Exhibit 10.9 to 2003 10-K

 

EMPLOYMENT AGREEMENT

 

This Agreement is made as of November 13, 2003 (the “Effective Date”) between
Convergys Corporation, an Ohio corporation (“Employer”), and Earl Shanks
(“Employee”).

 

Employer and Employee agree as follows:

 

1. Employment. By this Agreement, Employer and Employee set forth the terms of
Employer’s employment of Employee on and after the Effective Date.

 

2. Term of Agreement. The term of this Agreement shall be the 4 year period
commencing on the Effective Date. On the third anniversary of the Effective Date
and on each subsequent anniversary of the Effective Date, the term of this
Agreement automatically shall be extended for a period of one additional year.
Notwithstanding the foregoing, the term of this Agreement is subject to
termination as provided in Section 13.

 

3. Duties.

 

A. Employee will serve as Chief Financial Officer of Employer or in such other
equivalent capacity with Employer or an Affiliate as may be designated by the
Chairman and CEO of Employer. Employee will report to the Chairman, President
and CEO of Employer. For purposes of this Agreement, “Affiliate” means each
corporation which is a member of a controlled group of corporations (within the
meaning of section 1563(a) of the Internal Revenue Code of 1986, as amended)
which includes Employer.

 

B. Employee shall furnish such managerial, executive, financial, technical, and
other skills, advice, and assistance in operating Employer and its Affiliates as
Employer may reasonably request.

 

C. Employee shall also perform such other duties as are reasonably assigned to
Employee by the Chairman, President and CEO of Employer.

 

D. Employee shall devote Employee’s entire time, attention, and energies to the
business of Employer and its Affiliates. The words “entire time, attention, and
energies” are intended to mean that Employee shall devote Employee’s full effort
during reasonable working hours to the business of Employer and its Affiliates
and shall devote at least 40 hours per week to the business of Employer and its
Affiliates. Employee shall travel to such places as the Employer deems necessary
in the performance of Employee’s duties.

 

1

--------------------------------------------------------------------------------

4. Compensation.

 

A. Employee shall receive a base salary (the “Base Salary”) of at least $400,000
per year, payable not less frequently than monthly, for each year during the
term of this Agreement, subject to proration for any partial year. Such Base
Salary, and all other amounts payable under this Agreement, shall be subject to
withholding as required by law.

 

B. In addition to the Base Salary, Employee shall be entitled to receive an
annual incentive bonus (the “Annual Incentive Bonus”) for each calendar year for
which services are performed under this Agreement. Any Annual Incentive Bonus
for a calendar year shall be payable after the conclusion of the calendar year
in accordance with Employer’s annual incentive policy. For each year beginning
with the 2004 calendar year, Employee shall be given an Annual Incentive Bonus
target, by Employer’s Compensation & Benefits Committee, valued at no less than
$300,000, subject to proration for a partial year.

 

C. Employee shall be paid a signing bonus of $150,000 payable within five
business days of the Effective Date.

 

D. On at least an annual basis, Employee shall receive a performance review and
be considered for Base Salary and/or Annual Incentive Bonus target increases.

 

5. Business Expenses and Relocation Expenses. All reasonable and necessary
expenses incurred by Employee in the course of the performance of Employee’s
duties to Employer shall be reimbursable in accordance with Employer’s then
current travel and expense policies. In addition, all reasonable and necessary
expenses incurred by Employee in relocating from Dayton, Ohio to Cincinnati,
Ohio shall be reimbursable in accordance with Employer’s current management
relocation policy.

 

6. Benefits.

 

A. While Employee remains in the employ of Employer, Employee shall be entitled
to participate in all of the various employee benefit plans and programs, or
equivalent plans and programs which are either (i) generally made available to
other employees of Employer or (ii) described in Attachment A.

 

B. Notwithstanding anything contained herein to the contrary, the Base Salary
and Annual Incentive Bonuses otherwise payable to Employee shall be reduced by
any benefits paid to Employee by Employer under any disability plans made
available to Employee by Employer.

