EXECUTION COPY
This Agreement (the "Agreement") is entered into as of January 4th,
2006 by and between SITEL Corporation (the "Company" or "SITEL") and XXXX
Piranha Master Fund, Ltd. ("XXXX").
WHEREAS, XXXX has submitted an Advance Notice of Shareholder Business
and Shareholder Nominees dated November 29, 2005 (the "Notice") pertaining to
SITEL's 2006 annual meeting of shareholders (the "Annual Meeting") to SITEL's
corporate secretary;
WHEREAS, the parties hereto desire to enter into this Agreement in
order to resolve certain disagreements that may arise or have arisen with
respect to the Notice and related matters and to provide for certain matters
with respect to the Notice and related matters.
In consideration of the time and effort that can be avoided by the
parties that would otherwise be required to be incurred in the absence of this
Agreement, the Company and XXXX agree as follows:
1. NOTICE DEFICIENCIES: SITEL hereby confirms that SITEL has reviewed
the Notice for compliance with the content, timeliness and other applicable
requirements of SITEL's articles of incorporation and bylaws (the "Governing
Documents"), including Sections 10 and 11 of Article II of SITEL's bylaws (the
"Advance Notice Provisions"), and hereby declares that the Notice complies with
all such requirements, except that SITEL believes, and XXXX hereby acknowledges
having been notified by SITEL as of December 15, 2005 of SITEL's belief, that
the Notice contains the following deficiencies: (1) the purported voting
requirement for the removal of directors is incorrect, as described in Section 2
below, and (2) the purported reservation of rights on page 4 of the Notice (the
"Reservation") does not comply with the Advance Notice Provisions, as described
in Section 2 below. While SITEL believes that the Notice contains various other
statements which are legally or factually incorrect or with which SITEL
otherwise disagrees, SITEL hereby declares that SITEL does not believe that any
such statements render the Notice deficient under or otherwise non-compliant
with the Governing Documents.
2. (a) AMENDMENT OF VOTING REQUIREMENT IN JANA'S PROPOSAL 1. XXXX
acknowledges that SITEL and its Minnesota counsel have informed XXXX that SITEL
and such counsel believe that the voting threshold embodied in the proposed
amendment to Section 3, Article III of the Company's Bylaws set forth in
Proposal 1 of the Notice does not comply with the applicable requirements of the
Minnesota Business Corporation Act (the "MBCA"). Without prejudice to either
party's position on the merits of such analysis, the parties agree that an
amendment to Proposal 1 of the Notice by XXXX received in writing by SITEL on or
before the close of business on January 31, 2006 as set forth in paragraph (c)
below amending the voting threshold required for the removal of directors to
provide that such removal may not be effected without the approval of at least a
majority of the voting power of the outstanding shares shall not be deemed to
have materially altered the Notice and therefore XXXX shall still be deemed to
have given notice of its intent to bring such business before the Annual Meeting
in accordance with the timeliness and other applicable requirements of the
Advance Notice Provisions and neither SITEL nor its representatives (including
any Chairman of the Annual Meeting) shall at any point otherwise deem such
amendment as rendering the Notice non-compliant with the Governing Documents
with respect to timeliness or in any other respect. In the absence of such
amendment, SITEL reserves the right to assert the unenforceability and challenge
the enforceability of such voting threshold.
(b) REMOVAL OF PURPORTED RESERVATION. XXXX acknowledges that SITEL
has informed XXXX that SITEL believes that the Reservation does not comply with
the Advance Notice Provisions. Without prejudice to either party's position on
the merits of such statement, the parties agree that an amendment to the Notice
by XXXX received in writing by SITEL on or before the close of business on
January 31, 2006 as set forth in paragraph (c) below deleting the Reservation
shall not be deemed to have materially altered the Notice and therefore XXXX
shall still be deemed to have given notice of its intent to bring the business
described in the Notice (other than the matters covered by the Reservation)
before the Annual Meeting in accordance with the timeliness and other applicable
requirements of the Advance Notice Provisions and neither SITEL nor its
representatives (including any Chairman of the Annual Meeting) shall otherwise
deem such amendment as rendering the Notice non-compliant with the Governing
Documents with respect to timeliness or in any other respect. In the absence of
such amendment, SITEL reserves the right to challenge the Notice, insofar as it
relates to the Reservation and the matters covered thereby, as being deficient
under and non-compliant with the Advance Notice Provisions and for any other
reason.
(c) DECLARATION REGARDING AMENDED NOTICE. Attached as Annex A to
this Agreement is the form of amendment to the Notice reflecting the amendments
permitted by the preceding paragraphs (a) and (b). SITEL hereby declares that it
has reviewed the Notice together with such amendments for compliance with the
applicable requirements of the Governing Documents, including the Advance Notice
Provisions, and hereby declares (with continuing force and effect) the Notice as
so amended will be in compliance with the content, timeliness and other
applicable requirements of the Governing Documents and agrees neither it nor its
representatives (including any chairman of the Annual Meeting) will declare
otherwise, provided that XXXX delivers to SITEL an amendment to the Notice in
the form of Annex A on or before the close of business on January 31, 2006.
3. VOTE REQUIREMENT FOR ELECTION OF DIRECTORS. The parties acknowledge
and agree that the voting threshold required for the election of directors to
SITEL's Board of Directors is as set forth in Article 4.6 of SITEL's articles of
incorporation.
4. EQUITABLE RELIEF; DISMISSAL OF PENDING LITIGATION. (a) The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States located in the State of
Minnesota, without bond or other security being required, this being in addition
to any other remedy to which they are entitled at law or in equity. The parties
further agree that the sole appropriate venue for any future potential disputes
relating or with respect to the Annual Meeting or the Notice shall be a court of
the United States located in the State of Minnesota to the extent such court has
jurisdiction over such matters.
