PROSPECTUS SUPPLEMENT No. 1 Filed Pursuant to Rule 424(b)(3) and (c)
Dated April 3, 2002
To Prospectus Dated April 3, 2002
Registration No. 333-82394
and
PROSPECTUS SUPPLEMENT No. 3
Dated April 3, 2002
To Prospectus Dated July 20, 2001
Registration No. 333-63922
as supplemented by
Prospectus Supplement No. 1 Dated July 27, 2001
and
Prospectus Supplement No. 2 Dated August 7, 2001
14,909,761 Common Shares
Proposed to be Sold by Certain Selling Shareholders of
Convergys Corporation
This Prospectus Supplement No. 1 to Registration Statement No. 333-82394
and Prospectus Supplement No. 3 to Registration Statement No. 333-63922
relating to the proposed sale of up 14,909,761 common shares of Convergys
Corporation ("Convergys") from time to time by certain selling shareholders or
by distributees, pledgees, donees or other successors in interest that receive
the shares as a gift, partnership distribution or other non-sale related
transfer. The common shares being sold by the selling shareholders were
initially issued in connection with our acquisition of all of the outstanding
shares of Geneva Technology Limited, a company registered in England and Wales,
on April 6, 2001. We will not receive any of the proceeds from the sale of
common shares by the selling shareholders.
This Prospectus Supplement No. 1 to Registration Statement No. 333-82394
and Prospectus Supplement No. 3 to Registration Statement No. 333-63922 should
be read in conjunction with the prospectuses as supplemented. This Prospectus
Supplement No. 1 to Registration Statement No. 333-82394 and Prospectus
Supplement No. 3 to Registration Statement No. 333-63922 is qualified by
reference to the prospectuses as supplemented except to the extent that
information contained herein supersedes the information contained in the
prospectuses as supplemented.
You should read this prospectus carefully before you invest. INVESTING IN
OUR COMMON SHARES INVOLVES A HIGH DEGREE OF RISK. SEE "FORWARD LOOKING
STATEMENTS AND RISK FACTORS" CONTAINED ELSEWHERE IN THIS PROSPECTUS.
The common stock of Convergys is listed on the New York Stock Exchange
under the trading symbol "CVG".
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL AND COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus is dated April 3, 2002
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In making your investment decision, you should rely only on the information
contained or incorporated by reference in this prospectus supplement and the
attached prospectus. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it. You should not assume that the information contained or incorporated by
reference in this prospectus supplement or the attached prospectus is accurate
as of any date other than its respective date.
TABLE OF CONTENTS
About This Prospectus 3
Forward-Looking Information and Risk Factors 3
Where You Can Find More Information 3
Convergys Corporation 4
Use of Proceeds 4
Description of Common Shares 4
Selling Shareholders 5
Plan of Distribution 7
Legal Matters 7
Experts 7
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ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that relates to the
registration of Convergys common shares for resale by the selling shareholders.
You should read the additional information about the selling shareholders
described under the heading "Selling Shareholders."
This prospectus provides you with a general description of the securities
that the selling shareholders may offer. Each time a selling shareholder sells
securities, the selling shareholder will provide a prospectus that will contain
specific information about the terms of that offering. You should read this
prospectus together with the additional information described under the heading
"Where You Can Find More Information."
FORWARD-LOOKING INFORMATION AND RISK FACTORS
This prospectus and the documents incorporated by reference into this
prospectus include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA
provides a "safe harbor" for those statements to encourage companies to provide
prospective information about themselves so long as such information is
identified as forward-looking and is accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in the information. All statements other
than statements of historical fact made in this prospectus or incorporated by
reference are forward-looking. In particular, the statements regarding industry
prospects and our future results of operations or financial position are
forward-looking statements. Forward-looking statements represent management's
current expectations and are inherently uncertain. Investors are warned that our
actual results may differ significantly from management's expectations and,
therefore, from the results discussed in such forward-looking statements.