 

C. Subject to the approval of Employer’s Compensation & Benefits Committee,
Employee shall be granted options to purchase 80,000 common shares of Employer
under Employer’s 1998 Long Term Incentive Plan. For each calendar year beginning
after December 31, 2003 in which this Agreement is in effect, Employee will be
eligible for stock option grants under Employer’s 1998 Long Term Incentive Plan
or any similar plan made available to employees of Employer.

 

2

--------------------------------------------------------------------------------

D. Subject to the approval of Employer’s Compensation & Benefits Committee,
Employee shall receive a restricted stock award of 30,000 common shares of
Employer. Such award shall be made under Employer’s 1998 Long Term Incentive
Plan on the terms set forth in Attachment B.

 

E. For each calendar year beginning after December 31, 2003 in which this
Agreement is in effect, Employee will be given a long term incentive target
under Employer’s 1998 Long Term Incentive Plan or any similar plan made
available to employees of Employer (i.e., aggregate stock options, restricted
stock, performance share targets and/or equivalents). In no event will the value
of Employee’s long term incentive target for any calendar year be less than
$800,000.

 

F. Subject to the approval of Employer’s Compensation & Benefits Committee and
as long as Employee remains employed under this Agreement, Employee shall be
entitled to participate in Employer’s Supplemental Executive Retirement Plan.

 

7. Confidentiality. Employer and its Affiliates are engaged in the information
management and customer management industries within the U.S. and worldwide.
Employee acknowledges that in the course of employment with Employer, Employee
will be entrusted with, obtain access to and obtain intimate, detailed and
comprehensive knowledge or information proprietary to the Employer and its
Affiliates with respect to the following (all of which information is referred
to hereinafter collectively as the “Information”): the organization and
management strategies of Employer and its Affiliates; the names, addresses,
buying habits, and other special information regarding past, present and
potential customers, employees and suppliers of Employer and its Affiliates;
employee lists; customer relationships; customer and supplier contracts and
transactions; pricing; price lists of Employer, its Affiliates and their
suppliers; products, services, programs and processes sold, licensed or
developed by the Employer or its Affiliates; technical data, plans and
specifications, present and/or future development projects of Employer and its
Affiliates; financial and/or marketing data respecting the conduct of the
present or future phases of business of Employer and its Affiliates; computer
programs, systems and/or software; ideas, inventions, trademarks, trade secrets,
business information, know-how, processes, improvements, designs, redesigns,
discoveries and developments of Employer and its Affiliates; and other
information considered confidential by any of the Employer, its Affiliates or
customers or suppliers of Employer, its Affiliates. Employee agrees to retain
the Information in absolute confidence and not to permit access to or disclose
the Information to any person or organization except as required in the
performance of Employee’s duties for Employer, without the express written
consent of Employer; provided that Employee’s obligation of confidentiality
shall not extend to any Information which becomes generally available to the
public other than as a result of disclosure by Employee.

 

8. New Developments. All ideas, inventions, discoveries, concepts, trademarks,
or other developments or improvements, whether patentable or not, conceived by
the Employee, alone or with others, at any time during the term of Employee’s
employment, whether or not during working hours or on Employer’s premises, which
are within the scope of or related to the

 

3

--------------------------------------------------------------------------------

business operations of Employer or its Affiliates (“New Developments”), shall be
and remain the exclusive property of Employer. Employee shall do all things
reasonably necessary to ensure ownership of such New Developments by Employer,
including the execution of documents assigning and transferring to Employer all
of Employee’s rights, title and interest in and to such New Developments, and
the execution of all documents required to enable Employer to file and obtain
patents, trademarks, and copyrights in the United States and foreign countries
on any of such New Developments.

 

9. Surrender of Material Upon Termination. Employee hereby agrees that upon
cessation of Employee’s employment, for whatever reason and whether voluntary or
involuntary, Employee will immediately surrender to Employer all of the property
and other things of value in his possession or in the possession of any person
or entity under Employee’s control that are the property of Employer or any of
its Affiliates, including without any limitation all personal notes, drawings,
manuals, documents, photographs, or the like, including copies and derivatives
thereof, relating directly or indirectly to any confidential information or
materials or New Developments, or relating directly or indirectly to the
business of Employer or any of its Affiliates.

