:	 	 

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EXHIBIT B

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code
of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount
of any compensation taxable to taxpayer in connection with taxpayer’s receipt of the property
described below:

     1. The name, address, taxpayer identification number and taxable year of the undersigned are
as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NAME OF TAXPAYER:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	ADDRESS:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	IDENTIFICATION NO. OF TAXPAYER:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	TAXABLE YEAR:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

     2. The property with respect to which the election is made is described as follows:
                     shares of Common Stock of APAC Customer Services, Inc., an Illinois corporation (the
“Company”).

     3. The date on which the property was transferred is                     .

     4. The property is subject to the following restrictions:

The property is subject to a forfeiture right pursuant to which the Company can
reacquire the shares if either (a) the Company fails to attain certain performance
objectives for the period                      through                      or (b) the taxpayer’s
services with the Company are terminated for certain reasons during the period
commencing on                     and ending on                     .

     5. The aggregate fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of such property is
$                     (                dollars).

     6. The amount (if any) paid for such property is $0.00.

     The undersigned has submitted a copy of this statement to the person for whom the services
were performed in connection with the undersigned’s receipt of the above-described

 

 

property. The undersigned is the person performing the services in connection with the
transfer of said property.

     The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner of Internal Revenue.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Taxpayer	 	 

2exv10w16

 

EXHIBIT 10.16

APAC Customer Services, Inc.

Management Incentive Plan

As Amended and Restated

Effective March 15, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 1
	 	ESTABLISHMENT OF THE PLAN	 	 	1	 
	1.1
	 	Purpose	 	 	1	 
	1.2
	 	Term	 	 	1	 
	SECTION 2
	 	DEFINITIONS	 	 	1	 
	2.1
	 	Incentive Award	 	 	1	 
	2.2
	 	Award	 	 	1	 
	2.3
	 	Award Agreement	 	 	1	 
	2.4
	 	Base Salary	 	 	1	 
	2.5
	 	Board	 	 	1	 
	2.6
	 	Change in Control	 	 	1	 
	2.7
	 	Code	 	 	2	 
	2.8
	 	Committee	 	 	2	 
	2.9
	 	Company	 	 	2	 
	2.10
	 	Eligible Individual	 	 	2	 
	2.11
	 	Fair Market Value	 	 	2	 
	2.12
	 	Long-Term Incentive Award	 	 	2	 
	2.13
	 	Participant	 	 	3	 
	2.14
	 	Performance Goals	 	 	3	 
	2.15
	 	Performance Period	 	 	3	 
	2.16
	 	Plan	 	 	3	 
	2.17
	 	Plan Year	 	 	3	 
	2.18
	 	Stock	 	 	3	 
	2.19
	 	Stock Plan	 	 	3	 
	SECTION 3
	 	ELIGIBILITY AND PARTICIPATION	 	 	3	 
	3.1
	 	General	 	 	3	 
	3.2
	 	Partial Performance Period Participation	 	 	3	 
	3.3
	 	No Right to Participate	 	 	3	 
	SECTION 4
	 	INCENTIVE AWARD OPPORTUNITY	 	 	4	 
	4.1
	 	Performance Goals	 	 	4	 
	4.2
	 	Awards	 	 	4	 
	4.3
	 	Maximum Award	 	 	5	 
	SECTION 5
	 	PAYMENT OF INCENTIVE AWARDS	 	 	5	 
	5.1
	 	Form and Timing of Payment	 	 	5	 
	5.2
	 	Payment of Partial Awards	 	 	5	 
	5.3
	 	Termination of Employment	 	 	5	 
	5.4
	 	Change in Control Termination	 	 	5	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 6
	 	RIGHTS OF PARTICIPANTS	 	 	5	 
	6.1
	 	No Employment Rights	 	 	5	 
	6.2
	 	Nontransferability	 	 	5	 
	SECTION 7
	 	ADMINISTRATION, LIABILITY, INDEMNIFICATION	 	 	6	 
	7.1
	 	Administration	 	 	6	 
	7.2
	 	Liability; Indemnification	 	 	6	 
	SECTION 8
	 	AMENDMENT, MODIFICATION AND TERMINATION	 	 	7	 
	SECTION 9
	 	MISCELLANEOUS	 	 	7	 
	9.1
	 	Governing Law	 	 	7	 
	9.2
	 	Withholding Taxes	 	 	7	 
	9.3
	 	Shareholder Approval	 	 	7	 
	9.4
	 	Costs of the Plan	 	 	7	 
	9.5
	 	Unsecured General Creditor	 	 	7	 
	9.6
	 	Entire Agreement	 	 	7	 
	9.7
	 	Limitations of Liability	 	 	8	 
	9.8
	 	Successors	 	 	8	 
	9.9
	 	Captions, Gender and Number	 	 	8	 
	9.10
	 	Headings	 	 	8	 
	9.11
	 	Severability	 	 	8	 

