EXHIBIT 10.3
EMPLOYMENT SECURITY AGREEMENT
This Employment Security Agreement (the "Agreement") is entered into as of
this ___ day of _________, 2000, by and between APAC Customer Services, Inc.
(the "Employer") and ____________________ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Employer as its
[title]; 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 convenants 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 term
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.
(b) "BONUS" shall mean the target bonus, at the Executive's Base Salary
rate in effect on the date of the Executive's termination of
Employment, 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.
(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 or policies established by the Executive
Committee of the Employer, which continues for more than seven
(7) days after the Employer notifies the Executive of its
intention to terminate his Employment on account of such
disobedience; 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
of 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)(1)(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 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
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"33-1/3%" shall be substituted for "50%" in clauses (i), (ii) and
(v) of this Paragraph 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) "EFFECTIVE DATE" shall mean the date first set forth above in this
Agreement.
(g) "EMPLOYMENT" shall mean being in the employ of the Employer.
(h) "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.
(i) "GOOD REASON" shall exist if, after notice by the Executive to the
Employer and a fifteen (15) day opportunity by the Employer to cure:
(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 on the Executive's 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) The compensation received by the Executive is reduced in the
aggregate, and such reduction is not remedied within thirty
(30) days of the Executive's notice to the Employer thereof;
(iv) A determination is made by the Executive in good faith that as
a result of the Change in Control, and a change in
circumstances thereafter, significantly affecting his position
he is unable to carry out the authorities, powers, functions
or duties attached to his position, and the situation is not
remedied within thirty (30) days after receipt of the Employer
of written notice from the Executive of such determination;
(v) The Employer violates the material terms of this Agreement, or
an Employment Agreement, if any; or
(vi) There is a liquidation, dissolution, consolidation or merger
of the Employer 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
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assumed (either by operation of law or otherwise) all duties
and obligations of the Employer under this Agreement and any
Employment Agreement, if any.
2. TERM. The term of this Agreement shall be the period commencing on
the Effective Date 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
Paragraph 3, the term shall continue in effect until all payments and benefits
have been made or provided to the Executive hereunder.
3. BENEFITS UPON TERMINATION OF EMPLOYMENT. If, at any time during the
12 month period following a Change in Control, (i) the Executive's Employment is
terminated by the Employer without Cause; or (ii) the Executive terminates the
Executive's Employment by resignation under circumstances constituting Good
Reason, 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 or 18 for SVPs] months of the Executive's
Base Salary and [one times for VPs or 1.5 times for SVPs] the
Executive's Bonus. Payment shall be made in a lump sum within
thirty (30) days after termination of the Executive's Employment.
(b) STOCK OPTIONS. If any option or options to purchase common stock
of the Employer granted to the Executive are not then
exercisable, such option or options shall accelerate and become
exercisable with respect to all shares covered by the option or
options 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 or 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.
Notwithstanding anything in this Agreement to the contrary, 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.
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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.
(b) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If, following a
Change in Control, (i) the Executive's Employment is terminated for
Cause 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.
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(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. BENEFICIARIES. If the Executive is entitled to payments and benefits
under the circumstances described above in Paragraph 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.
8. 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 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; the American Disabilities Act of
1990; the Family Medical Leave Act, as amended; the Employee Retirement Income
Security Act of 1976, 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 Paragraph 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 Paragraph 5.
9. ASSIGNMENT. 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 Paragraph 1(i)(vi).
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.
10. 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 in Paragraph 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. Neither the Executive,
the
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Executive's spouse, or other beneficiary shall 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.
11. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire
Agreement and understanding between the Employer and the Executive
and, except where otherwise indicated herein, supersedes all other
agreements, written or oral, relating to the subject matter
contained 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.
(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. Notices, requests, or other communications under this
Agreement shall be in writing and shall be deemed to have been made
when delivered or mailed first-class postage prepaid by registered
mail, return receipt requested, or when delivered if by have,
overnight delivery services or confirmed facsimile transmission, to
the following addresses or to such other address that may be
furnished in writing to the other party. If to the Executive,
notices shall be sent to the Executive's home address as reflected
by the Employer's records. If to the Employer:
APAC Customer Services, Inc.
Six Parkway North
Fourth Floor
Deerfield, IL 60015
Attention: General Counsel
(e) SEVERABILITY. If any provision contained herein shall be found
invalid and 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.
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(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.
* * *
IN WITNESS WHEREOF, the Executive and the Employer have executed this
Agreement this ____ day of ______________, _____.
APAC CUSTOMER SERVICES, INC.
By: _______________________________
EXECUTIVE
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[Name]
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