 

10. Remedies.

 

A. Employer and Employee hereby acknowledge and agree that the services rendered
by Employee to Employer, the information disclosed to Employee during and by
virtue of Employee’s employment, and Employee’s commitments and obligations to
Employer and its Affiliates herein are of a special, unique and extraordinary
character, and that the breach of any provision of this Agreement by Employee
will cause Employer irreparable injury and damage, and consequently the Employer
shall be entitled to, in addition to all other remedies available to it,
injunctive and equitable relief to prevent a breach of Sections 7, 8, 9, 11 and
12 of this Agreement and to secure the enforcement of this Agreement.

 

B. Except as provided in Section 10.A., the parties agree to submit to final and
binding arbitration any dispute, claim or controversy arising between Employee
and Employer concerning (1) termination of employment, (2) loss of promotion,
(3) sexual or other harassment, (4) failure to accommodate a disability or (5)
an intentional tort, and waive their right to sue in court and have such claims
decided by a judge or jury. Claims subject to arbitration on these five subjects
include allegations of unlawful discrimination based on race, sex, religion,
age, national origin, disability, and retaliation and any other claim of a
violation of a right created or protected by local, state, or federal law. This
Agreement does not limit Employee’s right to file a charge with or to assist any
administrative agency, including the Equal Employment Opportunity Commission.

 

(i) This agreement to arbitrate and any resulting arbitration award are
enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. (“FAA”). If the FAA is held not to apply for any reason then Ohio Revised
Code Chapter 2711 regarding the enforceability of arbitration agreements and
awards will govern this Agreement and the arbitration award.

 

4

--------------------------------------------------------------------------------

(ii) (a) All of a party’s claims must be presented at a single arbitration
hearing. Any claim not raised at the arbitration hearing is waived and released.
The arbitration hearing will take place in Cincinnati, Ohio.

 

(b) The arbitration process will be governed by the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
(“AAA”) except to the extent they are modified by this Agreement.

 

(c) Employee has had an opportunity to review the AAA rules and the requirements
that Employee must pay a filing fee (which the Employer has agreed to split on
an equal basis).

 

(d) The arbitrator will be selected from a panel of arbitrators chosen by the
AAA in White Plains, New York, the arbitrators from such panel being those who
are also members of AAA’s labor-management panel and who have at least fifteen
years of experience as an arbitrator. After the filing of a Request for
Arbitration, the AAA will send simultaneously to Employer and Employee an
identical list of names of five persons chosen from the panel. Each party will
have 10 days from the transmittal date in which to strike up to two names,
number the remaining names in order of preference and return the list to the
AAA.

 

(e) Any pre-hearing disputes will be presented to the arbitrator for
expeditious, final and binding resolution.

 

(f) The award of the arbitrator will be in writing and will set forth each issue
considered and the arbitrator’s finding of fact and conclusions of law as to
each such issue.

 

(g) The remedy and relief that may be granted by the arbitrator to Employee are
limited to lost wages, benefits, cease and desist and affirmative relief,
compensatory, liquidated and punitive damages and reasonable attorney’s fees,
and will not include reinstatement or promotion. If the arbitrator would have
awarded reinstatement or promotion, but for the prohibition in this Agreement,
the arbitrator may award front pay. Employer will pay the arbitrator’s fees and
expenses. The arbitrator may assess to either party, or split, the
administrative expenses and the cost of the transcript, if any, in accordance
with the arbitrator’s determination of the merits of each party’s position, but
each party will bear any cost for its witnesses and proof.

 

(h) Employer and Employee recognize that a primary benefit each derives from
arbitration is avoiding the delay and costs normally associated with litigation.
Therefore, neither party will be entitled to conduct any discovery prior to the
arbitration hearing except that: (i) Employer will furnish Employee with copies
of all non-privileged documents in Employee’s personnel file; (ii) if the claim
is for discharge, Employee will furnish Employer with records of earnings and
benefits relating to Employee’s subsequent employment (including
self-employment) and all documents relating to Employee’s efforts to obtain
subsequent employment; (iii) the parties will exchange copies of all documents
they intend to introduce as evidence at the

 

5

--------------------------------------------------------------------------------

arbitration hearing at least 10 days prior to such hearing; (iv) Employee will
be allowed (at Employee’s expense) to take the depositions, for a period not to
exceed four hours each, of two representatives of Employer, and Employer will be
allowed (at its expense) to depose Employee for a period not to exceed four
hours; and (v) Employer or Employee may ask the arbitrator to grant additional
discovery to the extent permitted by AAA rules upon a showing that such
discovery is necessary.