ii

 

APAC Customer Services, Inc.

Management Incentive Plan

(As Amended and Restated Effective March 15, 2007)

Section 1

ESTABLISHMENT OF THE PLAN

     1.1 Purpose. APAC Customer Services, Inc. initially established the APAC Customer
Services, Inc. Management Incentive Plan effective as of January 3, 2000, subsequently amended and
restated the Plan effective January 3, 2005 and further amends the Plan by this restatement, to
reward certain eligible employees of the Company who help achieve certain performance goals of the
Company and, in some cases, specified individual goals.

     1.2 Term. The Company hereby amends and restates the Plan, as set forth herein, effective
March 15, 2007. The Plan shall terminate on the 10th anniversary of the effective date
(unless sooner terminated by the Board pursuant to Section 9).

Section 2

DEFINITIONS

     2.1 Incentive Award. “Incentive Award” means the actual bonus earned during a Plan
Performance Period by a Participant, payable to the Participant in cash or Stock having a Fair
Market Value equal to such earned bonus amount, as determined by the Committee at or after the end
of a Performance Period. A Participant’s Incentive Award may, in the discretion of the Committee,
be stated as a percentage of the Participant’s Base Salary, a dollar amount or other measurement.

     2.2 Award. “Award” means an Incentive Award or a Long-Term Incentive Award. “Awards” means
two or more Incentive Awards, Long-Term Incentive Awards or a combination thereof.

     2.3 Award Agreement. “Award Agreement” means a written communication from the Company to the
Participant that establishes the terms, conditions and restrictions applicable to an Award in
addition to those established by the Plan and by the Committee’s exercise of its administrative
powers.

     2.4 Base Salary. “Base Salary” means the base pay rate in effect at the end of the
Performance Period.

     2.5 Board. “Board” means the Board of Directors of the Company.

     2.6 Change in Control. “Change in Control” means any of the following events:

          (a) A tender offer shall be made and consummated for the ownership of more than 50% of the
outstanding voting securities of the Employer;

          (b) The Employer 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 Employer,
as the same shall have existed immediately prior to such merger or consolidation;

          (c) The Employer shall sell all or substantially all of its assets to another corporation
which is not a wholly-owned subsidiary or affiliate;

 

 

          (d) As the result of, or in connection with, any contested election for the Board of Directors
of the Employer, 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
Employer before the Transaction shall cease to constitute a majority of the Board of Directors of
the Employer, or any successor thereto; or

          (e) A person, within the meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on
the date hereof) of the Securities and Exchange Act of 1934 (“Exchange Act”), other than any
employee benefit plan then maintained by the Employer, shall acquire more than 50% of the
outstanding voting securities of the Employer (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) (as in effect on
the date hereof) pursuant to the Exchange Act.

     Notwithstanding the foregoing, (i) a Change in Control 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 more affiliates or associates, as defined in the
Exchange Act, of securities of the Employer, 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 (27%) percent of the Employer’s voting
securities while it is a public company, then
“331/3%” shall be substituted
for “50%” in clauses (a) and (e) of this Section 2.5, and “662/3%” shall be
substituted for “50%” in clause (b) of this Section 2.5.

     2.7 Code. “Code” means the Internal Revenue Code of 1986, as amended. References to a Section
of the Code shall include references to any temporary or final regulation related to such Section
or any successor to such Section or regulation.

