EXHIBIT 10.12
TO
FORM 10-K FOR 1999
EMPLOYMENT AGREEMENT
This Agreement is made as of August 2, 1999 (the "Effective Date")
between Convergys Corporation, an Ohio corporation ("Employer"), and Xxxx X.
Xxxxxx ("Employee").
Employer and Employee agree as follows:
1. EMPLOYMENT. By this Agreement, Employer and Employee set forth the
terms of Employer's employment of Employee on and after the Effective Date. Any
prior agreements or understandings with respect to Employee's employment by
Employer, are canceled as of the Effective Date. Notwithstanding the preceding
sentence, all stock options and restricted stock awards granted to Employee
prior to the Effective Date shall continue in effect in accordance with their
respective terms and shall not be modified, amended or canceled by this
Agreement.
2. TERM OF AGREEMENT. The term of this Agreement initially shall be the
four year period commencing on the Effective Date. On the third anniversary of
the Effective Date and on each subsequent anniversary of the Effective Date, the
term of this Agreement automatically shall be extended for a period of one
additional year. Notwithstanding the foregoing, the term of this Agreement is
subject to termination as provided in Section 13.
3. DUTIES.
A. Effective from and after October 1, 1999 or such earlier date as may
be agreed upon by Employee and the President of Convergys Customer Management
Group Inc. (the "Position Change Date"), Employee will serve as Executive Vice
President, U.S. Operations of Convergys Customer Management Group Inc.
("Convergys CMG") or in such other equivalent capacity as may be designated by
the President of Employer. From the Effective Date to the Position Change Date,
Employee shall continue to occupy the position Employee was occupying
immediately prior to the Effective Date. Employee will report to the Chief
Operating Officer of Convergys CMG or to such other officer as may be designated
by the President of Employer.
B. Employee shall furnish such managerial, executive, financial,
technical, and other skills, advice, and assistance in operating Employer and
its Affiliates as Employer may reasonably request. For purposes of this
Agreement, "Affiliate" means each corporation which is a member of a controlled
group of corporations (within the meaning of section 1563(a) of the Internal
Revenue Code of 1986, as amended (the "Code")), which includes Employer.
C. Employee shall also perform such other duties, consistent with the
provisions of Section 3.A., as are reasonably assigned to Employee by the
officer to whom Employee reports.
D. Employee shall devote Employee's entire time, attention, and
energies to the business of Employer and its Affiliates. The words "entire time,
attention, and energies" are intended to mean that Employee shall devote
Employee's full effort during reasonable working hours to the business of
Employer and its Affiliates and shall devote at least 40 hours per week to the
business of Employer and its Affiliates. Employee shall travel to such places as
are necessary in the performance of Employee's duties.
4. COMPENSATION.
A. Effective as of the Position Change Date, Employee shall receive a
base salary (the "Base Salary") of at least $275,000 per year, payable not less
frequently than monthly, for each year during the term of this Agreement,
subject to proration for any partial year. Such Base Salary, and all other
amounts payable under this Agreement, shall be subject to withholding as
required by law. From the Effective Date to the Position Effective Date,
Employee's base salary rate in effect on the day immediately prior to the
Effective Date shall continue in effect.
B. In addition to the Base Salary, Employee shall be entitled to
receive an annual bonus (the "Bonus") for each calendar year for which services
are performed under this Agreement. Any Bonus for a calendar year shall be
payable after the conclusion of the calendar year in accordance with Employer's
regular bonus payment policies. Each year, Employee shall be given a Bonus
target of not less than $85,000, subject to proration for a partial year.
C. Within five days after the date on which this Agreement is signed by
Employer and Employee, Employee shall receive a one-time signing bonus of
$100,000.
D. On at least an annual basis, Employee shall receive a formal
performance review and be considered for Base Salary and/or Bonus target
increases.
5. EXPENSES. All reasonable and necessary expenses incurred by Employee in
the course of the performance of Employee's duties to Employer shall be
reimbursable in accordance with Employer's then current travel and expense
policies.
6. BENEFITS.
A. While Employee remains in the employ of Employer, Employee shall be
entitled to participate in all of the various employee benefit plans and
programs, or equivalent plans and programs, which are made available to
similarly situated officers of Employer, including the benefits set forth in
Attachment A.