 

(i) Nothing herein will prevent either party from taking the deposition of any
witness where the sole purpose for taking the deposition is to use the
deposition in lieu of the witness testifying at the hearing and the witness is,
in good faith, unavailable to testify in person at the hearing due to poor
health, residency and employment more than 50 miles from the hearing site,
conflicting travel plans or other comparable reason.

 

(iii) Arbitration must be requested in writing no later than 6 months from the
date of the party’s knowledge of the matter disputed by the claim. A party’s
failure to initiate arbitration within the time limits herein will be considered
a waiver and release by that party with respect to any claim subject to
arbitration under this Agreement.

 

(iv) Employer and Employee consent that judgment upon the arbitration award may
be entered in any federal or state court that has jurisdiction.

 

(v) Except as provided in Section 10.A., neither party will commence or pursue
any litigation on any claim that is or was subject to arbitration under this
Agreement.

 

(vi) All aspects of any arbitration procedure under this Agreement, including
the hearing and the record of the proceedings, are confidential and will not be
open to the public, except to the extent the parties agree otherwise in writing,
or as may be appropriate in any subsequent proceedings between the parties, or
as may otherwise be appropriate in response to a governmental agency or legal
process.

 

11. Covenant Not to Compete. For purposes of this Section 11, the term
“Employer” shall mean, collectively, Employer and each of its Affiliates. During
Employee’s employment by Employer and for a period of two-years following
termination of Employee’s employment with Employer for any reason Employee will
not engage in any business offering services related to Employer’s then existing
business or the products or services being researched or developed by Employer
at the time of termination, whether as a principal, partner, joint venturer,
agent, employee, salesperson, consultant, director or officer, where such
position would involve Employee (i) in any business activity in competition with
Employer; (ii) in any position with any customer of Employer where such position
relates to the services that Employer does or did provide to such customer;
(iii) in any business that provides billing and/or billing related systems
and/or services to third parties (including wireless, wireline, cable and other
communication businesses); (iv) in any business that provides outsourced
customer management services (including but not limited to product information
or technical support, customer retention, sales or account management, and/or
human resources and benefits administration); or (v) in any business that
provides employee care services (including but not limited to human resources
and

 

6

--------------------------------------------------------------------------------

employee benefits consulting). This restriction will be limited to the
geographical area where Employer is doing business at the time of termination of
Employee’s employment.

 

During Employee’s employment by Employer and for a period of two-years following
termination of Employee’s employment with Employer for any reason Employee will
not (except as a private consumer), directly or indirectly, or through any
person or entity, divert, call on, contact, solicit, or communicate with (i) any
of Employer’s customers from which Employer generated revenue during the two
years preceding the termination of Employee’s employment or (ii) any prospective
customers identified by Employer during the two-year period prior to the
termination of Employee’s employment.

 

During Employee’s employment by Employer and for a period of three years after
the termination of Employee’s employment with Employer, Employee will not,
directly or indirectly, induce or seek to induce, any employee of Employer to
terminate his or her employment relationship with Employer.

 

12. Goodwill. Employee will not disparage or act in any manner that may damage
the business of Employer or any of its Affiliates or that would adversely affect
the goodwill, reputation and business relationships of Employer or any of its
Affiliates with the public generally, or with any of their customers, suppliers
or employees. Employer will not disparage Employee.

 

13. Termination.

 

A. (i) Employer or Employee may terminate this Agreement upon Employee’s failure
or inability to perform the services required hereunder because of any physical
or mental infirmity for which Employee receives disability benefits under any
disability benefit plans made available to Employee by Employer (the “Disability
Plans”), over a period of one hundred twenty consecutive working days during any
twelve consecutive month period (a “Terminating Disability”).

