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As filed with the Securities and Exchange Commission on December 29, 1999
Registration No. 333-69633
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CONVERGYS CORPORATION
(Exact name of registrant as specified in its charter)
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Ohio 31-1598292
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
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201 East Fourth Street
Cincinnati, Ohio 45202
(513) 397-5364
(Address, including zip code, of registrant's principal executive office)
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CONVERGYS CORPORATION EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
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William D. Baskett III
Secretary & General Counsel
201 East Fourth Street
Cincinnati, Ohio 45202
(513) 723-2444
(Name, address including zip code, and telephone number including area code,
of agent for service)
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Please send copies of all communications to:
Neil Ganulin, Esq.
Frost & Jacobs LLP
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 651-6800
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CALCULATION OF REGISTRATION FEE
No additional shares are being registered under this Post-Effective Amendment
No. 1 to Form S-8. Consequently, the registration fee has been previously paid.
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The purpose of this Post-Effective Amendment No. 1 to Registration Statement No.
333-69633 on Form S-8 (the "Registration Statement") of Convergys Corporation
(the "Company" or "Convergys") is to file as an exhibit to the Registration
Statement the Amended Convergys Corporation Employee Stock Purchase Plan dated
December 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I of Form S-8 to be contained in the Section
10(a) Prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended, and the Note to Part I on
Form S-8.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents have been filed by Convergys Corporation (the
"Company") with the Commission (File No. 1-14379) and are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 1, 1998.
2. The Company's Quarterly Reports on Form 10-Q for the periods
ended March 31, 1999, June 30, 1999 and September 30, 1999.
3. The Company's Current Reports on Form 8-K filed January 15,
1999 and November 18, 1999.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the
"Subsequently Filed Documents"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part of
this Registration Statement from the date of filing of such documents.
Any statement contained in this Registration Statement or in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any Subsequently Filed Document modifies
or supersedes such statement. Any such modified or superseded statement shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
The Company will provide without charge, upon written or oral request,
to each person to whom a copy of this Registration Statement is delivered, a
copy of any or all of the documents incorporated by reference herein, not
including exhibits to such documents. Requests for such copies should be
directed to the Secretary, Convergys Corporation, 201 East Fourth Street,
Cincinnati, Ohio 45202, telephone number (513) 723-7000.
ITEM 4. DESCRIPTION OF CAPITAL STOCK.
The following is a summary description of the capital stock of the
Company, does not purport to be complete and is subject to, and is qualified in
its entirety by, the Company's Amended Articles of Incorporation (the
"Articles") as filed with the Securities and Exchange Commission on July 17,
1998 as Exhibit 3.1 to Pre-Effective Amendment No. 2 to the Company's
Registration Statement on Form S-1 (File No. 333-53619).
The Company's authorized capital stock consists of 500,000,000 common
shares, without par value (the "Common Shares"), and 5,000,000 preferred shares,
without par value (the "Preferred Shares"), of which 4,000,000 are voting
preferred shares.
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All Common Shares of the Company are entitled to participate equally in
such dividends as may be declared by the Board of Directors of the Company and
upon liquidation of the Company, subject to the prior rights of any Preferred
Shares. All Common Shares are fully paid and nonassessable.
Each shareholder has one vote for each Common Share registered in the
shareholder's name. The Board of Directors is divided into three classes as
nearly equal in size as the total number of directors constituting the Board
permits. The number of directors may be fixed or changed from time to time by
the shareholders or the directors.
The Board of Directors is authorized to issue the Preferred Shares from
time to time in series and to fix the dividend rate and dividend dates,
liquidation price, redemption rights and redemption prices, sinking fund
requirements, conversion rights, covenants, and certain other rights,
preferences and limitations. Each series of Preferred Shares would rank, with
respect to dividends and redemption and liquidation rights, senior to the Common
Shares. It is not possible to state the actual effect of the authorization of
any series of Preferred Shares upon the rights of holders of the Common Shares
until the Board of Directors determines the rights of the holders of one or more
series of Preferred Shares. However, such effects could include (a) restrictions
on dividends on the Common Shares, (b) dilution of the voting power of the
Common Shares to the extent that the voting Preferred Shares have voting rights
or (c) inability of the Common Shares to share in the Company's assets upon
liquidation until satisfaction of any liquidation preference granted to the
Preferred Shares.
