AGREEMENT
This Agreement dated February 5, 2009 is by and among XXXX
Partners LLC ("XXXX") and Convergys Corporation (the "COMPANY"). In
consideration of and reliance upon the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to XXXX that this Agreement has been duly
authorized, executed and delivered by the Company, and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
Section 2. REPRESENTATIONS AND WARRANTIES OF XXXX. XXXX represents and
warrants to the Company that this Agreement has been duly authorized, executed
and delivered by XXXX, and is a valid and binding obligation of XXXX,
enforceable against XXXX in accordance with its terms. XXXX hereby represents
and warrants to the Company that it and its Affiliates and Associates (as such
terms are hereinafter defined) are the "beneficial owners" (as such term is
hereinafter defined) of the number of shares of the Company's common stock
("SHARES") and Derivative Instruments (as such term is hereinafter defined) set
forth on SCHEDULE A with respect to XXXX and such Affiliates and Associates, and
that none of XXXX or any of its Affiliates or Associates beneficially own, or
have any rights, options or agreements to acquire or vote, any other Shares or
Derivative Instruments. None of XXXX or any of its Affiliates or Associates
beneficially own, or have any rights, options or agreements to acquire any debt
securities of the Company.
Section 3. BOARD NOMINATION AND OTHER COMPANY MATTERS. (a) In accordance with
the Ohio General Corporation Law, the Company's Amended Articles of
Incorporation and the Company's Regulations, the Company will appoint to the
Company's board of directors (the "board of directors") (1) as a Class II
director, a senior executive of XXXX designated by XXXX and set forth on
SCHEDULE B hereto, (2) as a Class I director, an Independent (as defined in
Section 7 below) designated by XXXX and reasonably acceptable to the Governance
and Nominating Committee of the Company's board of directors (the "GOVERNANCE
AND NOMINATING COMMITTEE") and set forth on SCHEDULE B hereto and (3) as a Class
III director, an Independent jointly selected (from among candidates proposed in
good faith by either or both parties) in good faith, and reasonably acceptable
to each of, XXXX and the Governance and Nominating Committee (the persons in
clauses (1)-(3) collectively, the "2009 DESIGNEES). The parties shall use good
faith efforts to reach agreement promptly with respect to the 2009 Designee
referred to in clause (a)(3) of this Section, and in any event within twenty
business days of the execution of this Agreement or as soon as reasonably
practicable thereafter. Each of the appointments described in the preceding
sentence will be made, in accordance with the Company's Governance Principles, a
copy of which has previously been provided to XXXX (the "GOVERNANCE
PRINCIPLES"), promptly after (i) in the case of the 2009 Designee referred to in
clause (a)(3) of this Section, such 2009 Designee has been identified, and (ii)
for all 2009 Designees, the condition to his or her appointment set forth in the
second succeeding sentence has been satisfied, provided that this condition
shall be waived if the Company does not take all necessary action to enable such
individual to comply with such condition reasonably promptly following the date
such individual is identified and
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agreed upon, in each case, if applicable. The size of the board of directors
will be increased by one as each such appointment is made, for a total increase
of three directorships. As a condition to each such 2009 Designee's appointment
or election to the Company's board of directors, each 2009 Designee shall agree
to comply with all policies, code of conduct and code of ethics applicable to
all of the Company's directors and to provide information regarding such 2009
Designee that is required to be disclosed for candidates for directors and
directors in a proxy statement under the federal securities laws or applicable
New York Stock Exchange rules and regulations, information required by the
Governance Principles to be submitted in connection with shareholder director
nominations and such other customary information as reasonably and promptly
requested by the Company with respect to Company nominees. The parties also
agree to observe the procedures set forth on SCHEDULE C at meetings of the board
of directors. If XXXX and its Affiliates and Associates shall be in compliance
with the restrictions set forth in Section 4 through the time of the Company's
2009 annual meeting of shareholders (PROVIDED that, subject to Section 9(d), and
solely with respect to inadvertent, non-intentional non-compliance, XXXX shall
have five business days following written notice from the Company of
non-compliance to remedy such non-compliance if capable of remedy; it being
understood that any non-compliance that is not inadvertent or is intentional
shall not be subject to such five-business-day cure period) and XXXX and its
Affiliates and Associates collectively beneficially own at least 10% of the
outstanding Shares through the date of such meeting, the Company agrees to
nominate the 2009 Designee who is a member of Class II for election as a
director of the Company and to use at least the same efforts to cause the
election of such 2009 Designee at the Company's 2009 annual meeting of
shareholders as the Company uses with respect to the election or re-election of
any other person nominated for election or re-election by the Company at such
meeting; PROVIDED that as a condition to such nomination, such 2009 Designee
shall execute a letter agreement with the Company in which such person agrees to
resign effective as of the earlier to occur of (i) the Company's 2011 annual
meeting of shareholders and (ii) following the expiration of the Standstill
Period, the taking of any action by XXXX or its Affiliates or Associates which
would violate Section 4 hereof had such action taken place prior to the
expiration of the Standstill Period. If XXXX and its Affiliates and Associates
shall be in compliance with the restrictions set forth in Section 4 through the
time of the Company's 2010 annual meeting of shareholders (PROVIDED that,
subject to Section 9(d), and solely with respect to inadvertent, non-intentional
non-compliance, XXXX shall have five business days following written notice from
the Company of non-compliance to remedy such non-compliance if capable of
remedy; it being understood that any non-compliance that is not inadvertent or
is intentional shall not be subject to such five-business-day cure period) and
XXXX and its Affiliates and Associates collectively beneficially own at least 5%
of the outstanding Shares through the date of such meeting, the Company agrees
to nominate the 2009 Designee who is a member of Class III for election as a
director of the Company and to use at least the same efforts to cause the
election of such 2010 Designee at the Company's 2010 annual meeting of
shareholders as the Company uses with respect to the election or re-election of
any other person nominated for election or re-election by the Company at such
meeting.