 

(ii) If Employer or Employee elects to terminate this Agreement in the event of
a Terminating Disability, such termination shall be effective immediately upon
the giving of written notice by the terminating party to the other.

 

(iii) Upon termination of this Agreement on account of Terminating Disability,
Employer shall pay Employee Employee’s accrued compensation hereunder, whether
Base Salary, Annual Incentive Bonus or otherwise (subject to offset for any
amounts received pursuant to the Disability Plans), to the date of termination.
For as long as such Terminating Disability may exist, Employee shall continue to
be an employee of Employer for all other purposes and Employer shall provide
Employee with disability benefits and all other benefits according to the
provisions of the Disability Plans and any other Employer plans in which
Employee is then participating.

 

7

--------------------------------------------------------------------------------

(iv) If the parties elect not to terminate this Agreement upon an event of a
Terminating Disability and Employee returns to active employment with Employer
prior to such a termination, or if such disability exists for less than one
hundred twenty consecutive working days, the provisions of this Agreement shall
remain in full force and effect.

 

B. This Agreement terminates immediately and automatically on the death of the
Employee, provided, however, that the Employee’s estate shall be paid Employee’s
accrued compensation hereunder, whether Base Salary, Annual Incentive Bonus or
otherwise, to the date of death.

 

C. Employer may terminate this Agreement immediately, upon written notice to
Employee, for Cause. For purposes of this Agreement, Employer shall have “Cause”
to terminate this Agreement only if Employer’s Board of Directors determines
that there has been fraud, misappropriation, embezzlement, commission of a
felony or an act of moral turpitude on the part of Employee.

 

D. Employer may terminate this Agreement immediately, upon written notice to
Employee, for any reason other than those set forth in Sections 13.A., B. and
C.; provided, however, that Employer shall have no right to terminate under this
Section 13.D. within two years after a Change in Control. In the event of a
termination by Employer under this Section 13.D. or a constructive termination
by Employer without Cause, Employer shall pay Employee an amount equal to the
greater of (i) two times the sum of the annual Base Salary rate in effect at the
time of termination plus the Annual Incentive Bonus target in effect at the time
of termination or (ii) if the Current Term is longer than two years, the sum of
the Base Salary for the remainder of the Current Term (at the rate in effect at
the time of termination) plus the Annual Incentive Bonus targets (at the amount
in effect at the time of termination) for each calendar year commencing or
ending during the remainder of the Current Term (subject to proration in the
case of any calendar year ending after the Current Term). For the remainder of
the Current Term, Employer shall continue to provide Employee with medical,
dental, vision and life insurance coverage comparable to the medical, dental,
vision and life insurance coverage in effect for Employee immediately prior to
the termination; and, to the extent that Employee would have been eligible for
any post-retirement medical, dental, vision or life insurance benefits from
Employer if Employee had continued in employment through the end of the Current
Term, Employer shall provide such post-retirement benefits to Employee after the
end of the Current Term. For purposes of any restricted stock grant(s)
outstanding immediately prior to the termination, Employee’s employment with
Employer shall not be deemed to have terminated until the end of the Current
Term. For purposes of any stock option(s) outstanding immediately prior to the
termination, Employee’s employment with Employer shall not be deemed to have
terminated until the end of the Current Term; that is, such stock option(s)
shall become exercisable on the exercise dates otherwise specified in the stock
option agreement that occur on or prior to the end of the Current Term and may
continue to be exercised until the end of the Current Term. In addition,
Employee shall be entitled to receive, as soon as practicable after termination,
an amount equal to the sum of (i) any forfeitable benefits under any qualified
or nonqualified pension, profit sharing, 401(k) or deferred compensation plan of
Employer or any Affiliate which would have vested prior to the end of the
Current Term if Employee’s

 