No holders of shares of any class of the Company's capital stock have
pre-emptive rights nor the right to exercise cumulative voting in the election
of directors.
LIMITATIONS ON CHANGE IN CONTROL
The following provisions of the Articles and Ohio law might have the
effect of delaying, deferring or preventing a change in control of the Company
and would operate only with respect to an extraordinary corporate transaction,
such as a merger, reorganization, tender offer, sale or transfer of assets or
liquidation involving the Company and certain persons described below.
Ohio law provides that the approval of two-thirds of the voting power
of a corporation is required to effect mergers and similar transactions, to
adopt amendments to the articles of incorporation of a corporation and to take
certain other significant actions. Although under Ohio law the articles of
incorporation of a corporation may permit such actions to be taken by a vote
that is less than two-thirds (but not less than a majority), the Articles do not
contain such a provision. The two-thirds voting requirement tends to make
approval of such matters, including further amendments to the Articles,
relatively difficult, and a vote of the holders of in excess of one-third of the
outstanding Common Shares of the Company would be sufficient to prevent
implementation of any of the corporate actions mentioned above. In addition,
Article Fifth classifies the Board of Directors into three classes of directors
with staggered terms of office and the Regulations of the Company (the
"Regulations") provide certain limitations on the removal from and filling of
vacancies in the office of director.
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Article Sixth of the Articles requires that certain minimum price
requirements and procedural safeguards be observed by a person or entity after
he or it becomes the holder of 10% or more of the voting shares of the Company
if such person or entity seeks to effect mergers or certain other business
combinations ("Business Combinations") that could fundamentally change or
eliminate the interests of the remaining shareholders. If such requirements and
procedures are not complied with, or if the proposed Business Combination is not
approved by at least a majority of the members of the Board of Directors who are
unaffiliated with the new controlling person or entity (taking into account
certain special quorum requirements), the proposed Business Combination must be
approved by the holders of 80% of the outstanding Common Shares and outstanding
voting Preferred Shares of the Company (collectively, "Voting Shares"), voting
together as a class, notwithstanding any other class vote required by law or by
the Articles. In the event the price criteria and procedural requirements are
met or the requisite approval by such unaffiliated directors (taking into
account certain special quorum requirements) is given with respect to a
particular Business Combination, the normal voting requirements of Ohio law
would apply.
In addition, Article Sixth of the Articles provides that the
affirmative vote of the holders of 80% of the Voting Shares, voting as a single
class, shall be required to amend or repeal, or adopt any provisions
inconsistent with, Article Sixth. An 80% vote is not required to amend or
repeal, or adopt a provision inconsistent with, Article Sixth if the Board of
Directors has recommended such amendment or other change and if, as of the
record date for the determination of shareholders entitled to vote thereon, no
person is known by the Board of Directors to be the beneficial owner of 10% or
more of the Voting Shares, in which event the affirmative vote of the holders of
two-thirds of the Voting Shares, voting as a single class, shall be required to
amend or repeal, or adopt a provision inconsistent with, Article Sixth.
Ohio, the state of the Company's incorporation, has enacted Ohio
Revised Code Section 1701.831, a "control share acquisition" statute, and
Chapter 1704, a "merger moratorium" statute. The control share acquisition
statute basically provides that any person acquiring shares of an "issuing
public corporation" (which definition the Company meets) in any of the following
three ownership ranges must seek and obtain shareholder approval of the
acquisition transaction that first puts such ownership within each such range:
(i) more than 20% but less than 33 1/3%; (ii) 33 1/3% but not more than 50%; and
(iii) more than 50%.