(b) If XXXX delivers a notice in writing to the Company after
November 30, 2009 and on or prior to January 1, 2010 requesting that the Company
comply with this Section 3(b) and each of XXXX and its Affiliates and Associates
is in compliance with the restrictions set forth in Section 4 through the date
of the appointment (PROVIDED that, subject to Section 9(d), and solely with
respect to inadvertent, non-intentional non-compliance, XXXX shall have five
busi-
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ness days following written notice from the Company of non-compliance to remedy
such non-compliance if capable of remedy; it being understood that any
non-compliance that is not inadvertent or is intentional shall not be subject to
such five-business-day cure period) and XXXX and its Affiliates and Associates
collectively beneficially own at least 5% of the outstanding Shares through such
date of appointment, in accordance with the Ohio General Corporation Law, the
Company's Amended Articles of Incorporation and the Company's Regulations, the
Company shall no later than the date that is thirty business prior to the
Company's 2010 annual meeting, (1) increase the size of the board of directors
by two seats and (2) appoint (i) as a Class I director, an Independent
designated by XXXX and reasonably acceptable to the Governance and Nominating
Committee and (ii) as a Class III director, an Independent jointly selected
jointly selected (from among candidates proposed in good faith by either or both
parties) in good faith, and reasonably acceptable to each of, XXXX and the
Governance and Nominating Committee, to fill the newly-created seats
(collectively, the "2010 DESIGNEES"). The parties shall use good faith efforts
to reach agreement promptly with respect to the 2010 Designee referred to in
clause (b)(2)(ii) of this Section, and in any event within twenty business days
of the delivery of such notice or as soon as reasonably practicable thereafter.
If XXXX and its Affiliates and Associates shall be in compliance with the
restrictions set forth in Section 4 through the time of the Company's 2010
annual meeting of shareholders (PROVIDED that, subject to Section 9(d), and
solely with respect to inadvertent, non-intentional non-compliance, XXXX shall
have five business days following written notice from the Company of
non-compliance to remedy such non-compliance if capable of remedy; it being
understood that any non-compliance that is not inadvertent or is intentional
shall not be subject to such five-business-day cure period) and XXXX and its
Affiliates and Associates collectively beneficially own at least 5% of the
outstanding Shares through the date of such meeting, the Company agrees to
nominate the 2010 Designee who is a member of Class III for election as a
director of the Company and to use at least the same efforts to cause the
election of such 2010 Designee at the Company's 2010 annual meeting of
shareholders as the Company uses with respect to the election or re-election of
any other person nominated for election or re-election by the Company at such
meeting. As a condition to each such 2010 Designee's appointment or election to
the Company's board of directors, each 2010 Designee shall agree to comply with
all policies, code of conduct and code of ethics applicable to all of the
Company's directors and to provide information regarding such 2010 Designee that
is required to be disclosed for candidates for directors and directors in a
proxy statement under the federal securities or applicable New York Stock
Exchange rules and regulations, information required by the Governance
Principles to be submitted in connection with shareholder director nominations
and such other customary information as reasonably and promptly requested by the
Company with respect to Company nominees.
(c) If at any time during the Standstill Period, any of the XXXX
Selectees is or becomes unwilling or unable to serve as a nominee or, following
such person's appointment or election, as a director of the Company, upon the
delivery of the resignation (or if later, effective date of such resignation) of
such XXXX Selectee from the board of directors, XXXX shall be entitled to
designate a replacement nominee or director, as the case may be, which
replacement nominee or director shall meet the same requirements and be selected
in the same manner as was applicable to the nominee or director being replaced,
and such person shall be appointed to the board of directors to serve the
unexpired term of such XXXX Selectee, and shall thereafter be deemed a XXXX
Selectee for purposes of this Agreement and be entitled to the same rights and
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subject to the same requirements under this Agreement applicable to the
resigning XXXX Selectee prior to his resignation. If at any time during the
Standstill Period, any 2009 Designee or 2010 Designee who is not a XXXX Selectee
is or becomes unwilling or unable to serve as a nominee or, following such
person's appointment or election, as a director of the Company, upon the
delivery of the resignation (or if later, effective date of such resignation) of
such 2009 Designee or 2010 Designee from the board of directors, the Company
shall appoint an Independent jointly selected (from among candidates proposed in
good faith by either or both parties) in good faith, and reasonably acceptable
to each of, XXXX and the Governance and Nominating Committee, to serve the
unexpired term of such 2009 Designee or 2010 Designee, as applicable. In such
case, the parties shall use good faith efforts to reach agreement promptly with
respect to such Independent, and in any event within twenty business days of the
receipt of notice of such unwillingness or inability or resignation, or as soon
as reasonably practicable thereafter.
