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EXHIBIT 10.1
APAC CUSTOMER SERVICES, INC.
MANAGEMENT INCENTIVE PLAN
(EFFECTIVE JANUARY 3, 2000)
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TABLE OF CONTENTS
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SECTION 1 ESTABLISHMENT OF THE PLAN.......................................................................1
SECTION 2 DEFINITIONS.....................................................................................1
2.1 Annual Incentive Award..........................................................................1
2.2 Base Salary.....................................................................................1
2.3 Board...........................................................................................1
2.4 Cause...........................................................................................1
2.5 Change in Control...............................................................................1
2.6 Code............................................................................................2
2.7 Committee.......................................................................................2
2.8 Company.........................................................................................3
2.9 Disability......................................................................................3
2.10 Effective Date..................................................................................3
2.11 Eligible Individual.............................................................................3
2.12 Employment Agreement............................................................................3
2.13 Good Reason.....................................................................................3
2.14 Participant.....................................................................................4
2.15 Performance Goals...............................................................................4
2.16 Plan............................................................................................4
2.17 Plan Year.......................................................................................4
2.18 Retirement......................................................................................4
SECTION 3 ELIGIBILITY AND PARTICIPATION...................................................................4
3.1 General.........................................................................................4
3.2 Partial Year Participation......................................................................5
3.3 No Right to Participate.........................................................................5
SECTION 4 ANNUAL INCENTIVE OPPORTUNITY....................................................................5
4.1 Performance Goals...............................................................................5
4.2 Annual Incentive Awards.........................................................................6
SECTION 5 PAYMENT OF ANNUAL INCENTIVE AWARD...............................................................6
5.1 Form and Timing of Payment......................................................................6
5.2 Payment of Partial Awards.......................................................................6
SECTION 6 TERMINATION OF EMPLOYMENT.......................................................................7
6.1 Termination for Cause...........................................................................7
6.2 Termination by Death, Disability or Retirement..................................................7
6.3 Other Termination...............................................................................7
6.4 Change in Control Termination...................................................................7
SECTION 7 RIGHTS OF PARTICIPANTS..........................................................................8
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7.1 No Employment Rights............................................................................8
7.2 Nontransferability..............................................................................8
SECTION 8 ADMINISTRATION..................................................................................8
SECTION 9 AMENDMENT AND MODIFICATION......................................................................9
SECTION 10 MISCELLANEOUS...................................................................................9
10.1 Governing Law...................................................................................9
10.2 Withholding Taxes...............................................................................9
10.3 Shareholder Approval............................................................................9
10.4 Costs of the Plan...............................................................................9
10.5 Unsecured General Creditor......................................................................9
10.6 Entire Agreement...............................................................................10
10.7 Limitations of Liability.......................................................................10
10.8 Successors.....................................................................................10
10.9 Gender and Number..............................................................................10
10.10 Headings.......................................................................................10
10.11 Severability...................................................................................10
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APAC CUSTOMER SERVICES, INC.
MANAGEMENT INCENTIVE PLAN
SECTION 1
ESTABLISHMENT OF THE PLAN
APAC Customer Services, Inc. (the "Company") has established the APAC
Customer Services, Inc. Management Incentive Plan, as set forth herein,
effective as of January 3, 2000 (the "Plan"), to reward certain eligible
employees of the Company who help achieve the Company's annual performance goals
and who achieve specified individual goals.
SECTION 2
DEFINITIONS
2.1 ANNUAL INCENTIVE AWARD means the actual bonus earned during a Plan
Year by a Participant, as determined by the Committee at or after the end of the
Plan Year. A Participant's Annual Incentive Award shall be stated as a
percentage of the Participant's Base Salary.
2.2 BASE SALARY means the annual base pay rate in effect at the end of
the Plan Year.
2.3 BOARD means the Board of Directors of the Company.
2.4 CAUSE means:
(a) Gross negligence or gross misconduct in the performance of the
Participant's employment duties;
(b) Willful disobedience of the lawful directions received from the
Company or from the person to whom the Participant directly reports or of
established policies of the Company; or
(c) Commission 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.