The merger moratorium statute provides that, unless a corporation's
articles of incorporation or regulations otherwise provide, an "issuing public
corporation" (which definition the Company meets) may not engage in a "Chapter
1704 transaction" for three years following the date on which a person acquires
more than 10% of the voting power in the election of directors of the issuing
corporation, unless the "Chapter 1704 transaction" is approved by the
corporation's board of directors prior to such voting power acquisition. A
person who acquires such voting power is an "interested shareholder", and
"Chapter 1704 transactions" involve a broad range of transactions, including
mergers, consolidations, combinations, liquidations, recapitalizations and other
transactions between an "issuing public corporation" and an "interested
shareholder" if such transactions involve 5% of the assets or shares of the
"issuing public corporation" or 10% of its earning power. After the initial
three year moratorium, Chapter 1704 prohibits such transactions absent approval
by disinterested shareholders or the transaction meeting certain statutorily
defined fair price provisions.
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Ohio has also enacted a "greenmailer disgorgement" statute which
provides that a person who announces a control bid must disgorge profits
realized by that person upon the sale of any equity securities within 18 months
of the announcement.
The following is a summary description of the terms of the rights
described below, does not purport to be complete and is subject to, and is
qualified in its entirety by, the Company's Rights Agreement, filed with the
Securities and Exchange Commission as Exhibit 4.1 to this Registration
Statement.
On November 19, 1998, the Board of Directors of the Company declared a
dividend distribution of one right ("Right") on each of the Company's
outstanding Common Shares to holders of record of the Common Shares at the close
of business on December 1, 1998 (the "Record Date"). One Right also will be
distributed for each Common Share issued after December 1, 1998, until the
Distribution Date (which is described in the next paragraph). Each Right
entitles the registered holder to purchase from the Company a unit ("Unit")
consisting of one one-hundredth of a Series A Preferred Share of the Company
(the "Preferred Shares") at a purchase price of $70.00 per Unit, subject to
adjustment (the "Purchase Price").
Initially, the Rights will be attached to all Common Share certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Shares and the
"Distribution Date" will occur upon the earlier of (a) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding Common Shares
or (b) 10 business days following the commencement of a tender offer or exchange
offer that would if consummated result in a person or group beneficially owning
15% or more of the outstanding Common Shares.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 1, 2008, unless earlier redeemed by
the Company as described below.
After the Distribution Date, the separate Rights Certificates alone
will represent the Rights. Except for certain issuances in connection with
outstanding options and convertible securities and as otherwise determined by
the Board of Directors, only Common Shares issued prior to the Distribution Date
will be issued with Rights.
If a person becomes the beneficial owner of 15% or more of the Common
Shares ("Flip-In Event"), each holder of a Right will have the right to receive,
upon exercise, Common Shares having a value equal to two times the Purchase
Price of the Right. Moreover, the Rights will not be exercisable until the
Rights are no longer redeemable as described below. The Acquiring Person would
not be permitted to exercise any Rights and any Rights held by such person (or
certain transferees of such person) will be null and void and non-transferable.
If, following the Distribution Date, the Company is acquired in certain
specified mergers or other business combinations (i.e., the Company does not
survive or its Common Shares are changed or exchanged), or 50% or more of its
assets or earning power (on a consolidated basis) is sold or transferred in one
transaction or a series of related transactions ("Flip-Over Events"), each Right
becomes a Right to acquire common stock of the other party to the transaction
(or its ultimate parent in certain circumstances) having a value equal to two
times the Purchase Price. As an enforcement
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mechanism, the Rights Agreement prohibits the Company from entering into any
such transaction unless the other party agrees to comply with the provisions of
the Rights.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right, at any time prior to a Flip-In Event.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights may have certain anti-takeover effects and
possible disadvantages. The Rights will cause substantial dilution to a person
or group who attempts to acquire the Company or a significant Common Share
ownership interest without conditioning the offer on the Rights being redeemed
or a substantial number of Rights being acquired. Accordingly, an Acquiring
Person might decide not to acquire the Company or such an interest, although
individual shareholders may view such an acquisition favorably. In addition, to
the extent that issuance of the Rights discourages takeovers that would result
in a change in the Company's management or Board of Directors, such a change
will be less likely to occur. The Board of Directors believes, however, that the
advantages of discouraging potentially discriminatory and abusive takeover
practices outweigh any potential disadvantages of the Rights. The Rights should
not interfere with any merger or other Business Combination approved by the
Board of Directors. The Rights are designed to protect shareholders against
unsolicited attempts to acquire control of the Company, whether through
accumulation of Common Shares in the open market or partial or two-tier tender
offers, that do not offer a fair price to all shareholders.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There are no provisions in the Articles by which an officer or director
may be indemnified against any liability which he or she may incur in his or her
capacity as such. However, the Company has indemnification provisions in its
Regulations which provide the Company will, to the full extent permitted by Ohio
law, indemnify all persons whom it may indemnify under such law.