B. Notwithstanding anything contained herein to the contrary, the Base
Salary and Bonuses otherwise payable to Employee shall be reduced by any
benefits paid to Employee by Employer under any disability plans made available
to Employee by Employer.
C. As of the Effective Date, Employee shall be granted options to
purchase 40,000 common shares of Employer under Employer's 1998 Long Term
Incentive Plan. In each year of
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this Agreement after 1999, Employee will be granted stock options under
Employer's 1998 Long Term Incentive Plan or any similar plan made available to
employees of Employer.
D. As of the Effective Date, Employee shall receive a restricted stock
award of 40,000 common shares of Employer. Such award shall be made under
Employer's 1998 Long Term Incentive Plan on the terms set forth in Attachment B.
7. CONFIDENTIALITY. Employer and its Affiliates are engaged in the
outsourced customer care industry within the U.S. and world wide. Employee
acknowledges that in the course of employment with the Employer, Employee will
be entrusted with or obtain access to information proprietary to the Employer
and its Affiliates with respect to the following (all of which information is
referred to hereinafter collectively as the "Information"): the organization and
management of Employer and its Affiliates; the names, addresses, buying habits,
and other special information regarding past, present and potential customers,
employees and suppliers of Employer and its Affiliates; customer and supplier
contracts and transactions or price lists of Employer, its Affiliates and their
suppliers; products, services, programs and processes sold, licensed or
developed by the Employer or its Affiliates; technical data, plans and
specifications, present and/or future development projects of Employer and its
Affiliates; financial and/or marketing data respecting the conduct of the
present or future phases of business of Employer and its Affiliates; computer
programs, systems and/or software; ideas, inventions, trademarks, business
information, know-how, processes, improvements, designs, redesigns, discoveries
and developments of Employer and its Affiliates; and other information
considered confidential by any of the Employer, its Affiliates or customers or
suppliers of Employer or its Affiliates. Employee agrees to retain the
Information in absolute confidence and not to disclose the Information to any
person or organization except as required in the performance of Employee's
duties for Employer, without the express written consent of Employer; provided
that Employee's obligation of confidentiality shall not extend to any
Information which becomes generally available to the public other than as a
result of disclosure by Employee.
8. NEW DEVELOPMENTS. All ideas, inventions, discoveries, concepts,
trademarks, or other developments or improvements, whether patentable or not,
conceived by the Employee, alone or with others, at any time during the term of
Employee's employment, whether or not during working hours or on Employer's
premises, which are within the scope of or related to the business operations of
Employer or its Affiliates ("New Developments"), shall be and remain the
exclusive property of Employer. Employee shall do all things reasonably
necessary to ensure ownership of such New Developments by Employer, including
the execution of documents assigning and transferring to Employer, all of
Employee's rights, title and interest in and to such New Developments, and the
execution of all documents required to enable Employer to file and obtain
patents, trademarks, and copyrights in the United States and foreign countries
on any of such New Developments.
9. SURRENDER OF MATERIAL UPON TERMINATION. Employee hereby agrees that
upon cessation of Employee's employment, for whatever reason and whether
voluntary or involuntary, Employee will immediately surrender to Employer all of
the property and other things of value in his possession or in the possession of
any person or entity under Employee's control that are the
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property of Employer or any of its Affiliates, including without any limitation
all personal notes, drawings, manuals, documents, photographs, or the like,
including copies and derivatives thereof, relating directly or indirectly to any
confidential information or materials or New Developments, or relating directly
or indirectly to the business of Employer or any of its Affiliates.
10. REMEDIES.
A. Employer and Employee hereby acknowledge and agree that the services
rendered by Employee to Employer, the information disclosed to Employee during
and by virtue of Employee's employment, and Employee's commitments and
obligations to Employer and its Affiliates herein are of a special, unique and
extraordinary character, and that the breach of any provision of this Agreement
by Employee will cause Employer irreparable injury and damage, and consequently
the Employer shall be entitled to, in addition to all other remedies available
to it, injunctive and equitable relief to prevent a breach of Sections 7, 8, 9,
11 and 12 of this Agreement and to secure the enforcement of this Agreement.