     2.8 Committee. “Committee” means the Compensation Committee of the Board designated to
administer the Plan in accordance with Section 8. Unless the Board determines otherwise, and such
determination is reduced to a writing articulating the reasons for such determination, the
Committee shall be comprised solely of not less than 2 members, each of whom shall qualify as: (a)
a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) (or any successor rule) under the
Exchange Act, (b) an “outside director” within the meaning of Section 162(m) of the Code (or any
successor law or regulation), and (c) an “independent director” as such term is defined or used by
the rules of the exchange or system on which the Company’s Stock is listed.

     2.9 Company. “Company” means APAC Customer Services, Inc., an Illinois corporation, and any
successor thereto.

     2.10 Eligible Individual. “Eligible Individual” means one of the employees of the Company
designated as such by the Committee.

     2.11 Fair Market Value. “Fair Market Value” means (a) if Stock is readily tradeable on a
national securities exchange or other market system, the closing price of Stock on the date of
calculation (or on the last preceding trading date if Stock was not traded on such date), or (b) if
Stock is not then readily tradeable on a national securities exchange or other market system (i)
the book value of a share of Stock as of the last day of the last completed fiscal quarter
preceding the date of calculation; or (ii) any other value as otherwise determined in good faith by
the Board.

     2.12 Long-Term Incentive Award. “Long-Term Incentive Award” means the actual long-term
incentive award earned during a Performance Period of two or more Plan Years by a Participant,
payable in cash or Stock having a Fair Market Value equal to such earned award amount, as
determined by the Committee at or after the end of the Performance
Period and may, in

2

 

the discretion of the Committee, be stated as a percentage of the Participant’s Base Salary, a
dollar amount or other measurement.

     2.13 Participant. “Participant” means an Eligible Individual who has been designated as
eligible to participate under Section 3.

     2.14 Performance Goals. “Performance Goals” means the criteria established by the Committee
pursuant to Section 4, which shall be used to determine whether a Participant is entitled to an
Incentive Award or a Long-Term Incentive Award and the amount of such Award.

     2.15 Performance Period. “Performance Period” refers to the period for measuring the
achievement of Performance Goals under an Incentive Award or Long-Term Incentive Award.
Performance periods may range from one month to five years.

     2.16 Plan. “Plan” means this APAC Customer Services, Inc. Management Incentive Plan, as set
forth herein, and amended from time to time.

     2.17 Plan Year. “Plan Year” means the Company’s fiscal year.

     2.18 Stock. “Stock” means one or more shares of the common stock, $0.01 par value per share,
of the Company.

     2.19 Stock Plan. “Stock Incentive Plan” means the 2005 Incentive Stock Plan of the Company,
as may be in effect from time to time, and any successor plan thereto.

Section 3

ELIGIBILITY AND PARTICIPATION

     3.1 General. The Committee, in its discretion, shall designate the Eligible Individuals
who are eligible to participate in the Plan for each Performance Period. Eligible Individuals who
are eligible to participate in the Plan shall be so notified in writing, and shall be apprised of
the Performance Goals and related Award opportunities for the applicable Performance Period.

     3.2 Partial Performance Period Participation. In the event that an Eligible Individual
becomes eligible to participate in the Plan subsequent to the commencement of a Performance Period
(either because he or she first becomes an Eligible Individual or because he or she is designated
as eligible to participate after the commencement of the Performance Period), then such
individual’s Award shall be determined using the amount of the Award that would be payable for the
full Performance Period (but for the Participant’s participation for a partial year) multiplied by
a fraction, the numerator of which is the number of days in such Performance Period that the
Participant was eligible to participate in the Plan and the denominator of which is the total
number of days comprising the Performance Period.

     3.3 No Right to Participate. No Participant, Eligible Individual or other employee of the
Company shall at any time have the right to be selected for participation in the Plan for any
Performance Period, despite having previously participated in this Plan or another incentive plan
of the Company.

