exv10w1



 






Exhibit 10.1









Galleon Special Opportunities Master Fund, SPC LTD – Galleon Crossover Segregated Portfolio Company

Galleon Technology Offshore, LTD

c/o Galleon Group

590 Madison Avenue, 34th Floor

New York, NY 10022




February 29, 2008




Re: Agreement to Place Nominee on PSPT Board




Ladies and Gentlemen:




     This will confirm the results of the recent discussions between PeopleSupport, Inc. (“PSPT”),
on the one hand, and Galleon Special Opportunities Master Fund, SPC LTD – Galleon Crossover
Segregated Portfolio Company and Galleon Technology Offshore, LTD (together, “Galleon” or “you”),
on the other hand, with respect to the potential addition of Galleon nominees to the Board of
Directors of PSPT and certain other matters. PSPT shall as promptly as practicable, and in any
event no later than March 5, 2008, take all action necessary to (i) increase the number of
directors constituting its Board of Directors (the “Board”) from seven to eight and (ii) elect Mr.
Krish Panu (the “Galleon Designee”), to fill the vacancy created by such increase, which seat shall
be in the class of directors that will stand for election at PSPT’s 2009 annual meeting of
shareholders. PSPT’s Board of Directors will take such action as the first item of business at its
next regularly scheduled meeting to be held on March 5, 2008 and Mr. Panu will be entitled to take
his seat on the Board at that meeting. Should Mr. Panu or any successor thereof resign from the
Board or decide not to seek appointment or election to the Board, Galleon shall be entitled to
designate a replacement for Mr. Panu or such successor as a member of the Board, which replacement
shall be reasonably acceptable to PSPT’s Nominating and Corporate Governance Committee, and PSPT
shall take all necessary action to implement the foregoing as promptly as practicable. Any such
designated replacement who becomes a Board member as a successor of Mr. Panu under the terms of
this paragraph shall be deemed to be a Galleon Designee for all purposes under this Agreement. At
each annual meeting of shareholders at which the term of the Galleon Designee expires, PSPT shall
nominate the Galleon Designee as director and shall include the Galleon Designee on the Board’s
proposed slate of nominees for election.



     With this resolution of our discussions, Galleon has agreed that, until the latest of (i) such
time as Mr. Panu, or another Galleon Designee ceases to occupy a seat on the Board and (ii)
December 31, 2008, neither you nor your affiliates will seek to nominate



 









 




any persons for election (other than re-election of the Galleon Designee or election of a
replacement for the Galleon Designee then in office) as directors at any PSPT Annual or Special
Meeting. Galleon and its affiliates agree to vote all shares of PSPT common stock beneficially
owned by them and entitled to vote for the election of directors at the 2008 Annual Meeting for the
election of the nominees approved by PSPT’s Nominating and Corporate Governance Committee. We have
also agreed that an appropriate press release will be issued by PSPT, subject to Galleon’s
reasonable advance approval, and that such release will be filed as an exhibit to PSPT’s Form 8-K
filing reporting the increase in the size of the Board and election of Mr. Panu. Such press
release shall be issued no later than the first business day following the date hereof. In
addition, we have agreed that, at all times until the latest of (i) such time as a Galleon Designee
ceases to occupy a seat on the Board and (ii) December 31, 2008, (i) Galleon and its affiliates
will refrain from initiating or participating in any proxy contest or supporting any shareholder
proposal at any Annual or Special Meeting and (ii) we will each refrain from making disparaging
remarks publicly or in public filings about the other parties hereto (or their management).




     Either Galleon or PSPT can terminate this agreement at any time after December 31, 2008,
effective upon notice to the other parties hereto, provided that PSPT may not terminate this
agreement unless at the time of such termination there is a period of at least thirty (30) days
remaining in which Galleon may (i) nominate persons for election as directors at the next Annual
Meeting of PSPT shareholders under Section 2.1 of PSPT’s Bylaws and (ii) bring other business
before the next Annual Meeting of PSPT shareholders under Section 1.2 of PSPT’s Bylaws. PSPT
agrees that during the term of this agreement the period for shareholders to make director
nominations and bring business before the next annual meeting, as described in the preceding
clauses (i) and (ii), shall not expire prior to January 31. Upon any termination of this
agreement, any person then serving on the PSPT Board as a Galleon Designee shall immediately
resign.



     You hereby acknowledge that you have such knowledge and experience in financial and business
matters that you are capable of evaluating the merits and risks of this agreement. Each of us
acknowledges that we have been represented by legal counsel and such other advisors as we have
deemed appropriate, and that we have each relied on the counsel of our respective advisors in
making the decision to enter into this agreement.



     Each of the parties hereto represents and warrants to the other party that: (i) such party has
all requisite authority and power to execute and deliver this letter agreement (this “Agreement”)
and to consummate the transactions contemplated hereby, (ii) the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been duly and validly
authorized by all required action on the part of such party and no other proceedings on the part of
such party are necessary to authorize the execution and delivery of this Agreement or to consummate
the transactions contemplated hereby, (iii) the Agreement has been duly and validly executed and
delivered by such party and constitutes the valid and binding obligation of such party enforceable
against such party in accordance with its terms, and (iv) this Agreement will not result in a
violation of any terms or provisions of any agreements to which such



 









 




person is a party or by which such party may otherwise be bound or of any law, rule, license,
regulation, judgment, order or decree governing or affecting such party.




     This letter agreement shall be governed by the laws of the State of California. Any action
brought in connection with this letter agreement shall be brought in the federal or state courts
located in the State of California, and the parties hereto irrevocably consent to the jurisdiction
of such courts.



     It is hereby agreed and acknowledged that it will be impossible to measure in money the
damages that would be suffered if the parties fail to comply with any of the obligations herein
imposed on them and that in the event of any such failure, an aggrieved person will be irreparably
damaged and will not have an adequate remedy at law. Any such person, therefore, shall be entitled
to seek injunctive relief, including specific performance, to enforce such obligations, without the
posting of any bond.



     PSPT looks forward to working with you and Mr. Panu to increase the value of PSPT for all of
its stakeholders.



     To confirm your agreement with the foregoing, please sign and return a copy of this letter,
which will constitute our agreement with you with respect to the subject matter of this letter.



Very truly yours,




	 	 	 	 	 
	PEOPLESUPPORT, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lance Rosenzweig
 

Name: Lance Rosenzweig
	 	 
	 

	 	Title: Chief Executive Officer	 	 






	 	 	 	 	 	 	 
	ACKNOWLEDGED AND AGREED	 	 
	as of the date first above written:	 	 
	 
	 	 	 	 	 	 
	By:	 	/s/ Raj Rajaratnam	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Raj Rajaratnam	 	 
	 

	 	Title:
	 	Director, Galleon Special Opportunities Master Fund, SPC Ltd. – Galleon

Crossover Segregated Portfolio Company	 	 
	 

	 	 	 	Director, Galleon Technology Offshore, Ltd.