B. Except as provided in Section 10.A., the parties agree to submit to
final and binding arbitration any dispute, claim or controversy, whether for
breach of this Agreement or for violation of any of Employee's statutorily
created or protected rights, arising between the parties that either party would
have been otherwise entitled to file or pursue in court or before any
administrative agency (herein "claim"), and waives all right to xxx the other
party.
(i) This agreement to arbitrate and any resulting
arbitration award are enforceable under and subject to the Federal
Arbitration Act, 9 U.S.C. section 1 et seq. ("FAA"). If the FAA is held not
to apply for any reason then Ohio Revised Code Chapter 2711 regarding the
enforceability of arbitration agreements and awards will govern this
Agreement and the arbitration award.
(ii) (a) All of a party's claims must be presented at a
single arbitration hearing. Any claim not raised at the arbitration hearing is
waived and released. The arbitration hearing will take place in Cincinnati,
Ohio.
(b) The arbitration process will be governed by the
Employment Dispute Resolution Rules of the American Arbitration Association
("AAA") except to the extent they are modified by this Agreement.
(c) Employee has had an opportunity to review the AAA
rules and the requirements that Employee must pay a filing fee for which the
Employer has agreed to split on an equal basis.
(d) The arbitrator will be selected from a panel of
arbitrators chosen by the AAA in White Plains, New York. After the filing of a
Request for Arbitration, the AAA will send simultaneously to Employer and
Employee an identical list of names of five persons chosen
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from the panel. Each party will have 10 days from the transmittal date in which
to strike up to two names, number the remaining names in order of preference and
return the list to the AAA.
(e) Any pre-hearing disputes will be presented to the
arbitrator for expeditious, final and binding resolution.
(f) The award of the arbitrator will be in writing
and will set forth each issue considered and the arbitrator's finding of fact
and conclusions of law as to each such issue.
(g) The remedy and relief that may be granted by the
arbitrator to Employee are limited to lost wages, benefits, cease and desist and
affirmative relief, compensatory, liquidated and punitive damages and reasonable
attorney's fees, and will not include reinstatement or promotion. If the
arbitrator would have awarded reinstatement or promotion, but for the
prohibition in this Agreement, the arbitrator may award front pay. The
arbitrator may assess to either party, or split, the arbitrator's fee and
expenses and the cost of the transcript, if any, in accordance with the
arbitrator's determination of the merits of each party's position, but each
party will bear any cost for its witnesses and proof.
(h) Employer and Employee recognize that a primary
benefit each derives from arbitration is avoiding the delay and costs normally
associated with litigation. Therefore, neither party will be entitled to conduct
any discovery prior to the arbitration hearing except that: (i) Employer will
furnish Employee with copies of all non-privileged documents in Employee's
personnel file; (ii) if the claim is for discharge, Employee will furnish
Employer with records of earnings and benefits relating to Employee's subsequent
employment (including self-employment) and all documents relating to Employee's
efforts to obtain subsequent employment; (iii) the parties will exchange copies
of all documents they intend to introduce as evidence at the arbitration hearing
at least 10 days prior to such hearing; (iv) Employee will be allowed (at
Employee's expense) to take the depositions, for a period not to exceed four
hours each, of two representatives of Employer, and Employer will be allowed (at
its expense) to depose Employee for a period not to exceed four hours; and (v)
Employer or Employee may ask the arbitrator to grant additional discovery to the
extent permitted by AAA rules upon a showing that such discovery is necessary.
(i) Nothing herein will prevent either party from
taking the deposition of any witness where the sole purpose for taking the
deposition is to use the deposition in lieu of the witness testifying at the
hearing and the witness is, in good faith, unavailable to testify in person at
the hearing due to poor health, residency and employment more than 50 miles from
the hearing site, conflicting travel plans or other comparable reason.
(iii) Arbitration must be requested in writing no later than 6
months from the date of the party's knowledge of the matter disputed by the
claim. A party's failure to initiate arbitration within the time limits herein
will be considered a waiver and release by that party with respect to any claim
subject to arbitration under this Agreement.
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(iv) Employer and Employee consent that judgment upon the
arbitration award may be entered in any federal or state court that has
jurisdiction.
