Exhibit 10.1

                                 NCO GROUP, INC.

                           2004 EQUITY INCENTIVE PLAN

1. Purposes

         The purposes of the NCO Group, Inc. 2004 Equity Incentive Plan (the
"Plan") are to (i) promote the long-term retention of employees of NCO Group,
Inc. ("NCO"), and its current and future subsidiaries (collectively, the
"Company"), directors of NCO and other persons who are in a position to make
significant contributions to the success of the Company; (ii) further reward
these employees, directors and other persons for their contributions to the
Company's growth and expansion; (iii) provide additional incentive to these
employees, directors and other persons to continue to make similar contributions
in the future; and (iv) to further align the interests of these employees,
directors and other persons with those of NCO's shareholders. These purposes
will be achieved by granting to such employees and other persons, in accordance
with the provisions of this Plan, Options, Stock Appreciation Rights, Restricted
Stock or Unrestricted Stock, Deferred Stock, Restricted Stock Units or
Performance Awards, for shares of NCO's common stock, no par value per share
("Common Stock"), or Supplemental Grants, or combinations thereof (collectively,
"Awards").

2. Aggregate Number of Awards

         2.1. Shares Subject to the Plan and Maximum Awards. The aggregate
number of shares of Common Stock for which Awards may be granted under the Plan
shall be 2,000,000 shares, with an individual limit of 150,000 shares per fiscal
year for each Participant (as defined in Section 3.1) (excluding grants under
any initial employment agreement as an inducement material to the individual's
entering into employment with the Company). Such maximum numbers of shares are
subject to adjustment in accordance with Section 2.5. Treasury shares,
reacquired shares (including shares of Common Stock purchased in the open
market) and unissued shares of Common Stock may be used for purposes of the
Plan, at NCO's sole discretion. No fractional shares of Common Stock shall be
delivered under the Plan.

         2.2. Forfeited Awards. Shares of Common Stock that were issuable
pursuant to an Award that has terminated but with respect to which such Award
had not been exercised, shares of Common Stock that are issued pursuant to an
Award but that are subsequently forfeited and shares of Common Stock that were
issuable pursuant to an Award that was payable in Common Stock or cash but that
was satisfied in cash, shall be available for future Awards under the Plan and
shall not count toward the maximum number of shares of Common Stock that may be
issued under the Plan as set forth in Section 2.1.

         2.3. Shares Used to Pay Exercise Price and Taxes. If a Participant pays
the exercise price of an Option by surrendering previously owned shares of
Common Stock, as may be permitted by the Compensation Committee ("Committee") of
the Board of Directors ("Board") of NCO, and/or arranges to have the appropriate
number of shares of Common Stock otherwise issuable upon exercise withheld by
the Company to cover the withholding tax liability associated with the Option
exercise, the surrendered shares of Common Stock and shares of Common Stock used





to pay taxes shall not count towards the maximum number of shares of Common
Stock that may be issued under the Plan as set forth in Section 2.1. If a
Participant, as permitted by the Committee, arranges to have an appropriate
number of shares of a Stock Award withheld by the Company to cover the
withholding tax liability associated with such Stock Award, the shares of Common
Stock used to pay taxes shall not count towards the maximum number of shares of
Common Stock that may be issued under the Plan as set forth in Section 2.1.

         2.4. Other Items Not Included in Allocation. The maximum number of
shares of Common Stock that may be issued under the Plan as set forth in Section
2.1 shall not be affected by (i) the payment in cash of dividends or dividend
equivalents in connection with outstanding Awards; (ii) the granting or payment
of stock-denominated Awards which by their terms may be settled only in cash; or
(iii) Awards that are granted through the assumption of, or in substitution for,
outstanding awards previously granted to individuals who have become employees
as a result of a merger, consolidation, or acquisition or other corporate
transaction involving the Company.

         2.5. Adjustments. In the event of any stock dividend, stock split,
combination or exchange of equity securities, merger, consolidation,
recapitalization, reorganization, divestiture or other distribution (other than
ordinary cash dividends) of assets to shareholders, or any other event affecting
the Common Stock that the Committee deems, in its sole discretion, to be similar
circumstances, the Committee may make such adjustments as it may deem
appropriate, in its discretion, to: (i) the maximum number of shares of Common
Stock that may be issued under the Plan as set forth in Section 2.1; (ii) the
maximum number of shares of Common Stock that may be granted to any single
individual pursuant to Section 2.1; (iii) the number or kind of shares subject
to an Award; (iv) the Exercise Price applicable to an Award; (v) any measure of
performance that relates to an Award in order to reflect such change in the
Common Stock; and/or (vi) any other affected terms of any equity-based Award.
The Committee may also make such adjustments to take into account material
changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, as the Committee may determine in its sole discretion.

3. Participation

         3.1. Eligible Persons. All current and future employees of the Company,
including officers ("Employees"), all directors of NCO (including directors who
are Employees and directors who are not Employees) and all other persons who are
not Employees or directors who, in the opinion of the Committee, are in a
position to make a significant contribution to the success of the Company, shall
be eligible to receive Awards under the Plan (each, a "Participant"). No
eligible Employee, director or other person shall have any right to receive an
Award except as expressly provided in the Plan.

         3.2. Considerations to Participation. The Participants who shall
actually receive Awards under the Plan shall be determined by the Committee in
its sole discretion. In making such determinations, the Committee shall consider
the positions and responsibilities of eligible Employees and other persons,
their past performance and contributions to the Company's growth and expansion,
the value of their services to the Company, the difficulty of finding qualified
replacements, and such other factors as the Committee deems pertinent in its
sole discretion.

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         3.3. Cancellation and Modification of Awards. In the event of a change
in a Participant's duties and responsibilities, or a transfer of the Participant
to a different position, the Committee may cancel or modify any Award granted to
such Participant or adjust the number of shares of Common Stock subject thereto
commensurate with the transfer or change in responsibility, as determined by the
Committee, in its discretion, provided that no such action shall violate the
provisions of Section 5.1(b)(4), and provided further that the Committee may not
modify or cancel Awards exercisable at the time of such change in duties or
responsibilities or transfer or to which the Participant was irrevocably
entitled at the time of such change or transfer.

