<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
</TABLE>
<TABLE>
<S> <C>
CONVERGYS CORPORATION
------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
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</TABLE>
<PAGE>
[LOGO]
NOTICE OF 2000 ANNUAL MEETING
AND PROXY STATEMENT
---------------------
NOTICE OF ANNUAL MEETING
To The Shareholders:
The annual meeting of shareholders of Convergys Corporation (the "Company")
will be held at the ARONOFF CENTER IN THE JARSON-KAPLAN THEATER, 650 Walnut
Street, Cincinnati, Ohio, on Tuesday, April 25, 2000, at 11:30 A.M. for the
following purposes:
1. To elect three directors for three-year terms ending in 2003;
2. To approve the Convergys Corporation 1998 Long Term Incentive Plan; and
3. To act upon such other matters as may properly come before the meeting.
Shareholders of record at the close of business on February 29, 2000 will be
entitled to vote at the meeting and any adjournment thereof.
It is important that your shares be represented and voted at the meeting.
You can vote your shares by completing and returning the proxy card sent to you.
Most shareholders can also vote their shares over the Internet or by telephone.
If Internet or telephone voting is available to you, voting instructions are
printed on the proxy card sent to you.
[SIGNATURE]
W. D. Baskett III
SECRETARY
March 8, 2000
<PAGE>
CONVERGYS CORPORATION
201 EAST FOURTH STREET
P. O. BOX 1638
CINCINNATI, OHIO 45202
------------------------
PROXY STATEMENT
---------------------
This Proxy Statement and the accompanying proxy card are being mailed to
shareholders on or about March 13, 2000 in connection with the solicitation of
proxies by the Board of Directors of Convergys Corporation (the "Company") for
use at the annual meeting to be held on Tuesday, April 25, 2000, at 11:30 A.M.
in the Jarson-Kaplan Theater at the Aronoff Center, 650 Walnut Street,
Cincinnati, Ohio.
Shares can be voted at the meeting only if the shareholder is represented by
proxy or is present in person. A shareholder giving a proxy in the accompanying
form retains the power to revoke it by a later appointment received by the
Company or by giving notice of revocation to the Company in writing or in open
meeting. Such later appointments or notices should be directed to W. D. Baskett
III, Secretary of the Company, at the address set forth above. Shares
represented by properly executed proxies received in the accompanying form will
be voted in accordance with the instructions contained therein. IN THE ABSENCE
OF CONTRARY INSTRUCTIONS, SUCH SHARES WILL BE VOTED: (1) TO ELECT AS DIRECTORS
THE PERSONS NAMED AS CLASS II DIRECTORS ON PAGES 5 AND 6, (2) TO APPROVE THE
CONVERGYS CORPORATION 1998 LONG TERM INCENTIVE PLAN AND (3) TO ACT UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
In the event that a broker, bank, custodian, nominee or other record holder
of shares indicates on a proxy that it does not have discretionary authority to
vote certain shares on a particular matter (a "broker non-vote"), those shares
will be considered as present but not entitled to vote with respect to that
matter. An abstention from voting and broker non-votes will be included in
determining the presence of a quorum.
If a shareholder is a participant in the Company's Retirement and Savings
Plan or the Convergys CMG Retirement Savings Plan and the accounts are
registered in the same name, the proxy will also serve as a voting instruction
for the trustees of these plans.
YOUR VOTE IS IMPORTANT. MOST SHAREHOLDERS HAVE A CHOICE OF VOTING OVER THE
INTERNET, BY TELEPHONE OR BY USING A TRADITIONAL PROXY CARD. PLEASE REFER TO
YOUR PROXY CARD OR THE INFORMATION FORWARDED BY YOUR BANK, BROKER OR OTHER
HOLDER OF RECORD TO SEE WHICH OPTIONS ARE AVAILABLE TO YOU.
<PAGE>
GENERAL
On the record date, February 29, 2000, outstanding voting securities of the
Company consisted of 153,621,104 common shares, without par value ("Common
Shares"), all of one class. Each Common Share has one vote on each matter
presented for action at the meeting. The following table sets forth information,
unless otherwise indicated, as of the record date, with respect to those persons
that the Company believes to be beneficial owners of more than 5% of the
Company's voting securities:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
TITLE OF CLASS BENEFICIAL OWNER(A) COMMON SHARES CLASS
- -------------- --------------------------------- ------------- ----------
<S> <C> <C> <C>
Common Shares The Western and Southern 13,905,392 9.05%
Life Insurance Company
400 Broadway
Cincinnati, Ohio 45202
Common Shares Putnam Investments, Inc. 9,070,479 5.90%
One Post Office Square
Boston, MA 02109
</TABLE>
- ------------------------
(a) The Securities and Exchange Commission has defined "beneficial owner" of a
security to include any person who has or shares voting power or investment
power with respect to any such security or has the right to acquire
beneficial ownership of any such security within 60 days.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Ownership of and transactions in Company securities by executive officers
and directors of the Company are required to be reported to the Securities and
Exchange Commission pursuant to Section 16 of the Securities Exchange Act. All
executive officers and directors complied with these requirements on a timely
basis during 1999.
BOARD OF DIRECTORS
GENERAL INFORMATION
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company, although it
is not involved in day-to-day operating details. Directors are kept informed of
the Company's business by various reports and documents sent to them, as well as
by operating and financial reports presented at Board and committee meetings by
the Chairman, Chief Executive Officer and other officers.
Meetings of the Board of Directors are scheduled approximately six times a
year, and there is also an organizational meeting following the annual meeting
of shareholders. Additional meetings of the Board may be called whenever needed.
The Board of Directors of the Company held eight meetings in 1999. Each director
attended at least 85% of the total number of meetings of the Board and
committees of which he or she was a member.
COMMITTEES OF THE BOARD
The committees established by the Board of Directors to assist it in the
discharge of its responsibilities are described below. The biographical
information on each director, including those nominated for election, which
begins on page 5 of this Proxy Statement, identifies the committee memberships
currently held by each nominee and each incumbent director.
The Executive Committee has four members, two of whom are officers of the
Company. The Committee meets on call whenever needed and has authority to act on
most matters during the intervals
2
<PAGE>
between Board meetings, except for those matters reserved to the full Board of
Directors by the Ohio General Corporation Law. The Committee met three times in
1999.
The Audit and Finance Committee has five members, none of whom is an officer
of the Company. The Committee meets with management to consider the adequacy of
the internal controls of the Company and the objectivity of its financial
reporting; the Committee also meets with the independent accountants and with
appropriate Company financial personnel and internal auditors concerning these
matters. The Committee recommends to the Board the appointment of the
independent accountants. Both the internal auditors and the independent
accountants periodically meet alone with the Committee and have unrestricted
access to the Committee. The Committee also reviews the capital structure of the
Company, short-term borrowing limits, proposed financings, options available for
the financing of all material acquisitions by the Company, the Company's benefit
plans, the performance of the portfolio managers of such plans and pension plan
funding. From time to time the Committee makes such reports and recommendations
to the Board with respect to the foregoing as it deems appropriate. The
Committee met six times in 1999.
The Compensation and Benefits Committee has three members, none of whom is
an officer of the Company. It makes recommendations to the Board with respect to
the compensation of the Chief Executive Officer, the Chairman of the Board and
non-employee directors. The Committee also approves the compensation of certain
executive officers of the Company and administers the Company's 1998 Long Term
Incentive Plan (the "LTIP"). The Committee met four times in 1999.
The Governance and Nominating Committee has four members, one of whom is an
officer of the Company. The Committee reviews the performance of senior
management, recommends candidates for director, monitors the scope and
performance of Board committees and suggests to the Board shareholder concerns
to be addressed. The Committee met one time in 1999.
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company receive no remuneration for
serving as directors or committee members. Non-employee directors receive an
annual retainer of $26,000 and a meeting fee of $1,000 for each Board and
committee meeting attended. The Chairmen of the Audit and Finance Committee and
the Compensation and Benefits Committee receive an additional fee of $3,000 per
year for serving as Chairmen of those committees. In lieu of the annual retainer
and individual meeting fees, Mr. Mechem, as Chairman of the Board, receives an
annual fee of $300,000 and supplemental medical insurance, the cost of which is
approximately $1,941 per year.
Non-employee directors also receive stock options pursuant to the LTIP. Each
non-employee director who is first elected or appointed to the Board will
receive an option to purchase 17,000 Common Shares. Each non-employee director
also will receive an option to purchase 8,500 Common Shares on the day of each
annual meeting of shareholders subsequent to his or her initial election or
appointment to the Board, provided that he or she continues in office after the
annual meeting. The exercise price for each option granted is 100% of the fair
market value of the Common Shares on the date of grant.
Directors may elect to defer the receipt of all or a part of their fees and
retainers under the Company's Deferred Compensation Plan for Non-Employee
Directors (the "Directors Deferred Compensation Plan"). Amounts so deferred are
assumed to be invested in the same type of investments, including Common Shares,
as are made available to employees of the Company under the Company's Retirement
and Savings Plan. Accounts under the Directors Deferred Compensation Plan will
be paid out in cash, in one lump sum or up to ten annual installments, when the
director leaves the Board.