(v) Except as provided in Section 10.A., neither party will
commence or pursue any litigation on any claim that is or was subject to
arbitration under this Agreement.
(vi) All aspects of any arbitration procedure under this
Agreement, including the hearing and the record of the proceedings, are
confidential and will not be open to the public, except to the extent the
parties agree otherwise in writing, or as may be appropriate in any subsequent
proceedings between the parties, or as may otherwise be appropriate in response
to a governmental agency or legal process.
11. COVENANT NOT TO COMPETE. For purposes of this Section 11 only, the term
"Employer" shall mean, collectively, Employer and each of its Affiliates. During
the two-year period following termination of Employee's employment with Employer
for any reason (or if this period is unenforceable by law, then for such period
as shall be enforceable) Employee will not engage in any business offering
services related to the current business of Employer, whether as a principal,
partner, joint venturer, agent, employee, salesman, consultant, director or
officer, where such position would involve Employee (i) in any business activity
in competition with Employer; (ii) in any position with any customer of Employer
which involves such customer's billing and/or billing related systems or; or
(iii) in any business that provides billing and/or billing related systems to
third parties engaged in the communication business (including wireless,
wireline and cable communication businesses). This restriction will be limited
to the geographical area where Employer is then engaged in such competing
business activity or to such other geographical area as a court shall find
reasonably necessary to protect the goodwill and business of the Employer.
During the two-year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable by
law, then for such period as shall be enforceable) Employee will not interfere
with or adversely affect, either directly or indirectly, Employer's
relationships with any person, firm, association, corporation or other entity
which is known by Employee to be, or is included on any listing to which
Employee had access during the course of employment as a customer, client,
supplier, consultant or employee of Employer and that Employee will not divert
or change, or attempt to divert or change, any such relationship to the
detriment of Employer or to the benefit of any other person, firm, association,
corporation or other entity.
During the two-year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable by
law, then for such period as shall be enforceable) Employee shall not, without
the prior written consent of Employer, accept employment, as an employee,
consultant, or otherwise, with any company or entity which is a customer or
supplier of Employer at any time during the final year of Employee's employment
with Employer.
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Employee will not, during or at any time within three years after the
termination of Employee's employment with Employer, induce or seek to induce,
any other employee of Employer to terminate his or her employment relationship
with Employer.
12. GOODWILL. Employee will not disparage Employer or any of its Affiliates
in any way which could adversely affect the goodwill, reputation and business
relationships of Employer or any of its Affiliates with the public generally, or
with any of their customers, suppliers or employees. Employer will not disparage
Employee.
13. TERMINATION.
A. (i) Employer or Employee may terminate this Agreement upon
Employee's failure or inability to perform the services required hereunder
because of any physical or mental infirmity for which Employee receives
disability benefits under any disability benefit plans made available to
Employee by Employer (the "Disability Plans"), over a period of one hundred
twenty consecutive working days during any twelve consecutive month period (a
"Terminating Disability").
(ii) If Employer or Employee elects to terminate this
Agreement in the event of a Terminating Disability, such termination shall be
effective immediately upon the giving of written notice by the terminating party
to the other.
(iii) Upon termination of this Agreement on account of
Terminating Disability, Employer shall pay Employee Employee's accrued
compensation hereunder, whether Base Salary, Bonus or otherwise (subject to
offset for any amounts received pursuant to the Disability Plans), to the date
of termination. For as long as such Terminating Disability may exist, Employee
shall continue to be an employee of Employer for all other purposes and Employer
shall provide Employee with disability benefits and all other benefits according
to the provisions of the Disability Plans and any other Employer plans in which
Employee is then participating.
(iv) If the parties elect not to terminate this Agreement upon
an event of a Terminating Disability and Employee returns to active employment
with Employer prior to such a termination, or if such disability exists for less
than one hundred twenty consecutive working days, the provisions of this
Agreement shall remain in full force and effect.
B. This Agreement terminates immediately and automatically on the death
of the Employee, provided, however, that the Employee's estate shall be paid
Employee's accrued compensation hereunder, whether Base Salary, Bonus or
otherwise, to the date of death.