4. Administration

         4.1. Power and Authority. The Committee shall have full and exclusive
power to administer and interpret the Plan, to grant Awards and to adopt such
administrative rules, regulations, procedures and guidelines governing the Plan
and the Awards as it may deem necessary in its discretion, from time to time.
The Committee's authority shall include, but not be limited to, the authority
to: (i) determine the type of Awards to be granted under the Plan; (ii) select
Award recipients and determine the extent of their participation; (iii)
determine the method or formula for establishing the fair market value of the
Common Stock for various purposes under the Plan; and (iv) establish all other
terms, conditions, restrictions and limitations applicable to Awards and the
shares of Common Stock issued pursuant to Awards, including, but not limited to,
those relating to a Participant's retirement, death, disability, leave of
absence or termination of employment. The Committee may accelerate or defer the
vesting or payment of Awards, cancel or modify outstanding Awards, waive any
conditions or restrictions imposed with respect to Awards or the Common Stock
issued pursuant to Awards and make any and all other interpretations and
determinations which it deems necessary with respect to the administration of
the Plan, subject to the limitations contained in Section 5.1(b)(4) with respect
to all Participants and subject to the provisions of Section 162(m) of the Code
with respect to "covered employees" as defined thereunder, except that the
Committee may not, without the consent of the holder of an Award or unless
specifically authorized by the terms of the Plan or an Award, take any action
under this clause with respect to such Award if such action would adversely
affect the rights of such holder. The Committee's right to make any decision,
interpretation or determination under the Plan shall be in its sole and absolute
discretion.

         4.2. Administrators of the Plan. The Plan shall be administered by the
Committee. The Committee may delegate all or any portion of its authority
hereunder to one or more subcommittees consisting of at least one Committee
member (and references in this Plan to the "Committee" shall thereafter be to
the Committee or such subcommittees). Nothing is this Plan shall limit the
ability of the Committee to select a class of Award recipients and the extent of
their participation and to direct an appropriate officer of the Company to
determine the individual participants and amount and nature of the Award to be
issued to such participants, subject to such criteria, limitations and
instructions as the Committee shall determine. The Committee shall be comprised
of no fewer than three members, each of whom must qualify as (i) an "Independent
Director" within the meaning of Rule 4200(a)(15) of the listing standards of the
Nasdaq Stock Market, Inc. or any future corresponding rule; (ii) a "non-employee
director" within the meaning of Rule 16b-3(b)(3) under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or any future corresponding rule; and
(iii) an "outside director" within the meaning of the regulations promulgated

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under Section 162(m) of the Code, or any future corresponding rule, provided
that the failure of the Committee or of the Board for any reason to be composed
solely of non-employee directors or outside directors shall not prevent an Award
from being considered granted under this Plan.

         4.3. Administration of the Plan. The Committee may adopt such rules for
the administration of the Plan as it deems necessary or advisable, in its sole
discretion. For all purposes of the Plan, a majority of the members of the
Committee shall constitute a quorum, and the vote of a majority of the members
of the Committee (or written consent of all of the members) on a particular
matter shall constitute the act of the Committee on that matter. The Committee
shall have the exclusive right to construe the Plan and any Award, to settle all
controversies regarding the Plan or any Award, to correct defects and omissions
in the Plan and in any Award, and to take such further actions as the Committee
deems necessary or advisable, in its sole discretion, to carry out the purpose
and intent of the Plan. Such actions shall be final, binding and conclusive upon
all parties concerned.

         4.4. Liability; Indemnification. No member of the Committee shall be
liable for any act or omission (whether or not negligent) taken or omitted in
good faith, or for the good faith exercise of any authority or discretion
granted in the Plan to the Committee, or for any act or omission of any other
member of the Committee. The members of the Committee shall be entitled to
indemnification and reimbursement to the fullest extent provided in NCO's
articles of incorporation, bylaws and applicable law. In the performance of its
functions under the Plan, the Committee shall be entitled to rely upon
information and advice furnished by NCO's officers, accountants, counsel and
other parties the Committee deems necessary, and no member of the Committee
shall be liable for any action taken or not taken in reliance upon such advice.

         4.5. Costs; Liabilities. All costs incurred in connection with the
administration and operation of the Plan shall be paid by the Company. Except
for the express obligations of the Company under the Plan and under Awards
granted in accordance with the provisions of the Plan, the Company shall have no
liability with respect to any Award, or to any Participant or any transferee of
shares of Common Stock from any Participant, including, but not limited to, any
tax liabilities, capital losses, or other costs or losses incurred by any
Participant or any such transferee.

5. Types of Awards

         5.1. Options.

              (a) An Option is an Award entitling the recipient on exercise
thereof to purchase Common Stock at a specified exercise price. Both "incentive
stock options," as defined in Section 422 of the Code (any Option intended to
qualify as an incentive stock option is hereinafter referred to as an "ISO"),
and Options that are not incentive stock options (any such Option is hereinafter
referred to as a "non-ISO"), may be granted under the Plan. ISOs shall be
awarded only to Employees.

              (b) The exercise price of an Option shall be determined by the
Committee subject to the following:

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                   (1) The exercise price of an ISO shall not be less than 100%
(110% in the case of an ISO granted to a ten percent shareholder) of the fair
market value of the Common Stock subject to the ISO, determined as of the time
the Option is granted. A ten percent shareholder is any person who at the time
of grant owns, directly or indirectly, or is deemed to own by reason of the
attribution rules of Section 424(d) of the Code, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or of
any of its subsidiaries.

                   (2) The exercise price of a non-ISO shall not be less than
100% of the fair market value of the Common Stock subject to the non-ISO,
determined as of the time the non-ISO is granted.

                   (3) In no case may the exercise price paid for Common Stock
which is part of an original issue of authorized Common Stock be less than the
par value per share of the Common Stock.

                   (4) In no case may the Committee reduce the exercise price of
an Option at any time after the time of grant, including by amendment or
cancellation and subsequent issuance, except in the case of an adjustment as set
forth in Section 2.5(iv).

