EMPLOYMENT SECURITY AGREEMENT
Exhibit 10.12
This Employment Security Agreement (the “Agreement”) is entered into as of this
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day of
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, by and between APAC Customer Services, Inc. (the “Employer”) and
_____
(the “Executive”).
WHEREAS, the Executive is currently employed by the Employer as its
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;
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:
(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; |
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(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; |
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(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; |
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(iii) | 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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(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 |
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(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 Xxxxxxxx X. Xxxxxxxx, or as a result of the acquisition by
Xxxxxxxx X. Xxxxxxxx, 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 Xx. Xxxxxxxx or his affiliates, associates, family members or trusts for the benefit of
family members (collectively, the “Xxxxxxxx
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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 Xxxxxxxx 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; |
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(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; |
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(iii) | Executive’s base salary is reduced; or |
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(iv) | The Employer violates the material terms of this
Agreement, or an employment agreement, if any. |
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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.
(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.
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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.
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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.
APAC Customer Services, Inc.
Xxx Xxxxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Xxx Xxxxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
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.
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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] |
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