2.5 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;
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(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 "33-1/3%" shall be substituted for "50%" in clauses (a)
and (e) of this Section 2.5, and "66-2/3%" shall be substituted for "50%" in
clause (b) of this Section 2.5.
2.6 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.
2.7 COMMITTEE means the Compensation Committee of the Board designated
to administer the Plan in accordance with Section 8, which shall consist of two
or more "outside directors" within the meaning of Section 162(m) of the Code,
who are appointed by the Board.
2.8 COMPANY means APAC Customer Services, Inc., a Delaware corporation,
and any successor thereto.
2.9 DISABILITY means, to the extent such term is not defined in an
Employment Agreement, if any, a physical or mental condition that entitles the
Participant to benefits under the Company-sponsored long term disability plan
covering the Participant.
2.10 EFFECTIVE DATE means January 3, 2000.
2.11 ELIGIBLE INDIVIDUAL means the Chief Executive Officer, an
Executive Vice President, a Senior Vice President, Vice President, Director,
Site Director, Business Unit Director, Manager or Center Business Manager, of
the Company or such other individual designated by the Committee.
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2.12 EMPLOYMENT AGREEMENT means one or more written agreements entered
into by the Participant and the Employer covering the terms and conditions of
the Participant's employment with the Company, including written agreements
covering the terms and conditions of severance payable, if any, upon a
termination of the Participant's employment.
2.13 GOOD REASON means, after notice by the Participant to the Company
and a fifteen (15) day opportunity by the Company to cure (during which it does
not cure the condition),
(a) The Participant's principal place of work (not including regular
business travel) is relocated by more than fifty (50) miles;
(b) The Participant'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 Participant's written
consent; provided that any reduction or diminishment in any of the foregoing
resulting merely from the acquisition of the Company and its existence as a
subsidiary or division of another entity shall not be sufficient to constitute
Good Reason;
(c) The compensation received by the Participant is reduced in the
aggregate, and such reduction is not remedied within thirty (30) days of the
Participant's notice to the Company thereof;
(d) A determination is made by the Participant in good faith that as a
result of a Change in Control, and a change in circumstances thereafter
significantly affecting his or her position, he or she is unable to carry out
the authorities, powers, functions or duties attached to his or her position and
the situation is not remedied within thirty (30) days after receipt of the
Company of written notice from the Participant of such determination;
(e) The Company violates the material terms of the Plan with respect to
the Participant; or
(f) There is a liquidation, dissolution, consolidation or merger of the
Company or transfer of all or a significant portion of its assets unless a
successor or successors (by merger, consolidation or otherwise) to which all or
a significant portion of its assets have been transferred shall have assumed
(either by operation of law or otherwise) all duties and obligations of the
Company under the Plan.
2.14 PARTICIPANT means an Eligible Individual who has been designated
as eligible to participate under Section 3.
2.15 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 Annual Incentive Award and the amount of an Annual Incentive
Award.
2.16 PLAN means the APAC Customer Services, Inc. Management Incentive
Plan, as set forth herein, and amended from time to time.
2.17 PLAN YEAR means the Company's fiscal year.
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2.18 RETIREMENT means, to the extent such term is not defined in an
Employment Agreement, a Participant's termination of employment at or after the
"normal retirement date" as provided under the Company's qualified pension plan
in which the Participant is participating.
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 Plan
Year. 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 Annual Incentive Award opportunities for the relevant Plan Year within
the first 90 days of the Plan Year.
3.2 PARTIAL YEAR PARTICIPATION. In the event that an Eligible
Individual becomes eligible to participate in the Plan subsequent to the
commencement of a Plan Year (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 Plan Year), then such individual's Annual Incentive
Award shall be determined using his or her Base Salary multiplied by a fraction,
the numerator of which is the number of days in such year that the Participant
was eligible to participate in the Plan and the denominator of which is 365.
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 Plan Year, despite having previously
participated in this Plan or another incentive plan of the Company.