                   (5) Notwithstanding (1) and (2) above, an Option (whether an
ISO or non-ISO) may be granted with an exercise price determined according to
the provisions of Section 424(a) of the Code, if the grant of such Option is
pursuant to a transaction described in Section 424(a) of the Code.

              (c) The period during which an Option may be exercised shall be
determined by the Committee, except that the period during which an Option may
be exercised shall not exceed ten years (five years, in the case of an ISO
granted to a ten percent shareholder) from the day immediately preceding the
date the Option was granted.

              (d) An Option shall become exercisable at such time or times, and
on such terms and conditions, as the Committee may determine. The Committee may
at any time accelerate the time at which all or any part of the Option may be
exercised. Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (i) any documents
required by the Committee and (ii) payment in full in accordance with Section
5.1(e) below for the number of shares for which the Option is exercised.

              (e) Stock purchased on exercise of an Option must be paid for as
follows: (i) in cash or by check (acceptable to NCO in accordance with
guidelines established for this purpose), bank draft or money order payable to
the order of NCO or (ii) if so permitted by the instrument evidencing the Option
(or in the case of an Option which is not an ISO, by the Board at or after grant
of the Option), (A) through the delivery of shares of Common Stock which have
been outstanding for at least six months (unless the Board expressly approves a
shorter period) and which have a fair market value on the date of exercise at
least equal to the exercise price, or (B) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to NCO sufficient funds
to pay the exercise price (including in connection with a so-called "cashless
exercise" effected by such broker), or (C) by any combination of the permissible
forms of payment.

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              (f) In the event a Participant tenders shares of Common Stock to
pay the exercise price of an Option and/or arranges to have a portion of the
shares otherwise issuable upon exercise withheld or sold to pay the applicable
withholding taxes, in no case may the Committee grant "reload" or "restoration"
options entitling the Participant to purchase shares of Common Stock equal to
the sum of the number of such shares tendered to pay the exercise price and the
number of shares used to pay the withholding taxes.

              (g) Any Employee who disposes of shares acquired upon the exercise
of an ISO either (i) within two years after the date of grant of such ISO or
(ii) within one year after the transfer of such shares to the Employee shall
notify the Company of such disposition and of the amount realized upon such
disposition.

         5.2. Stock Appreciation Rights.

              (a) A Stock Appreciation Right ("SAR") is an Award entitling the
recipient on its exercise to receive an amount, in cash or Common Stock or a
combination thereof (such form to be determined by the Committee), determined in
whole or in part by reference to appreciation in Common Stock value. In general,
a SAR entitles the Participant to receive, with respect to each share of Common
Stock as to which the SAR is exercised, the excess of the share's fair market
value on the date of exercise over its fair market value on the date the SAR was
granted, except that if a SAR is granted retroactively in substitution for an
Option, the fair market value established by the Committee may be the fair
market value at the time such Option was granted. Any such substitution of a SAR
for an Option granted to a "covered employee" under Section 162(m) of the Code
may only be made in compliance with the provisions thereof.

              (b) Notwithstanding the above, the Committee may provide at the
time of grant that the amount the recipient is entitled to receive shall be
adjusted upward or downward under rules established by the Committee to take
into account the performance of the Common Stock in comparison with the
performance of other stocks or an index or indices of other stocks. The
Committee may also grant SARs that provide that following a Change in Control of
the Company (as defined in Section 6.3(c)) the holder of such SAR shall be
entitled to receive, with respect to each share of Common Stock subject to the
SAR, an amount equal to the excess of a specified value (which may include an
average of values) for a share of Common Stock during a period preceding such
Change in Control over the fair market value of a share of Common Stock on the
date the SAR was granted.

              (c) SARs may be granted in tandem with, or independently of,
Options granted under the Plan. A SAR granted in tandem with an Option that is
not an ISO may be granted either at or after the time the Option is granted. A
SAR granted in tandem with an ISO may be granted only at the time the Option is
granted.

              (d) When SARs are granted in tandem with Options, the following
rules shall apply:

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                   (1) The SAR shall be exercisable only at such time or times,
and to the extent, that the related Option is exercisable and shall be
exercisable in accordance with the procedure required for exercise of the
related Option.

                   (2) The SAR shall terminate and no longer be exercisable upon
the termination or exercise of the related Option, except that a SAR granted
with respect to less than the full number of shares covered by an Option shall
not be reduced until the number of shares as to which the related Option has
been exercised or has terminated exceeds the number of shares not covered by the
SAR.

                   (3) The Option shall terminate and no longer be exercisable
upon the exercise of the related SAR.

                   (4) The SAR shall be transferable only with the related
Option.

                   (5) A SAR granted in tandem with an ISO may be exercised only
when the market price of the Stock subject to the Option exceeds the exercise
price of such option.

              (e) A SAR not granted in tandem with an Option shall become
exercisable at such time or times, and on such terms and conditions, as the
Committee may specify. The Committee may at any time accelerate the time at
which all or any part of the SAR may be exercised. Any exercise of an
independent SAR must be in writing, signed by the proper person and delivered or
mailed to NCO, accompanied by any other documents required by the Committee.

         5.3. Stock Awards

              (a) Form of Awards. The Committee may grant Awards ("Stock
Awards") which are payable in shares of Common Stock or denominated in units
equivalent in value to shares of Common Stock or are otherwise based on or
related to shares of Common Stock, including, but not limited to, Awards of
Unrestricted Stock, Restricted Stock, Deferred Stock and Restricted Stock Units,
subject to such terms, conditions, restrictions and limitations as the Committee
may determine to be applicable to such Stock Awards, in its discretion, from
time to time. The Committee may consider the impact of the conditions,
restrictions or limitations applicable to a Stock Award, as well as the
possibility of forfeiture or cancellation, in determining the fair market value
for purposes of determining the number of shares of Common Stock allocable to a
Stock Award. Without limiting the generality of the foregoing, the Committee may
issue Stock Awards to Participants in connection with management or employee
stock purchase programs.