Section 4

INCENTIVE AWARD OPPORTUNITY

     4.1 Performance Goals.

          (a) Performance Goals. Prior to the beginning of a Performance Period, or as soon as
practicable thereafter but not later than 90 days after commencement of the

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Performance Period, the Committee, in its discretion, and subject to the approval of the
Board, shall in writing establish objective Performance Goals for Eligible Individuals. For the
Performance Goals so established, the Committee shall establish individual or aggregate threshold,
target and maximum levels of performance necessary to achieve and to earn all or a portion of an
Award. The Performance Goals may be based upon both financial and non-financial goals, including,
but not limited to, (i) earnings before interest, taxes, depreciation and amortization, (ii)
revenue, (iii) sales, (iv) earnings per share, (v) funds from operations, (vi) pretax income before
allocation of corporate overhead and bonus, (vii) budget, (viii) cash flow, (ix) net income, (x)
division, group or corporate financial goals, (xi) appreciation in or maintenance of the price of
the Stock or any other publicly traded securities of the Company, (xii) dividends, (xiii) total
shareholder return, (xiv) return on shareholders’ equity, (xv) return on assets, (xvi) return on
investment, (xvii) internal rate of return, (xviii) attainment of strategic and operational
initiatives, (xix) market share, (xx) operating margin, (xxi) profit margin, (xxii) gross profits,
(xxiii) earnings before interest and taxes, (xxiv) economic value-added models, (xxv)comparisons
with various stock market indices, (xxvi) increase in number of customers, and (xxvii) reductions
in costs, as determined by the Committee.

          (b) Individual Performance Goals. If the Committee determines that the Award shall be
attributable, in part, to a Participant’s achievement of individual Performance Goals, such
achievement shall be determined by the Committee after consulting the person to whom the
Participant directly reports.

          (c) Adjustment of Performance Goals. For any Award subject to Section 162(m) of the Code, the
Committee shall not have the authority to increase the Award opportunities during a Performance
Period, but shall have authority to exercise negative discretion provided that such exercise does
not result in an increase in the Award of another Participant. For any other Award, the Committee
shall have the right to increase or to decrease the Performance Goals and the Award opportunities
if it determines that external changes or other unanticipated business conditions have materially
affected the fairness of the Performance Goals and have unduly influenced the ability to achieve
the Performance Goals. Further, in the event of a Performance Period of less than twelve (12)
months, the Committee shall have the authority to equitably adjust the Performance Goals and the
Incentive Award opportunities, in its sole discretion accordingly.

     4.2 Awards. The Committee shall have the authority, in its sole discretion, to grant
Incentive Awards and Long-Term Incentive Awards to Participants, and to establish the terms and
conditions of such Awards, including payout, tax withholding and restrictive covenants, and, in the
case of any payout in Stock, vesting and other restrictions, the effects of the termination of a
Participant’s employment or service and transferability, in each case in accordance with the terms
of the Stock Plan. Each Award granted under the Plan shall be evidenced by an Award Agreement
which shall be signed by the Committee or its designee; provided, however, that in the event of any
conflict between a provision of the Plan and any provision of an Award Agreement, the provision of
the Plan shall prevail. Incentive Awards or Long-Term Incentive Awards based on percentage
achievement of Performance Goals between the threshold, target and maximum levels shall be
determined by interpolation in accordance with procedures established by the Committee.

     4.3 Maximum Award. The maximum dollar amount of any Incentive Award and of any Long-Term
Incentive Award that may be paid to any single Participant in any calendar year with respect to
Awards the compensation of which is determined by a formula that calculates a dollar amount
(whether payable in cash or property) is (a) the greater of $1,000,000 or 250% of the Participant’s
Base Salary for Incentive Awards and (b) the greater of $2,000,000 or 500% of the Participant’s
Base Salary for Long-Term Incentive Awards. The maximum aggregate number of shares of Stock that
may be granted to any single Participant in any calendar year with respect to Awards the
compensation of which is determined by the number of shares of Stock actually awarded or subject to
vesting shall be 300,000 shares, subject to adjustment as provided in

4

 

Section 11 of the Stock Plan; provided, however, that with respect to Awards that may be
subject to Section 162(m) of the Code, such modifications and/or changes do not disqualify
compensation attributable to such Awards as “performance-based compensation” under Section 162(m)
of the Code.