(d) Other than for vacancies filled pursuant to Section 3(c),
during the Standstill Period, the Company shall not fill any vacancy occurring
on the board of directors if after filling such vacancy the board of directors
would have more than 14 members. The Company shall not take any action to
increase the size of the board of directors during the Standstill Period other
than as set forth in this Agreement, unless following such increase the board of
directors shall have no more than fourteen members. The foregoing
notwithstanding, nothing in this paragraph or this agreement shall prevent the
Company from appointing its chief executive officer to the board of directors
even if such appointment results in the number of directors exceeding fourteen
unless the absence of the chief executive officer from the board of directors
results from the resignation from the board of directors by such chief executive
officer or his or her predecessor followed by the filling of the vacancy created
thereby by the board of directors with an individual who is not the chief
executive officer of the Company.
(e) The Company shall appoint the XXXX Selectee referred to in
Section 3(a)(1) who is a senior executive of XXXX to any committee of the board
of directors now existing or formed in the future the primary purpose of which
committee is to review the strategic direction or operational performance of the
Company, such appointment to be made promptly following such 2009 Designee's
appointment, or if no such committee now exists but is formed hereafter,
promptly following such formation; PROVIDED that the service of any XXXX
Selectee on any such committee shall cease immediately, and any such XXXX
Selectee shall resign from any such committee effective immediately upon the
expiration of the Standstill Period, unless otherwise determined by the board of
directors in its sole discretion. It is understood by the parties that
committees of the board of directors, including but not limited to the executive
committee of the board of directors, which have the power to review strategic
direction or operational performance of the Company but were not formed
primarily for such purpose and have not been assigned such primary purpose after
January 21, 2008 shall not be subject to the preceding sentence. It is the
understood by the parties that only the board of directors, and not any
committee thereof, has the power to designate or change the purpose of a
committee of the board of directors. In the event of the replacement as set
forth in Section 3(c) of any director appointed to a committee pursuant to this
Section 3(e), his or her successor shall be promptly appointed to the committee
seat vacated by such former director to serve until the end of the Standstill
Period.
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(f) The Company agrees that, until the earlier of (1) the
expiration of the Standstill Period and (2) such time as any Section 3(f) Person
(as defined below) makes any statement that would be in violation of Section
4(a)(E) if made by XXXX, it will not make, or cause to be made, or in any way
encourage any other person to make or cause to be made, any statement or
announcement that relates to and constitutes an ad hominem attack on, or relates
to and otherwise disparages, XXXX, any of its officers or directors or any
person who has served as an officer or director of XXXX (such persons, "SECTION
3(F) PERSONS"): (A) in any document or report filed with or furnished to the SEC
or any other governmental agency, (B) in any press release or other publicly
available format, or (C) to any journalist or member of the media (including
without limitation, in a television, radio, newspaper or magazine interview).
(g) Within 30 days of the date of this Agreement, the Company
shall amend the Rights Agreement, dated as of November 30, 1998, between the
Company and Computershare Trust Company, N.A. (as successor for the Fifth Third
Bank, N.A.), as amended (the "RIGHTS AGREEMENT"), to increase the thresholds set
forth in Sections 1(a) and 3(a) of the Rights Agreement to 20%.