3
<PAGE>
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of Common Shares as
of February 29, 2000 by each director and named executive officer and by all
directors and officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF PERCENT OF COMMON
FEB. 29, 2000(A) SHARES
------------------- -----------------
<S> <C> <C>
John F. Barrett(b)(c)....................... 71,871 *
William D. Baskett III(b)................... 424,252 *
Judith G. Boynton........................... 45,806 *
Gary C. Butler.............................. 32,500 *
David B. Dillon............................. 0 *
David F. Dougherty(b)....................... 506,913 *
Roger L. Howe............................... 113,319 *
Robert J. Marino(b)......................... 544,974 *
Steven C. Mason............................. 44,300 *
Charles S. Mechem, Jr....................... 153,212 *
Philip A. Odeen............................. 0 *
James F. Orr................................ 1,906,135 1.24%
Steven G. Rolls............................. 276,520 *
Brian H. Rowe............................... 61,638 *
All Directors and Officers as a group
(consisting of 20 persons, including those
named above).............................. 4,802,724 3.13%
</TABLE>
- ------------------------
* less than 1 percent
(a) Includes Common Shares subject to outstanding options which are exercisable
by such individuals within 60 days. The following options are included in
the totals: 1,600,578 Common Shares for Mr. Orr; 435,224 Common Shares for
Mr. Marino; 425,424 Common Shares for Mr. Dougherty; 353,832 Common Shares
for Mr. Baskett; 219,131 Common Shares for Mr. Rolls; 131,500 Common Shares
for Mr. Mechem; 63,300 Common Shares for Mr. Barrett; 47,300 Common Shares
for each of Messrs. Howe and Rowe; 43,300 Common Shares for each of
Mrs. Boynton and Mr. Mason; and 24,500 Common Shares for Mr. Butler.
(b) Includes Common Shares held directly by members of the director's or
officer's family who have the same home as the director or officer but as to
which the director or officer disclaims beneficial ownership: 1,568 for
Mr. Barrett; 2,107 for Mr. Baskett; 2,200 for Mr. Dougherty; 100 for
Mr. Marino; and 440 for other officers.
(c) Does not include Common Shares held by The Western and Southern Life
Insurance Company of which Mr. Barrett is President and Chief Executive
Officer. Mr. Barrett disclaims beneficial ownership of those shares.
4
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
The Board of Directors of the Company presently consists of ten members, two
of whom are officers of the Company. The Company's Amended Articles of
Incorporation require that the directors be divided into three classes. At each
annual meeting of shareholders, directors constituting a class are elected for a
three-year term. The terms of the Class II directors expire in 2000. Charles S.
Mechem, Jr., the Chairman of the Board since 1998, is not standing for
re-election pursuant to the Company's policy that non-employee directors are not
eligible for re-election after attaining age 68. The Board of Directors has
nominated John F. Barrett, Steve C. Mason and James F. Orr for election as
directors in Class II to serve until the 2003 annual meeting of shareholders.
Mr. Mason is currently a member of Class III, whose terms expire at the 2001
annual meeting of shareholders. If Mr. Mason is elected at this annual meeting
as a Class II director, he will no longer be a member of Class III. The three
nominees for director receiving the greatest number of votes will be elected
Class II directors. The three directors in Class III continue to serve until the
2001 annual meeting of shareholders and the three directors in Class I continue
to serve until the 2002 annual meeting of shareholders. The directors of each
class will serve until their respective successors are elected and qualified.
It is intended that shares represented by the accompanying form of proxy
will be voted for the election of the nominees, unless contrary instructions are
indicated as provided on the proxy card. (If you do not wish your shares to be
voted for a particular nominee, please so indicate on the proxy card.) If one or
more of the nominees should at the time of the meeting be unavailable or unable
to serve as a candidate, the shares represented by the proxies will be voted to
elect the remaining nominee or nominees and any substitute nominee or nominees
designated by the Board of Directors. The Board of Directors knows of no reason
why any of the nominees will be unavailable or unable to serve.
For each director of the Company, including those nominated for election,
there follows a brief listing of principal occupation during at least the past
five years, other major affiliations and age on the date of this Proxy
Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED
BELOW.
NOMINEES FOR CLASS II DIRECTORS
(TERMS EXPIRE IN 2003)
<TABLE>
<S> <C>
John F. Barrett, President and Chief Executive Officer of
[PHOTO] The Western and Southern Life Insurance Company since 1994;
President and Chief Operating Officer, 1989-1994; Executive
Vice President and Chief Financial Officer, 1987-1989.
Director of The Western and Southern Life Insurance Company,
The Fifth Third Bancorp and its subsidiary, The Fifth Third
Bank, and The Andersons, Inc. Director of the Company since
May 1998; Chairman of the Audit and Finance Committee;
member of the Compensation and Benefits Committee and the
Executive Committee. Age 50.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
Steven C. Mason, Retired Chairman of the Board and Chief
[PHOTO] Executive Officer of Mead Corporation since 1997; Chairman
of the Board and Chief Executive Officer, 1992-1997.
Director of PPG Industries, Inc. and Elder Beerman Stores.
Director of the Company since May 1998; Chairman of the
Compensation and Benefits Committee; member of the Executive
Committee and the Governance and Nominating Committee. Age
64.
James F. Orr, President and Chief Executive Officer of the
[PHOTO] Company since May 1998; Chief Operating Officer and a
Director of Cincinnati Bell Inc., 1996-1998; Chairman of
Convergys Information Management Group Inc. since 1996;
Chairman of Convergys Customer Management Group Inc. since
1997; Executive Vice President of Cincinnati Bell Inc. and
President and Chief Executive Officer of Convergys
Information Management Group Inc., 1995-1996; Chief
Operating Officer of Convergys Information Management Group
Inc., 1994; President and Chief Executive Officer of
Convergys Customer Management Group Inc., 1993-1994.
Director of Ohio National Life Insurance Company. Director
of the Company since May 1998; member of the Executive
Committee. Age 54.
</TABLE>
CLASS III DIRECTORS
(TERMS EXPIRE IN 2001)
<TABLE>
<S> <C>
Gary C. Butler, President and Chief Operating Officer of
[PHOTO] Automatic Data Processing, Inc. since 1998; Group President
of the Employer Services Group, 1995-1998; Group President
of the Dealer Services Group, 1990-1995. Director of
Automatic Data Processing, Inc. and Career Builder Inc.
Director of the Company since January 1999; Member of the
Audit and Finance Committee. Age 53.
Roger L. Howe, Retired Chairman of the Board of U.S.
[PHOTO] Precision Lens, Inc. since 1998; Chairman of the Board,
1988-1998; Chairman of the Board and Chief Executive
Officer, 1970-1988. Director of Baldwin Piano & Organ Co.,
Cintas Corporation, and Firstar Corporation and its
subsidiary, Firstar Bank. Director of the Company since May
1998; member of the Audit and Finance Committee and the
Governance and Nominating Committee. Age 65.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Philip A. Odeen, Executive Vice President of TRW Inc. since
[PHOTO] 1997; President and Chief Executive Officer of BDM
International, Inc., 1992-1997. Director of The Reynolds
and Reynolds Company and Washington Gas Light Company.
Director of the Company since March 2000. Age 64.
</TABLE>
CLASS I DIRECTORS
(TERMS EXPIRE IN 2002)
<TABLE>
<S> <C>
Judith G. Boynton, Executive Vice President, Business
[PHOTO] Development of Polaroid Corporation since 2000; Chief
Financial Officer since 1998; Vice President and Controller
of Amoco Corporation 1996-1998; General Manager--Auditing,
1994-1996; Controller of Amoco Oil Company, 1993-1994.
Director of the Company since May 1998; member of the Audit
and Finance Committee and the Governance and Nominating
Committee. Age 45.
David B. Dillon, President and Chief Operating Officer of
[PHOTO] The Kroger Co. since February 2000; President, October
1998-2000; President and Chief Operating Officer, June
1995-1998; Executive Vice President, 1990-1995; President of
Dillon Companies, Inc., 1986-1990. Director of The Kroger
Company. Director of the Company since March 2000. Age 48.
Brian H. Rowe, Retired Chairman of General Electric Aircraft
[PHOTO] Engines since 1995; Chairman, 1993-1995; President and Chief
Executive Officer, 1979-1993; Senior Vice President of the
General Electric Company, 1979-1993. Director of Stewart &
Stevenson Services, Inc., B/E Aerospace, Textron Inc., Atlas
Air Inc., Dynatech Corporation and The Fifth Third Bank.
Director of the Company since May 1998; member of the Audit
and Finance Committee and the Compensation and Benefits
Committee. Age 68.