8

--------------------------------------------------------------------------------

employment had not terminated plus (ii) if Employee is participating in a
qualified or nonqualified defined benefit plan of Employer or any Affiliate at
the time of termination, an amount equal to the present value of the additional
vested benefits which would have accrued for Employee under such plan if
Employee’s employment had not terminated prior to the end of the Current Term
and if Employee’s annual Base Salary and Annual Incentive Bonus target had
neither increased nor decreased after the termination. For purposes of this
Section 13.D., “Current Term” means the longer of (i) the two year period
beginning at the time of termination or (ii) the unexpired term of this
Agreement at the time of the termination, determined as provided in Section 2
but assuming that there is no automatic extension of the Agreement term after
the termination. For purposes of this Section 13.D. and Section 13.E., “Change
in Control” means a change in control as defined in Employer’s 1998 Long Term
Incentive Plan. In order to receive the payments and benefits set forth in this
Section 13.D., Employee must first execute a separation agreement and release of
all claims in a form suitable to Employer.

 

E. This Agreement shall terminate automatically in the event that there is a
Change in Control and either (i) Employee elects to resign within 90 days after
the Change in Control or (ii) Employee’s employment with Employer is actually or
constructively terminated by Employer within two years after the Change in
Control for any reason other than those set forth in Sections 13.A., B. and C.
For purposes of the preceding sentence, a “constructive” termination of
Employee’s employment shall be deemed to have occurred if, without Employee’s
consent, there is a material reduction in Employee’s authority or
responsibilities or if there is a reduction in Employee’s Base Salary or Annual
Incentive Bonus target from the amount in effect immediately prior to the Change
in Control or if Employee is required by Employer to relocate from the city
where Employee is residing immediately prior to the Change in Control. In the
event of a termination under this Section 13.E., Employer shall pay Employee an
amount equal to three times the sum of the annual Base Salary rate in effect at
the time of termination plus the Annual Incentive Bonus target in effect at the
time of termination, all stock options shall become immediately exercisable (and
Employee shall be afforded the opportunity to exercise them), the restrictions
applicable to all restricted stock shall lapse and any long term awards shall be
paid out at target. For the remainder of the Current Term, Employer shall
continue to provide Employee with medical, dental, vision and life insurance
coverage comparable to the medical, dental, vision and life insurance coverage
in effect for Employee immediately prior to the termination; and, to the extent
that Employee would have been eligible for any post-retirement medical, dental,
vision or life insurance benefits from Employer if Employee had continued in
employment through the end of the Current Term, Employer shall provide such
post-retirement benefits to Employee after the end of the Current Term.
Employee’s accrued benefit under any nonqualified pension or deferred
compensation plan maintained by Employer or any Affiliate shall become
immediately vested and nonforfeitable and Employee also shall be entitled to
receive a payment equal to the sum of (i) any forfeitable benefits under any
qualified pension or profit sharing or 401(k) plan maintained by Employer or any
Affiliate plus (ii) if Employee is participating in a qualified or nonqualified
defined benefit plan of Employer or any Affiliate at the time of termination, an
amount equal to the present value of the additional benefits which would have
accrued for Employee under such plan if Employee’s employment had not terminated
prior to the end of the Current Term and if Employee’s annual Base Salary and
Annual Incentive Bonus target had neither increased nor decreased after the
termination. Finally,

 

9

--------------------------------------------------------------------------------

to the extent that Employee is deemed to have received an excess parachute
payment by reason of the Change in Control, Employer shall pay Employee an
additional sum sufficient to pay (i) any taxes imposed under section 4999 of the
Code plus (ii) any federal, state and local taxes resulting from the payment of
the amount called for under clause (i) of this sentence. For purposes of this
Section 13.E., “Current Term” means the longer of (i) the three year period
beginning at the time of termination or (ii) the unexpired term of this
Agreement at the time of the termination, determined as provided in Section 2
but assuming that there is no automatic extension of the Agreement term after
the termination.

 

F. Employee may resign upon 60 days’ prior written notice to Employer. In the
event of a resignation under this Section 13.F., this Agreement shall terminate
and Employee shall be entitled to receive Employee’s accrued compensation and
benefits, including accrued Base Salary, through the date of termination.

