Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.12

EMPLOYMENT SECURITY AGREEMENT

This Employment Security Agreement (the “Agreement”) is entered into as of this
 _____ 
day of

 _____ 
, by and between APAC Customer Services, Inc. (the “Employer”) and

 _____ 
(the “Executive”).

WITNESSETH:

WHEREAS, the Executive is currently employed by the Employer as its
 _____ 
;
and

WHEREAS, in the event of a change in control of the Employer, the Employer desires to provide
certain security to the Employer and the Executive, and to retain the Executive’s continued
devotion of the Executive’s business time and attention to the Employer’s affairs; and

WHEREAS, the Executive and the Employer desire to enter into this Agreement, which sets forth
the terms of the security the Employer is providing the Executive with respect to the Executive’s
employment in the event of a change in control of the Employer;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Employer and the Executive agree as follows:

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings
set forth below:

(a) “Base Salary” shall mean the higher of the Executive’s annual base salary at the rate in
effect on (i) the date of a Change in Control, or (ii) the date the Executive’s Employment
terminates without regard to any reduction made in connection with an event constituting Good
Reason hereunder.

(b) “Bonus” shall mean the bonus based on the Executive’s Base Salary that is payable to the
Executive under the Employer’s annual incentive bonus plan, as in effect from time to time or under
a successor annual incentive plan, at the target payout level in effect on the date the Executive’s
Employment terminates without regard to any reduction made in connection with an event constituting
Good Reason hereunder or on the date of a Change in Control, whichever produces a greater result.

(c) “Cause” shall exist only if:

	 	(i)	 	The Executive is grossly negligent or engages in
gross misconduct in the performance of his employment duties;

	 
	 	(ii)	 	The Executive willfully disobeys the lawful
directions received from the Company or from the person to whom the
Executive directly reports or of established policies of the Company; or

 

 

 

	 	(iii)	 	The Executive commits a crime involving fraud or
moral turpitude that can reasonably be expected to have an adverse effect
on the business, reputation or financial situation of the Employer.

(d) “Change in Control” shall mean any of the following events:

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

	 
	 	(ii)	 	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;

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

	 
	 	(iv)	 	As the result of, or in connection with, any
contested election for the Board of Directors 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

	 
	 	(v)	 	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)(l)(i) (as in effect
on the date hereof) pursuant to the Exchange Act.

Notwithstanding the foregoing, (A) 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

 

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Entities”) do not control, directly or indirectly, at least twenty-seven percent (27%) of the
resulting entity, and (B) 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
“33-1/3%” shall be substituted for “50%” in clauses (i) and (v) of this Section 2(d), and “66-2/3%”
shall be substituted for “50%” in clause (ii) of this Section 2(d).

(e) “Disability” shall mean, to the extent such term is not defined in an Employment
Agreement, if any, a physical or mental condition that entitles the Executive to benefits under the
Employer-sponsored long term disability plan in which the Executive participates.

(f) “Employment” shall mean being in the employ of the Employer.

(g) “Employment Agreement” shall mean a written agreement between the Executive and the
Employer covering the terms and conditions of Executive’s employment with the Employer.

(h) “Good Reason” shall exist if, after notice by the Executive within 30 days of the
existence of one of the following conditions, such notice given to the Employer and providing a
thirty (30) day opportunity by the Employer to cure (during which it does not cure the condition):

	 	(i)	 	The principal place of work (not including regular
business travel) is relocated by more than fifty (50) miles;

	 
	 	(ii)	 	The Executive’s duties, responsibilities or authority
as an executive employee are materially reduced or diminished from those
in effect immediately prior to a Change in Control without the Executive’s
written consent, provided that any reduction or diminishment in any of the
foregoing resulting merely from the acquisition of the Employer and its
existence as a subsidiary or division of another entity shall not be
sufficient to constitute Good Reason;

	 
	 	(iii)	 	Executive’s base salary is reduced; or

	 
	 	(iv)	 	The Employer violates the material terms of this
Agreement, or an employment agreement, if any.