</TABLE>
7
<PAGE>
APPROVAL OF THE CONVERGYS CORPORATION 1998 LONG TERM INCENTIVE PLAN
(ITEM 2 ON PROXY CARD)
The Convergys Corporation 1998 Long Term Incentive Plan ("LTIP") was
approved by Cincinnati Bell Inc. ("CBI"), and became effective on July 20, 1998,
when CBI was the Company's sole shareholder. The shareholders are being asked to
approve the LTIP at this time so that, in accordance with applicable Internal
Revenue Service regulations, the Company may continue to obtain a deduction when
options granted after the 2000 annual meeting are exercised. The principal
provisions of the LTIP are as follows:
The purposes of the LTIP are to further the long term growth of the Company
by offering competitive incentive compensation related to long term performance
goals to those employees who will be largely responsible for planning and
directing such growth, to reinforce the commonality of interest between the
Company's shareholders and the employees who are participating in the LTIP and
to aid in attracting and retaining employees of outstanding abilities and
specialized skills.
ADMINISTRATION
The Compensation and Benefits Committee administers the LTIP and selects the
employees who are eligible to receive awards under the LTIP.
SHARES AVAILABLE
A total of 30,000,000 Common Shares may be issued under the LTIP. Of this
number, a maximum of 15,000,000 Common Shares may be issued in conjunction with
incentive stock options ("ISOs") and not more than 3,000,000 Common Shares may
be issued to any one person. Any Common Shares issued under the LTIP may
consist, in whole or in part, of authorized and unissued Common Shares or Common
Shares held as treasury shares or Common Shares purchased in the open market. If
any Common Shares subject to any award are forfeited or the award terminates
without the issuance of such Common Shares, the Common Shares subject to such
award, to the extent of any such forfeiture or termination, will again be
available for grant.
TYPES OF AWARDS
Awards under the LTIP may be in any one or a combination of the following:
(a) stock options, including ISOs, (b) stock appreciation rights ("SARs"), in
tandem with stock options or free standing, (c) restricted stock,
(d) performance shares and performance units conditioned upon meeting certain
performance criteria and (e) other awards valued in whole or in part by
reference to or otherwise based on Common Shares or other securities of the
Company or any of its subsidiaries ("other stock unit awards"). In addition, in
connection with any award or deferred award, payments may also be made
representing dividends or interest or their equivalents.
STOCK OPTIONS
The LTIP provides that the purchase price of Common Shares purchasable under
any stock option shall be determined by the Compensation and Benefits Committee,
provided that the purchase price of any ISO's shall not be less than 100% of the
fair market value of the Common Shares on the date that the option is granted.
Payment of the purchase price for option shares must be made in cash or by
delivery of other Common Shares of the Company or other property, or a
combination thereof, having a fair market value equal to the purchase price of
the option shares.
The period of any option shall be determined by the Compensation and
Benefits Committee, but no ISO may be exercised later than 10 years after the
date of grant. The aggregate fair market value, determined at the date of grant
of the ISO, of Common Shares for which ISOs are exercisable for the first
8
<PAGE>
time during any calendar year as to any participant may not exceed the maximum
limitation in Section 422 of the Code.
STOCK APPRECIATION RIGHTS
A SAR represents the right to receive payment of a sum not to exceed the
amount, if any, by which the fair market value of a Common Share on the date of
exercise of the SAR exceeds the grant price of the SAR. The grant price (which
shall not be less than the fair market value of a Common Share on the date of
the grant) and other terms of the SAR shall be determined by the Compensation
and Benefits Committee. A SAR may be granted free-standing or in tandem with new
options or after the grant of a related option which is not an ISO. Upon the
exercise of a SAR, payment may be made in cash, Common Shares or other property,
or a combination thereof, as the Compensation and Benefits Committee shall
determine.
RESTRICTED STOCK
Restricted stock will consist of Common Shares which are subject to such
conditions, restrictions and limitations as the Compensation and Benefits
Committee determines to be appropriate. Restricted stock will be awarded without
consideration other than the rendering of services or the payment of any minimum
amount required by law, unless the Compensation and Benefits Committee decides
otherwise. With respect to Common Shares awarded as restricted stock, the
recipient shall have all rights of a shareholder of the Company, including the
right to vote and the right to receive cash dividends, unless the Compensation
and Benefits Committee shall otherwise determine. Any Common Shares issued with
respect to restricted stock as a result of a stock split, stock dividend or
similar transaction shall be restricted to the same extent as such restricted
stock, unless otherwise determined by the Compensation and Benefits Committee.
Upon termination of the participant's employment during the restriction period,
all restricted stock shall be forfeited subject to such exceptions, if any, as
are authorized by the Compensation and Benefits Committee as to termination of
employment, retirement, disability, death or special circumstances.
PERFORMANCE SHARES AND UNITS
The LTIP permits the grant of performance shares and performance units
("performance awards") as additional compensation to participants for services
to the Company or one of its subsidiaries based on performance periods and
performance goals established by the Compensation and Benefits Committee for the
Company or any subsidiary of the Company. Payment of performance awards may be
made in cash, Common Shares or other property, or a combination thereof, as the
Compensation and Benefits Committee shall determine. There may be more than one
award in existence at any one time and performance periods may differ.
Recipients of performance awards are not required to provide consideration other
than the rendering of service, unless the Compensation and Benefits Committee
decides otherwise.
OTHER STOCK UNIT AWARDS
The LTIP permits the award of other stock unit awards, either alone or in
addition to other awards granted under the LTIP, subject to such conditions,
restrictions, and limitations as the Compensation and Benefits Committee
determines to be appropriate. Other stock unit awards are awards of Common
Shares or other securities of the Company and other awards that are valued in
whole or in part by reference to, or are otherwise based on, Common Shares or
other securities of the Company. Other stock unit awards may be paid in cash,
Common Shares or other property, or a combination thereof, as the Compensation
and Benefits Committee shall determine.
9
<PAGE>
GRANTS TO NON-EMPLOYEE DIRECTORS
Under the LTIP, awards of stock options (other than ISOs) and restricted
stock may be made to directors who are not employees of the Company. With
respect to any awards to non-employee directors, the Board of Directors will
exercise the powers otherwise reserved to the Compensation and Benefits
Committee under the LTIP, including authority to select the non-employee
directors who will receive awards, to select the types of awards and to impose
limitations, conditions and restrictions on the awards as the Board of Directors
may deem appropriate.
CHANGE OF CONTROL
In the event of a change in control of the Company, all outstanding stock
options and SARs shall become exercisable in full, the restrictions applicable
to any Common Shares awarded as restricted stock shall lapse and a pro rata
portion of all outstanding performance awards and other stock unit awards shall
be paid within five days after the Change in Control. The LTIP change in control
provisions may not be amended on or subsequent to a change in control without
the consent of the participants who would be adversely affected by the
amendment.
AMENDMENT AND TERMINATION
The LTIP may be amended or terminated by the Board of Directors of the
Company, provided that no such action shall impair the rights of a participant
without the participant's consent and provided that no amendment shall be made
without shareholder approval which shall (a) increase the total number of Common
Shares reserved for issuance under the LTIP, the total number of Common Shares
which may be issued upon the exercise of ISOs or the total number of Common
Shares which may be issued to any one individual or (b) change the classes of
persons eligible to receive awards under the LTIP.
FEDERAL INCOME TAX CONSEQUENCES.
The following are the federal income tax consequences generally arising with
respect to awards granted under the LTIP.
The grant of an option or SAR will create no tax consequences for an
optionee or the Company. The optionee will have no taxable income upon
exercising an ISO (except that the alternative minimum tax may apply), and the
Company will receive no deduction when an ISO is exercised. Upon exercising an
option other than an ISO or SAR, the optionee must recognize ordinary income
equal to the difference between the exercise price and the fair market value of
the Common Shares on the date of exercise; the Company will be entitled to a
deduction for the same amount. The treatment to an optionee of a disposition of
Common Shares acquired through the exercise of an option depends on how long the
Common Shares have been held and whether such Common Shares were acquired by
exercising an ISO or by exercising an option other than an ISO or SAR.
Generally, there will be no tax consequence to the Company in connection with
the disposition of Common Shares acquired under an option except that the
Company may be entitled to a deduction in the case of a disposition of Common
Shares acquired under an ISO before the applicable ISO holding periods have been
satisfied.
With respect to other awards granted under the LTIP that are settled either
in cash or in Common Shares or other property that is either transferable or not
subject to substantial risk of forfeiture, the participant must recognize
ordinary income equal to the cash or the fair market value of Common Shares or
other property received; the Company will be entitled to a deduction for the
same amount. With respect to awards that are settled in Common Shares or other
property that is restricted as to transferability and subject to substantial
risk of forfeiture, the participant must recognize ordinary income equal to the
fair market value of the Common Shares or other property received at the first
time the Common Shares or other property became transferable or not subject to
substantial risk of forfeiture, whichever occurs earlier; the Company will be
entitled to a deduction for the same amount.