 

G. Employee may retire (i) upon six months’ prior written notice to Employer at
any time after Employee has attained age 55 and completed at least ten years of
service with Employer and its Affiliates or (ii) on such earlier date as may be
approved by the Chairman, President and CEO of Employer. In the event of a
retirement under this Section 13.G., this Agreement shall terminate and Employee
shall be entitled to receive Employee’s accrued compensation and benefits,
including accrued Base Salary, through the date of termination. In addition,
Employee shall be entitled to receive any compensation or benefits made
available to retiree under Employer’s standard policies and programs, including
retiree medical and life insurance benefits, a prorated Annual Incentive Bonus
for the year of termination and the right to exercise options after retirement.

 

H. Employer and Employee may mutually agree to terminate this Agreement at any
time under terms and conditions that, in the aggregate, are no more favorable
than the terms and conditions described in Section 13.D.

 

I. Upon termination of this Agreement as a result of an event of termination
described in this Section 13 and except for Employer’s payment of the required
payments under this Section 13 (including any Base Salary accrued through the
date of termination, any Annual Incentive Bonus earned for the year preceding
the year in which the termination occurs and any nonforfeitable amounts payable
under any employee plan), all further compensation under this Agreement shall
terminate.

 

J. The termination of this Agreement shall not amend, alter or modify the rights
and obligations of the parties under Sections 7, 8, 9, 10, 11, and 12 hereof,
the terms of which shall survive the termination of this Agreement.

 

14. Assignment. As this is an agreement for personal services involving a
relation of confidence and a trust between Employer and Employee, all rights and
duties of Employee arising under this Agreement, and the Agreement itself, are
non-assignable by Employee.

 

10

--------------------------------------------------------------------------------

15. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient, if in writing, and if delivered personally or by certified
mail to Employee at Employee’s place of residence as then recorded on the books
of Employer or to Employer at its principal office.

 

16. Waiver. No waiver or modification of this Agreement or the terms contained
herein shall be valid unless in writing and duly executed by the party to be
charged therewith. The waiver by any party hereto of a breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by such party.

 

17. Governing Law. This agreement shall be governed by the laws of the State of
Ohio, without giving effect to any conflict of law provisions.

 

18. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to Employee’s employment by Employer. There are no other
contracts, agreements or understandings, whether oral or written, existing
between them except as contained or referred to in this Agreement.

 

19. Severability. In case any one or more of the provisions of this Agreement is
held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or other enforceability shall not affect any other provisions
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provisions have never been contained herein.

 

20. Successors and Assigns. Subject to the requirements of Paragraph 14 above,
this Agreement shall be binding upon Employee, Employer and Employer’s
successors and assigns.

 

21. Confidentiality of Agreement Terms. The terms of this Agreement shall be
held in strict confidence by Employee and shall not be disclosed by Employee to
anyone other than Employee’s spouse, Employee’s legal counsel, and Employee’s
other advisors, unless required by law. Further, except as provided in the
preceding sentence, Employee shall not reveal the existence of this Agreement or
discuss its terms with any person (including but not limited to any employee of
Employer or its Affiliates) without the express authorization of the Chairman
and CEO of Employer. To the extent that the terms of this Agreement have been
disclosed by Employer, in a public filing or otherwise, the confidentiality
requirements of this Section 21 shall no longer apply to such terms.

 

11

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 

CONVERGYS CORPORATION

By:  

/s/  JAMES F. ORR

   

--------------------------------------------------------------------------------

 

EARL SHANKS By:  

/s/  EARL C. SHANKS

   

--------------------------------------------------------------------------------

     

 

12

--------------------------------------------------------------------------------

Attachment A

 

EMPLOYEE BENEFITS

 

Legal/Financial/Insurance Allowance

   $7,500 per calendar year

Automobile Allowance

   $1,065 per month

Cellular Telephone

   Yes

Lap Top

   Yes

Parking

   Yes

401(k) and Executive Deferred Compensation Plans

   Yes

Short Term Disability Supplement

   Yes

Annual Executive Physical

   Yes

Paid Time Off

   32 days per calendar year

Holidays

   For 2003, New Year’s Day, Memorial Day, Fourth of July, Labor Day,
Thanksgiving Day and day after, Christmas Day

Business Club Membership

   Yes

 

Note: Paid time off and holidays are pro-rated for partial year.

 

13