2. Term. The term of this Agreement shall be the period commencing on the effective date first
set forth above and terminating on the date the Executive’s employment with the Employer is
terminated; provided that, if the Executive’s employment is terminated following a Change in
Control under the circumstances described in Section 3, the term shall continue in effect until all
payments and benefits have been made or provided to the Executive hereunder.

 

3

 

In the event of a liquidation, dissolution, consolidation or merger of the Employer or
transfer of all or a significant portion of its assets, Employer will cause a successor or
successors (by merger, consolidation or otherwise) to which all or a significant portion of its
assets have been transferred to assume (either by operation of law or otherwise) all duties and
obligations of the Employer under this Agreement and any employment agreement.

3. Benefits Upon Termination of Employment. If (i) the Employer terminates the Executive’s
Employment without Cause coincident with or at any time within 12 months following a Change in
Control; or (ii) the Executive terminates the Executive’s Employment by resignation due to an event
constituting Good Reason that occurs coincident with or at any time within 12 months following a
Change in Control, the Executive shall be entitled to receive the following:

(a) Severance Pay. The Employer shall pay to the Executive an amount equal to [12 FOR VPS and
18 FOR SVPS] months of the Executive’s Base Salary and [1 for VPS and 1-1/2 FOR SVPS] times the
Executive’s Bonus. Subject to Subsection (d) below, payment shall be made in a lump sum within
thirty (30) days after termination of the Executive’s Employment.

(b) Stock Options. To the extent the Executive has any outstanding option or options to
purchase common stock of the Employer as of the date of the Change in Control, the exercisability
of such options shall be determined in accordance with the terms of the Employer’s stock option
plan then in effect, and/or a written agreement entered into by the Employer and the Executive,
which covers the terms and conditions of the exercise of such option or options.

(c) Health Benefits. The Employer shall provide to the Executive, the Executive’s spouse or
beneficiary continued medical, dental, life, disability coverages and such other benefits as
provided under any other welfare plans or programs in which he participated immediately prior to
his termination for a period of [12 FOR VPS and 18 FOR SVPS] months on the same basis as provided
to other employees as of the date of termination. Following such period, the Employer shall make
available to such persons any benefit continuation or conversion of rights otherwise provided at
the time an employee’s employment terminates (without offset for the coverage provided pursuant to
the previous sentence), under the Employer’s established welfare plans.

(d) Notwithstanding anything in this Agreement to the contrary, if Executive is deemed as of
the date of Executive’s termination of Employment to be a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Internal Revenue Code (the “Code”), to the extent delayed
commencement of any portion of the severance payments to which Executive is entitled under this
Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code, such portion of the severance payments will not be provided to Executive prior to the
earlier of (1) the expiration of the six-month period measured from the date of the Executive’s
“separation from service” with the Company (as such term is defined in the Treasury Regulations
issued under Section 409A of the Code) or (2) Executive’s death. Upon the expiration of the
applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred
pursuant to this Section 3 shall be paid in a lump sum to Executive, and any remaining
payments due shall be paid as otherwise provided herein.

 

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In addition, to the extent that an Employment Agreement, if any, or such other written
agreement between the Executive and the Employer, expressly covers the terms of severance payable,
if any, and such other benefits available to the Executive upon termination of his Employment
following a Change in Control, such Employment Agreement or other agreement shall govern and
supersede the terms of this Agreement if such severance payable or other benefits are more
favorable to the Executive than those provided in this Agreement.

4. No Setoff.

(a) The payments and benefits made or provided to the Executive, the Executive’s spouse or
other beneficiary under this Agreement shall not be reduced by the amount of any claim of the
Employer against the Executive or the Executive’s spouse or other beneficiary for any debt or
obligation of the Executive or the Executive’s spouse or other beneficiary to the Employer.

(b) The Executive shall have no duty to seek employment following termination of Employment or
otherwise to mitigate damages. The amounts or benefits payable or available to the Executive, the
Executive’s spouse or other beneficiary under this Agreement shall not be reduced by any amount the
Executive may earn or receive from employment with another employer or from any other source.