SECTION 4
ANNUAL INCENTIVE OPPORTUNITY
4.1 PERFORMANCE GOALS.
(a) COMPANY PERFORMANCE GOALS. Prior to the beginning of the Plan Year,
or as soon as practicable thereafter, the Committee, in its discretion, and
subject to the approval of the Board, shall establish Performance Goals for the
Company, the Company's business units and/or for each Participant (based on his
or her position in the Company). 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
Annual Incentive Award. The Performance Goals may be based upon both financial
and non-financial goals. Financial goals shall be measured by both revenue and
profitability, each of which shall be weighted depending upon the organizational
unit of the Company, as determined by the Committee. Unless the Committee
determines otherwise, earnings per share shall be used to measure profitability
for the Company. If the Committee establishes Performance Goals for the
Company's business units to achieve for a Plan Year, the Committee, in its
discretion, shall determine the profitability measures for such business units.
(b) INDIVIDUAL PERFORMANCE GOALS. If the Committee determines that the
Annual Incentive Award shall be attributable, in part, to a Participant's
achievement of individual Performance Goals, such achievement shall be
determined by the person to whom the Participant
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directly reports, subject to the approval of the Committee. Notwithstanding any
provision of the Plan to the contrary, a Participant shall not receive payment
of an Annual Incentive Award if the Participant does not achieve a "meets
expectations" or higher performance appraisal rating under the Company's
performance management plan or program.
(c) ADJUSTMENT OF PERFORMANCE GOALS. The Committee shall have the right
to adjust the Performance Goals and the Annual Incentive Award opportunities
(either up or down) during a Plan Year 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 Plan Year of less than twelve (12)
months, the Committee shall have the right to adjust the Performance Goals and
the Annual Incentive Award opportunities, in its sole discretion.
4.2 ANNUAL INCENTIVE AWARDS. As soon as practicable after the end of
the Plan Year, the Committee, in its discretion, shall determine the amount of
each Participant's Annual Incentive Award. Unless the Committee determines
otherwise, Participants shall receive an Annual Incentive Award based upon their
position and percentage achievement of the Performance Goal or Goals established
for such position in accordance with the following table. Notwithstanding the
foregoing, if a Participant is promoted or demoted during the Plan Year, the
Annual Incentive Award will equal the sum of prorated amounts for each position
that the Participant was in during the Plan Year based on his or her performance
for the whole Plan Year and the number of days in such year that the Participant
served in each position.
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ANNUAL INCENTIVE AWARD
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POSITION THRESHOLD LEVEL TARGET LEVEL MAXIMUM LEVEL
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Chief Executive Officer 30% of Base Salary 60% of Base Salary 90% of Base Salary
Executive Vice Presidents 25% of Base Salary 50% of Base Salary 75% of Base Salary
Senior Vice Presidents 20% of Base Salary 40% of Base Salary 60% of Base Salary
Vice Presidents 15% of Base Salary 30% of Base Salary 45% of Base Salary
Directors, SBU Directors, and
Site Directors 10% of Base Salary 20% of Base Salary 30% of Base Salary
Managers and Center Business
Managers 7.5% of Base Salary 15% of Base Salary 22.5% of Base Salary
------------------------------- ---------------------------- ---------------------------- ----------------------------
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Annual Incentive Awards for percentage achievement of Performance Goals
between the threshold, target and maximum levels shall be determined by straight
line interpolation.
SECTION 5
PAYMENT OF ANNUAL INCENTIVE AWARD
5.1 FORM AND TIMING OF PAYMENT. As soon as practicable after the end of
each Plan Year (and, generally, during March), the Company shall pay to each
Participant a lump sum cash payment equal to the Participant's Annual Incentive
Award for the applicable Plan Year.
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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 Plan Year, the Committee may, in its discretion, pay a partial award
for the portion of the Plan Year the individual was a Participant.
SECTION 6
TERMINATION OF EMPLOYMENT
6.1 TERMINATION FOR CAUSE. In the event the Company terminates the
Participant's employment for Cause, the Participant shall forfeit all rights to
receive an Annual Incentive Award for the Plan Year in which the Participant's
employment terminates.