              (b) Unrestricted Stock. Shares of Common Stock may be used as
payment for compensation which otherwise would have been delivered in cash
(including any compensation that is intended to qualify as performance-based
compensation for purposes of Section 162(m) of the Code), and unless otherwise
determined by the Committee, no minimum vesting period shall apply to such
shares. Any shares of Common Stock used for such payment shall be valued at the
fair market value of such shares at the time of payment and shall be subject to
such terms, conditions, restrictions and limitations as shall be determined by
the Committee at the time of payment.

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              (c) Restricted Stock. A Restricted Stock Award entitles the
recipient to acquire shares of Common Stock subject to the restrictions
described in Section 5.3(c)(3) ("Restricted Stock") for no consideration,
nominal consideration or any higher price, all as determined by the Committee.

                   (1) A Participant who is granted a Restricted Stock Award
shall have no rights with respect to such Award unless the Participant accepts
the Award by written instrument delivered or mailed to NCO accompanied by
payment in full of the specified purchase price, if any, of the shares covered
by the Award. Payment may be by certified or bank check or other instrument
acceptable to the Committee.

                   (2) A Participant who receives Restricted Stock shall have
all the rights of a shareholder with respect to such stock, including voting and
dividend rights, subject to the restrictions described in 5.3(c)(3) and any
other conditions imposed by the Committee at the time of grant. Unless the
Committee otherwise determines, certificates evidencing shares of Restricted
Stock shall remain in the possession of the Company until such shares are free
of all restrictions under the Plan.

                   (3) Except as otherwise specifically provided by the Plan or
the Award, Restricted Stock may not be sold, assigned, exchanged, pledged,
gifted or otherwise disposed of, or transferred, and if a Participant suffers a
Status Change (as defined in Section 6.1) for any reason (other than by reason
of death or permanent disability), must be offered to NCO for purchase for the
amount of cash paid for such stock, or forfeited to the Company if no cash was
paid. These restrictions shall lapse at such time or times, and on such terms
and conditions, as the Committee may determine. The Committee may at any time
accelerate the time at which the restrictions on all or any part of the shares
shall lapse.

                   (4) Any Participant making, or required by an Award to make,
an election under Section 83(b) of the Code with respect to Restricted Stock
shall deliver to NCO, within ten days of the filing of such election with the
Internal Revenue Service, a copy of such election.

                   (5) The Committee may, at the time any Award described in
this Section 5 is granted, provide that any or all the Common Stock delivered
pursuant to the Award shall be Restricted Stock.

                   (6) The Committee may, in its sole discretion, approve the
sale to any Participant of shares of Common Stock free of restrictions under the
Plan for a price which is not less than the par value of the Common Stock.

              (d) Deferred Stock. A Deferred Stock Award entitles the recipient
to receive shares of Common Stock to be delivered in the future. Delivery of the
Common Stock shall take place at such time or times, and on such terms and
conditions, as the Committee may determine. The Committee may at any time
accelerate the time at which delivery of all or any part of the Common Stock
shall take place. At the time any Award described in this Section 5 is granted,

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the Committee may provide that, at the time Common Stock would otherwise be
delivered pursuant to the Award, the Participant shall instead receive an
instrument evidencing the Participant's right to future delivery of Deferred
Stock. Awards of Deferred Stock represent only an unfunded, unsecured promise to
deliver shares in the future and do not give Participants any greater rights
than those of an unsecured general creditor of the Company.

              (e) Restricted Stock Units. A Restricted Stock Unit is an Award
denominated in shares of Restricted Stock, pursuant to a formula determined by
the Committee, which may be settled either in shares of Restricted Stock or in
cash, in the discretion of the Committee, subject to such other terms,
conditions, restrictions and limitations determined by the Committee from time
to time.

         5.4. Supplemental Grants. In connection with any Award under this
Section 5, the Committee may grant a supplemental cash award to the Participant
(a "Supplemental Grant") not to exceed an amount equal to (i) the amount of any
Federal, state and local income tax on ordinary income for which the Participant
may be liable with respect to the Award, determined by assuming taxation at the
highest marginal rate, plus (ii) an additional amount on a grossed-up basis
intended to make the Participant whole on an after-tax basis after discharging
all the Participant's income tax liabilities arising from all payments under
this Section 5. Any payments under this Section 5.4(b) shall be made at the time
the Participant incurs Federal income tax liability with respect to the Award.

         5.5. Performance Awards. A Performance Award entitles the recipient to
receive, without payment, an Award or Awards described in this Section 5 (such
form to be determined by the Committee) following the attainment of such
performance goals, during such measurement period or periods, and on such other
terms and conditions, all as the Committee may determine. Performance goals may
be related to personal performance, corporate performance, group or departmental
performance or any such other category of performance as the Committee may
determine. The Committee shall have the authority to determine the performance
goals, the period or period during which performance is to be measured and all
other terms and conditions applicable to the Award.

         5.6. Section 162(m) Limitations.

              (a) If the Committee determines at the time an Award that is
intended to qualify as performance-based compensation for purposes of Section
162(m) of the Code is granted to a Participant that such Participant is, or may
be as of the end of the tax year for which the Company would claim a tax
deduction in connection with such Award, a "covered employee," then the
Committee may provide that this Section 5.6 is applicable to such Award under
such terms as the Committee shall determine.

              (b) If an Award is subject to this Section 5.6, then any grant
shall be subject to the achievement of specified levels of one or more of the
following performance goals, unless and until the Company's shareholders approve
a change to such performance goals: operating income, net earnings, earnings
before interest, taxes, depreciation and amortization (EBITDA), earnings before
interest and taxes (EBIT), net income, earnings per share, total shareholder
return, cash flow, return on assets, decrease in expenses, Common Stock price,
price-earnings multiple, comparisons to market indices, sales growth, market

                                       9


share, the achievement of certain quantitatively and objectively determinable
non-financial performance measures including, but not limited to, operational
measures, growth strategies, strategic initiatives, corporate development and
leadership development, and any combination of the foregoing. The performance
goals shall be determined and approved by the Committee within the first 90 days
of each fiscal year. Awards subject to this Section 5.6 may not be adjusted
upward. The Committee shall retain the discretion to adjust such Awards
downward. Prior to the payment of any Award subject to this Section 5.6, the
Committee shall certify in writing that the applicable performance goal was
satisfied.