Reference is made to Section 1701.13(E) of the Ohio Revised Code, which
provides for indemnification of directors and officers in certain circumstances.
The Company provides liability insurance for its directors and officers
for certain losses arising from certain claims and charges, including claims and
charges under the Securities Act of 1933, which may be made against such persons
while acting in their capacities as directors and officers of the Company.
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The above discussion of the Articles, Regulations and Section
1701.13(E) of the Ohio Revised Code is not intended to be exhaustive and is
respectively qualified in its entirety by the Articles, Regulations and such
statute.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits filed as part of this Registration Statement are described
in the Exhibit Index included in this filing.
ITEM 9. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
of the securities registered hereunder are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
this registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in this registration
statement or any material change to such
information in the registration statement;
provided; however, that the undertakings in clauses
(i) - (ii) hereof will not apply if the information
required to be included in a post-effective amendment
by those clauses is contained in periodic reports
filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are
incorporated by reference in this registration
statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
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(c) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions of Rule 512(h) of
Regulation S-K, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issues.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cincinnati and State of Ohio, on the 23rd day of
December, 1999.
CONVERGYS CORPORATION
By: /s/ William D. Baskett III
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William D. Baskett III
Secretary and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on the 23rd day of December, 1999 by the
following persons in the capacities indicated.
Signature
/s/ James F. Orr * Principal Executive Officer;
- --------------------------------- President, Chief Executive Officer
James F. Orr and Director
/s/ Andre S. Valentine Controller and Vice President
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Andre S. Valentine
/s/ Charles S. Mechem, Jr.* Chairman of the Board
- --------------------------------- and Director
Charles S. Mechem, Jr
/s/ John F. Barrett* Director
- ---------------------------------
John F. Barrett
/s/ Judith G. Boynton* Director
- ---------------------------------
Judith G. Boynton
/s/ Gary C. Butler* Director
- ---------------------------------
Gary C. Butler
/s/ Roger L. Howe* Director
- ---------------------------------
Roger L. Howe
/s/ Steven C. Mason* Director
- ---------------------------------
Steven C. Mason
/s/ Brian H. Rowe* Director
- ---------------------------------
Brian H. Rowe
* /s/ William D. Baskett III
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William D. Baskett III,
as attorney-in-fact
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EXHIBIT INDEX
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Exhibit Description Page
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3.1 Amended Articles of Incorporation of the Company are hereby
incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment
No. 2 to the Company's Registration Statement on Form S-1 (File No.
333-53619) filed on July 17, 1998.
3.2 Regulations of the Company are hereby incorporated by reference to
Exhibit 3.2 to Pre-Effective Amendment No. 2 to the Company's
Registration Statement on Form S-1 (File No. 333-53619) filed on July
17, 1998.
4.1 Convergys Corporation Rights Agreement is hereby incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-8 (File No. 333-69633) filed December 23, 1998.
4.2 Amended Convergys Corporation Employee Stock Purchase Plan dated
January 1, 2000.
23 Consent of PricewaterhouseCoopers LLP
24 Powers of Attorney are hereby incorporated by reference to Exhibit 24
to the Company's Registration Statement on Form S-8 (File No.
333-69633) filed December 23, 1998.
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EXHIBIT 4.2
[GRAPHIC OMITTED]
EMPLOYEE STOCK
PURCHASE PLAN
Q&A
ANSWERS TO COMMONLY
ASKED QUESTIONS
January 1, 2000
This document constitutes part of a prospectus covering
securities that have been registered under the
Securities Act of 1933.