5. Existing Rights. Any payments and benefits under this Agreement are in lieu of benefits to
which the Executive may be entitled under any severance plan or policy of the Employer, but are in
addition to any other benefits due to the Executive, the Executive’s spouse or other beneficiaries
from the Employer, including, but not limited to, payments under any other welfare or retirement
plan maintained by the Employer in which the Executive is or was eligible to participate. No
provision in this Agreement shall be construed to reduce or impair the Executive’s rights and
benefits under such welfare or retirement plans.

6. Other Termination.

(a) Termination Before Change in Control. If the Executive’s Employment is terminated for any
reason before a Change in Control, severance payments, if any, due to the Executive shall be
determined under the Employer’s severance plans or policies then in effect, and/or the Executive’s
Employment Agreement, if any. In such circumstances, the Executive shall not be entitled to any
payments or benefits under this Agreement, and the Employer shall have no further obligation to the
Executive hereunder, except to the extent provided under any welfare, retirement or other plan,
policy or arrangement maintained by the Employer in which the Executive is or was eligible to
participate.

 

5

 

(b) Termination for Cause or Without Good Reason. If, following a Change in Control, (i) the
Executive’s Employment is terminated for Cause by the Board of Directors acting in good faith by written notice by the Employer to the Executive
specifying the event relied upon for such termination, or (ii) the Executive terminates the
Executive’s Employment without Good Reason, the Executive shall receive the Executive’s Base Salary
at the rate then in effect on the date the, Executive’s Employment terminates paid through the date
of termination. In such circumstances, the Executive shall not be entitled to any payments or
benefits under this Agreement, and the Employer shall have no further obligation to the Executive
hereunder, except to the extent provided under any welfare, retirement or other plan, policy or
arrangement maintained by the Employer in which the Executive is or was eligible to participate.

(c) Death or Disability. If the Executive’s Employment is terminated by reason of death or
Disability, the Executive, the Executive’s spouse or other beneficiary, as the case may be, shall
not be entitled to any payments or benefits under this Agreement, and the Employer shall have no
further obligation to the Executive hereunder except to the extent provided under any welfare,
retirement or other plan, policy or arrangement maintained by the Employer in which the Executive
is or was eligible to participate.

7. Section 280G. Notwithstanding any provision of this Agreement to the contrary, in the event
that:

(a) The aggregate payments or benefits to be made or afforded to the Executive under the this
Agreement or from the Company in any other manner (the “Termination Benefits”) would be deemed to
include an “excess parachute payment” under Section 280G of the Code, or any successor thereto, and

(b) If such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the
value of which is one dollar ($1.00) less than the amount that would result in an “excess parachute
payment” under Section 280G of the Code, and the Non-Triggering Amount would be greater than the
aggregate value of Termination Benefits (without such reduction) minus the amount of tax required
to be paid by Executive thereon by Section 4999 of the Code, then the Termination Benefits shall be
reduced so that the Termination Benefits are not more than the Non-Triggering Amount. The
application of said Section 280G, and the allocation of the reduction required by this Section,
shall be determined by the Company’s auditors.

8. Beneficiaries. If the Executive is entitled to payments and benefits under the
circumstances described above in Section 3, but dies before all amounts payable and benefits
available thereunder have been paid or provided, the remaining payments and benefits shall be made
or provided to the Executive’s surviving spouse, if any, or other beneficiary designated in a
writing delivered to the Employer (and in such form as is prescribed by the Employer). If the
Executive has no surviving spouse, and has not designated a beneficiary, the remaining payments
shall be made to the Executive’s estate.

 

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9. Full Satisfaction; Waiver and Release. As a condition to receiving the payments and
benefits hereunder, the Executive shall execute a document in customary form, releasing and waiving
any and all claims, causes of actions and the like against the Employer, their respective
successors, shareholders, officers, trustees, agents and employees, regarding all matters relating
to the Executive’s service as an employee of the Employer and to the termination of such
relationship. Such claims include, without limitation, any claims arising under the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”); Title VII of the Civil Rights
Act of 1964, as amended; the Civil Rights Act of 1991, as amended; the Equal Pay Act of 1962, as
amended; the Americans With Disabilities Act of 1990, as amended; the Family Medical Leave Act, as
amended; the Employee Retirement Income Security Act of 1974, as amended; or any other federal,
state or local statute or ordinance, but exclude claims arising under the ADEA to challenge the
provisions of this Section 8, and any claims that arise out of an asserted breach of the terms of
this Agreement or claims related to the matters described in Section 5.