              (c) The Committee shall have the discretion to impose such other
restrictions on Awards subject to this Section 5.6 as it may deem necessary or
appropriate to ensure that such Awards qualify as performance-based compensation
for purposes of Section 162(m) of the Code. In the event that applicable tax/and
or securities laws change to permit the Committee the discretion to alter the
governing performance goals without obtaining shareholder approval, the
Committee shall have the sole discretion to make such changes without obtaining
shareholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards, or modify existing Awards, that shall not
qualify as performance-based compensation for purposes of Section 162(m) of the
Code, the Committee may make such grants and modifications without satisfying
the requirements of Section 162(m) of the Code.

6. Events Affecting Outstanding Awards

         6.1. Termination of Service by Death or Permanent Disability. If a
Participant who is an Employee or director ceases to be an Employee or director,
or if there is a termination of the consulting, service or other relationship in
respect of which a non-Employee Participant was granted an Award under the Plan
(such termination of employment or other relationship referred to as a "Status
Change") in any case by reason of death or permanent disability, the following
rules shall apply, unless otherwise determined by the Committee:

              (a) All Options and SARs held by the Participant at the time of
such Status Change shall automatically become exercisable in full and shall
continue to be exercisable by the Participant or his or her heirs, executor,
administrator or other legal representative for a period of one year days after
the Participant's Status Change by reason of death or permanent disability.
After the expiration of such one-year period, all such Options and SARs shall
terminate. In no event, however, shall an Option or SAR remain exercisable
beyond the latest date on which it could have been exercised without regard to
this Section 6.1.

              (b) All Restricted Stock and Restricted Stock Units held by the
Participant at the time of such Status Change shall automatically become free of
all restrictions and conditions.

              (c) The Participant shall automatically be entitled to any payment
or benefit under all Deferred Stock Awards, Performance Awards or Supplemental
Grants, held by the Participant at the time of such Status Change.

              (d) "Disability" or "Permanent Disability" shall mean disability
as defined in Section 22(e)(3) of the Internal Revenue Code or as otherwise
determined by the Committee.

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         6.2. Termination of Service Other Than by Death or Permanent
Disability. Subject to the provisions of Section 6.4, if a Participant suffers a
Status Change other than by reason of death or permanent disability (as
determined by the Committee), the following rules shall apply, unless otherwise
determined by the Committee:

              (a) All Options and SARs held by the Participant at the time of
such Status Change, to the extent then exercisable, shall continue to be
exercisable by the Participant for a period of 90 days after the Participant's
Status Change. After the expiration of such 90-day period, all such Options and
SARs shall terminate. In no event, however, shall an Option or SAR remain
exercisable beyond the latest date on which it could have been exercised without
regard to this Section 6.2. All Options and SARs held by a Participant at the
time of such Status Change that are not then exercisable shall terminate upon
such Status Change.

              (b) All Restricted Stock held by the Participant at the time of
such Status Change shall be transferred to the Company (and, in the event the
certificates representing such Restricted Stock are held by the Company, such
Restricted Stock shall be so transferred without any further action by the
Participant) in accordance with Section 5.3(c) above.

              (c) Any payment or benefit under a Restricted Stock Unit, Deferred
Stock Award, Performance Award, or Supplemental Grant, to which the Participant
was not irrevocably entitled at the time of such Status Change shall be
forfeited and the Award canceled as of the date of such Status Change.

              (d) For all purposes of this Section 6.2 and Section 6.3, the
employment with the Company of a Participant who is an Employee shall not be
deemed to have been terminated if the Participant is transferred from NCO to a
subsidiary of NCO, or vice versa, or from one subsidiary of NCO to another and,
in the sole discretion of the Committee, a Status Change shall not be deemed to
have occurred if, on the date that a Participant's employment, directorship,
consulting, service or other relationship with the Company terminates, such
Participant has an employment, directorship, consulting, service or other
relationship with the Company that would otherwise permit such Participant to
receive an Award under this Plan.

              (e) A termination by the Company of a Participant's employment,
directorship, consulting, service or other relationship with the Company shall
be for "Cause" if the Committee determines that the Participant: (i) was guilty
of fraud, gross negligence or willful misconduct in the performance of his or
her duties for the Company, (ii) willfully and continually failed to perform
substantially the Participant's duties with the Company (other than any such
failure resulting from incapacity due to permanent disability) after delivery of
written demand for substantial performance to the Participant by the Board, the
Committee or the Chief Executive Officer that specifically identified the manner
in which the Board, the Committee or the Chief Executive Officer believed the
Participant did not substantially perform his or her duties, (iii) breached or
violated, in a material respect, any agreement between the Participant and the
Company or any of the Company's codes of conduct or corporate policies,
including policy statements regarding conflicts-of-interest, insider trading or
confidentiality, (iv) committed a material act of dishonesty or breach of trust,
(v) acted in a manner that was inimical or injurious, in a material respect, to
the business or interests of the Company, or (vi) was convicted of, or plead
guilty or nolo contendere to, a felony or any other crime involving moral
turpitude which subjects, or if generally known, would subject, the Company to
public ridicule or embarrassment.

                                       11


         6.3. Change in Control

              (a) Notwithstanding the provisions of Section 6.3(b), in the event
of a Change in Control (as defined in Section 6.3(c)), the following rules shall
apply, unless otherwise expressly provided by the Committee in accordance with
Section 6.3(d):

                   (1) Each outstanding Option and SAR shall automatically
become exercisable in full upon the occurrence of such Change in Control. This
provision shall not prevent an Option or SAR from becoming exercisable sooner as
to Common Stock or cash that would otherwise have become available under such
Option or SAR during such period.

                   (2) Each outstanding share of Restricted Stock shall
automatically become free of all restrictions and conditions upon the occurrence
of such Change in Control. This provision shall not prevent the earlier lapse of
any restrictions or conditions on Restricted Stock that would otherwise have
lapsed during such period.