(b) This Agreement shall terminate, shall be null and void and shall
be of no further force or effect if XXXX shall not have delivered to SITEL not
later than the close of business on January 9, 2006, proof that XXXX has caused
the proceeding entitled XXXX PARTNERS LLC & XXXX PIRANHA MASTER FUND, LTD. V.
SITEL CORPORATION, No. 0:05-dv-2927 (D. Minn., filed Dec. 19, 2005) to be
dismissed and discontinued in all respects, provided that such dismissal and
discontinuance may be without prejudice to XXXX. The parties hereby further
agree that neither party nor its representatives will bring any action related
to performance of either party's obligations under the December 12, 2005 letter
agreement between the parties (the "Letter Agreement") (except for the portions
of the Letter Agreement relating to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended).
5. SEVERABILITY; RESERVATION OF RIGHTS. (a) If any term or other
provision of this Agreement is determined by a court of competent jurisdiction
to be invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the end
that the agreements contemplated hereby are implemented to the extent possible.
(b) Except as expressly provided herein, each party expressly
reserves all of its rights.
6. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York. Any waiver or amendment of
this Agreement must be in writing signed by the parties hereto. This Agreement
shall inure to the benefit of any be binding upon, each party and that party's
respective successors and assigns. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect to the matters which are the
subject hereof (except for the portions of the Letter Agreement relating to Rule
14a-8 under the Securities Exchange Act of 1934, as amended).
This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement and each of which shall be deemed an
original.
[Rest of page left intentionally blank. Signature page follows.]
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed or caused this Agreement to be executed as of the date first
written above.
SITEL CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: CEO
XXXX PIRANHA MASTER FUND, LTD.
By: XXXX Partners LLC, its Investment Manager
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Managing Partner
ANNEX A
XXXX PIRANHA MASTER FUND, LTD.
January 31, 2006
Corporate Secretary
SITEL Corporation
0000 Xxxxx Xxxxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
Re: AMENDMENT TO THE ADVANCE NOTICE OF SHAREHOLDER BUSINESS AND
SHAREHOLDER NOMINEES
XXXX Piranha Master Fund, Ltd., a Cayman Islands exempted company,
hereby submits the following amendments to the notice (the "Notice") delivered
to SITEL Corporation (the "Company") on November 29, 2005.
Proposal 1 of the Notice and the accompanying lead-in to Proposal 1 is
hereby amended to read as follows:
PROPOSAL 1: A proposal to amend and restate Sections 3 and 4 of Article
III of the Bylaws to permit shareholders to remove directors with or
without cause by the vote of a majority of the voting power of the
outstanding shares, and to fill the vacancies so created, which
proposal will be in substantially the following form: RESOLVED, that
Sections 3 and 4 of Article III of the Bylaws are hereby amended and
restated in their entirety as follows:
Section 3. Resignation or Removal. Any director may resign at
any time upon written notice to the corporation. Any director, or the
entire board of directors, may be removed from office at any time, with
or without cause, only at a regular meeting of the shareholders or at
any special meeting of the shareholders called for such purpose, if a
quorum is present (in person or by proxy), upon the affirmative vote of
the holders of a majority of the voting power of all shares entitled to
vote at an election of directors. Notwithstanding the foregoing, any
director who was an employee of the corporation at the time such
director was elected may be removed from office at the election of a
majority of the remaining directors if such director ceases, for any
reason, to be an employee of the corporation.
Section 4. Vacancies. Any vacancies in the board of directors
for any reason and any newly created directorships resulting by reason
of any increase in the number of directors may be filled either by: (1)
the board of directors, acting by a majority of the remaining directors
then in office, although less than a quorum, or by a sole remaining
director or (2) the shareholders at any annual or special meeting, if a
quorum is present (in person or by proxy), by the affirmative vote of
the holders of at least a majority of the voting power of the shares
present (in person or by proxy) at the meeting and entitled to vote
generally in the election of directors, voting together as a single
class. Any directors so appointed shall hold office until the next
election of the class for which such directors have been chosen and, in
either instance, until their successors are elected and qualified or
their earlier resignation or removal. Notwithstanding the foregoing
provisions of this Section 4, a vacancy occurring as a result of the
removal of any director with or without cause by the shareholders shall
be filled exclusively by the shareholders at any annual or special
meeting, including the meeting at which such directors were removed, if
a quorum is present (in person or by proxy), by the affirmative vote of
the holders of at least a majority of the voting power of the shares
present (in person or by proxy) at the meeting and entitled to vote
generally in the election of directors, voting together as a single
class.
PROPOSAL 2: Provided that Proposal 1 is approved by the requisite
shareholder vote, a proposal to remove two directors, in substantially
the following form: RESOLVED, that Xxxxx X. Xxxxx and Xxxxx X. Xxxxx
(or any successors thereto) are hereby removed without cause as
directors of the Company.
The following language is hereby deleted from the Notice: "The
Shareholder reserves the right to nominate additional nominees in the event the
Company, by the appropriate corporate action, has increased or increases the
number of directors to be elected at the Meeting and reserves the right to make
modifications to the foregoing proposals in the event that the composition of
the board of directors has changed prior to the Meeting."
The Notice is hereby amended to replace "(or any replacement thereof)"
in each instance that it appears with "(or any successor thereto)".
Very truly yours,
XXXX PIRANHA MASTER FUND, LTD.
By: XXXX Partners LLC, its investment manager
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Managing Partner