Section 5

PAYMENT OF INCENTIVE AWARDS

     5.1 Form and Timing of Payment. As soon as practicable after the end of the applicable
Performance Period, the Company shall pay to each Participant the amount due under the
Participant’s Incentive Award or Long-Term Incentive Award for the applicable Performance Period,
in cash or Stock, in accordance with the terms and conditions of the Award and the procedures
established by the Committee. All Awards payable in Stock shall be issued pursuant to the Stock
Plan to the extent of shares of Stock available for issuance thereunder.

     5.2 Payment of Partial Awards. In the event a Participant no longer meets the eligibility
criteria set forth in the Plan during the course of a particular Performance Period (other than due
to termination of employment), the Committee may, in its discretion, pay a partial award for the
portion of the Plan Year the individual was a Participant.

     5.3 Termination of Employment. It is a condition to the payment of an Incentive Award and a
Long-Term Incentive Award under the Plan that the Participant be employed on the date of payment,
unless the Award Agreement providing for such Award specifically provides otherwise.

     5.4 Change in Control Termination. Unless an Incentive Award or any Long-Term Incentive Award
specifically provides otherwise, if the Company terminates a Participant’s employment coincident
with or after a Change in Control, the Participant shall be entitled to receive an amount of such
Award for such Performance Period equal to the product of (a) a target level Award multiplied by
(b) a fraction, the numerator of which is the number of days that the Participant was participating
during the applicable Performance Period through the day of termination and the denominator of
which is the total number of days comprising such Performance Period. Payment under this Section
5.4 may be made in accordance with Section 5.1 or sooner, as determined by the Committee in its
discretion.

Section 6

RIGHTS OF PARTICIPANTS

     6.1 No Employment Rights. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Eligible Individual’s employment at any time, nor confer
upon any Eligible Individual any right to continue in the employ of the Company.

     6.2 Nontransferability. No Participant or any other person shall have any right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate
or convey in advance of actual receipt of the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgment, alimony or separate maintenance
owed by a Participant or any other person, nor be transferable by operation of law in the event of
a Participant’s or any other person’s bankruptcy or insolvency.

5

 

Section 7

ADMINISTRATION, LIABILITY, INDEMNIFICATION

     7.1 Administration. The Committee shall administer the Plan in accordance with its
terms, and shall have the sole discretion and authority necessary to carry out the administration
of the Plan. With respect to Participants whose position is below the Senior Vice President level,
the Committee may delegate, to one or more individuals, some or all of its authority to administer
the Plan and to permit such individuals to have the discretion necessary to carry out the
administration of the Plan to the extent that award and payment of Awards to such Participants are
not subject to Section 162(m) of the Code. Such authority shall include the authority to:

          (a) Select the Eligible Individuals eligible to participate in the Plan for each Performance
Period or portion thereof;

          (b) To determine eligibility for and the type and size of an Award granted under the Plan;

          (c) To grant Awards to, and to enter into Award Agreements with, Participants;

          (d) Determine the Performance Goals applicable to the payment of Incentive Awards and
Long-Term Incentive Awards, and the amount of the Incentive Awards and Long-Term Incentive Awards
payable upon the Participants’ achievement of the applicable Performance Goals;

          (e) To the extent consistent with the Plan, to impose such terms, limitations, restrictions,
and conditions upon the receipt of Incentive Awards and Long-Term Incentive Awards as it deems
appropriate, and, to the extent consistent with the Plan, to grant waivers of Plan terms,
conditions, restrictions, and limitations;

          (f) To accelerate the vesting conditions of any Award payable in Stock when such action would
be in the best interests of the Company;

          (g) Interpret the Plan, make any necessary factual determinations under the Plan, adopt,
amend, and rescind administrative guidelines and other rules and regulations relating to the Plan;

          (h) Correct any defect or omission or reconcile any inconsistency in this Plan or any award of
payment hereunder, and

          (i) Make all other necessary determinations and take all other actions necessary or advisable
for the implementation and administration of the Plan.