                   (3) Conditions on Restricted Stock Units, Deferred Stock
Awards, Performance Awards and Supplemental Grants, which relate only to the
passage of time and continued employment shall automatically terminate upon the
occurrence of such Change in Control. This provision shall not prevent the
earlier lapse of any conditions relating to the passage of time and continued
employment that would otherwise have lapsed during such period. Performance or
other conditions (other than conditions relating only to the passage of time and
continued employment) shall continue to apply unless otherwise provided in the
instrument evidencing the Awards or in any other agreement between the
Participant and the Company or unless otherwise agreed to by the Committee.

              (b) The Committee may, in its discretion, at the time an Award is
made hereunder or at any time prior to, coincident with or after the time of a
Change in Control: (i) require the purchase and sale of any Awards for an amount
of cash equal to the amount which a Participant could have obtained upon the
exercise or realization of such rights had such Awards been currently
exercisable; (ii) make such adjustment to the Awards then outstanding as the
Committee deems appropriate to reflect such Change in Control; and/or (iii)
cause the Awards then outstanding to be assumed, or their rights substituted
therefor, by the surviving or acquiring corporation in such Change in Control.
The Committee may, in its discretion, include such further provisions and
limitations in any Award Agreement as it may deem in the best interests of the
Company.

              (c) A "Change in Control" means: (i) the occurrence of an event
that would, if known to NCO's management, be required to be reported by NCO as a
change in control under Form 8-K pursuant to the 1934 Act; or (ii) the
acquisition or receipt, in any manner, by any person (as defined for purposes of
the 1934 Act) or any group of persons acting in concert, of direct or indirect
beneficial ownership (as defined for purposes of the 1934 Act) of more than 50%
of the combined voting securities ordinarily having the right to vote for the
election of directors of NCO; or (iii) a change in the constituency of the Board
with the result that individuals (the "Incumbent Directors") who are members of

                                       12


the Board on the Effective Date (as defined in Section 13) cease for any reason
to constitute at least a majority of the Board, provided that any individual who
is elected to the Board after the Effective Date and whose nomination for
election was unanimously approved by the Incumbent Directors shall be considered
an Incumbent Director beginning on the date of his or her election to the Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest (as
defined for purposes of the 1934 Act) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board; or (iv) the sale, exchange,
liquidation or other disposition of all or more than 50% of NCO's business or
assets; unless in any such case, at least a majority of the Incumbent Directors
determine, prior to the occurrence of such Change in Control, that no Change in
Control has or will have occurred; or (v) the occurrence of a reorganization,
merger, consolidation or other corporate transaction involving NCO, in each
case, with respect to which NCO's shareholders immediately prior to such
transaction do not, immediately after such transaction, own more than 50% of the
combined voting securities ordinarily having the right to vote for the election
of directors of NCO or other corporation resulting from such transaction; or
(vi) the approval by NCO's shareholders of a complete liquidation or dissolution
of NCO; or (vii) any similar transaction, circumstance or event which the
Committee determines to constitute a Change in Control.

              (d) The provisions of Section 6.3(a) shall not apply to the extent
expressly determined by at least 75% of the Incumbent Directors at a duly
convened meeting of the Board held before the occurrence of a Change in Control.

              (e) Any good faith determination by the Committee as to whether a
Change in Control within the meaning of this Section 6.3 has occurred shall be
conclusive and binding on the Participants.

         6.4. Special Forfeiture Provisions Following a Termination of
Employment. Notwithstanding the provisions of Section 6.2, in any instance where
the rights of a Participant with respect to an Award extend beyond a Status
Change other than by reason of death, all of such rights shall terminate and be
forfeited, if, in the determination of the Committee, the Participant, at any
time prior or subsequent to such Status Change breaches or violates, in a
material way, the terms of any agreement with the Company, including any
employment agreement, termination agreement, confidentiality agreement,
non-solicitation agreement or non-competition agreement.

7. Grant and Acceptance of Awards

         7.1. Evidence of Approval. The Committee's approval of a grant of an
Award under the Plan, including the names of Participants and the size of the
Award, including the number of shares of Common Stock subject to the Award,
shall be reflected in minutes of meetings held by the Committee or in written
consents signed by members of the Committee. Once approved by the Committee,
each Award shall be evidenced by such written instrument, containing such terms
as are required by the Plan and such other terms, consistent with the provisions
of the Plan, as may be approved from time to time by the Committee.

                                       13


         7.2. Award Agreements. Each instrument may be in the form of agreements
to be executed by both the Participant and the Company, or certificates, letters
or similar instruments, which need not be executed by the Participant but
acceptance of which shall evidence agreement to the terms thereof. The grant of
an Award shall not impose any obligation on the Participant to accept the Award.

         7.3. Conditions. Except as specifically provided by the Plan or the
instrument evidencing an Award, a Participant shall not become a shareholder of
NCO until (i) the Participant makes any required payments in respect of the
Common Stock issued or issuable pursuant to the Award, (ii) the Participant
furnishes NCO with any required agreements, certificates, letters or other
instruments, and (iii) the Participant actually receives the shares of Common
Stock. Subject to any terms and conditions imposed by the Plan or the instrument
evidencing an Award, upon the occurrence of all of the conditions set forth in
the immediately preceding sentence, a Participant shall have all rights of a
shareholder with respect to shares of Common Stock, including, but not limited
to, the right to vote such shares and to receive dividends and other
distributions paid with respect to such shares. The Committee may, upon such
terms and conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
and all Common Stock subject to the Participant's Award, had such Common Stock
been outstanding. Without limitation, the Board may provide for payment to the
Participant of amounts representing such dividends, either currently or in the
future, or for the investment of such amounts on behalf of the Participant.