Section 4. STANDSTILL. (a) XXXX agrees that, from the date of this
Agreement until the date that is the earliest of (1) the date that is six months
after the date of the conclusion of the Company's 2010 annual meeting of
shareholders, (2) December 31, 2010 and (3) thirty (30) calendar days prior to
any applicable deadline by which a shareholder must give notice to the Company
of its intention to nominate a director for election at the Company's 2011
annual meeting of shareholders under the Company's Regulations or other
applicable laws (such period, the "STANDSTILL PERIOD"), neither it nor any of
its Affiliates or Associates will in any manner, directly or indirectly:
(A) effect or seek (including, without limitation, entering into
any discussions, negotiations, agreements or understandings with any third
person), offer or propose (whether publicly or otherwise) to effect, or cause or
participate in, or in any way assist, facilitate or encourage any other person
to effect or seek, offer or propose (whether publicly or otherwise) to effect or
participate in, (1) any acquisition of any securities (or beneficial ownership
thereof), rights or options to acquire any securities (or beneficial ownership
thereof), or any assets or businesses, of the Company or any of its
subsidiaries; PROVIDED that XXXX and its Affiliates and Associates may acquire
beneficial ownership of Shares if upon such acquisition the aggregate beneficial
ownership of Shares by XXXX and its Affiliates and Associates would not at any
time be in excess of 19.9% of the number of Shares that are then outstanding,
(2) any tender offer or exchange offer, merger, acquisition or other business
combination, or other extraordinary transactions, involving the Company or any
of its subsidiaries, (3) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries, or (4) any solicitation of proxies or consents to vote
any voting securities of the Company with respect to the election of directors
or any other proposal to be considered at the Company's annual meeting or
special meetings of shareholders or for the call of a special meeting of
shareholders, or present, conduct, participate or engage in any proposals or
other type of referendum (binding or non-binding), including nominations for
directors, for consideration at such annual meeting or special meetings of
shareholders or for the call of a special meeting of shareholders, PROVIDED that
this clause shall not (A) restrict any XXXX Selectee from, in his or her
capacity as a member of the Company's board of directors, expressing or
advocating for his
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views to other members of the board of directors or during board of directors
meetings, provided that all such actions may not be directed to or observable by
persons who are not members of the board of directors unless approved by the
board of directors, or prevent XXXX from supporting the nomination and election
of any XXXX Selectee to the board of directors in accordance with this Agreement
or (B) prohibit participation in the transactions specified in clauses (2) and
(3) in JANA's or its Affiliates' or Associates' capacity as shareholders, but
only if the Company's board of directors has recommended that the Company's
shareholders affirmatively accept, participate in, approve or otherwise support
such transactions, and such recommendation has not been withdrawn;
(B) form or join in a partnership, limited partnership, syndicate
or other group, including without limitation a group as defined under Section
13(d) of the Exchange Act, with respect to the Shares, or otherwise support or
participate in any effort by a third party, with respect to the matters set
forth in (A), or deposit any Shares in a voting trust or subject any Shares to
any voting agreement, other than solely with its Affiliates or Associates (which
Affiliates and Associates XXXX shall cause to be subject to the same
restrictions set forth herein as if they were parties hereto) with respect to
the Shares now or hereafter owned by XXXX or pursuant to this Agreement, except
and only to the extent that any of the 2009 Designees or 2010 Designees may be
deemed to be members of a group with XXXX or its Associates or Affiliates;
(C) otherwise act, alone or in concert with others, to seek to
control or influence the management, board of directors or policies of the
Company, or, except as provided by Section 3(b) hereof, initiate or take any
action to obtain representation on the board of directors of the Company (other
than in accordance with this Agreement, and in the case of a XXXX Selectee,
other than non-public actions taken in his or her capacity as a member on the
board of directors);
(D) take any action which would, or would reasonably be expected
to, force the Company to make a public announcement regarding any of the types
of matters set forth in (A) above;
(E) make, or cause to be made, or in any way encourage any other
person to make or cause to be made, any statement or announcement that relates
to and constitutes an ad hominem attack on, or relates to and otherwise
disparages, the Company, any of its officers or directors or any person who has
served as an officer or director of the Company: (A) in any document or report
filed with or furnished to the Securities and Exchange Commission (the "SEC") or
any other governmental agency, (B) in any press release or other publicly
available format, or (C) to any journalist or member of the media (including
without limitation, in a television, radio, newspaper or magazine interview); or
(F) enter into any discussions or arrangements with any third
party with respect to any of the foregoing or disclose publicly (in SEC filings
or otherwise) any intention, plan or arrangement that is inconsistent with the
foregoing.
(b) During the Standstill Period, XXXX shall cause all Shares
beneficially owned, directly or indirectly, by it, or by any of its Affiliates
or Associates (including without limitation all Shares beneficially owned as of
the respective record dates for the 2009 and 2010
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annual meetings of shareholders and as of the record dates for any special
meeting of shareholders), to be present for quorum purposes and to be voted, at
such meetings or at any adjournments or postponements thereof, in favor of the
directors nominated by the board of directors (which shall include the
applicable 2009 Designee or 2010 Designee, as appropriate, under Section 3 of
this Agreement) for election at such meetings and as recommended by the board of
directors on any other matter to be voted on at such meetings that relates to
the composition, structure or functioning of the Company's board of directors,
including but not limited to the election or removal of directors, the
classification of the board of directors and the number of directors
constituting the board of directors ("BOARD-RELATED MATTERS"); PROVIDED,
HOWEVER, that it is understood and agreed that, other than with respect to
Board-Related Matters, so long as XXXX is not in breach of this Agreement, XXXX
may, in its capacity as shareholder, vote Shares owned by it in its discretion.
XXXX also agrees during the Standstill Period not to, and shall cause its
Affiliates, Associates, agents and representatives not to (i) request, directly
or indirectly, any amendment or waiver of any provision of this Section 4
(including this sentence) by the Company and (ii) make, or cause to be made, any
statement, announcement or public filing with respect to any proposal or matter
to be considered at the Company's annual meeting or any special meetings of
shareholders concerning compensation or equity incentives for directors,
officers, employees of the Company which statement or announcement is
inconsistent with the recommendation by the board of directors to any such
proposal.