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EMPLOYEE STOCK PURCHASE PLAN
WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Convergys Corporation Employee Stock Purchase Plan
(the "Plan") is to allow eligible employees of Convergys Corporation
("Convergys") and its subsidiaries to purchase Convergys common shares through
payroll deductions and participate in the potential future growth and
profitability of Convergys.
WHO IS ELIGIBLE TO PARTICIPATE?
Generally, all employees of Convergys and its subsidiaries who have
reached the age of majority for the state in which they reside are eligible to
participate. The Plan is not available to employees residing outside the United
States.
WHO ADMINISTERS THE PLAN?
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
administers the Plan for participants, keeps records, sends quarterly account
statements to you, and performs other administrative duties related to the Plan.
HOW DOES THE PLAN WORK?
You decide on the percentage of pay you would like to invest each pay
period, from a minimum of 1% to a maximum of 20%. (Your total contributions for
any calendar year may not exceed $25,000.) Your employer regularly deducts those
funds from your paycheck. Your pay, for the purposes of this Plan, is your pay
before 401(k) contributions, deferred compensation and other deductions. That
amount is combined with all the dollars deducted from the checks of other
employees who participate in the Plan -- plus a 15% matching contribution from
the participating employers. These funds are then used to buy shares of
Convergys on a monthly basis.
When you enroll in the Plan, you authorize Merrill Lynch to open and
maintain an individual securities account for you, which is subject to the terms
and conditions shown on your enrollment form. Convergys shares will be purchased
for you and credited to your account on a monthly basis. This account is under
your control, and there are no restrictions on the retention or sale of shares
once they are credited to your account.
If you subsequently sell shares, you pay any fees for the sale and for
any additional purchases you make beyond the scope of the Plan. (See "Can I buy
additional Convergys shares through the Plan?")
WHAT ARE THE ADVANTAGES OF THE PLAN?
Purchasing shares of Convergys through this Plan ensures that 100% of
your money goes to work for you, because you pay no commissions or fees.
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You'll find that the Plan is convenient and encourages regular
investment. Setting aside a specific amount of money every pay period is one of
the easiest ways to build your portfolio. You save regularly, because you pay
yourself first. Simply choose the percentage of pay you want to invest, and the
rest is automatic.
The Plan also offers an affordable way to invest. Your employer will
participate with you in share purchases by contributing 15% of your investment
pay election. You don't commit to buy a specific number of shares each pay
period. Just select the percentage of your pay that you want to invest.
Though no investment program is free of risk, this Plan can help
cushion you from market fluctuations through a long-term investment technique
known as dollar-cost averaging. By placing a fixed sum regularly in the same
investment, you buy more shares when the price falls and fewer shares when the
price rises. Over time, your average cost per share generally is less than if
you bought a fixed number of shares each time. However, dollar cost averaging
does not protect your investment in a falling stock market, and its does not
guarantee that your investment will be profitable.
Finally, you always have easy access to your account. You may sell all
or any part of your Convergys shares quickly and conveniently by calling a
special toll-free telephone number.
HOW ARE SHARES PURCHASED?
Shares for the Plan may be purchased:
1. Directly from Convergys; or
2. Through market transactions. These include transactions on
securities exchanges where Convergys common shares are traded,
transactions in over-the-counter markets, and negotiated
transactions -- as well as transactions with
Convergys-sponsored employee benefit trusts.
WHAT WILL BE THE PRICE OF SHARES PURCHASED FOR THE PLAN?
The price of shares purchased from Convergys will be the average of the
daily high and low sale prices for the shares (as reported in the listings of
the New York Stock Exchange Composite Transactions) for the last five days on
which the shares were traded and ending on the actual investment date.
The price of shares purchased in market transactions will be the
average price paid by Merrill Lynch or other independent agent.
HOW OFTEN WILL SHARES BY PURCHASED UNDER THE PLAN?
If shares are purchased from Convergys, the purchased will be made on
the 15th of each month (or the first business day after the 15th).