         7.4. Payments and Deferrals. Payment of Awards may be in the form of
cash, shares of Common Stock, other Awards, or combinations thereof as the
Committee shall determine, subject to such terms, conditions, restrictions and
limitations as it may impose. The Committee may postpone the exercise of Options
or SARs, and may require or permit Participants to elect to defer the receipt or
issuance of shares of Common Stock pursuant to Awards or the settlement of
Awards in cash under such rules and procedures as it may establish, in its
discretion, from time to time. It also may provide for deferred settlements of
Awards including the payment or crediting of earnings on deferred amounts, or
the payment or crediting of dividend equivalents where the deferred amounts are
denominated in common share equivalents. In addition, the Committee may
stipulate in an Award Agreement, either at the time of grant or by subsequent
amendment, that a payment or portion of a payment of an Award be delayed in the
event that Section 162(m) of the Code (or any successor or similar provision of
the Code) would disallow a tax deduction by the Company for all or a portion of
such payment. The period of any such delay in payment shall be until the
payment, or portion thereof, is tax deductible, or such earlier date as the
Committee shall determine in its discretion.

         7.5. Removal of Restrictions. Notwithstanding any other provision of
the Plan, the Company shall not be obligated to deliver any shares of Common
Stock pursuant to the Plan or to remove any restriction from shares of Common
Stock previously delivered under the Plan (i) until all conditions to the Award
have been satisfied or removed, (ii) until, in the opinion of counsel to the
Company, all applicable Federal and state laws and regulations have been
complied with, (iii) if the outstanding Common Stock is at the time listed on
any stock exchange or included for quotation on an inter-dealer system, until
the shares to be delivered have been listed or included or authorized to be
listed or included on such exchange or system upon official notice of notice of

                                       14


issuance, (iv) if it might cause the Company to issue or sell more shares of
Common Stock that the Company is then legally entitled to issue or sell, and (v)
until all other legal matters in connection with the issuance and delivery of
such shares have been approved by counsel to the Company. If the sale of Common
Stock has not been registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of an Award, such
representations or agreements as counsel to the Company may consider appropriate
to avoid violation of such Act and may require that the certificates evidencing
such Common Stock bear an appropriate legend restricting transfer. If an Award
is exercised by the Participant's legal representative, the Company shall be
under no obligation to deliver Common Stock pursuant to such exercise until the
Company is satisfied as to the authority of such representative.

8. Tax Withholding

         The Company shall withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all Federal, state and local withholding
tax requirements (the "withholding requirements"). In the case of an Award
pursuant to which Common Stock may be delivered, the Committee shall have the
right to require that the Participant or other appropriate person remit to the
Company an amount sufficient to satisfy the withholding requirements, or make
other arrangements satisfactory to the Committee with regard to such
requirements, prior to the delivery of any Common Stock. If and to the extent
that such withholding is required, the Committee may permit a Participant or
such other person or entity to elect at such time and in such manner as the
Committee may determine to have the Company hold back from the shares of Common
Stock to be delivered, or to deliver to the Company, Common Stock having a value
calculated to satisfy the withholding requirement. If at the time an ISO is
exercised, the Committee determines that the Company could be liable for
withholding requirements with respect to a disposition of the Common Stock
received upon exercise, the Committee may require as a condition of exercise
that the person exercising the ISO agree (i) to inform the Company promptly of
any disposition (within the meaning of Section 424(c) of the Code) of Common
Stock received upon exercise, and (ii) to give such security as the Committee
deems adequate to meet the potential liability of the Company for the
withholding requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Board to preserve the adequacy of such
security.

9. Dividends and Dividend Equivalents

         The Committee may provide that Stock Awards shall earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to an account maintained on the books of the
Company. Any payment or crediting of dividends or dividend equivalents will be
subject to such terms, conditions, restrictions and limitations as the Committee
may establish, from time to time, including reinvestment in additional shares of
Common Stock or common share equivalents. Unless the Committee determines
otherwise, any Employee subject to the reporting requirements of Section 16(a)
of the 1934 Act may not participate in dividend reinvestment programs
established under the Plan. The Committee shall determine the Participant's
rights under the Plan with respect to extraordinary dividends or distributions
on the shares of Common Stock.

                                       15


10. Voting

         The Committee shall determine whether a Participant shall have the
right to direct the vote of shares of Common Stock allocated to a Stock Award.
If the Committee determines that an Award shall carry voting rights, the shares
allocated to such Award shall be voted by the Company's Secretary, or such other
person as the Committee may designate in accordance with instructions received
from the Participant (unless to do so would constitute a violation of fiduciary
duties). Shares as to which no instructions are received shall be voted by the
Committee or its designee proportionately in accordance with instructions
received from Participants in the Plan (unless to do so would constitute a
violation of fiduciary duties).

11. Unfunded Plan

         Unless otherwise determined by the Committee, the Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate
fund or funds. The Plan shall not create any fiduciary relationship between the
Company on behalf of any Participant or other person. To the extent any
Participant holds any rights by virtue of an Award granted under the Plan, such
rights shall constitute general unsecured liabilities of the Company and shall
not confer upon any Participant any right, title, or interest in any assets of
the Company.

12. Rights as Shareholder

         Unless the Committee determines otherwise, a Participant shall not have
any rights as a shareholder with respect to shares of Common Stock covered by an
Award until the date the Participant becomes the holder of record with respect
to such shares in accordance with Section 7.3. No adjustment shall be made for
dividends or other rights for which the record date is prior to such date,
except as provided in Section 9.

13. Effective Date and Term of Plan

         The effective date of this Plan (the "Effective Date") is May 17, 2004,
the date on which the Plan was approved by the affirmative vote of the holders
of NCO's Common Stock. No Award shall be granted more than ten years after the
Effective Date.

