Exhibit 10.1
AGREEMENT
     This Agreement (the “Agreement”) is entered into this 3rd day of May, 2006,
by and between S1 Corporation, a Delaware corporation (“S1” or the “Company”),
on the one hand, and each of Starboard Value and Opportunity Master Fund Ltd.,
Ramius Master Fund, Ltd, Ramius Fund III, Ltd., Parche, LLC, RCG Ambrose Master
Fund, Ltd., RCG Halifax Fund, Ltd., C4S & Co., L.L.C., Admiral Advisors, LLC,
Ramius Advisors, LLC, Ramius Capital Group, L.L.C., Morgan B. Stark, Peter A.
Cohen, Jeffrey M. Solomon, Thomas W. Strauss, Barington Companies Equity
Partners, L.P., James A. Mitarotonda, Barington Companies Investors, LLC,
Barington Companies Offshore Fund, Ltd. (BVI), Barington Investments, L.P.,
Barington Companies Advisors, LLC, Barington Capital Group, L.P., LNA Capital
Corp., Arcadia Partners, L.P., Arcadia Capital Management, LLC, William J. Fox,
Jeffrey C. Smith, Jeffrey Glidden, Richard Rofé, Edward Terino and John Mutch
(collectively, the “Ramius Group”), on the other hand. For purposes of this
Agreement, the Ramius Group shall also include all parties (and their
affiliates) to the Schedule 13D with respect to Company common stock of any or
all members of the Ramius Group, as now or hereinafter filed with the SEC (the
“Schedule 13D”).
RECITALS
     WHEREAS, upon further review and analysis of its long term plan for success
with financial and legal advisors, the Board of S1 has determined to engage its
financial, legal and other advisors to explore strategic alternatives available
to S1 in order to maximize stockholder value;
     WHEREAS, the Board has determined that it is in the best interests of the
Company for Jeffrey Smith of the Ramius Group to join the Board in the class of
directors to expire in 2008; and
     WHEREAS, the parties hereto desire to set forth certain covenants and
agreements to resolve their respective views regarding various matters as to the
Company, including the individuals to be presented to the S1 stockholders as
nominees for election to the Board at the Company’s 2006 Annual Meeting (as
defined below) without the burden, distraction or expense of a proxy contest.
     NOW, THEREFORE, in consideration for the covenants and other agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

 

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     1. Covenants of S1. S1 covenants and agrees that, in reliance on the
covenants and agreements of the Ramius Group set forth herein:
          (a) No later than the first business day after the date of this
Agreement, the Board of S1 shall meet (the “Board Meeting”) and (i) agree to fix
the size of the Board at seven directors; (ii) appoint Jeffrey Smith of the
Ramius Group as a director of the Company in the class whose term expires at the
2008 annual meeting of stockholders; (iii) set a record date of 21 business days
after the date of the Board Meeting for an annual meeting of stockholders to be
held on or about June 30, 2006 (the “2006 Annual Meeting”) with the only matters
to be submitted for a stockholder vote at the 2006 Annual Meeting being the
election of the Board Nominees (as defined below); (iv) nominate Messrs. Thomas
Johnson and John Speigel (the “Board Nominees”) (both of whom S1 represents and
warrants have consented to such nomination) to stand for election at the 2006
Annual Meeting; and (v) adopt an amendment to Section 2.3 of the Company’s
Bylaws in the form attached hereto as Exhibit A to allow stockholders holding at
least one-tenth of the outstanding common stock of the Company to call a special
meeting of stockholders;
          (b) At the Board Meeting, the Board (including the newly appointed
Director Smith) shall immediately take all necessary and advisable actions to
explore strategic alternatives available to the Company to maximize stockholder
value, including instructing Friedman, Billings, Ramsey Group, Inc., to take all
appropriate steps to advise on strategic alternatives available to the Company.
To the extent any smaller committee of the Board subsequently takes
responsibility for such exploration or related process, that committee shall
include Director Smith (unless he or any member of the Ramius Group has a direct
or indirect interest in any proposed strategic alternative (other than in their
role as a stockholder));
          (c) S1 shall issue a press release no later than the first business
day after the date of this Agreement substantially in the form attached as
Exhibit B;
          (d) S1 shall reimburse the Ramius Group for its reasonable, documented
out-of-pocket fees and expenses incurred (including proxy solicitation, legal
and public relations) in connection with the Schedule 13D, the preparation of
its proxy solicitation and related matters for the 2006 Annual Meeting and the
negotiation and execution of this Agreement and all related activities and
matters, provided such reimbursement shall not exceed $87,500 in the aggregate;
          (e) From the date hereof through and including September 30, 2006, S1
will not (i) bring any proposals to the stockholders other than the election of
the Board Nominees at the 2006 Annual Meeting, and any other proposals which may
be necessary in furtherance of any strategic alternative, (ii) take any action
to