C. Employer may terminate this Agreement immediately, upon written
notice to Employee, for Cause. For purposes of this Agreement, Employer shall
have "Cause" to terminate this Agreement only if Employer's Board of Directors
determines that there has been fraud, misappropriation or embezzlement on the
part of Employee.
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D. Employer may terminate this Agreement immediately, upon written
notice to Employee, for any reason other than those set forth in Sections 13.A.,
B. and C. In the event of a termination by Employer under this Section 13.D.,
Employer shall, within five days after the termination, pay Employee an amount
equal to two times the sum of the annual Base Salary rate in effect at the time
of termination plus the Bonus target in effect at the time of termination. For
the two year period following the termination, Employer shall continue to
provide Employee with medical, dental, vision and life insurance coverage
comparable to the medical, dental, vision and life insurance coverage in effect
for Employee immediately prior to the termination; and, to the extent that
Employee would have been eligible for any post-retirement medical, dental,
vision or life insurance benefits from Employer if Employee had continued in
employment through the end of such two year period, Employer shall provide such
post-retirement benefits to Employee after the end of such two year period. For
purposes of any stock option or restricted stock grant outstanding immediately
prior to the termination, Employee's employment with Employer shall not be
deemed to have terminated until the end of the two year period following the
termination. In addition, Employee shall be entitled to receive, as soon as
practicable after termination, an amount equal to the sum of (i) any forfeitable
benefits under any qualified or nonqualified pension, profit sharing, 401(k) or
deferred compensation plan of Employer or any Affiliate which would have vested
prior to the end of the two year period following the termination if Employee's
employment had not terminated plus (ii) if Employee is participating in a
qualified or nonqualified defined benefit plan of Employer or any Affiliate at
the time of termination, an amount equal to the present value of the additional
vested benefits which would have accrued for Employee under such plan if
Employee's employment had not terminated prior to the end of the two year period
following the termination and if Employee's annual Base Salary and Bonus target
had neither increased nor decreased after the termination. Finally, to the
extent that Employee is deemed to have received an excess parachute payment
(within the meaning of section 4999 of the Code) from Employer or any Affiliate,
Employer shall pay Employee an additional sum sufficient to pay (i) any taxes
imposed under section 4999 of the Code plus (ii) any federal, state and local
taxes applicable to the payment called for under clause (i) of this sentence.
E. Employee may resign upon 60 days' prior written notice to Employer.
In the event of a resignation under this Section 13.E., this Agreement shall
terminate and Employee shall be entitled to receive Employee's Base Salary
through the date of termination, any Bonus earned but not paid at the time of
termination and any other vested compensation or benefits called for under any
compensation plan or program of Employer.
F. Employee may retire (a) upon six months' prior written notice to
Employer at any time after Employee has attained age 55 and completed at least
ten years of service with Employer and its Affiliates or (b) on such earlier
date as may be approved by the President of Employer. For purposes of the
preceding sentence, service with Cincinnati Xxxx Inc. and its subsidiaries prior
to the Effective Date shall be deemed to be service with Employer. In the event
of a retirement under this Section 13.F., this Agreement shall terminate and
Employee shall be entitled to receive Employee's Base Salary through the date of
termination and any Bonus earned but not paid at the time of termination. In
addition, Employee shall be entitled to receive any compensation or benefits
made available to retirees under Employer's standard policies and
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programs, including retiree medical and life insurance benefits, a prorated
Bonus for the year of termination, and the right to exercise options after
retirement.
G. Upon termination of this Agreement as a result of an event of
termination described in this Section 13 and except for Employer's payment of
the required payments under this Section 13 (including any Base Salary accrued
through the date of termination, any Bonus earned for the year preceding the
year in which the termination occurs and any nonforfeitable amounts payable
under any employee plan), all further compensation under this Agreement shall
terminate.
H. The termination of this Agreement shall not amend, alter or modify
the rights and obligations of the parties under Sections 7, 8, 9, 10, 11, and 12
hereof, the terms of which shall survive the termination of this Agreement.
14. ASSIGNMENT. As this is an agreement for personal services involving a
relation of confidence and a trust between Employer and Employee, all rights and
duties of Employee arising under this Agreement, and the Agreement itself, are
non-assignable by Employee.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient, if in writing, and if delivered personally or by
certified mail to Employee at Employee's place of residence as then recorded on
the books of Employer or to Employer at its principal office.