14. Effect, Amendment, Suspension and Termination

         Unless otherwise determined by the Committee, Awards received by
Participants under the Plan shall not be deemed a part of a Participant's
regular, recurring compensation for purposes of calculating payments or benefits
under any Company benefit plan or severance program. No Employee, director or
other person shall have any claim or right to be granted an Award under the
Plan. There shall be no obligation of uniformity of treatment of Employees,
directors or other persons under the Plan and the terms and conditions of Awards
and the Committee's determinations and interpretations with respect thereto need
not be the same with respect to each Participant (whether or not such
Participants are similarly situated). Neither adoption of the Plan nor the grant
of Awards to a Participant shall affect the Company's right to grant to such
Participant awards that are not subject to the Plan, to issue to such
Participant Common Stock as a bonus or otherwise, or to adopt other plans or
arrangements under which Common Stock may be issued to Employees or other

                                       16


persons or entities. The Committee reserves the right, at any time and from time
to time, to amend the Plan in any way, or to suspend or terminate the Plan,
effective as of the date specified by the Committee when it takes such action,
which date may be before or after the date the Committee takes such action;
provided that any such action shall not affect any Awards granted before the
actual date on which such action is taken by the Committee; and further provided
that the approval of NCO's shareholders shall be required whenever necessary for
the Plan to continue to satisfy the conditions of Rule 16b-3 under the 1934 Act,
Section 422 of the Code with respect to the award of ISOs (unless the Board
determines that ISOs shall no longer be granted under the Plan), any bylaw, rule
or regulation of the market system or stock exchange on which NCO's Common Stock
is then listed or admitted to trading, or any other applicable law, rule or
regulation. Unless terminated earlier by the Board, this Plan shall terminate on
such date (which shall not be prior to May 17, 2014) as all Awards under the
Plan have been exercised or shall have terminated.

15. Other Provisions

         15.1. Future Rights. Nothing contained in the Plan or any Award shall
confer upon any Employee or other Participant the right to continue in the
employ of, or to continue to provide service to, the Company or any affiliated
person, or interfere in any way with the right of the Company or any affiliated
person to terminate the employment or service of any Employee or other
Participant for any reason.

         15.2. Grant Date. Corporate action constituting an offer by NCO of
Common Stock to any Participant under the terms of an Award shall be deemed
completed as of the date of grant of the Award, regardless of when the
instrument, certificate, or letter evidencing the Award is actually received or
accepted by the Participant.

         15.3. Transferability. None of a Participant's rights under any Award
or under the Plan may be assigned or transferred in any manner other than by
will or under the laws of descent and distribution. The foregoing shall not,
however, restrict a Participant's rights with respect to Unrestricted Stock or
the outright transfer of cash, nor shall it restrict the ability of a
Participant's heirs, estate, beneficiaries, or personal or legal representatives
to enforce the terms of the Plan with respect to Awards granted to the
Participant. Notwithstanding the foregoing, at the discretion of the Committee,
the terms of an Award may permit a Participant to transfer such Award to one or
more members of the Participant's family or to trusts, family partnerships, or
other entities for the benefit of the Participant and/or members of the
Participant's family to the extent provided in such Award and permitted under
the terms for use of Form S-8 promulgated under the Securities Act of 1933, as
amended.

         15.4. Governing Law. The Plan, and all Awards granted hereunder, shall
be governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.

         15.5. Interpretation. The headings of the Sections of the Plan are for
convenience of reference only and shall not affect the interpretation of the
Plan. All pronouns and similar references in the Plan shall be construed to be
of such number and gender as the context requires or permits. When used in this
Plan, the words "including" and "include" shall be deemed followed by the words
"without limitation." Except as otherwise indicated, the term "person" as used
in the Plan shall include individuals, corporations, partnerships, trusts,
estates, limited liability companies and partnerships and any other type of
entity.

                                       17


         15.6. Severability. If any provision of the Plan is determined to be
unenforceable for any reason, then that provision shall be deemed to have been
deleted or modified to the extent necessary to make it enforceable, and the
remaining provisions of the Plan shall be unaffected.

         15.7. Notices. All notices with respect to the Plan shall be in writing
and shall be hand delivered or sent by certified mail or reputable overnight
delivery service, expenses prepaid. Notices to the Company or the Committee
shall be delivered or sent to NCO's headquarters to the attention of its General
Counsel. Notices to any Participant or holder of shares of Common Stock issued
pursuant to an Award shall be sufficient if delivered or sent to such person's
address as it appears in the regular records of the Company or its transfer
agent.

         15.8. Prior Services. In any case that a Participant purchases Common
Stock under an Award for a price equal to the par value of the Common Stock, the
Committee may determine, in its sole discretion, that such price has been
satisfied by past services rendered by the Participant.

         15.9. Fair Market Value. For the purposes of the Plan and any Award
granted hereunder, unless otherwise determined by the Committee, the term "fair
market value" of Common Stock on a specified date shall mean the last sale price
for one share of Common Stock on the last trading day on or before the specified
date, as reported on the Nasdaq National Market System, or on such other market
system or stock exchange on which NCO's Common Stock is then listed or admitted
to trading, or, if the foregoing does not apply, the market value determined by
the Board.

         15.10. Reduction of Payments. Unless otherwise agreed upon in writing
by the Company and a Participant, in the event that any payment, benefit or
transfer under the Plan to or for the benefit of a Participant pursuant to a
Change in Control from the Company or otherwise (a "Payment") would (i)
constitute a "parachute payment" within the meaning of Section 280G of the Code,
and (ii) but for this Section 15.10, be subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then such Payment shall be reduced
to the Reduced Amount. The "Reduced Amount" shall be either (x) the largest
portion of the Payment that would result in no portion of the Payment being
subject to the Excise Tax or (y) the largest portion, up to and including the
total, of the Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
the Participant's receipt, on an after-tax basis, of the greater amount of the
Payment notwithstanding that all or some portion of the Payment may be subject
to the Excise Tax. If a reduction in payments or benefits constituting
"parachute payments" is necessary so that the Payment equals the Reduced Amount,
reduction shall occur in the following order unless the Participant elects in
writing a different order (provided, however, that such election shall be
subject to the Company's approval if made on or after the date on which the
event that triggers the Payment occurs): reduction of cash payments;
cancellation of accelerated vesting of Awards; and reduction of employee
benefits. In the event that the acceleration of vesting of Award compensation is
to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of the Participant's Awards unless the Participant
elects in writing a different order for cancellation.

                                       18


15.11. Successors and Assigns. The Plan and any applicable Award Agreement
entered into under the Plan shall be binding on all successors and assigns of a
Participant, including the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.


                                       19