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If shares are purchased in market transactions, Merrill Lynch or
another independent purchasing agent will be obligated to invest promptly. For
payroll deduction funds and your employer's 15% contributions, this will occur
on or about the 15th of each month. For dividends (see "Will I Receive the
Benefits of Dividend Reinvestment?"), it will occur on or about the dividend
payment date.
HOW MANY SHARES CAN I PURCHASE THROUGH THE PLAN?
Merrill Lynch will credit your account every month with as many whole
and fractional shares as your deductions plus your employer's contributions will
permit. If your payroll deductions are $100 each month, your employer's
contribution is $15.00, and shares cost $29.00 a share, you will purchase 3.9655
shares that month.
WILL CERTIFICATES BE ISSUED FOR CONVERGYS SHARES PURCHASES?
Convergys shares purchased under the Plan will be registered in the
name of Merrill Lynch (or its nominee) as agent, and certificates will not be
issued to you unless you ask.
Certificates for any number of whole shares credited to your account
will be issued upon your request. This request should be directed to Merrill
Lynch. Any remaining whole shares and fraction of a share will continue to be
credited to your account. Shares credited to your account may not be pledged. If
you wish to pledge these shares, you must request that certificates for such
shares be issued in your name. Certificates for fractions of shares will not be
issued.
WILL I RECEIVE THE BENEFITS OF DIVIDEND REINVESTMENT?
Although Convergys does not anticipate paying cash dividends, your
account would be credited with any dividends paid on the shares credited to your
account, and those dividends would be automatically reinvested in additional
Convergys shares. Your employer would pay all transaction fees, but would not
make a 15% matching contribution for dividend payments.
If you elect to hold share certificates in your own name, any dividends
would be paid directly to you and would not be reinvested.
CAN I BUY ADDITIONAL CONVERGYS SHARES THROUGH THE PLAN?
Yes. As a Plan participant, you have a brokerage account with Merrill
Lynch and you may purchase Convergys shares in addition to those purchased
through payroll deductions. Your employer will not contribute a 15% match for
these additional shares or pay the transaction fees. However, as a Plan
participant, these fees are discounted from Merrill Lynch rates.
Your order for additional Convergys shares is executed by Merrill Lynch
on the first business day following acceptance of your order, or as soon as
possible thereafter. Shares purchased in the open market may occur over a period
of time, and your price will be the average price of all shares purchased over
that period.
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HOW DO I CHANGE THE AMOUNT OF MY PAYROLL DEDUCTION?
By completing a new enrollment form, you can increase or decrease
deductions -- or discontinue deductions entirely. Requests for change will take
effect as soon as possible.
If you notify your employer to discontinue deductions, of if you cease
to be employed by a Convergys company, or if you cease to be employed by a
Convergys company that offers the Plan, or if the Plan is discontinued by your
employer (see "May the Plan be changed or discontinued?"), your account with
Merrill Lynch will remain open until you choose to close it. You can continue to
buy and sell any securities through your account, but different transaction fees
and an annual account fee may apply.
If you want to close your account, Merrill Lynch will sell your
holdings and send you a check for the net proceeds, or deliver stock
certificates for whole shares and a check for the net cash value of any
fractional share. You pay all transaction fees.
WHAT TRANSACTION RECORDS WILL I RECEIVE?
Shortly after the end of every quarter you will receive a summary
investment statement from Merrill Lynch showing:
1. Current market value of your holdings on the last day of the
quarter;
2. All account activity for the quarter, including whole and
fractional shares and the price of each purchase, sale, or
dividend;
3. A special fourth-quarter statement with an end-of-year
summary;
4. A tax-reporting statement every January for use in preparing
your income tax returns.
HOW DO I BENEFIT FROM HAVING MERRILL LYNCH HOLD MY SHARES?
o Merrill Lynch calculates all transaction activity and prepares
quarterly reports for you. Since Merrill Lynch retains your
share certificates, you avoid the cost or effort of storing
certificates or replacing missing certificates.
o Any dividends are automatically reinvested.
o You enjoy the convenience of selling your shares without
having to retrieve your share certificates.
o You can transfer any securities certificates into your Merrill
Lynch account at no cost; there is a $15 fee for removing
certificates from your account.