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amend the Bylaws of the Company other than as provided in Section 1(a) hereof or
(iii) take any action to increase the size of the Board beyond seven members.
     2. Covenants of the Ramius Group. Each member of the Ramius Group, on
behalf of himself or itself, as applicable, covenants and agrees that, in
reliance on the covenants and agreements of S1 set forth herein:
          (a) they will support the election of the Board Nominees, agree to
vote all shares beneficially owned by them in favor of the Board Nominees, and
agree to refrain from taking any action inconsistent with the foregoing, in each
case at the 2006 Annual Meeting;
          (b) they will not solicit authority, directly or indirectly, from any
S1 stockholder to elect or vote for any candidate or candidates for election to
the Board at the 2006 Annual Meeting other than the Board Nominees or otherwise
present for consideration to any S1 stockholder in connection with the 2006
Annual Meeting any candidates other than the Board Nominees or any proposal for
any action, other than proposals or action which are made by the Board of
Directors, nor will they engage in any campaign or efforts to have votes
withheld from or otherwise campaign against any of the Board Nominees in
connection with the 2006 Annual Meeting or cause any other party to do, or
assist any other party in doing, any of the foregoing;
          (c) from the date hereof through and including September 30, 2006,
they will not engage in any “solicitation” of proxies or consents, seek to
advise, encourage or influence any person with respect to the voting of any
Company securities, except in support of Board-approved proposals; initiate,
propose or otherwise “solicit” stockholders of the Company for the approval of,
stockholder proposals; induce or attempt to induce any other person to initiate
any such stockholder proposal or any attempt to call a special meeting of
stockholders; provided, however, nothing herein shall limit the ability of any
member of the Ramius Group to vote its shares of common stock of the Company on
any matter submitted to a vote of the stockholders of the Company other than the
election of the Board Nominees or to announce its opposition to any
Board-approved stockholder proposals not supported by Director Smith;
          (d) from the date hereof through and including September 30, 2006,
they will not form, join or in any way participate in any “group” with respect
to any voting securities, other than a “group” that includes all or some lesser
number of the persons identified as part of the Ramius Group, but does not
include any other members who are not currently identified as Ramius Group
members as of the date hereof;

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          (e) on or before two business days from the date of this Agreement,
they will amend or cause to be amended the Schedule 13D to file this Agreement
and to make all appropriate disclosure related thereto; and
          (f) by execution of this Agreement, Starboard Value and Opportunity
Master Fund Ltd. hereby rescinds notice of its intention to nominate any persons
for director at the 2006 Annual Meeting, and hereby rescinds notice of its
intention to propose any other matters to come before the stockholders at the
2006 Annual Meeting. For purposes of clarity, the demand to inspect certain
records and lists of S1 stockholders and certain other documents as set forth in
the demand letter referred to in the Schedule 13D is hereby rescinded.
     3. General.
          (a) (i) S1 represents and warrants that the individual set forth below
as signatory to this Agreement for S1 has the authority to execute this
Agreement on behalf of S1 and to bind S1 to the terms hereof.
               (ii) Each member of the Ramius Group listed herein, on behalf of
himself or itself, as applicable, represents and warrants that (x) to the best
of his or its knowledge, except for Ramius Fund III, Ltd, which became a member
of the Ramius Group on May 1, 2006, all parties (and their affiliates) to the
Schedule 13D with respect to Company common stock as filed with the SEC are the
only parties required under applicable law to be listed in the Schedule 13D, and
the references to those parties are correctly set forth in this Agreement, and
(y) each signatory to this Agreement by any member of the Ramius Group has the
authority to execute the Agreement on behalf of himself and the applicable
member of the Ramius Group associated with that signatory’s name, and to bind
such member of the Ramius Group to the terms hereof.
          (b) This Agreement shall be governed by the laws of the State of
Delaware, without regard to the conflicts of law provisions thereof.
          (c) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one instrument.
          (d) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
Parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

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          (e) If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision(s) in good faith so as to become enforceable while hewing as closely
as possible to the original intent. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision(s), then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
this Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of this Agreement shall remain enforceable in accordance with
its terms.
          (f) Each party acknowledges that its breach of this Agreement would
cause irreparable injury to the other for which monetary damages would not be an
adequate remedy. Accordingly, a party will be entitled to seek injunctions and
other equitable remedies in the event of such a breach by the other party (or
any of its members).
          (g) This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and any and all other
written or oral agreements existing between the parties with respect to the
subject matter hereof are expressly canceled.
[Signature page follows]

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     In Witness Whereof, the Parties have caused this Agreement to be executed
and delivered by themselves or their duly authorized officer or attorney-in-fact
as of the date first set forth above.

     
S1 CORPORATION
   
 
   
/s/ James S. Mahan
         
 
   
Print Name: James S. Mahan III
   
 
   
Title: CEO
   
 
   
Starboard Value and Opportunity Master Fund Ltd.
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
Ramius Master Fund, Ltd.
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
Parche, LLC
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   

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RCG Ambrose Master Fund, Ltd.
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
RCG Halifax Fund, Ltd.
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
Ramius Fund III, Ltd.
   
