Exhibit 10.1
December 17, 2008
AMENDMENT TO CHANGE OF CONTROL AGREEMENT AND NON-COMPETITION AGREEMENT
     THIS AMENDMENT TO CHANGE OF CONTROL AGREEMENT AND NON-COMPETITION AGREEMENT
(“Amendment”) by and between Agilysys, Inc., formerly known as Pioneer-Standard
Electronics, Inc., an Ohio corporation (the “Company”), and Robert J. Bailey
(the “Employee”), is effective as of the execution date below.
     WHEREAS, the Company and the Employee are parties to a Change of Control
Agreement dated as of February 25, 2000, as subsequently amended (the “Change of
Control Agreement”); and
     WHEREAS, the Company and the Employee are parties to a Non-Competition
Agreement dated as of February 25, 2000, as subsequently amended (the
“Non-Competition Agreement”); and
     WHEREAS, the Employee was terminated by the Company without cause effective
October 21, 2008, and, as a result of such termination, the Employee is entitled
to severance payments under Section 3 of the Non-Competition Agreement (the
“Severance Payments”); and
     WHEREAS, the Company and the Employee desire that certain modifications be
made to the Change of Control Agreement and Non-Competition Agreement to comply
with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
and to confirm further the terms of the Employee’s Severance Payments; and
     WHEREAS, Section 8(c) of the Change of Control Agreement and the
Non-Competition Agreement permit the parties thereto to amend such agreements in
a writing signed by each party.
     NOW, THEREFORE, in consideration of the parties’ mutual desire to modify
the Change of Control Agreement and the Non-Competition Agreement, the parties
agree as follows effective as of the date of execution of this Amendment:
PART I — CHANGE OF CONTROL AMENDMENT
     1. Part I of this Amendment shall amend the terms of the Change of Control
Agreement as set forth herein. Capitalized terms not otherwise defined in this
Part I shall have the meanings ascribed to them in the Change of Control
Agreement.
     2. Effective as of October 21, 2008 (the date of the Employee’s “separation
from service” from the Company within the meaning of Section 409A of the Code),
the Change of Control Agreement is hereby terminated in its entirety and shall
no longer be of any force and effect, and the Employee shall not be entitled to
any benefit or amount hereunder.

 

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PART II — NON-COMPETITION AMENDMENT
     1. Part II of this Amendment shall amend the terms of the Non-Competition
Agreement as set forth herein. Capitalized terms not otherwise defined in this
Part II shall have the meanings ascribed to them in the Non-Competition
Agreement.
     2. The Non-Competition Agreement is hereby amended by providing that all
references to “termination of employment” or forms and derivations thereof shall
refer to events which constitute a “separation from service” as defined under
and for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended.
     3. The Non-Competition Agreement is hereby amended by the addition of the
following paragraphs to the end of Section 3 entitled “Duration”:
“For purposes of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), the Severance Payments are intended to constitute the right to a
series of separate payments. Any Severance Payments made during the first six
months following Employee’s termination of employment without cause from the
Company are intended to fit into the “separation pay due to involuntary
separation from service” exception under Treas. Reg.
Section 1.409A-1(b)(9)(iii), subject to any limits contained therein.
Utilizing the transition relief afforded under Section 409A of the Code,
including under IRS Notice 2007-86, the Company and Employee agree to extend the
length of Employee’s Severance Payments payable January 1, 2009 through
October 20, 2010 until December 31, 2011 (but without increasing the amount of
the aggregate Severance Payments owed to Employee during that time). With
respect to such extension and in accordance with the Section 409A of the Code
transition relief, this transition election does not shift amounts owed under
this Agreement (or any aggregated arrangement) into or out of 2008. The amounts
owed from January 1, 2009 through December 31, 2011 will be paid in accordance
with the normal payroll practices of the Company and are reflected on Attachment
A.”
     4. The Non-Competition Agreement is hereby amended by the addition of a new
Section 3A as follows:
“3A. PROVISION OF SEVERANCE PAYMENT “BENEFIT COVERAGE”. As of October 21, 2008
and through October 20, 2010, Employee is entitled to the “benefit coverage”
provided on Attachment B. It is the intention of the Company and Employee that
the provision of such benefits fits into exemptions from Section 409A of the
Code or otherwise complies with Section 409A of the Code, including, but not
limited to, the following:
     Reimbursements paid or in-kind benefits provided from October 21, 2008
through October 20, 2010 will be paid in accordance with Treas. Reg. Section
1.409A-1(b)(9)(v); provided, however, that from the end of the COBRA
continuation coverage period through October 20, 2010, any reimbursements
provided for health coverage under this Section 3A will be paid at the same time
as payments are made for active employees of the Company and, in any event, will
be paid no later than the end of the taxable year following the taxable year in
which such expense was incurred. The amounts eligible for reimbursement or the
in-