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SHOULD I KEEP MY QUARTERLY STATEMENTS?
Yes. It is important for you to keep your quarterly statements. For tax
purposes, you must know the price you paid and the price for which you sold your
shares. These statements are the only records of purchase or sale prices of your
shares. Your employer will not have this information.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES, UNDER PRESENT LAW, FOR PLAN
PARTICIPANTS?
The tax consequences under present law are as follows:
1. The 15% employer contribution is considered to be imputed
income and your paycheck will reflect it as such;
2. You will be subject to taxes on any reinvested dividends
credited to your account under the Plan;
3. Your tax basis of Convergys common shares that are purchased
with payroll deductions and your employer's 15% contribution
will be equal to the purchase price of those shares;
4. Your tax basis of Convergys common shares that are purchased
with any dividends will be equal to the amount of the
dividend;
5. Your holding period for tax purposes will begin on the day
after the investment date;
6. You will not realize any taxable gain if you elect to receive
certificates for whole shares from your account;
7. You will realize a gain or loss if you sell or exchange shares
of Convergys, whether you terminate participation in the Plan
or after you receive the shares, including cash adjustments
for a fraction of a share. The gain or loss will be the
difference between what you receive for the shares (or a
fraction of a share) and the tax basis of those shares.
The foregoing opinions are not intended to cover all tax aspects of
your participation in the Plan. The tax consequences outlined above are subject
to change by legislation, administrative action, and judicial decisions, and do
not deal with variations of state and local taxation. You should consult an
attorney or tax advisor regarding the tax effects of your participation in the
Plan.
HOW WILL MY SHARES BE VOTED?
Any Convergys shares held for you in the Plan will be voted as you
direct. You will receive a single proxy covering all Convergys shares credited
to your account under the Plan.
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MAY THE PLAN BE CHANGED OR DISCONTINUED?
Convergys reserves the right to suspend, modify, or terminate the Plan
at any time. All participants will receive notice of any such suspension,
modification, or termination.
WHAT PROTECTION DOES MERRILL LYNCH PROVIDE?
Cash and securities held by Merrill Lynch for your account are
protected through its membership in the Securities Investor Protection
Corporation for up to $500,000 ($100,000 for cash balances). Merrill Lynch
carries additional protection that brings total coverage for cash and securities
to $2.5 million ($100,000 for cash balances).
HOW DO I CONTACT MERRILL LYNCH FOR ACCOUNT INFORMATION?
Call the special toll-free telephone number: (800) 621-3777 or write to
Merrill Lynch at:
Merrill Lynch Group Employee Services
P. O. Box 173779
Denver, CO 80235
Attn: CMSS
CAN I ACCESS MY ACCOUNT ELECTRONICALLY?
Yes. When you join the Plan, Merrill Lynch will send you a five-digit
Personal Identification Number (PIN). Whenever you call the toll-free telephone
number, just enter your Social Security number and your PIN and follow the voice
instructions to obtain up-to-date account information.
You will also receive an instruction guide and wallet-size reference
card to assist you whenever you call.
WHAT SERVICES ARE AVAILABLE THROUGH THE TOLL-FREE NUMBER?
Using a touch-tone telephone, you can conveniently obtain your account
balance, receive company stock price quotes, execute sale riders, or change your
PIN. All these features can be executed 24 hours a day, every day.
To place buy or sell orders for securities, or to obtain additional
information, you can talk directly with a Merrill Lynch customer service
representative Mondays through Fridays from 8:00 a.m. to 7:00 p.m., Eastern
Standard Time.
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Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 18, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Convergys Corporation, which is incorporated by reference in Convergys
Corporation's Annual Report on Form 10-K for the year ended December 31, 1998.
We also consent to the incorporation by reference of our report dated February
18, 1999 relating to the financial statement schedule, which appears in such
Annual Report on Form 10-K.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Cincinnati, Ohio
December 28, 1999