Section 5. CONFIDENTIAL INFORMATION AND OTHER RELATED MATTERS. (a) XXXX and
the XXXX Selectee referred to in Section 3(a)(1) who is a senior executive of
XXXX shall each enter into a confidentiality agreement in the form attached
hereto as EXHIBIT A (the "CONFIDENTIALITY AGREEMENT") with the Company.
(b) XXXX acknowledges that it has received a copy of the Convergys
Corporation Xxxxxxx Xxxxxxx Policy (and supplemental restrictions for Directors
and Senior Level Officers) (the "TRADING POLICY") and until the expiration of
the Standstill Period and thereafter for so long as a XXXX executive is on the
Company's board of directors, XXXX shall, and shall cause its Affiliates and
Associates to, comply with such Trading Policy, and thereafter to comply with
applicable federal securities laws restricting a person's ability to purchase,
sell, trade or otherwise transfer securities of the Company, and to communicate
material, non-public information to any other person under circumstances in
which it is reasonably foreseeable that such person may purchase, sell, trade or
otherwise transfer securities of the Company, while in possession of material,
non-public information of an issuer.
Section 6. PUBLIC ANNOUNCEMENT AND SEC FILING. (a) XXXX and the Company
shall announce this Agreement and the material terms hereof by means of a joint
press release in the form attached hereto as EXHIBIT B (the "PRESS RELEASE") as
soon as practicable on or after the date hereof.
(b) XXXX shall promptly prepare and file an amendment (the "13D
AMENDMENT") to its Schedule 13D with respect to the Company filed with the SEC
on July 25, 2008, as subsequently amended, reporting the entry into this
Agreement and amending applicable items to conform to its obligations hereunder.
The 13D Amendment shall be consistent with the Press Release and the terms of
this Agreement. XXXX shall provide the Company with reasonable op-
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portunity to review and comment upon the 13D Amendment prior to filing, and
shall consider in good faith any changes proposed by the Company.
Section 7. DEFINITIONS. For purposes of this Agreement:
(a) the terms "AFFILIATE" and "ASSOCIATE" shall have the
respective meanings set forth in Rule 12b-2 promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT");
(b) the terms "BENEFICIAL OWNER" and "BENEFICIALLY OWN" shall have
the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the
Exchange Act except that a person shall also be deemed to be the beneficial
owner of all Shares which such person has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
the exercise of any rights in connection with any securities or any agreement,
arrangement or understanding (whether or not in writing), regardless of when
such rights may be exercised and whether they are conditional, and all Shares
which such person or any of such person's Affiliates or Associates has or shares
the right to vote or dispose;
(c) the term "DERIVATIVE INSTRUMENT" shall mean any option,
warrant, convertible security, stock appreciation right, or similar right with
an exercise or conversion privilege or a settlement payment or mechanism at a
price related to any class or series of shares of the Company or with a value
derived in whole or in part from the value of any class or series of shares of
the Company or any derivative or synthetic arrangement having characteristics of
a long position in any class or series of shares of the Company, whether or not
such instrument or right shall be subject to settlement in the underlying class
or series of capital stock of the Company, or otherwise directly or indirectly
owned beneficially by such shareholder, and any other direct or indirect
opportunity to profit or share in any profit derived from any increase or
decrease in the value of shares of the Company;
(d) the term "INDEPENDENT" means an individual who is (1) not an
Affiliate or Associate of XXXX or of the Company and (2) would qualify as an
"Independent Director" pursuant to the listing standards of the New York Stock
Exchange (the "NYSE") with respect to XXXX or any of its Affiliates or
Associates (if such persons were listed on the NYSE) and with respect to the
Company (including that such individual has no material relationship with
(either directly or as a partner, shareholder or officer of an organization that
has a relationship with) any of XXXX, its Affiliates or Associates or the
Company, as applicable.
(e) "XXXX SELECTEE" means each of the 2009 Designees referred to
in Section 3(a)(1) and 3(a)(2) hereof, and the 2010 Designee referred to in
Section 3(b)(2)(i) hereof.
(f) the terms "PERSON" or "PERSONS" shall mean any individual,
corporation (including not-for-profit), general or limited partnership, limited
liability or unlimited liability company, joint venture, estate, trust,
association, organization or other entity of any kind or nature.
Section 8. NOTICES. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be in writing and
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shall be deemed validly given, made or served, if (a) given by telecopy and
email, when such telecopy is transmitted to the telecopy number set forth below
and sent to the email address set forth below and the appropriate confirmation
is received or (b) if given by any other means, when actually received during
normal business hours at the address specified in this Section:
if to the Company: Convergys Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Xxxx Xxxxxx
Facsimile: (000) 000-0000
if to XXXX: XXXX Partners LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
Section 9. SPECIFIC PERFORMANCE; REMEDIES. (a) In furtherance and not in
limitation of Section 9(b), the parties hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, in addition to any
other remedy to which they are entitled at law or in equity. Furthermore, each
of the parties hereto (a) irrevocably waives the right to trial by jury, (b)
agrees to waive any bonding requirement under any applicable law, in the case
any other party seeks to enforce the terms by way of equitable relief and (c)
irrevocably consents to service of process by first class certified mail, return
receipt requested, postage prepaid, to the address of such parties' principal
place of business or as otherwise provided by applicable law. THIS AGREEMENT
SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND
EFFECT, BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE
OF LAW PRINCIPLES OF SUCH STATE.