10
<PAGE>
The Board of Directors has not determined what action it will take if the
LTIP is not approved by the shareholders, although, by its terms, the LTIP in
its current form would remain in effect pending such action, if any.
OUR RECOMMENDATION
APPROVAL OF THE CONVERGYS CORPORATION 1998 LONG TERM INCENTIVE PLAN REQUIRES
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE COMMON SHARES PRESENT
OR REPRESENTED AND ENTITLED TO VOTE AT THE MEETING. ABSTENTIONS WILL HAVE THE
SAME EFFECT AS VOTES AGAINST THE PROPOSAL. BROKER NON-VOTES WILL NOT AFFECT THE
OUTCOME OF THE VOTE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ADOPTION OF
THE PROPOSAL.
11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation and Benefits Committee has the responsibility to
review annually and recommend to the Board compensation for the Chief Executive
Officer. The Committee reviews and approves the compensation for the Company's
Chief Financial Officer, the General Counsel, the Presidents of Convergys
Information Management Group Inc. ("IMG") and Convergys Customer Management
Group Inc. ("CMG") and other executive officers.
EXECUTIVE COMPENSATION PRINCIPLES
The executive compensation program established by the Company's Compensation
and Benefits Committee is based on the following principles: (a) compensation
should be related to performance and should be comparable to the compensation
provided by a select group of high performing growth companies; (b) individual
compensation targets should be competitive with selected survey groups and
provide significant incentives for superior Company performance;
(c) compensation should align the interests of the executive officers with the
interests of the Company's shareholders; and (d) compensation should enable the
Company to attract and retain the management necessary to lead and manage a high
growth services company.
Compensation levels for executive officers are benchmarked to the outside
market, using information from general industry surveys conducted by two outside
consultants. The outside market is defined as a select group of leading high
performing growth companies and those with whom the Company competes for
executive talent.
COMPONENTS OF EXECUTIVE COMPENSATION
The three components of the total compensation program are:
BASE SALARIES. Base salary ranges for the named executive officers are set
at levels that are comparable to similar positions at other companies with whom
we compare for compensation purposes. It is intended that salaries will only be
adjusted as needed based on individual performance and on the results of our
market surveys.
ANNUAL INCENTIVES. The annual bonuses for the Chief Executive Officer,
Chief Financial Officer and General Counsel are based two-thirds on Company
Earnings Per Share ("EPS") and one-third on personal performance. The annual
bonuses for subsidiary Presidents are based two-thirds on subsidiary operating
income and one-third on personal performance.
LONG TERM INCENTIVES. The executive officers' long term incentives are
entirely in the form of stock options under the LTIP. Annual stock option grants
are adjusted based on individual performances. The relative weight given to each
element of total direct compensation (base salary, annual bonus and long term
incentives) is intended to favor long term incentives over annual bonuses.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
As President and Chief Executive Officer of the Company, based upon the
Company's actual EPS results and evaluation of his personal performance,
Mr. Orr received the base salary and annual bonus, shown in the table on page
14. In January 1999, he received the options to purchase Common Shares shown in
the table on page 15.
STOCK OWNERSHIP GUIDELINES
To further align the interests of the Company's executive officers with
those of the Company's shareholders, the Company's Compensation and Benefits
Committee has established Common Share ownership guidelines for the Company's
senior executives.
12
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deduction for
compensation paid to the Company's named executives. The Company's Compensation
and Benefits Committee intends to maximize the amount of compensation expense
that is deductible by the Company when it is appropriate and in the best
interests of the Company and its shareholders. However, compensation decisions
will be based primarily on the Committee's perception of the effectiveness of
each type of compensation for incenting results and the extent to which
performance goals have been achieved.
Compensation and Benefits Committee
Steven C. Mason, CHAIRMAN
John F. Barrett
Brian H. Rowe
13
<PAGE>
EXECUTIVE COMPENSATION
I. SUMMARY COMPENSATION TABLE
The following table shows the compensation of the Chief Executive Officer
and the other four most highly compensated executive officers of the Company.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------- --------------------------------------
AWARDS PAYOUTS
------------------------- ----------
RESTRICTED SECURITIES LONG-TERM
OTHER ANNUAL STOCK UNDERLYING INCENTIVE ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)(E) ($)(A)
- ------------------ -------- --------- -------- ------------- ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James F. Orr............. 1999 $765,000 $509,565 (b) $ 0 260,488 $775,483 $31,844
President and Chief 1998 509,647 393,509 (b) 4,012,500(c) 579,400 0 31,340
Executive Officer 1997 370,000 284,000 (b) 0 43,800 0 31,344
David F. Dougherty....... 1999 $360,000 $135,258 (b) $ 0 79,524 $541,669 $11,503
President, Customer 1998 283,521 60,741 (b) 1,125,000(c) 188,700 0 17,461
Management Group 1997 241,039 36,920 (b) 0 27,000 0 12,273
Robert J. Marino......... 1999 $360,000 $134,990 (b) $ 0 79,524 $167,567 $25,235
President, Customer 1998 298,863 70,036 (b) 1,125,000(c) 188,700 0 17,664
Management Group 1997 270,000 177,601 (b) 0 27,000 0 9,500
Steven G. Rolls.......... 1999 $320,000 $143,242 (b) $ 0 70,131 0 $ 5,333
Chief Financial Officer 1998 160,417(d) 97,593 $126,899(f) 675,000(c) 74,000 0 0
William D. Baskett III... 1999 $310,000 $135,018 (b) $ 0 43,832 $128,598 $12,425
General Counsel and 1998 275,000 158,889 (b) 675,000(c) 95,000 0 3,408
Secretary 1997 0 85,200 (b) 0 30,000 0 0
</TABLE>
- ------------------------------
(a) Represents Company contributions to defined contribution savings plans, and
to the Executive Deferred Compensation Plan described on page 18.
(b) Does not include the value of perquisites and other personal benefits
because the total amount of such compensation, if any, does not exceed the
lesser of $50,000 or 10% of the total amount of the annual salary and bonus
for the individual for that year.
(c) Restricted stock holdings as of December 31, 1999: Mr. Orr, 267,500 Common
Shares with a value of $8,284,208; each of Messrs. Marino and Dougherty,
75,000 Common Shares with a value of $2,322,675; and each of Messrs. Rolls
and Baskett, 45,000 Common Shares with a value of $1,393,605.
(d) Mr. Rolls started with the Company as of June 1, 1998.
(e) Cashouts of performance shares under CBI's long term incentive plan in
conjunction with the Company's spin-off from CBI in 1998.
(f) Represents relocation expenses incurred by the Company on behalf of
Mr. Rolls.
14
<PAGE>
II. GRANTS OF STOCK OPTIONS
The following table shows all options to purchase Common Shares granted to
the named executive officers during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
NUMBER OF % OF TOTAL FOR OPTION TERM(B)
SECURITIES UNDERLYING OPTIONS GRANTED EXERCISE OR ----------------------------
OPTIONS GRANTED TO EMPLOYEES IN BASE PRICE 5% 10%
NAME (#)(A) FISCAL YEAR ($/SH) EXPIRATION DATE ($) ($)
- ---- --------------------- --------------- ----------- --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
James F. Orr.......... 260,488 10.38% $22.219 2009 $3,637,975 $10,606,550
David F. Dougherty.... 79,524 3.17% $22.219 2009 $1,110,632 $ 3,238,058
Robert J. Marino...... 79,524 3.17% $22.219 2009 $1,110,632 $ 3,238,058
Steven G. Rolls....... 70,131 2.79% $22.219 2009 $ 979,450 $ 2,855,594
William D. Baskett
III................. 43,832 1.75% $22.219 2009 $ 612,158 $ 1,784,751
</TABLE>
- --------------------------
(a) The material terms of the options granted are: grant type, non-statutory;
grant price, fair market value on grant date; exercisable 25% after one
year, an additional 25% after the second year and the remaining 50% after
the third year; term of grant, 10 years; except in case of retirement,
disability or death, any unexercisable options are cancelled upon
termination of employment.
(b) As required by rules of the Securities and Exchange Commission, potential
values stated are based on the prescribed assumption that the Company's
Common Shares will appreciate in value from the date of grant to the end of
the option term at annualized rates of 5% and 10% (total appreciation of
62.9% and 183.2%) resulting in values of approximately $36.18 and $62.93.
They are not intended, however, to forecast possible future appreciation, if
any, in the price of the Company's Common Shares. The total of all stock
options granted to employees, including executive officers, during fiscal
1999 was approximately 1.6% of the total Common Shares outstanding during
the year. As an alternative to the assumed potential realizable values
stated in the above table, the Securities and Exchange Commission rules
would permit stating the present value of such options at date of grant.
Methods of computing present values suggested by different authorities can
produce significantly different results. Moreover, since these stock options
are not transferrable, there are no objective criteria by which any
computation of present value can be verified. Consequently, the Company's
management does not believe there is a reliable method of computing the
present value of such stock options for proxy disclosure purposes.