Factors that might cause such differences include, but are not limited to, the
risk factors described in the our Annual Report on Form 10-K.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file with the SEC at its public reference facilities in
Washington, D.C., New York, New York or Chicago, Illinois. You can also obtain
copies of the documents at prescribed rates by writing to the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference facilities. You can also inspect reports, proxy statements and
other information about us at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
We are allowed to "incorporate by reference" the information we file with
the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file subsequently
with the SEC will automatically update and supersede the information included
and/or incorporated by reference in this prospectus. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the initial filing of the registration statement that contains this prospectus
and prior to the time that the offering of the securities is completed:
. Our Annual Report on Form 10-K for the year ended December 31, 2001;
. Our Current Report on Form 8-K filed on January 22, 2002;
. The description of our common shares from our Registration Statement
on Form 8-A filed with the Securities and Exchange Commission on
August 6, 1998 and any amendment or report filed thereafter for the
purposes of updating such description; and
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. The description of our preferred share purchase rights from our
Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on December 23, 1998.
You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no cost,
by writing or telephoning us at the following address:
Investor Relations
Convergys Corporation
201 East Fourth Street
Cincinnati, Ohio 45202
(513) 723-7000
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the state does not permit an offer. You should not assume that
the information in this prospectus is accurate as of any date other than the
date on the front of the prospectus.
CONVERGYS CORPORATION
Convergys Corporation is a global leader in the provision of outsourced,
integrated billing and customer care services. We focus on developing long-term
strategic relationships with clients in customer-intensive industries including
telecommunications, cable, broadband, satellite broadcasting, Internet services,
technology and financial services. We serve our clients through our two
operating segments: (i) the Information Management Group, which provides
outsourced billing and information services and software; and (ii) the Customer
Management Group, which provides outsourced marketing, customer support services
and employee care services. We have developed a large base of recurring revenues
by providing value-added billing and customer management solutions for our
clients, generally under long-term contracts.
Our principal executive offices are located at 201 East Fourth Street,
Cincinnati, Ohio 45202, and our telephone number is (513) 723-7000. We were
organized in Ohio in 1998.
USE OF PROCEEDS
If any of the selling shareholders sell any common shares offered under
this prospectus, we will not receive any proceeds from their sale of common
shares.
DESCRIPTION OF COMMON SHARES
We are authorized to issue 505,000,000 shares of all classes of stock,
500,000,000 of which are common shares, without par value, and 5,000,000 of
which are preferred shares, without par value, of which 4,000,000 are voting
preferred shares. As of December 31, 2001, there were 172,211,264 common shares
issued and outstanding and no preferred shares issued and outstanding, although
2,000,000 Series A preferred shares have been authorized in connection with our
preferred share purchase rights.
The Common Shares registered for resale in this prospectus are of the same
class as our outstanding Common Shares that are registered pursuant to Section
12 of the Securities Exchange Act of 1934, as amended. The Common Shares are
listed on the New York Stock Exchange under the symbol "CVG".
The description of our capital stock is available in our filings with the
SEC referenced in the section "Where You Can Find More Information" and can be
obtained as described in the section "Where You Can Find More Information". The
description of our capital stock is a summary only and is qualified in its
entirety by the complete provisions of the Amended Articles of Incorporation and
Regulations (which are filed as Exhibits to this
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registration statement) and the preferred share purchase rights agreement, which
are incorporated by reference in the registration statement of which this
prospectus is a part.
SELLING SHAREHOLDERS
The selling shareholders are former shareholders of Geneva Technology
Limited, a company registered in England and Wales, which Convergys acquired on
April 6, 2001. In consideration for the shares of Geneva Technology Limited,
Convergys issued 14,909,761 of its common shares to the selling shareholders.
Thus, except for their acquisition in the Geneva transaction, none of the
selling shareholders acquired the Convergys common shares that are being
registered for sale hereunder during the past three years. As part of the terms
of the acquisition, Convergys agreed to register its common shares issued to the
selling shareholders, and this registration statement fulfills Convergys'
remaining registration obligations. Pursuant to Registration Statement No.
333-63922, effective July 20, 2001, Convergys previously registered 7,666,360 of
its common shares issued to the selling shareholders.
During the three years prior to Convergys's acquisition of Geneva
Technology Limited, no selling shareholder held any positions or offices or had
any other material relationships with Convergys or any of its predecessors or
affiliates. In December 2000, Convergys did enter into a loan agreement with
Geneva Technology Limited to lend it up to $35,000,000, of which $14,923,000 was
disbursed prior to the acquisition.
Since the acquisition, Geneva has changed its name to Convergys EMEA
Limited. Steven Edwards, the founder and former Chairman, Chief Technical
Officer and director of Geneva, is now the Senior Technical Advisor of Convergys
and, in such position, will help identify new market opportunities and help
determine the necessary strategy and technology to address these opportunities.