(b) Notwithstanding any other Section in this Agreement and
without limiting any other remedies the Company may have in law or equity, (i)
in the event that XXXX (or any Affiliate or Associate of XXXX) inadvertently and
non-intentionally fails to perform or otherwise fulfill its obligations set
forth in Sections 4 or 5 in any material respect, and shall not have remedied
such failure or non-fulfillment if capable of being remedied or fulfilled within
five business days following written notice from the Company of such failure or
non-fulfillment (which five-business-day period is subject to Section 9(d)) or
(ii) in the event that XXXX (or any Affiliate or Associate of XXXX)
non-inadvertently or intentionally fails to perform or otherwise fulfill its
obligations set forth in Sections 4 or 5 in any material respect, the Company
shall not be required to perform or fulfill its obligations set forth in Section
3 (and, in the case of Section 3(e) may, in
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its discretion, remove any XXXX Selectee from any committee of the board of
directors), and the XXXX Selectees shall promptly tender their resignations as
members of the Company's board of directors effective immediately as of such
time. As a condition to appointment to the board of directors pursuant to this
Agreement, each XXXX Selectee agrees to execute an irrevocable letter agreement
with the Company in which each such person agrees to resign if required in
accordance with the immediately preceding sentence.
(c) Notwithstanding any other Section in this Agreement and
without limiting any other remedies XXXX may have in law or equity, (i) in the
event that the Company inadvertently and non-intentionally fails to perform or
otherwise fulfill its obligations set forth in Section 3 in any material
respect, and shall not have remedied such failure or non-fulfillment if capable
of being remedied or fulfilled within five business days following written
notice from XXXX of such failure or non-fulfillment (which five-business-day
period is subject to Section 9(d)) or (ii) in the event that the Company
non-inadvertently or intentionally fails to perform or otherwise fulfill its
obligations set forth in Section 3 in any material respect, XXXX shall not be
required to perform or fulfill its obligations set forth in Sections 4 and 5 but
only for so long as such failure to perform or non-fulfillment of its
obligations by the Company remain unremedied or unfulfilled, as the case may be,
after such five-business-day period.
(d) It is understood and agreed by the parties that the cure
periods in Section 3(a), Section 3(b), Section 9(b) and Section 9(c) of this
Agreement do not relieve the non-compliant party from any liability resulting
from such non-compliance under this Agreement.
Section 10. SEVERABILITY. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent jurisdiction
to be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality or unenforceability of such provision shall have no
effect upon the legality or enforceability of any other provision of this
Agreement.
Section 11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
Section 12. NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the
benefit of the parties hereto and is not enforceable by any other persons.
Section 13. ENTIRE UNDERSTANDING. This Agreement and the Confidentiality
Agreement contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and may be amended only by an agreement in
writing executed by the parties hereto.
Section 14. INTERPRETATION AND CONSTRUCTION. (a) The Company acknowledges
that its board of directors is bound by the obligations of the Company hereto.
(b) Each of the parties hereto acknowledges that it has been
represented by counsel of its choice throughout all negotiations that have
preceded the execution of this Agreement, and that it has executed the same with
the advice of said counsel. Each party and its counsel cooperated and
participated in the drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto exchanged among the
parties shall be
-10-
deemed the work product of all of the parties and may not be construed against
any party by reason of its drafting or preparation. Accordingly, any rule of law
or any legal decision that would require interpretation of any ambiguities in
this Agreement against any party that drafted or prepared it is of no
application and is hereby expressly waived by each of the parties hereto, and
any controversy over interpretations of this Agreement shall be decided without
regard to events of drafting or preparation.
-11-
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized signatories of the parties as of the date
hereof.
CONVERGYS CORPORATION XXXX PARTNERS LLC
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxxxxxx
--------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxx Xxxxxxxxxx
Title: Non-Executive Chairman Title: Managing Partner
of the Board
[Signature Page to the Agreement]
SCHEDULE A
Name SHARES BENEFICIALLY OWNED DERIVATIVE INSTRUMENTS
------------------------- ----------------------
(INCLUDING DESCRIPTION THEREOF)
XXXX Partners LLC 17,035,512 0
[Schedule A to the Agreement]
SCHEDULE B
DIRECTOR CLASS NAME
-------------- ----
Class II (a senior executive of XXXX designated by XXXX) Xxxxx Xxxxxxxxxx
Class I (Independent director designated by XXXX and Xxxxxxx X. Xxx
reasonably acceptable to the Governance and
Nominating Committee)
[Schedule B to the Agreement]
SCHEDULE C
All meetings of the board of directors shall be conducted in
accordance with the Governance Principles. For so long as Xxxxx Xxxxxxxxxx
serves as a director of the Company, Xxxx Scotch (the "OBSERVER") may attend, in
order to assist Xx. Xxxxxxxxxx, as an observer, meetings of the board of
directors attended by Xx. Xxxxxxxxxx, such attendance to be in-person if Xx.