15
<PAGE>
III. AGGREGATE OPTION EXERCISES
The following table shows aggregate option exercises in the last fiscal year
and fiscal year-end values for the Company:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FY-END (#) FY-END($)(A)
SHARES ACQUIRED VALUE EXERCISABLE (E)/ EXERCISABLE (E)/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE (U) UNEXERCISABLE (U)
- ---- --------------- ----------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
James F. Orr............... 0 0 (E) 227,950 (E) $ 3,801,183
(U) 1,066,938 (U) $ 14,498,718
David F. Dougherty......... 0 0 (E) 90,875 (E) $ 1,586,766
(U) 234,549 (U) $ 4,727,067
Robert J. Marino........... 0 0 (E) 110,675 (E) $ 2,047,939
(U) 234,549 (U) $ 4,727,067
Steven G. Rolls............ 0 0 (E) 18,500 (E) $ 295,427
(U) 125,631 (U) $ 1,499,925
William D. Baskett III..... 0 0 (E) 178,750 (E) $ 3,995,089
(U) 130,082 (U) $ 1,689,337
</TABLE>
- ------------------------
(a) Values stated for the Company are based on the fair market value (average of
the high and low) of $30.969 per share of the Common Shares on the New York
Stock Exchange on December 31, 1999.
IV. LONG-TERM INCENTIVE PLAN AWARDS TABLE
Since no awards pursuant to any long-term incentive plans were made to any
named executive officer in the fiscal year ended December 31, 1999, no table has
been included.
V. DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
All of the named executive officers of the Company participate in both the
Company's Pension Plan and a non-qualified pension plan known as the
Supplemental Executive Retirement Plan (the "SERP").
Under the SERP, a participant's pension at retirement is 50% of the
participant's average monthly compensation reduced by benefits payable under the
Pension Plan, including amounts which are intended to supplement or be in lieu
of benefits under the Pension Plan, and Social Security benefits. The
compensation averaging period is the high 36 month period during the 60 month
period preceding retirement, there is a reduction of 2.5% for each year by which
the sum of the participant's years of age and years of service at retirement
total less than 75, and no benefits are payable if the participant leaves prior
to attaining age 55 and completing at least 10 years of service. In the
discretion of the Compensation and Benefits Committee, the age and service
requirements of the SERP may be waived.
16
<PAGE>
The benefit formula under the Pension Plan is a cash balance formula. Under
this formula, each participant has an account to which pension credits are
allocated at the end of each year based upon the participant's attained age and
covered compensation for the year. To the extent that a participant's covered
compensation exceeds the Social Security wage base, additional pension credits
are given for such excess compensation. The following chart shows the pension
credits which will be given at the ages indicated:
<TABLE>
<CAPTION>
ATTAINED AGE PENSION CREDITS
- ------------ --------------------------------------------
<S> <C>
Less than 30 years................... 2.50% of total covered compensation plus
2.50% of excess compensation
30 but less than 35 years............ 2.75% of total covered compensation plus
2.75% of excess compensation
35 but less than 40 years............ 3.25% of total covered compensation plus
3.25% of excess compensation
40 but less than 45 years............ 4.00% of total covered compensation plus
4.00% of excess compensation
45 but less than 50 years............ 5.25% of total covered compensation plus
5.25% of excess compensation
50 but less than 55 years............ 6.50% of total covered compensation plus
6.50% of excess compensation
55 or more years..................... 8.00% of total covered compensation plus
8.00% of excess compensation
</TABLE>
At the end of each year, a participant's account is also credited with
assumed interest at the rate of 7.75% per annum for 1999 and 2000, and 4% per
annum for subsequent years. At retirement or other termination of employment, an
amount equivalent to the balance then credited to the account is payable to the
participant in the form of an immediate or deferred lump sum or annuity. (In the
case of a participant who was a participant in Cincinnati Bell Management
Pension Plan ("CBMPP") on December 31, 1998, the participant's account also was
credited with pension credits equivalent to the participant's accrued benefit
under CBMPP on that date.)
If Messrs. Orr, Dougherty, Marino, Rolls and Baskett continue in employment
and retire at the normal retirement age of 65 (age 67 for Mr. Baskett), their
estimated straight life annuity annual pension amounts under both the Pension
Plan and the SERP combined, prior to deduction for Social Security benefits,
would be: $637,283 for Mr. Orr, $247,629 for Mr. Dougherty, $247,495 for
Mr. Marino, $231,621 for Mr. Rolls and $222,509 for Mr. Baskett. These annual
pension amounts would be reduced: in the case of Mr. Orr (age 54 and eleven
years of service), if he retires prior to age 59; in the case of Mr. Dougherty
(age 43 and nine years of service), if he retires prior to age 55; in the case
of Mr. Marino (age 52 and four years of service), if he retires prior to age 62;
in the case of Mr. Rolls (age 45 and two years of service), if he retires prior
to age 59; and in the case of Mr. Baskett (age 60 and two years of service), if
he retires prior to age 67.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into Employment Agreements with Messrs. Orr,
Dougherty, Marino, Rolls and Baskett which provide for their employment and
retention for four years commencing on August 13, 1998 (June 1, 1998 in the case
of Mr. Rolls), subject to automatic one year extensions unless terminated prior
to the beginning of the final year. For years after 1998, the Employment
Agreements provide a minimum annual base salary, a minimum annual bonus target,
and annual grants of long-term incentives with a minimum present value. If their
employment is terminated within two years after a change in control or if they
elect to leave within 90 days after a change in control, they will receive lump
sum payments equal to three times the sum of their base salary and bonus targets
and benefits will continue to be provided for three years. If their employment
is terminated by the Company without cause, they will receive lump sum severance
payments equal to their base salary and bonus targets for the remainder of the
Employment Agreement terms (but not less than two times the sum of their base
salary and bonus targets) and benefits
17
<PAGE>
will continue to be provided for the remainder of the Employment Agreement terms
(or, if longer, for two years).
The Executive Deferred Compensation Plan was adopted effective January 1,
1999 to permit executives to defer receipt of up to 75% of their base salary and
up to 100% of their cash bonuses. There is a Company match of $.0666 for each
dollar deferred, with a maximum match of 4% of the participant's compensation
(reduced by the Company "match" under the Company's qualified Retirement and
Savings Plan). Amounts deferred by participants (and the related Company
"match") are assumed to have been invested in various mutual funds and other
investments (including Company Shares). Upon termination of employment, the
amounts then credited to the participant's account are distributed in two equal
annual installments or in up to ten annual installments. The 1999 "match" for
Messrs. Orr, Dougherty, Marino, Rolls and Baskett is reflected in the Summary
Compensation Table under the "All Other Compensation" column.
Under the LTIP, in the event of a change in control, all outstanding stock
options will become immediately exercisable, all restrictions applicable to
restricted stock awards will lapse and a pro rata portion of all accrued
incentive awards will be paid in cash. Under the Executive Deferred Compensation
Plan, the present value of all deferred amounts will be paid in cash in the
event of a change in control. The present values of all accrued unfunded
benefits under the Pension Plan and the SERP will be funded within five days
after a change in control.
18
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the percentage change, for the
period from August 13, 1998 through December 31, 1999, of the cumulative total
shareholder return on the Company's Common Shares with the cumulative total
return of the S&P 500 Stock Index and the Custom Composite.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
<S> <C> <C> <C>
BEGINNING AUGUST 13, 1998
Convergys S&P 500 Custom Composite
8/13/98 $100 $100 $100
9/30/98 $100 $95 $88
12/31/98 $149 $115 $112
3/31/99 $114 $121 $117
6/30/99 $129 $129 $117
9/30/99 $132 $121 $115
12/31/99 $205 $139 $192
</TABLE>
Convergy's total return assumes investment of $100 at the Company's IPO
price of $15.00.
The Custom Composite consists of Amdocs LTD., APAC Teleservices Inc., CSG
Systems International Inc., DST Systems Inc., Saville Systems plc ADR (through
3Q99), Sitel Corp., Teletech Holdings Inc. and West Teleservices Inc.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit and Finance
Committee, has reappointed the firm of PricewaterhouseCoopers LLP as independent
accountants to audit the financial statements of the Company for the year 1999.
One or more members of the firm of PricewaterhouseCoopers LLP will attend the
annual meeting, will have an opportunity to make a statement and will be
available to answer questions.
SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in proxy statement for the
annual meeting in 2001 must be received by the Company on or before
November 13, 2000 and must comply with Rule 14a-8 promulgated under the
Securities Exchange Act of 1934. If a non-Rule 14a-8 shareholder proposal is
submitted at the annual meeting in 2001, the proxy solicited by the Board of
Directors with respect to the annual meeting will authorize the named proxies to
exercise discretionary voting authority with respect to that proposal unless
notice of the proposal is received by the Company on or before Janurary 27,
2001.