10. Assignment. Except as provided above in Section 8, the Employer may not assign this
Agreement, or any rights, duties or obligations hereunder, except that the Employer’s rights,
duties, and obligations shall be binding obligations of any successor, as provided in Section 2. No
interest of the Executive (or the Executive’s spouse or other beneficiary) nor any right to receive
any payment or distribution hereunder shall be subject to sale, transfer, assignment, pledge,
attachment or garnishment or otherwise be assigned or encumbered. No such interest or right shall
be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or
other claims against, the Executive (or the Executive’s spouse or other beneficiary), including
claims for alimony, child support, separate maintenance and claims in bankruptcy.

11. Source of Payment. The rights created under this Agreement are unfunded promises to
provide severance pay and other benefits described herein in the event of the termination of the
Executive’s Employment under the circumstances described above in Section 3. The Employer shall not
segregate assets for purposes of payment for any amounts due hereunder, nor shall any provision
contained herein be interpreted to require the Employer to segregate assets for purposes of
providing payment of any benefit hereunder. The Executive, the Executive’s spouse, or other
beneficiary shall not have any interest in or right against any specific assets of the Employer,
and any rights shall be limited to those of a general unsecured creditor.

12. Miscellaneous.

(a) Entire Agreement; Amendment. This Agreement contains the entire Agreement and
understanding between the Employer and the Executive and, except for any employment agreement and
stock option agreements, supersedes all other agreements, written or oral, relating to the payment
of severance or any other benefit in the event of a Termination of Employment Without Cause or with
Good Reason in the event of a Change of Control, as described herein. Any amendment or modification
of the terms of this Agreement must be in writing and signed by the Employer and the Executive to
have any binding effect upon the parties.

 

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(b) Applicable Law. Except to the extent preempted by federal law, this Agreement is governed
by, and shall be construed and interpreted in accordance with the substantive laws of the State of
Illinois, not including the choice of law provisions thereof.

(c) No Employment Rights. Nothing contained herein shall be construed to confer upon the
Executive any right to continue in the employment of the Employer, or to limit the right of the
Employer to terminate the Executive’s employment at any time, with or without Cause, subject to the
Executive’s rights hereunder with respect to such termination.

(d) Notices. All notices under this Agreement shall be in writing and shall be deemed to have
been made when delivered or mailed by registered, or certified mail, or by a nationally recognized
overnight delivery service, postage or charges prepaid. All notices to the Company shall be sent
to:

APAC Customer Services, Inc.

Six Parkway North Center

First Floor

Deerfield, IL 60015

Attention: Chief Executive Officer

All notices to the Executive shall be sent to the Executive’s last known address on
the Company’s records, or such other address as the Executive may furnish to the
Company.

(e) Severability. If any provision contained herein shall be found invalid an unenforceable,
the remaining provisions of this Agreement shall remain in full force and effect.

(f) Successors. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, representatives, and successors.

(g) Headings. The headings and subheadings contained in this Agreement are provided solely for
convenience of reference and shall not be construed or interpreted in any way as affecting the
meaning of any provision of this Agreement.

* * *

 

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IN
WITNESS WHEREOF, the Executive and the Employer have executed
this Agreement as of the date set forth above.

	 	 	 	 	 
	 	 	APAC CUSTOMER SERVICES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	[Name]

 

9Filed by Bowne Pure Compliance

 

Exhibit 10.13

PERSONAL AND CONFIDENTIAL

August 6, 2007

Mr. George Hepburn

1969 Spruce Drive

Glenview, IL 60025

Dear George:

This letter amends your offer letter, dated September 6, 2005 (the “Letter”), for documentary
compliance with recent legislative and regulatory changes affecting nonqualified deferred
compensation arrangements. These amendments affect the terms of your severance benefits, by
bringing the definition of “Agreed Reason” into the safe harbor provided by Treasury Regulations,
and by delaying payment for 6 months if necessary in the event that you are considered a “specified
employee” on the date of your separation from service and any portion of your severance benefits
are considered nonqualified deferred compensation. These changes are intended to protect your
severance benefits from potential excise taxes under the new nonqualified deferred compensation
arrangement rules.