16. WAIVER. No waiver or modification of this Agreement or the terms
contained herein shall be valid unless in writing and duly executed by the party
to be charged therewith. The waiver by any party hereto of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such party.
17. GOVERNING LAW. This agreement shall be governed by the laws of the
State of Ohio.
18. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to Employee's employment by Employer. There are no other
contracts, agreements or understandings, whether oral or written, existing
between them except as contained or referred to in this Agreement.
19. SEVERABILITY. In case any one or more of the provisions of this
Agreement is held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or other enforceability shall not affect any other
provisions hereof, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provisions have never been contained herein.
20. SUCCESSORS AND ASSIGNS. Subject to the requirements of Paragraph 14
above, this Agreement shall be binding upon Employee, Employer and Employer's
successors and assigns.
21. CONFIDENTIALITY OF AGREEMENT TERMS. The terms of this Agreement shall
be held in strict confidence by Employee and shall not be disclosed by Employee
to anyone other than
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Employee's spouse, Employee's legal counsel, and Employee's other advisors,
unless required by law. Further, except as provided in the preceding sentence,
Employee shall not reveal the existence of this Agreement or discuss its terms
with any person (including but not limited to any employee of Employer or its
Affiliates) without the express authorization of the President of Employer. To
the extent that the terms of this Agreement have been disclosed by Employer, in
a public filing or otherwise, the confidentiality requirements of this Section
21 shall no longer apply to such terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CONVERGYS CORPORATION
By:
-----------------------------------
EMPLOYEE
---------------------------------------
Xxxx X. Xxxxxx
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Attachment A
EMPLOYEE BENEFITS
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Automobile Allowance $850 per month
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Cellular Telephone Yes
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Executive Deferred Compensation Plan Yes
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Group Accident Life $500,000
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Legal/Financial/Insurance Allowance $5,000 per year
------------------------------------------------------------- -----------------------------------------------
Parking Yes
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Annual Physical Yes
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Short Term Disability Supplement Yes
------------------------------------------------------------- -----------------------------------------------
Travel Insurance (Spouse) $50,000
------------------------------------------------------------- -----------------------------------------------
Vacation 27 days per year
------------------------------------------------------------- -----------------------------------------------
ATTACHMENT B
RESTRICTED STOCK AWARD
UNDER THE PROVISIONS OF
THE CONVERGYS CORPORATION
1998 LONG TERM INCENTIVE PLAN
NAME OF EMPLOYEE: XXXX X. XXXXXX
AWARD DATE: AUGUST 2, 1999
NUMBER OF RESTRICTED SHARES: 40,000
Pursuant to the provisions of the Convergys Corporation 1998 Long Term
Incentive Plan (the "Plan"), a copy of which has been delivered to you, the
Compensation and Benefits Committee of the Board of Directors of Convergys
Corporation (the "Compensation Committee") has granted you an award of 40,000
common shares, without par value, of Convergys Corporation (the "Shares"), on
and subject to the terms of the Plan and your agreement to the following terms,
conditions and restrictions.
1. SECURITIES SUBJECT TO THIS AGREEMENT. This Agreement is made with
respect to the Shares and any securities (including additional common
shares of Convergys Corporation (the "Company")) issued in respect of
the Shares, whether by way of a share dividend, a share split, any
reorganization or recapitalization of the Company or its stock or any
merger, exchange of securities or like event or transaction as the
result of which any security or securities of any kind are issued to
you by reason of your ownership of the Shares. Reference herein to the
Shares shall include any such securities issued in respect of the
Shares.
2. RIGHTS OF OWNERSHIP. Except for the Restrictions (as defined in
Section 3 hereof) and subject to the provisions regarding forfeiture
set forth in Section 8 hereof, you are the record and beneficial owner
of the Shares, with all rights and privileges (including but not
limited to the right to vote, to receive dividends and to receive
distributions upon liquidation of the Company) appertaining thereto.