 

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kind benefits provided regarding such health coverage during any one taxable
year may not affect the expenses eligible for reimbursement or in-kind benefits
to be provided in any other taxable year.”
     5. The Non-Competition Agreement is hereby amended by the deletion of
Section 5 entitled “NONCOMPETITION” in its entirety and the substitution of the
following new Section 5:
“5. NONCOMPETITION. Employee agrees that, in exchange for adequate consideration
the sufficiency of which Employee does hereby agree to and acknowledge,
including, but not limited to, the retirement benefits under the Company’s
Supplemental Executive Retirement Plan and the extension of the length of the
Severance Payments hereunder, as a result of Employee’s termination of
employment without cause from the Company, Employee will not, without the prior
written consent of the Company, be employed by, own, manage, operate or control,
or participate, directly or indirectly, in the ownership, management, operation,
or control of, or be connected with (whether as a director, officer, employee,
partner, consultant, or otherwise), any business which competes with the
business of the Company, including but not limited to the sale of information
technology products, software and services, enterprise computer systems, and
related consulting, integration, maintenance and professional services for the
duration of the Noncompetition Period. For purposes of this Agreement,
“Noncompetition Period” shall refer to the full period of time during which
Employee is receiving the Severance Payments, commencing on the effective date
of Employee’s termination of employment with the Company.”
     6. The Non-Competition Agreement is hereby amended by the deletion of
Section 8 entitled “PREEMPTION IN THE EVENT OF CHANGE IN CONTROL” in its
entirety.
     7. The Non-Competition Agreement is hereby amended by the addition of a new
Section 14 as follows:
“14. SECTION 409A OF THE CODE. The parties intend that this Agreement be, at all
relevant times, in compliance with (or exempt from) Section 409A of the Code and
all other applicable laws, and this Agreement shall be so interpreted and
administered. In addition to the general amendment rights of the Company with
respect to the Agreement, the Company specifically retains the unilateral right
(but not the obligation) to make, prospectively or retroactively, any amendment
to this Agreement or any related document as it deems necessary or desirable to
more fully address issues in connection with compliance with (or exemption from)
Section 409A of the Code and other laws. In no event, however, shall this
section or any other provisions of this Agreement be construed to require the
Company to provide any gross-up for the tax consequences of any provisions of,
or payments under, this Agreement. Except as may be provided in another
agreement to which the Company is bound, the Company and its affiliates shall
have no responsibility for tax or legal consequences to Employee (or Employee’s
beneficiaries) resulting from the terms or operation of this Agreement.”

 

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     IN WITNESS WHEREOF, the parties have executed this Amendment to Change of
Control Agreement and Non-Competition Agreement as of the date below written.

                  EMPLOYEE   COMPANY    
 
                /s/ Robert J. Bailey
 
  By:   /s/ Richard A Sayers, II

 
   
Robert J. Bailey
      Name:   Richard A. Sayers, II    
 
      Its:   EVP, Chief Human Resources and Compliance Officer    
 
               
Dated: December 17, 2008