19
<PAGE>
Proposals or notices should be sent to W. D. Baskett III, Secretary, 201 East
Fourth Street, P. O. Box 1638, Cincinnati, Ohio 45201.
OTHER MATTERS TO COME BEFORE MEETING
At the time this Proxy Statement was released for printing on March 8, 2000,
the Company knew of no other matters which might be presented for action at the
meeting. If any other matters properly come before the meeting, it is intended
that the Common Shares represented by proxies will be voted with respect thereto
in accordance with the judgment of the persons voting them.
The costs of soliciting proxies will be borne by the Company. In addition to
this solicitation by mail, directors, officers and regular employees of the
Company may solicit proxies in person or by telephone, make additional requests
for the return of proxies and may receive proxies on behalf of the Company.
Brokers, nominees, fiduciaries and other custodians will be requested to forward
soliciting material to the beneficial owners of Common Shares and will be
reimbursed for their expenses. The Company also has retained Georgeson
Shareholder Communications Inc. to assist it in connection with the solicitation
at an estimated fee of $16,000 plus reimbursement of out-of-pocket expenses.
FINANCIAL STATEMENTS AVAILABLE
Financial statements for the Company and its subsidiaries are included in
the Annual Report of the Company to shareholders for the year 1999. A copy of
the Company's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission for the year 1999 will be furnished, without charge, on
request directed to W. D. Baskett III, Secretary, 201 East Fourth Street,
P.O. Box 1638, Cincinnati, Ohio 45201.
By Order of the Board of Directors
[SIGNATURE]
W. D. Baskett III
SECRETARY
March 8, 2000
20
<PAGE>
CONVERGYS CORPORATION
1998 LONG TERM INCENTIVE PLAN
1. PURPOSE.
The purpose of the Convergys Corporation 1998 Long Term Incentive Plan
(the "Plan") is to further the long term growth of Convergys Corporation (the
"Company") by offering competitive incentive compensation related to long term
performance goals to those employees of the Company and its affiliates who will
be largely responsible for planning and directing such growth. The Plan is also
intended as a means of reinforcing the commonality of interest between the
Company's shareholders and the employees who are participating in the Plan and
as an aid in attracting and retaining employees of outstanding abilities and
specialized skills. The Plan shall become effective on the date on which it is
approved by the shareholders of the Company (the "Effective Date").
2. ADMINISTRATION.
2.1 The Plan shall be administered by the Compensation Committee
(the "Committee") of the Company's Board of Directors (the "Board"). The
Committee shall consist of at least three members of the Board (a) who are
neither officers nor employees of the Company and (b) who are "outside
directors" within the meaning of section 162(m)(4)(C) of the Internal Revenue
Code of 1986, as amended (the "Code").
2.2 Subject to the limitations of the Plan, the Committee shall
have the sole and complete authority (a) to select from the employees of the
Company and its affiliates those individuals who shall participate in the
Plan, (b) to make awards in such forms and amounts as it shall determine and
to cancel or suspend awards, (c) to impose such limitations, restrictions and
conditions upon awards as it shall deem appropriate, (d) to interpret the
Plan and to adopt, amend and rescind administrative guidelines and other
rules and regulations relating to the Plan and (e) to make all other
determinations and to take all other actions necessary or advisable for the
proper administration of the Plan. Determinations of fair market value under
the Plan shall be made in accordance with the methods and procedures
established by the Committee. The Committee's determinations on matters
within its authority shall be conclusive and binding on the Company and all
other parties.
2.3 The Committee may delegate to one or more Senior Managers or
to one or more committees of Senior Managers the right to make awards to
employees who are not officers or directors of the Company.
<PAGE>
3. TYPES OF AWARDS.
Awards under the Plan may be in any one or more of the following: (a)
stock options, including incentive stock options ("ISOs"), (b) stock
appreciation rights (SARs"), in tandem with stock options or free-standing, (c)
restricted stock, (d) performance shares and performance units conditioned upon
meeting performance criteria and (e) other awards based in whole or in part by
reference to or otherwise based on Company Common Shares, without par value
("Common Shares"), or other securities of the Company or any of its subsidiaries
("other stock unit awards"). In connection with any award or any deferred award,
payments may also be made representing dividends or interest or other
equivalent. No awards shall be made under the Plan after ten years from the
Effective Date.
4. SHARES SUBJECT TO PLAN.
Subject to adjustment as provided in Section 14 below, 30,000,000 of
the Company's outstanding Common Shares shall be available for award under the
Plan. Common Shares available in any year which are not used for awards under
the Plan shall be available for award in subsequent years. Notwithstanding the
foregoing, subject to adjustment as provided in Section 14 below, the total
number of Common Shares available under the Plan for awards of ISOs shall not
exceed 15,000,000 and the total number of Common Shares available for awards
under the Plan to any one individual shall not exceed 3,000,000. In the future,
if another company is acquired, any Common Shares covered by or issued as result
of the assumption or substitution of outstanding grants of the acquired company
shall not be deemed issued under the Plan and shall not be subtracted from the
Common Shares available for grant under the Plan. The Common Shares deliverable
under the Plan may consist in whole or in part of authorized and unissued shares
or treasury shares. If any Common Shares subject to any award are forfeited, or
the award is terminated without issuance of Common Shares or other
consideration, the Common Shares subject to such awards shall again be available
for grant pursuant to the Plan.
5. STOCK OPTIONS.
Except as provided in Section 10, all stock options granted under the
Plan shall be subject to the following terms and conditions:
5.1 The Committee may, from time to time, subject to the
provisions of the Plan and such other terms and conditions as the Committee
may prescribe, grant to any employee of the Company or affiliate of the
Company options to purchase Common Shares, which options may be options that
comply with the requirements for incentive stock options set forth in section
422 of the Code ("ISOs") or options which do not comply with such
requirements ("NSOs") or both. The grant of an option shall be evidenced by a
signed written agreement ("Stock Option Agreement') containing such terms and
conditions as the Committee may from time to time prescribe.
2
<PAGE>
5.2 The purchase price per Common Share of options granted under
the Plan shall be determined by the Committee; provided that the purchase
price per Common Share of any ISO shall not be less 100% of the fair market
value of a Common Share on the date the ISO is granted.
5.3 Unless otherwise prescribed by the Committee in the Stock
Option Agreement, each option granted under the Plan shall be for a period of
ten years, shall be exercisable in whole or in part after the commencement of
the second year of its specified term and may thereafter be exercised in
whole or in part before it terminates under the provisions of the Stock
Option Agreement. The Committee shall establish procedures governing the
exercise of options and shall require that written notice of exercise be
given and that the option price be paid in full in cash at the time of
exercise. The Committee may permit an optionee, in lieu of part or all of the
cash payment, to make payment in Common Shares or other property valued at
fair market value on the date of exercise, as partial or full payment of the
option price. As soon as practicable after receipt of each notice and full
payment, the Company shall deliver to the optionee a certificate or
certificates representing the acquired Common Shares, unless, in accordance
with rules prescribed by the Committee, the optionee has elected to defer
receipt of the Common Shares.
5.4 Any ISO granted under the Plan shall be exercisable upon the
date or dates specified in the Stock Option Agreement, but not earlier than
one year after the date of grant of the ISO and not later than 10 years after
the date of grant of the ISO, provided that the aggregate fair market value,
determined as of the date of grant, of Common Shares for which ISOs are
exercisable for the first time during any calendar year as to any individual
shall not exceed the maximum limitations in section 422 of the Code.
Notwithstanding any other provisions of the Plan to the contrary, no
individual will be eligible for or granted an ISO if, at the time the option
is granted, that individual owns (directly or indirectly, within the meaning
of section 424(d) of the Code) stock of the Company possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
of any of its subsidiaries.
6. STOCK APPRECIATION RIGHTS.
6.1 A SAR may be granted free-standing or in tandem with new
options or after the grant of a related option which is not an ISO. The SAR
shall represent the right to receive payment of a sum not to exceed the
amount, if any, by which the fair market value of the Common Shares on the
date of exercise of the SAR (or, if the Committee shall so determine in the
case of any SAR not related to an ISO, any time during a specified period
before the exercise date) exceeds the grant price of the SAR.
6.2 The grant price and other terms of the SAR shall be
determined by the Committee.
6.3 Payment of the amount to which an individual is entitled upon
the exercise of a SAR shall be made in cash, Common Shares or other property
or in a combination
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thereof, as the Committee shall determine. To the extent that payment is made in
Common Shares or other property, the Common Shares or other property shall be
valued at fair market value on the date of exercise of the SAR.
6.4 Unless otherwise determined by the Committee, any related
option shall no longer be exercisable to the extent the SAR has been
exercised and the exercise of an option shall cancel the related SAR to the
extent of such exercise.
7. RESTRICTED STOCK.
Common Shares awarded as restricted stock may not be disposed of by the
recipient until certain restrictions established by the Committee lapse.