Specifically, section 8 of the Letter is replaced by the following new section 8, effective upon
your execution of this letter.

	8.	 	Except for (1) your termination of employment in connection with a “Change in Control” as
defined in the Employment Security Agreement referenced above, or (2) your termination of
employment by APAC “for cause” (defined as “(i) gross misconduct or gross negligence in the
performance of your employment duties; (ii) willful disobedience by you of the lawful
directions received from the Company or from the person to whom you directly report or of
established policies of the Company; or (iii) commission by you of a crime involving fraud or
moral turpitude that can reasonably be expected to have an adverse effect on the business,
reputation or financial situation of the Company”), or (3) your termination as a result of
your resignation from employment with the Company other than for Agreed Reason, and provided
you sign a then-current Waiver & Release Agreement, APAC will pay you severance equal to (x)
the monthly amount of your then-current Base Salary plus (y) the amount necessary to reimburse
you for payments you make in connection with your exercise of your rights under COBRA to
continue your and your dependants’ medical and dental benefits in accordance with the terms of
the Company’s welfare plans as may be in effect from time to time during each of the following
twelve (12) months following such termination.

 

 

 

G. Hepburn

August 6, 2007

Page Two of Three

Resignation for “Agreed Reason” shall mean a resignation by you prior to any Change in
Control if, after giving notice to the Company within thirty days following the initial
existence of one of the following conditions and providing a thirty day opportunity for the
Company to cure the condition:

	 	(1)	 	without your written consent, (i) your duties and
responsibilities are materially reduced or diminished from those in effect on
your commencement of employment, or (ii) you no longer report to the Chief
Executive Officer of the Company, and instead are required to report to a
supervisor with materially diminished authority, duties or responsibilities
compared to that of the Chief Executive Officer of the Company, or

	 
	 	(2)	 	your base salary is reduced and not in accordance with a
compensation reduction applicable to all senior executives’ salaries generally,
or

	 
	 	(3)	 	any other material breach of the terms of the Letter or the
terms of your employment in general.

Severance payments will be made in accordance with either this agreement or the prevailing
change of control agreement, whichever is more advantageous to you; but in no event will
severance payments be made under both agreements. Such payments will be made on APAC’s
customary payroll dates in installments equal to your regular biweekly salary, less all
applicable withholding taxes. You are not required to mitigate the amount of any severance
payment provided for in this letter by seeking other employment or otherwise, nor shall the
amount of any payment or benefit provided for in this letter be reduced by any compensation,
income or benefit you may receive from any other source. In addition, no payments to you
under this letter may be subject to any offset or setoff due to any claim the Company or its
affiliates may have against you.

Notwithstanding the foregoing, if you are deemed at the time of your separation from service
to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Internal
Revenue Code (the “Code”), to the extent delayed commencement of any portion of the
severance payments to which you are entitled under this agreement is required in order to
avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of
your severance payments will not be provided to you prior to the earlier of (1) the
expiration of the six-month period measured from the date of the your “separation from
service” with the Company (as such term is defined in the Treasury Regulations issued under
Section 409A of the Code) or (2) your death. Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to this paragraph 8
shall be paid in a lump sum to you, and any remaining payments due shall be paid as
otherwise provided herein.

 

 

 

G. Hepburn

August 6, 2007

Page Three of Three

The other terms of Letter remain in full force and effect. If you have any questions about this
change, please don’t hesitate to contact me.

Sincerely,

/s/ PAMELA R. SCHNEIDER

APAC CUSTOMER SERVICES, INC.

	 	 	 	 	 
	 	ACCEPTED BY:

 	 
	 	                                              /s/ GEORGE HEPBURN
 	 
	 	George Hepburn 	 

	 	 	 	 	 	 	 
	 

	 	Date:

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