Xxxxxxxxxx attends in-person, and to be telephonic if Xx. Xxxxxxxxxx attends
telephonically or if otherwise invited by the board of directors; provided that
the Observer shall be limited to observing, and may not participate in any such
meetings; provided, further, that at the time of his attendance at each such
meeting, the Observer continues to be an employee of XXXX. It is understood by
the parties that (1) the Observer may be excluded from any part of any meetings
of the board of directors if his presence at such meetings (or part thereof) may
negatively affect the existence of, or the ability of the Board, the Company or
any director to assert any, privilege, and (2) the Observer shall not be
entitled to attend or participate in any executive sessions of the board of
directors.
[Schedule C to the Agreement]
EXHIBIT A
CONVERGYS CORPORATION
000 XXXX XXXXXX XXXXXX
XXXXXXXXXX, XXXX 00000
000-000-0000
February 5, 2009
To: Each of the Persons Listed on Schedule A Hereto (the "XXXX GROUP")
Ladies and Gentlemen:
This letter agreement shall be effective concurrently with the
execution of that Agreement (the "AGREEMENT"), dated as of the date hereof, by
and between the XXXX Group and the Company. You have informed Convergys
Corporation (the "COMPANY") that, subject to the terms of, and in accordance
with, this letter agreement, the 2009 Designee (as defined in the Agreement)
(who is a senior executive of XXXX Partners LLC and has been designated by you
to serve on the Company's board of directors (the "BOARD") pursuant to Section
3(a)(1) of the Agreement) (the "XXXX DIRECTOR") may disclose to you non-public
information he obtains while a member of the Board and to discuss confidential
matters relating to the Company. Accordingly, you may receive certain non-public
information regarding the Company. You acknowledge that this information is
proprietary to the Company and may include strategic, business or financial
planning, the thoughts and deliberations of the Board as a whole or of
individual directors or senior executives, or other business information the
disclosure of which could harm the Company. In consideration of the Company's
agreements and obligations in the Agreement, you and your representatives,
attorneys, advisors, directors, officers and employees (collectively, the
"Representatives") agree to treat any and all information concerning the Company
that is furnished to you or your Representatives by the Company and its
Representatives or the XXXX Director (regardless of the manner in which it is
furnished, including without limitation in written or electronic format or
orally, gathered by visual inspection or otherwise), together with any notes,
analyses, compilations, studies, interpretations, documents or records
containing, referring, relating to, based upon or derived from such information,
in whole or in part (collectively, "CONFIDENTIAL INFORMATION"), in accordance
with the provisions of this letter agreement, and to take or abstain from taking
the other actions hereinafter set forth.
1. The term "Confidential Information" does not include
information that (i) is or has become generally available to the public other
than as a result of a direct or indirect disclosure by you or your
Representatives in violation of this letter agreement or, in the case of
Representatives, in violation of any other duty or obligation of confidentiality
to the Company, or (ii) was within your or any of your Representatives'
possession prior to its being furnished to you by the XXXX Director, or by or on
behalf of the Company; PROVIDED, that in the case of (ii) above, the source of
such information was not believed by you, after inquiring of the disclosing
person, to be bound by a confidentiality agreement with or other contractual,
legal or fiduciary obligation
A-1
of confidentiality to the Company with respect to such information at the time
the same was disclosed.
2. You hereby agree that you and your Representatives will (a)
keep the Confidential Information strictly confidential and (b) not disclose any
of the Confidential Information in any manner whatsoever without the prior
written consent of the Company; PROVIDED, HOWEVER, that you may disclose any of
such information to your Representatives who (i) need to know such information
and (ii) are informed by you of the confidential nature of such information;
PROVIDED, FURTHER, that you will be responsible for any violation of this letter
agreement by your Representatives as if they were parties hereto except that you
will not be so responsible with respect to any such Representative who has
executed a copy of this letter agreement as an Additional Signatory and
delivered such signed copy to the Company. It is understood and agreed that the
XXXX Director shall not disclose to you or your Representatives any Legal Advice
(as defined below) that may be included in the Confidential Information with
respect to which such disclosure could constitute waiver of the Company's
attorney client privilege. "Legal Advice" as used herein shall mean the advice
provided by legal counsel stating legal rights, duties, liabilities and defenses
and shall not include factual information or the formulation or analysis of
business strategy.
3. In the event that you or any of your Representatives are
required by applicable subpoena to disclose any of the Confidential Information,
you will in advance of such disclosure (a) promptly notify the Company in
writing by facsimile and certified mail, (b) provide the Company with a list of
any Confidential Information you intend to disclose (and, if applicable, the
text of the disclosure language itself) and (c) cooperate with the Company, at
the Company's request and expense, to the extent it may seek to limit such
disclosure, including, if requested, taking all reasonable steps to resist or
narrow the scope of such required disclosure or subpoena and to obtain
confidential treatment of any information which could be disclosed. If, in the
absence of a protective order or the receipt of a waiver from the Company in its
sole discretion after a request in writing therefor is made by you (such request
to be made as soon as reasonably practicable to allow the Company a reasonable
amount of time to respond thereto), you are required pursuant to any such
subpoena to disclose Confidential Information, you will disclose only that
portion of the Confidential Information which you are advised by counsel is
legally required and use your reasonable best efforts to obtain assurances that
confidential treatment will be accorded to such Confidential Information. In no
event will you or any of your Representatives oppose action by the Company to
obtain a protective order or other relief to prevent the disclosure of the
Confidential Information or to obtain reliable assurance that confidential
treatment will be afforded the Confidential Information.