Recipients of restricted stock are not required to provide consideration other
than the rendering of services or the payment of any minimum amount required by
law, unless the Committee otherwise elects. The recipient shall have, with
respect to Common Shares awarded as restricted stock, all of the rights of a
shareholder of the Company, including the right to vote the Common Shares, and
the right to receive any cash dividends, unless the Committee shall otherwise
determine. Upon termination of employment during the restricted period, all
restricted stock shall be forfeited, subject to such exceptions, if any, as are
authorized by the Committee, as to termination of employment, retirement,
disability, death or special circumstances.
8. PERFORMANCE SHARES AND UNITS.
8.1 The Committee may award to any Participant Performance Shares
and Performance Units ("Performance Award"). Each Performance Share shall
represent, as the Committee shall determine, one Common Share or other
security. Each Performance Unit shall represent the right of the recipient to
receive an amount equal to the value determined in the manner established by
the Committee at time of award. Recipients of Performance Awards are not
required to provide consideration other than the rendering of service, unless
the Committee otherwise elects.
8.2 Each Performance Award under the Plan shall be evidenced by a
signed written agreement containing such terms and conditions as the
Committee may determine.
8.3 The performance period for each award of Performance Shares
and Performance Units shall be of such duration as the Committee shall
establish at the time of award ("Performance Period"). There may be more than
one award in existence at any one time, and Performance Periods may differ.
The performance criteria for each Performance Period shall be determined by
the Committee.
8.4 The Committee may provide that amounts equivalent to
dividends paid shall be payable with respect to each Performance Share
awarded, and that amounts equivalent to interest at such rates as the
Committee may determine shall be payable with respect to amounts equivalent
to dividends previously credited to the Participant. The
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Committee may provide that amounts equivalent to interest at such rates as the
Committee may determine shall be payable with respect to Performance Units.
8.5 Payments of Performance Shares and any related dividends,
amounts equivalent to dividends and amounts equivalent to interest may be
made in a lump sum or in installments, in cash, property or in a combination
thereof, as the Committee may determine. Payment of Performance Units and any
related amounts equivalent to interest may be made in a lump sum or in
installments, in cash, property or in a combination thereof, as the Committee
may determine.
9. OTHER STOCK UNIT AWARDS.
9.1 The Committee is authorized to grant to employees of the
Company and its affiliates, either alone or in addition to other awards
granted under the Plan, awards of Common Shares or other securities of the
Company or any subsidiary of the Company and other awards that are valued in
whole or in part by reference to, or are otherwise based on, Common Shares or
other securities of the Company or any subsidiary of the Company ("other
stock unit awards"). Other stock unit awards may be paid in cash, Common
Shares, other property or in a combination thereof, as the Committee shall
determine.
9.2 The Committee shall determine the employees to whom other
stock unit awards are to be made, the times at which such awards are to be
made, the number of shares to be granted pursuant to such awards and all
other conditions of such awards. The provisions of other stock unit awards
need not be the same with respect to each recipient. The recipient shall not
be permitted to sell, assign, transfer, pledge, or otherwise encumber the
Common Shares or other securities prior to the later of the date on which the
Common Shares or other securities are issued, or the date on which any
applicable restrictions, performance or deferral period lapses. Common Shares
(including securities convertible into Common Shares) and other securities
granted pursuant to other stock unit awards may be issued for no cash
consideration or for such minimum consideration as may be required by
applicable law. Common Shares (including securities convertible into Common
Shares) and other securities purchased pursuant to purchase rights granted
pursuant to other stock unit awards may be purchased for such consideration
as the Committee shall determine, which price shall not be less than the fair
market value of such Common Shares or other securities on the date of grant,
unless the Committee otherwise elects.
10. GRANTS TO NON-EMPLOYEE DIRECTORS.
10.1 For purposes of the Plan, "Non-Employee Director" means a
member of the Board who is not an employee of the Company or an affiliate of
the Company. In addition to awards to employees, awards of stock options
(other than ISOs) and restricted stock also may be made to Non-Employee
Directors under the Plan. Except as otherwise provided in this Section 10,
any award to a Non-Employee Director shall be subject to all of the terms and
conditions of the Plan.
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10.2 The Board, in its sole discretion, may make awards to
Non-Employee Directors. In exercising such authority, the Board shall have
all of the power otherwise reserved to the Committee under the Plan,
including, but not limited to, the sole and complete authority (a) to select
the Non-Employee Directors who shall be eligible to receive awards, (b) to
select the types and amounts of awards which may be made and (c) to impose
such limitations, restrictions and conditions upon awards as the Board shall
deem appropriate.
11. NONASSIGNABILITY OF AWARDS.
Unless permitted by the Committee, no award granted under the Plan
shall be assigned, transferred, pledged or otherwise encumbered by the
recipient, otherwise than (a) by will, (b) by designation of a beneficiary after
death or (c) by the laws of descent and distribution. Each award shall be
exercisable during the recipient's lifetime only by the recipient or, if
permissible under applicable law, by the recipient's guardian or legal
representative or, in the case of a transfer permitted by the Committee, by the
recipient of the transferred amount.
12. DEFERRALS OF AWARDS.
The Committee may permit recipients of awards to defer the distribution
of all or part of any award in accordance with such terms and conditions as the
Committee shall establish.
13. PROVISIONS UPON CHANGE OF CONTROL.
In the event of a Change in Control occurring on or after the Effective
Date, the provisions of this Section 13 will supersede any conflicting
provisions of the Plan.
13.1 In the event of a Change in Control, all outstanding stock
options and SARs under Sections 5 and 6 of the Plan shall become exercisable
in full and the restrictions otherwise applicable to any common shares
awarded as restricted stock under Section 7 of the Plan shall lapse; further,
unless the Committee shall revoke such an entitlement prior to a Change in
Control, any optionee who is deemed by the Committee to be a statutory
officer ("insider") for purposes of Section 16 of the Securities Exchange Act
of 1934, as amended (the "1934 Act"), shall be entitled to receive in lieu of
exercise of any stock option, to the extent that it is then exercisable, a
cash payment in an amount equal to the difference between the aggregate price
of such option, or portion thereof, and (a) in the of a tender offer or
similar event, the final offer price per share paid for Common Shares times
the number of Common Shares covered by the option or portion thereof, or (b)
the aggregate value of the Common Shares covered by the stock option.
In the event of a tender offer in which fewer than all Common Shares
which are validly tendered in compliance with such offer are purchased or
exchanged, then only that portion of the Common Shares covered by a stock option
as results from multiplying
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such Common Shares by a fraction, the numerator of which is the number of Common
Shares acquired pursuant to the offer and the denominator of which is the number
of Common Shares tendered in compliance with such offer, shall be used to
determine the payment thereupon. To the extent that all or any portion of a
stock option shall be affected by this provision, all or such portion of the
stock option shall be terminated.
13.2 In the event of a Change in Control, a pro rata portion of
all outstanding awards under Sections 8 and 9 of the Plan, whether in the
form of Performance Shares or Units, shall be paid to each recipient of the
award within five business days of such Change in Control The pro rata
portion of such awards to be paid shall equal the full present value of each
such award as of the first day of the month in which such Change in Control
occurs multiplied by a ratio, the numerator of which shall equal the number
of full and partial months (including the month in which any Change in
Control occurs) since the date of the award and the denominator of which
shall equal the number of months in the applicable performance period.
13.3 For purposes of this Section 13, a "Change in Control" of the
Company means and shall be deemed to occur if:
(a) a tender shall be made and consummated for the
ownership of 30% or more of the outstanding voting securities of the Company;
(b) the Company shall be merged or consolidated with
another corporation and as a result of such merger or consolidation less than
75% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders of the
Company, other than affiliates (within the meaning of the 1934 Act) of any
party to such merger or consolidation, as the same shall have existed
immediately prior to such merger or consolidation;
(c) the Company shall sell substantially all of its assets
to another corporation which is not a wholly owned subsidiary;
(d) a person, within the meaning of Section 3(a)(9) or of
Section 13(d)(3) of the 1934 Act, shall acquire 20% or more of the
outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record), or a person, within the meaning of Section
3(a)(9) or Section 13(d)(3) of the 1934 Act, controls in any manner the
election of a majority of the directors of the Company; or
(e) within any period of two consecutive years commencing
on or after the effective date of the Plan, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the directors then in office
who were directors at the beginning of the period. For purposes hereof,
ownership of voting securities shall take into account and shall include
ownership as determined by applying the provisions of Rule 13d-3(d)(1)(i)
pursuant to the 1934 Act.
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13.4 In the event of a Change in Control, the provisions of this
Section 13 may not be amended on or subsequent to the Change in Control in
any manner whatsoever which would be adverse to any recipient of an award
under the Plan without the consent of such recipient who would be so
affected; provided, however, the Board may make minor or administrative
changes to this Section 13 or changes to conform to applicable legal
requirements.