Stephen Thomas, the former Chief Executive Officer and director of Geneva, is
the President of Convergys EMEA Limited and oversees the full line of Convergys
Information Management Group and Customer Management Group products and services
and the sales, marketing, financial and human resource organizations of
Convergys' EMEA. He remains a director of Convergys EMEA. Rosalind A. J. Smith,
who was a director of Geneva before the acquisition, remains a director of
Convergys EMEA. Many of the selling shareholders were employees of Geneva before
its acquisition by Convergys and have remained employees of Convergys EMEA after
the acquisition.
The following table sets forth information with respect to the number of
Convergys common shares owned by the selling shareholders named below as
adjusted to give effect to the sale of shares offered hereby.
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INFORMATION CONCERNING SELLING SHAREHOLDERS
Shares Beneficially Maximum
Name of Selling Shareholder Owned Prior to the Number of Shares Beneficially Owned
Offering (1)(2) Common Shares After the Offering(2)(3)
Number Percent(4) to be Offered(3) Number Percent (4)
----------------
Steven Lloyd Edwards (5) (6) (7) (8) 3,223,543 1.87% 3,223,543 0 0
Rosalind Anita Jane Smith (5) (7) (8) 4,083,542 2.37% 3,908,342 0 0
Stephen Glyn Thomas 2,168,164 1.26% 2,083,164 0 0
Spectrum Equity Investors III, L.P. (9) (11) 2,351,299 1.37% 235,129 0 0
Spectrum III Entrepreneurs' Fund, L.P. (9) 73,478 * 7,347 0 0
(11)
Spectrum III Investment Managers' Fund, 24,492 * 2,449 0 0
L.P. (9) (11)
Geocapital V, L.P. (10) (11) 885,605 * 88,560 0 0
Geocapital Advisors, L.P. (10) (11) 27,059 * 2,705 0 0
Geocapital Investors V, L.P. (10) (11) 5,810 * 581 0 0
Geocapital Eurofund, L.P. (10) (11) 612,317 * 61,231 0 0
Bear Stearns International Limited (6) 857,500 * 0 0 0
New Hall in Cambridge (7) 2,500(7) * 2,500(7) 0 0
St. Edmund Hall in Oxford (8) (8) (8) 0 0
Other selling shareholders (consisting of 594,452 * 372,975 0 0
85 persons who collectively do not own 1%
or more of the outstanding Convergys common
shares) (2)
---------------------------------------------------------------------------------------------------------------------
TOTAL: 14,909,761 8.66% 9,988,526 0 0
* Less than 1%
(1) Share ownership figures include the 7,666,360 Convergys common shares
previously registered pursuant to Registration Statement No. 333-63922 on July
20, 2001 as well as the 7,243,401 Convergys common shares being registered
pursuant to this Registration Statement.
(2) Share ownership figures do not include shares subject to outstanding options
which are exercisable by such individuals within 60 days, which shares have been
previously registered on Forms S-8. The excluded shares are not subject to sale
pursuant to this prospectus. The shares excluded are 5,499 shares for Mr.
Edwards, 37,558 shares for Mr. Thomas, 312,980 shares for the other selling
shareholders and zero shares for the other persons listed above.
(3) Adjusted for sales and/or distributions of the 7,666,360 Convergys common
shares previously registered pursuant to Registration Statement No. 333-63922
and assumes all Convergys common shares being offered pursuant to this
prospectus by each selling shareholder are sold.
(4) As a percentage of the 172,211,264 Convergys common shares outstanding as of
December 31, 2001.
(5) Mr. Edwards and Ms. Smith are husband and wife, but each disclaims
beneficial ownership of the other person's Convergys common shares.
(6) 857,500 Convergys common shares were pledged by Mr. Edwards to Bear, Stearns
International Limited ("BSIL") and have been sold by BSIL, as pledgee/selling
shareholder, through Bear, Stearns & Co. Inc.
(7) Mr. Edwards has donated 2,500 Convergys common shares to New Hall in
Cambridge. Mr. Edwards and Ms. Smith have indicated that, in the future, each
may donate an additional indeterminate number of Convergys common shares to New
Hall in Cambridge.
(8) Mr. Edwards and Ms. Smith have indicated that, in the future, each may
donate an indeterminate number of Convergys common shares to St. Edmund Hall in
Oxford.