6.2 TERMINATION BY DEATH, DISABILITY OR RETIREMENT. Unless an
Employment Agreement specifically provides for the treatment of an annual
incentive award under the circumstances, in the event that the Participant's
employment with the Company terminates by reason of death, Disability, or
Retirement during a Plan Year, the Participant (or his or her beneficiary or
estate, as described below) shall be entitled to receive an annual incentive
award for such Plan Year equal to the product of (i) a Target Level Annual
Incentive Award times (ii) a fraction, the numerator of which is the number of
days that the Participant was participating hereunder in such year through the
day of termination and the denominator of which is 365. Payment under this
Section 6.2 may be made in accordance with Section 5.1 or sooner, as determined
by the Committee in its discretion.
In the event a Participant's employment with the Company terminates by
reason of death, payments under this Section 6.2 shall be made to the
Participant's surviving spouse, if any, or other beneficiary designated in a
writing delivered to the Company (and in such form as is prescribed by the
Company). If the Participant has no surviving spouse, and has not designated a
beneficiary, the remaining payments shall be made to the Participant's estate.
6.3 OTHER TERMINATION. Unless an Employment Agreement specifically
provides for the treatment of an annual incentive award under the circumstances,
it is a condition to the receipt of an Annual Incentive Award that the
Participant be employed or that the Participant's employment terminated because
of death, Disability or Retirement, and the Participant shall not be entitled to
receive an Annual Incentive Award for the Plan Year in which the Participant's
employment terminates unless such termination is because of death, Disability or
Retirement. However, the Committee may, in its discretion, pay a prorated award
for the Plan Year in which the Participant's employment terminates other than
death, Disability or Retirement, in an amount determined by the Committee.
6.4 CHANGE IN CONTROL TERMINATION. Unless an Employment Agreement
specifically provides for the treatment of an annual incentive award under the
circumstances, in the event that the Company terminates a Participant's
employment without Cause coincident with or after a Change in Control, or, the
Participant resigns from employment with the Company due to an event
constituting Good Reason that occurs coincident with or after a Change in
Control, the Participant shall be entitled to receive an annual incentive award
for such Plan Year equal to the product of (i) a Target Level Annual Incentive
Award, based on the highest Base Salary rate paid to the Participant for such
Plan Year, times (ii) a fraction, the
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numerator of which is the number of days in such year through the day of
termination and the denominator of which is 365.
SECTION 7
RIGHTS OF PARTICIPANTS
7.1 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.
7.2 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.
SECTION 8
ADMINISTRATION
The Committee shall administer the Plan in accordance with its terms,
and shall have the 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. Such authority shall include the authority to:
(a) Select the Eligible Individuals eligible to participate in the Plan
for each Plan Year or portion thereof;
(b) Determine the Performance Goals applicable to the payment of Annual
Incentive Awards, and the amount of the Annual Incentive Awards payable upon the
Participants' achievement of the Performance Goals;
(c) Impose such limitations, restrictions, an conditions upon the
receipt of Annual Incentive Awards as it deems appropriate;
(d) 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;
(e) Correct any defect or omission or reconcile any inconsistency in
this Plan or any award of payment hereunder, and
(f) Make all other necessary determinations and take all other actions
necessary or advisable for the implementation and administration of the Plan.
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The Committee's determinations on matters within its authority shall be
conclusive and binding upon all parties.
SECTION 9
AMENDMENT AND MODIFICATION
The Committee, in its sole discretion, without notice, at any time and
from time to time, may 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 10
MISCELLANEOUS
10.1 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
governed by and construed in accordance with the laws of the State of Illinois.
10.2 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.
10.3 SHAREHOLDER APPROVAL. This Plan is adopted and any Annual
Incentive Awards hereunder 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.
10.4 COSTS OF THE PLAN. All costs of implementing and administering the
Plan shall be borne by the Company.
10.5 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.
10.6 ENTIRE AGREEMENT. Except to the extent an Employment Agreement
expressly provides for additional or other terms pertaining to a Participant's
or beneficiary's annual incentive compensation, including, but not limited to,
guaranteed bonuses or annual incentive award opportunities equal to a percentage
of Base Salary different from the percentages set forth above in Section 4.2,
this Plan and any written amendments thereto 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.
10.7 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.
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10.8 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.
10.9 GENDER AND NUMBER. 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.
10.10 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.
10.11 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 May, 2000.
APAC CUSTOMER SERVICES, INC.
By: ______________________________
Its: ______________________________
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