3. RESTRICTIONS. Neither the Shares nor any interest therein may be
transferred or conveyed by you in any manner whatsoever, whether or not
for consideration (the "Restrictions"), except upon the passage of time
or occurrence of events as specified in Sections 4, 5, 6, and 7 hereof.
4. LAPSE. The Restrictions shall lapse and be of no further force and
effect as to 100% of the Shares on August 1, 2003.
5. TERMINATION OF RESTRICTIONS - DEATH. In the event of your death
while employed by the Company or any of its subsidiaries the
Restrictions shall terminate and be of no further force or effect,
effective as of the date of death: (a) if death occurs prior to August
1, 2003, with respect to a number of the Shares (rounded up to the
nearest whole Share) that bears the same ratio to the total number of
Shares as the number of days from August 2, 1999 through the date of
your death bears to the number of days from August 2, 1999 through
August 1, 2003. Any Shares which remain subject to the Restrictions
after the calculation prescribed in the preceding sentence shall be
forfeited to the Company as of your date of death. Upon the
Restrictions terminating with respect to certain Shares, the executor,
administrator or other personal representative of your estate, or the
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trustee of any trust becoming entitled thereto be reason of your death,
may transfer the unrestricted Shares to any person or persons entitled
thereto under your will or under your trust or other instrument (or in
the absence of any will under the laws of descent and distribution)
governing the distribution of your estate in the event of your death.
6. TERMINATION OF RESTRICTIONS - DISABILITY. If you shall become
disabled to such extent that you are unable to perform the usual duties
of your job for a period of 12 consecutive weeks or more and if as the
result thereof the Compensation Committee approves the termination of
your employment on terms that include the right to transfer the Shares
free of the Restrictions, the Restrictions shall terminate and be of no
further force and effect as of the date you cease to be an employee in
the same manner as prescribed in the event of death outlined in Section
5 above.
7. TERMINATION OF RESTRICTIONS - TERMINATION WITHOUT CAUSE. In the
event that your employment is terminated by the Company without Cause
(within the meaning of your Employment Agreement dated August 2, 1999),
the Restrictions shall terminate and be of no further force and effect
two years after the date on which your employment is terminated and,
for purposes of this Section 7, your employment shall not be deemed to
have terminated until the end of such two year period.
8. FORFEITURE. If you cease to be an employee of the Company or any of
its subsidiaries, except as provided in Section 4, 5, 6, and 7 hereof,
any Shares which remain subject to the Restrictions of the date such
employment terminates shall be at once forfeited to the Company as of
the date of such termination of employment (the "Forfeiture Date").
Upon such forfeiture all of your rights in respect of such Shares shall
cease automatically and without further action by the Company or you.
For the purpose of giving effect to this provision, you have executed
and delivered to the Company a stock power with respect to each
certificate evidencing any of the Shares, thereby assigning to the
Company all of your interest in the Shares. By the execution and
delivery of this Agreement, you authorize and empower the Company, in
the event of a forfeiture of any of the Shares under this Section 8 to
(a) date (as of the Forfeiture Date) those stock powers relating to
Shares that remain subject to the Restrictions as of the Forfeiture
Date and (b) present such stock powers and the certificates to which
they relate to the Company's transfer agent or other appropriate party
for the sole purpose of transferring the forfeited Shares to the
Company.
9. MATTERS RELATING TO CERTIFICATES.
(a) Upon their issuance, the certificates representing the
Shares shall be deposited with the Secretary of the Company
and shall be released to you only pursuant to the provisions
of this Section 9.
(b) Each certificate for Shares issued to you in accordance
with this Agreement shall bear the following legend:
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"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE REGISTERED
HOLDER HEREOF AND CONVERGYS CORPORATION, DATED AS OF AUGUST 2,
1999, AND MAY NOT BE TRANSFERRED BY THE HOLDER, EXCEPT AS
PROVIDED BY THE TERMS OF SUCH AGREEMENT, A COPY OF WHICH IS ON
DEPOSIT WITH THE SECRETARY OF CONVERGYS CORPORATION AND WHICH
WILL BE MAILED TO A SHAREHOLDER OF CONVERGYS CORPORATION
WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN
REQUEST."