(9) Since they control the general partner of one or more of the Spectrum
venture funds identified in the above table, the following individuals may be
deemed to have voting or investment control over the Convergys common shares
held by such venture funds: Brion B. Applegate, William P. Collatos, Kevin J.
Maroni, Neal M. Douglas and/or Randy J. Henderson. Each of the foregoing
individuals disclaims beneficial ownership of the Convergys common shares held
by the Spectrum venture funds.
(10) Since they control the general partner of one or more of the Geocapital
venture funds identified in the above table, the following individuals may be
deemed to have voting or investment control over the Convergys common shares
held by such venture funds: Stephen J. Clearman, Lawrence W. Lepard and/or
Richard A. Vines. Each of the foregoing individuals disclaims beneficial
ownership of the Convergys common shares held by the Geocapital venture funds.
(11) The venture funds identified in the table above may distribute the
Convergys common shares, listed in the Maximum Number of Common Shares to be
Offered column, to their limited and/or general partners who may sell such
shares pursuant to this Prospectus. The venture funds may distribute the
Convergys common shares as follows: Spectrum Equity Investors III, L.P. to 66
partners; Spectrum III Entrepreneurs' Fund, L.P. to 91 partners; Spectrum III
Investment Managers Fund, LP to 24 partners; Geocapital V, L.P. to 34 partners;
Geocapital Advisors, L.P. to 44 partners; Geocapital Investors V, L.P. to 15
partners; and Geocapital Eurofund, L.P. to 55 partners. To the funds' knowledge,
none of the
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partners to whom the funds may distribute the Convergys common shares own either
prior to or after this offering 1% or more of the outstanding Convergys common
shares.
PLAN OF DISTRIBUTION
Plan of Distribution by Selling Shareholders
Pursuant to this prospectus, the selling shareholders may collectively sell
or distribute up to 7,243,401 common shares from time to time through dealers or
brokers or other agents or directly to one or more purchasers in a variety of
ways, including:
. transactions, which may involve crosses and block transactions, on the
New York Stock Exchange on which the common shares are listed for
trading;
. privately negotiated transactions;
. in the over-the-counter market;
. in brokerage transactions; or
. in a combination of these types of transactions.
These transactions may be effected by the selling shareholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed.
The selling shareholders may enter into hedging transactions with
broker-dealers in connection with distribution of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling shareholders. The
selling shareholders may also sell shares short and redeliver the shares to
close out such short positions. The selling shareholders may enter into option,
forward sales or other transactions with broker-dealers which may require the
delivery to the broker-dealer of the shares. The broker-dealer may then resell
or otherwise transfer such shares pursuant to this prospectus. The selling
shareholders also may loan or pledge the shares to a broker-dealer. The
broker-dealer may sell the shares so loaned or upon a default the broker-dealer
may sell the pledged shares pursuant to this prospectus.
Those selling shareholders, which are venture funds, may distribute the
Convergys common shares held by them, from time to time, to their limited and/or
general partners who may sell such shares pursuant to this prospectus. To the
funds' knowledge, none of the persons to whom the funds distribute the Convergys
common shares will own, either prior to or after the offering, 1% or more of the
outstanding Convergys common shares.
The selling shareholders may also transfer shares that they own by gift,
and, upon such transfer, the donee would have the same right of sale as the
selling shareholder.
Any Convergys common shares covered by this prospectus which qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under that Rule
rather than pursuant to this prospectus.
LEGAL MATTERS
The validity of the securities will be passed upon for us by Frost Brown
Todd LLC, Cincinnati, Ohio.
EXPERTS
The Convergys consolidated financial statements and related financial
statement schedule incorporated by reference in this registration statement from
Convergys's Annual Report on Form 10-K as of and for the year ended
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December 31, 2001 have been audited by Ernst & Young LLP, independent auditors,
as stated in their report, which is incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm, given upon their
authority as experts in accounting and auditing. The Convergys consolidated
financial statements and related financial statement schedule as of and for the
two years ended December 31, 2000 have been audited by PricewaterhouseCoopers
LLP, independent accountants, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm, given upon their authority as experts in accounting and auditing.
* * * * * * * *
Convergys has not authorized anyone to give any information or make any
representation about Convergys that is different from, or in addition to, that
contained in this prospectus or in any of the materials that have been
incorporated into this document. Therefore, if anyone does give you information
of this sort, you should not rely on it. The information contained in this
document speaks only as of the date of this document unless the information
specifically indicates that another date applies.
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