14. ADJUSTMENTS.
14.1 In the event of any change affecting the Common Shares by
reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distributions to common shareholders other than cash
dividends, the Committee shall make such substitution or adjustment in the
aggregate number or class of shares which may be distributed under the Plan
and in the number, class and option price or other price of shares subject to
the outstanding awards granted under the Plan as it deems to be appropriate
in order to maintain the purpose of the original grant.
14.2 The Committee shall be authorized to make adjustments in
performance award criteria or in the terms and conditions of other awards in
recognition of unusual or non-recurring events affecting the Company or its
financial statements or changes in applicable laws, regulations or accounting
principles. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any award in the manner and to the
extent it shall deem desirable to carry it into effect.
15. AMENDMENTS AND TERMINATIONS.
Notwithstanding any other provisions hereof to the contrary, the Board
may assume responsibilities otherwise assigned to the Committee and may amend,
alter or discontinue the Plan or any portion thereof at any time, provided that
no such action shall impair the rights of any recipient of an award under the
Plan without such recipient's consent and provided that no amendment shall be
made without shareholder approval which shall (a) increase the total number of
Common Shares reserved for issuance pursuant to the Plan, the total number of
Common Shares which may be issued upon the exercise of ISOs or the total number
of Common Shares which may be issued to any one individual or (b) change the
classes of persons eligible to receive awards under the Plan.
16. WITHHOLDING.
To the extent required by applicable federal, state, local or foreign
law, the recipient of an award under the Plan shall make arrangements
satisfactory to the Company for the satisfaction of any withholding obligations
that arise in connection with the award and the Company shall have the right to
withhold from any cash award the amount necessary, or retain from any award in
the form of Common Shares a sufficient number of Common Shares, to satisfy the
applicable withholding tax obligation. Unless
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otherwise provided in the applicable award agreement, a Participant may satisfy
any tax withholding obligation by any of the following means or any combination
thereof: (a) by a cash payment to the Company, (b) by delivering to the Company
Common Shares owned by the Participant or (c) with the consent of the Committee,
by authorizing the Company to retain a portion of the Common Shares otherwise
issuable to the Participant pursuant to the exercise or vesting of the award.
17. CBI STOCK PLAN.
17.1 For purposes of this Section 17, "CBI" means Cincinnati Bell
Inc., "CBI Option" means an option to purchase CBI common shares granted
under a CBI Stock Plan, "CBI Restricted Stock" means an award of CBI common
shares as restricted stock under a CBI Stock Plan, "CBI Stock Plan" means,
collectively, the Cincinnati Bell Inc. 1988 Long Term Incentive Plan, the
Cincinnati Bell Inc. 1989 Stock Option Plan, the Cincinnati Bell Inc. 1997
Long Term Incentive Plan, the Cincinnati Bell Inc.1988 Stock Option Plan for
Non-Employee Directors and the Cincinnati Bell Inc. 1997 Stock Option Plan
for Non-Employee Directors and "Distribution" means the date as of which CBI
distributes to its shareholders all of the Common Shares owned by CBI.
17.2 At the time of the Distribution, each holder of a CBI Option
shall receive an additional stock option under this Plan ("Company Option")
to purchase a number of Common Shares equal to the number of CBI common
shares subject to the CBI Option. Each Company Option shall have the same
terms and conditions (including vesting) as the CBI Option with respect to
which it is granted, except that termination of employment shall mean, (a) in
the case of a CBI employee or director, termination of employment with CBI
and (b) in the case of a Company employee or director, termination of
employment with the Company. The exercise price per share of each CBI Option
(the "CBI Exercise Price") shall be reduced, and the exercise price per share
of the associated Company Option (the "Company Exercise Price") shall be set
so that (a) the sum of the CBI Exercise Price (after the reduction provided
herein) and the Company Exercise Price is equal to the CBI Exercise Price
(before the reduction provided herein) and (ii) the ratio of the CBI Exercise
Price (after the reduction provided herein) to the Company Exercise Price is
equal to the ratio of the average of the high and low per-share prices of CBI
common shares on the New York Stock Exchange ("NYSE") on January 4, 1999 to
the average of the high and low per-share prices of Common Shares on the NYSE
on January 4, 1999. Notwithstanding the foregoing, in the event that the
number of Common Shares to be distributed to each CBI shareholder at the time
of the Distribution with respect to each CBI common share owned by the
shareholder on the record date for the Distribution is greater or less than
one, the number of Common Shares represented by each Company Option and the
Company Exercise Price shall be adjusted to reflect such difference.
17.3 At the time of the Distribution, the Common Shares to be
distributed with respect to each CBI common share which constitutes CBI
Restricted Stock shall be deemed to have been issued under this Plan and
shall be subject to the same terms, conditions and restrictions (including
vesting) which apply to the CBI Restricted Stock
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with respect to which the distribution is being made, except that termination of
employment shall mean, (a) in the case of a CBI employee, termination of
employment with CBI and (b) in the case of a Company employee, termination of
employment with the Company.
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CONVERGYS CORPORATION
C/O CORPORATE TRUST SERVICES
MAIL DROP 10AT66--4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OHIO 45263
---------------------------------------------
NAME APPEARS
---------------------------------------------
----------------------------------------------------------
YOUR CONTROL NUMBER IS:
----------------------------------------------------------
You are now able to cast your vote by using a touch-tone
telephone or by using the internet. Instructions for
voting are on the reverse side. Your Control number for
voting is noted above.
fold and detach here
................................................................................
Please vote, date and sign below and return this proxy form promptly in the
enclosed envelope. If you attend the meeting and wish to change your vote, you
may do so by revoking your proxy at an open meeting and vote by ballot. This
proxy form, when properly executed, will be voted in accordance with the
directions given by the shareholder. If no directions are given hereon, the
proxy form will be voted FOR the election of directors and FOR the approval of
the 1998 Long Term Incentive Plan.
Dated _____________________ , 2000
- ---------------------------------- ------------------------
------------------------
----------------------------------
SIGNATURE
----------------------------------
SIGNATURE IF SHARES HELD JOINTLY
Please sign exactly as name appears
opposite. Executors, trustees,
administrators and other
- ---------------------------------- fiduciaries should so indicate.
<PAGE>
R.S. ROWE & COMPANY, INC.; JOB NO. 8469; PROOF OF 2-28-00
[LOGO] (781) 849-9700; (212) 926-2444; (800) 324-6202; FAX NO. (781) 849-9740
EMAIL ADDRESS: [email protected]
PM6\5TH-3RD\CONV-PRX
VOTE BY TELEPHONE
Have your proxy card available when you call the TOLL-FREE number 1-800-250-9081
using a Touch-Tone phone. You will be prompted to enter your control number
found on the reverse side and then you can follow the simple prompts that will
be presented to you to record your vote.
VOTE BY INTERNET
Have your proxy card available when you access the WEBSITE
HTTP://WWW.VOTEFAST.COM. You will be prompted to enter your control number found
on the reverse side and then you can follow the simple prompts that will be
presented to you to record your vote.
VOTE BY MAIL
Please mark, sign and date your proxy card and return it in the postage paid
envelope provided or return it to: Corporate Trust Services, P.O. Box 535800,
Pittsburgh, Pennsylvania 15253.
VOTE BY TELEPHONE VOTE BY INTERNET VOTE BY MAIL
Call TOLL-FREE using a Access the WEBSITE and Return your proxy
Touch-Tone phone Cast your vote in the POSTAGE-PAID
1-800-250-9081 HTTP://WWW.VOTEFAST.COM envelope provided
VOTE 24 HOURS A DAY, 7 DAYS A WEEK!
Your telephone and internet vote MUST BE RECEIVED BY 11:59 P.M. EASTERN DAYLIGHT
TIME ON APRIL 24, 2000 to be counted in the final tabulation. If you vote by
telephone or internet, please do not send your proxy by mail.
Your Control Number is printed on the reverse side.
CONVERGYS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 25, 2000
The undersigned hereby appoints John F. Barrett, Roger L. Howe and James F. Orr,
and each or any of them, proxies, with full power of substitution, to represent
and to vote all common shares of Convergys Corporation held of record by the
undersigned on February 29, 2000, at the annual meeting of shareholders to be
held on April 25, 2000, at 11:30 A.M. in the Aronoff Center in the Jarson-Kaplan
Theater, 650 Walnut Street, Cincinnati, Ohio, and at any adjournment thereof,
notice of which meeting together with the related proxy statement has been
received. The proxies are directed to vote the shares the undersigned would be
entitled to vote if personally present.
ITEM 1 Authority to vote for the election of Class II directors whose terms
expire in 2003:
FOR / / WITHHOLD / /
ALL NOMINEES LISTED AUTHORITY TO VOTE
(EXCEPT AS MARKED TO
THE CONTRARY BELOW)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
John F. Barrett Steven C. Mason James F. Orr
ITEM 2 To approve the Convergys Corporation 1998 Long Term Incentive Plan
/ / FOR / / AGAINST / / ABSTAIN
ITEM 3 To act upon such other matters as may properly come before the meeting.
(CONTINUED ON REVERSE SIDE)