Upon the lapse or termination of the Restrictions as to any
Shares, the certificate evidencing such Shares shall be promptly
presented to the Company's transfer agent or other appropriate party
with instructions to cause such certificate to be reissued, to the
extent appropriate, in your name and without the foregoing legend. Any
Shares evidenced by such certificate which remain subject to the
Restrictions shall be evidenced by a new certificate, bearing the
foregoing legend, which shall be returned to the Company. Upon the
lapse or termination of the Restrictions as to any Shares, the stock
power or powers held by the Company with respect to such Shares shall
be surrendered to you (in exchange, if applicable, for a stock power
relating to any Shares which remain subject to the Restrictions).
10. INTERPRETATION. You acknowledge that the Compensation Committee has
the authority to construe and interpret the terms of the Plan and this
Agreement if and when any questions of meaning arises under the Plan or
this Agreement, and any such construction or interpretation shall be
binding on you, your heirs, executors, administrators, personal
representatives and any other persons having or claiming to have an
interest in the Shares.
11. WITHHOLDING. In connection with the award of Shares to you and any
dividend payments made while such Shares remain subject to restrictions
hereunder, the Company will withhold or cause to be withheld from your
salary payments such amounts of tax at such times as may be required by
law to be withheld with respect to the Shares and/or dividends,
provided that if your salary is not sufficient for such purpose, you
shall remit to the Company, on request, the amount required for such
withholding taxes. Within 45 days after issuance of the certificates
representing the Shares, you shall advise the Company in writing
whether or not you have made an election, under Section 83(b) of the
Internal Revenue Code of 1986, to include the fair market value of the
Shares in your gross income for the calendar year in which the
certificates are issued.
12. NOTICES. All notices and other communications to be given hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally or when deposited in the United States mail, first
class postage prepaid, and addressed as follows:
TO THE COMPANY: Convergys Corporation
000 Xxxx Xxxxxx Xxxxxx, XX. 000-0000
P. O. Xxx 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Assistant Secretary of the Compensation
and Benefits Committee
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TO THE EMPLOYEE: XXXX X. XXXXXX
0000 XXXXXX XXXXX
XXXXXXXXXX, XX 00000
or to any other address as to which notice has been given in the manner
herein provided.
13. MISCELLANEOUS. This Agreement shall be binding upon the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and assigns. Subject to the provisions of
the Plan, this Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and shall be
construed and interpreted in accordance with the laws of the State of
Ohio. This Agreement may not be amended except in a writing signed by
each of the parties hereto. If any provisions of this Agreement shall
be deemed to be invalid or void under any applicable law, the remaining
provisions hereof shall not be affected thereby and shall continue in
full force and effect.
Please indicate your acceptance by signing at the place provided and returning
this Agreement.
COMPENSATION AND BENEFITS
COMMITTEE OF THE BOARD OF
DIRECTORS OF CONVERGYS
CORPORATION
Dated: By:
------------------------- -------------------------
Assistant Secretary
Dated:
------------------------- -------------------------
Accepted and Agreed
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Attachment B
Election Under Section 83(b)
OF THE INTERNAL REVENUE CODE
The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, with respect to the property
described below and supplies the following information in accordance with the
regulations promulgated thereunder.
(1) Name: XXXX X. XXXXXX
Address: 0000 XXXXXX XXXXX
XXXXXXXXXX, XX 00000
Taxpayer's Identification Number: XXX-XXX-XXX
(2) Description of property to which this election is being made: 40,000
shares of common stock of Convergys Corporation.
(3) Date on which the stock was transferred: AUGUST 2, 1999 Taxable year
for which this election is made: 1999
(4) Nature of Restrictions:
The shares may not be transferred by the holder in accordance with the
terms of a Restrictive Stock Award and are subject to forfeiture to
Convergys Corporation upon termination of employment for reasons other
than death or disability. Restrictions lapse as to 40,000 SHARES ON
AUGUST 1, 2003.
(5) Fair market value at time of transfer (determined without regard to any
restrictions other than provisions which by their terms will never
lapse): $19.50 per share (market price) or $780,000.00 in total.
(6) The amount paid for such property: $ NONE .
(7) A copy of this statement has been furnished to Convergys Corporation.
---------------------------------------
Date
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Xxxx X. Xxxxxx
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