4. You acknowledge that (a) none of the Company or any of its
representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of the Confidential Information, and (b) none of
the Company or any of its representatives shall have any liability to you or to
any of your Representatives relating to or resulting from the use of the
Confidential Information or any errors therein or omissions therefrom.
5. All Confidential Information shall remain the property of the
Company. Neither you nor any of your Representatives shall by virtue of
disclosure of and/or your use of any Confidential Information acquire any rights
with respect thereto, all of which rights (including all intellectual property
rights) shall remain exclusively with the Company.
A-2
6. You hereby confirm that you are aware, and that you will advise
your Representatives who are informed as to the matters which are the subject of
this letter agreement, that the federal securities laws impose restrictions on a
person's ability to purchase, sell, trade or otherwise transfer securities of
the Company, and to communicate material, non-public information to any other
person under circumstances in which it is reasonably foreseeable that such
person may purchase, sell, trade or otherwise transfer securities of the
Company, until such time as the material, non-public information becomes
publicly available or is no longer material. You and your Representatives agree
to comply with all such restrictions.
7. [Omitted.]
8. You hereby represent and warrant to the Company that this
letter agreement has been duly authorized, executed and delivered by you, and is
a valid and binding obligation, enforceable against you in accordance with its
terms.
9. It is understood and agreed that no failure or delay by the
Company in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder.
10. You acknowledge that the value of the Confidential Information
to the Company is unique and substantial, but may be impractical or difficult to
assess in monetary terms. In the event of an actual or threatened violation of
this letter agreement, you expressly consent to the enforcement of this letter
agreement by injunctive relief or specific performance, without proof of actual
damages, , in addition to any other remedy to which the Company is entitled at
law or in equity. Each of the parties hereto (a) irrevocably waives the right to
trial by jury, (b) agrees to waive any bonding requirement under any applicable
law, in the case any other party seeks to enforce the terms by way of equitable
relief and (c) irrevocably consents to service of process by first class
certified mail, return receipt requested, postage prepaid, to the address of
such parties' principal place of business or as otherwise provided by applicable
law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY,
INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.
11. This letter agreement contain the entire understanding of the
parties with respect to the subject matter hereof and thereof and may be amended
only by an agreement in writing executed by the parties hereto.
12. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard hereto
shall be in writing and shall be deemed validly given, made or served, if (a)
given by telecopy and email, when such telecopy is transmitted to the telecopy
number set forth below and sent to the email address set forth below and the
appropriate confirmation is received or (b) if given by any other means, when
actually received during normal business hours at the address specified in this
subsection:
A-3
if to the Company: Convergys Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Xxxx Xxxxxx
Facsimile: (000) 000-0000
if to the XXXX Group: XXXX Partners LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
13. If at any time subsequent to the date hereof, any
provision of this letter agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision shall
have no effect upon the legality or enforceability of any other provision of
this letter agreement.
14. This letter agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
15. This letter agreement and the rights and obligations
herein may not be assigned or otherwise transferred, in whole or in part, by you
without the express written consent of the Company.
16. Each of the parties hereto acknowledges that it has been
represented by counsel of its choice throughout all negotiations that have
preceded the execution of this letter agreement, and that it has executed the
same with the advice of said counsel. Each party and its counsel cooperated and
participated in the drafting and preparation of this letter agreement and the
documents referred to herein, and any and all drafts relating thereto exchanged
among the parties shall be deemed the work product of all of the parties and may
not be construed against any party by reason of its drafting or preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this letter agreement against any party
that drafted or prepared it is of no application and is hereby expressly waived
by each of the parties hereto, and any controversy over interpretations of this
letter agreement shall be decided without regards to events of drafting or
preparation.
A-4
Please confirm your agreement with the foregoing by signing and returning one
copy of this letter to the undersigned, whereupon this letter agreement shall
become a binding agreement between you and the Company.
Very truly yours,
CONVERGYS CORPORATION
By:
---------------------------
Name:
Title:
[Signature Page to the Confidentiality Agreement between Convergys Corporation
and the XXXX Group]
Accepted and agreed as of the date first written above:
XXXX PARTNERS LLC
By:
----------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Managing Partner
--------------------------
Name: Xxxxx Xxxxxxxxxx
--------------------------
Name: Xxxx Scotch
[Signature Page to the Confidentiality Agreement between Convergys Corporation
and the XXXX Group]
SCHEDULE A
XXXX PARTNERS LLC
XXXXX XXXXXXXXXX
XXXX SCOTCH
EXHIBIT B
B-1
