Each Director has an aggregate
of 12,600 Common Shares which are subject to time-based restricted stock unit awards outstanding at year end.
(2)
The aggregate number of Common
Shares subject to options outstanding at year end for each Director is 17,000 for Ms. Baird and Mr. Whitwam; 51,000 for Mr. Dillon and Mr. Odeen; 42,500 for Mr. Fast and Mr. Gibbs; 45,500 for Mr. Howe; 77,300 for Mr. Mason;
69,300 for Mr. Barrett and 34,000 for Dr. Ribeau. All options are fully vested and exercisable.
(3)
Matching contributions made by the Company pursuant to the Company’s Educational Matching Gifts Program which matches
qualified contributions made by the Company’s employees and Directors to accredited colleges and universities using a dollar-for-dollar ratio.
Company employees receive no extra compensation for serving as a Director. Non-employee Directors receive compensation consisting of cash and restricted stock units. Non-employee Directors receive an annual retainer
of $35,000 and a meeting fee of $1,500 for each Board meeting attended and $1,000 for each committee meeting attended. Messrs. Dillon, Whitwam, Barrett and Odeen, as chairs of the Audit, Compensation and Benefits, Finance and Governance and
Nominating Committees, respectively, receive an additional fee of $5,000 per year. Non-employee Directors also receive restricted stock units pursuant to the Convergys Corporation 1998 Long Term Incentive Plan, as amended. Each non-employee Director
who is first elected or appointed to the Board receives a restricted stock unit award of 6,300 Common Shares. Each non-employee Director also receives an annual restricted stock unit award of 4,200 Common Shares, subsequent to his or her initial
election or appointment to the Board, provided that he or she continues in office after the annual meeting. Restricted stock units awarded to non-employee Directors vest three years after the grant date (or earlier in the case of death, disability
or retirement).
Effective January 1, 2007, the new fee structure for the non-management Directors will be $80,000 annual cash
retainer, $80,000 time based restricted stock units, $10,000 annual retainer for Audit Committee members, $15,000 annual retainer for Committee chairs and $30,000 annual retainer for the Presiding Director. New Board members will receive $80,000 in
a one time grant of time-based restricted stock units at the time they are elected to the Board.
Directors may elect to defer the receipt
of all or a part of their fees, retainers and the restricted stock units under the Company’s Deferred Compensation and LTIP Award Deferral Plan for Non-Employee Directors (the “Directors Deferred Compensation Plan”). Fees and
retainers that are deferred are assumed to be invested as directed by the Directors in the same type of investments, including Company Common Shares, as are made available under the Executive Deferred Compensation Plan and listed on page 44.
Accounts credited with fees and retainers under the Directors Deferred Compensation Plan will be paid in cash, in one lump sum or up to ten
annual installments, when the Director leaves the Board. Amounts credited to the restricted stock account are assumed to be invested in Common Shares and are
distributed in the form of Common Shares when the Director leaves the Board. In the event of a change of control as defined in the Directors Deferred Compensation Plan, all accounts will be distributed in a single lump sum.
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