          (j) The Committee’s determinations on matters within its authority shall be conclusive and
binding upon all parties (including Participants’ heirs, successors and legal representatives).

     7.2 Liability; Indemnification. 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, except in
circumstances involving his or her bad faith, gross negligence or willful misconduct, or 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 the Plan have been delegated. The Company shall indemnify
members of the Committee and any agent of the Committee who is an employee of the Company, against
any and all liabilities or expenses to which they may be

6

 

subjected by reason of any act or failure to act with respect to their duties on behalf of the
Plan, except in circumstances involving such person’s bad faith, gross negligence or willful
misconduct.

Section 8

AMENDMENT, MODIFICATION AND TERMINATION

     The Committee, in its sole discretion, without notice, at any time and from time to time,
may in writing modify or amend, in whole or in part, any or all of the provisions of the Plan, or
suspend or terminate it entirely; provided, however, that no such modification, amendment,
suspension, or termination may, without the consent of a Participant (or his or her beneficiary in
the case of the death of the Participant), reduce the right of a Participant (or his or her
beneficiary, as the case may be) to a payment or distribution hereunder to which he or she is
otherwise entitled.

Section 9

MISCELLANEOUS

     9.1 Governing Law. The Plan, and all agreements hereunder, shall be governed by and
construed in accordance with the laws of the State of Illinois (without regard for its conflict of
laws rules).

     9.2 Withholding Taxes. The Company shall have the right to deduct from all payments under the
Plan any Federal, state, or local taxes required by law to be withheld with respect to such
payments.

     9.3 Shareholder Approval. This Plan, and any Awards hereunder to be granted after the annual
meeting of shareholders immediately succeeding the date that this Plan is adopted by the Board, are
made subject to the condition that the Plan be approved by the shareholders of the Company. If the
Plan is not so approved, it and such Awards shall be null and void and without effect. Shareholder
approval shall not be required for Awards granted prior to such annual meeting. If required by
Section 162(m) of the Code or any successor regulation or rule, the material terms of performance
goals as described in Section 4.1 shall be disclosed to and reapproved by the shareholders of the
Company no later than the first shareholder meeting that occurs in the 5th year following the year
in which the Company’s shareholders previously approved such performance goals.

     9.4 Costs of the Plan. All costs of implementing and administering the Plan shall be borne by
the Company.

     9.5 Unsecured General Creditor. Participants and their heirs, successors and assigns shall
have no legal or equitable rights, interest or claims in any property or assets of the Company by
virtue of participation in the Plan. The Company’s obligation under the Plan shall be that of an
unfunded and unsecured promise of the Company to pay money in the future.

     9.6 Entire Agreement. Except to the extent an Employment Agreement expressly provides for
additional or other terms pertaining to a Participant’s or beneficiary’s incentive incentive
compensation, this Plan (as may be amended from time to time) and Award Agreements thereunder are
the entire agreement between the Company and the Participants and beneficiaries regarding the Plan.
No oral statement regarding the Plan may be relied upon by any Participant or beneficiary.

     9.7 Limitations of Liability. The liability of the Company under this Plan is limited to the
obligations expressly set forth in the Plan, and no term or provision of the Plan may be construed
to impose any further or additional duties, obligations or costs on the Company or the Committee
not expressly set forth in the Plan.

7

 

     9.8 Successors. All obligations of the Company under the Plan shall be binding upon and inure
to the benefit of any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

     9.9 Captions, Gender and Number. The descriptive headings in this Plan are inserted for
convenience of reference only and are not intended to be part of or to affect the meaning or
interpretation of the Plan. The use of the word “including” in this Plan shall be by way of
example rather than by limitation. Except where otherwise indicated by the context, any masculine
term used herein also shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.

     9.10 Headings. The headings and captions contained herein are provided for convenience only,
and are not to be used to in the interpretation or construction of any provision contained in the
Plan.

     9.11 Severability. In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.

     IN WITNESS WHEREOF, the Company has executed this Plan by its duly authorized officers as of
this ___day of March, 2007, effective the effective date set forth in Section 1.2.

	 	 	 	 	 	 	 
	 	 	APAC CUSTOMER SERVICES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

8

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