/s/ Morgan B. Stark
         
 
   
Print Name: Morgan B. Stark
   
 
   
Title: Authorized Signatory
   
 
   
C4S & Co., L.L.C.
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
Admiral Advisors, LLC
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   
 
   
Ramius Advisors, LLC
   
/s/ Jeffrey M. Solomon
         
 
   
Print Name: Jeffrey M. Solomon
   
 
   
Title: Authorized Signatory
   

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          Ramius Capital Group, L.L.C.     /s/ Jeffrey M. Solomon          
 
        Print Name: Jeffrey M. Solomon    
 
        Title: Authorized Signatory    
 
        Morgan B. Stark     /s/ Morgan B. Stark          
 
        Print Name: Morgan B. Stark    
 
       
Title:
       
 
       
 
        Peter A. Cohen     /s/ Peter A. Cohen          
 
        Print Name: Peter A. Cohen    
 
       
Title:
       
 
       
 
        Jeffrey M. Solomon     /s/ Jeffrey M. Solomon          
 
        Print Name: Jeffrey M. Solomon    
 
       
Title:
       
 
       
 
        Thomas W. Strauss     /s/ Thomas W. Strauss          
 
        Print Name: Thomas W. Strauss    
 
       
Title:
       
 
       

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Barington Companies Equity Partners, L.P.
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: Managing Member of General Partner, Barington Companies Investors, LLC
   
          
   
 
   
James A. Mitarotonda
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: Managing Member
   
 
   
Barington Companies Investors, LLC
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: Managing Member
   
 
   
Barington Companies Offshore Fund, Ltd. (BVI)
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: President
   
 
   
Barington Investments, L.P.
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: Authorized Signatory
   

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Barington Companies Advisors, LLC
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: Authorized Signatory
   
 
   
Barington Capital Group, L.P.
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: President and CEO of General Partner, LNA Capital Corp.
   
          
   
 
   
LNA Capital Corp.
   
/s/ James A. Mitarotonda
         
 
   
Print Name: James A. Mitarotonda
   
 
   
Title: President and CEO
   
 
   
Arcadia Partners, L.P.
   
/s/ Richard Rofe
         
 
   
Print Name: Richard Rofe
   
 
   
Title: General Partner
   
 
   
Arcadia Capital Management, LLC
   
/s/ Richard Rofe
         
 
   
Print Name: Richard Rofe
   
 
   
Title: President
   

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          Richard Rofé     /s/ Richard Rofe          
 
        Print Name: Richard Rofe    
 
       
Title:
       
 
       
 
        William J. Fox     /s/ William Fox          
 
        Print Name: William Fox    
 
       
Title:
       
 
       
 
        Jeffrey C. Smith     /s/ Jeffrey C. Smith          
 
        Print Name: Jeffrey C. Smith    
 
       
Title:
       
 
       
 
        Jeffrey Glidden     /s/ Jeffrey D. Glidden          
 
        Print Name: Jeffrey D. Glidden    
 
       
Title:
       
 
       
 
        Edward Terino     /s/ Edward Terino          
 
        Print Name: Edward Terino    
 
        Title: Co-CEO and CFO, Arlington Tankers, Ltd.    
 
        John Mutch     /s/ John Mutch          
 
        Print Name: John Mutch    
 
        Title: General Partner, MV Advisors    

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EXHIBIT A
Section 2.3 of the Bylaws of the Company is amended by deleting the section in
its entirety and replacing it with the following:
“Special meetings of the shareholders for any purpose or purposes, unless
otherwise prescribed by statute, may be called at any time by the Chairman of
the Board of Directors, the President, or a majority of the Board of Directors,
and shall be called by the Chairman of the Board of Directors, the President, or
the Secretary upon the written request of the holders of not less than one tenth
of all of the outstanding capital stock of the Corporation entitled to vote at
the meeting. Such written request shall state the purpose or purposes of the
meeting and shall be delivered to the principal office of the Corporation
addressed to the Chairman of the Board, the President, or the Secretary.”

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EXHIBIT B
S1 Reaches Agreement with Ramius Group to End Proxy Contest
Jeffrey Smith of Ramius Capital to Join Board of Directors
ATLANTA, May 3, 2006 – S1 Corporation (Nasdaq: SONE), a leading global provider
of customer interaction financial and payments solutions, announced today that
it has reached a definitive agreement with a group of investors led by Ramius
Capital Group, L.L.C. to settle their dispute relative to the nomination of
certain directors to the S1 Board of Directors at the 2006 Annual Meeting.
As a result of this settlement, the Ramius Group agreed to withdraw the notice
of its intention to nominate directors and make other shareholder proposals at
the Company’s 2006 Annual Meeting. Additionally, Jeffrey C. Smith, a managing
director of Ramius Capital Group, L.L.C., will be joining the S1 Board of
Directors. The Company also agreed to amend its Bylaws to restore the right of
stockholders owning 10% of the outstanding shares of common stock to call a
special meeting.
S1 also said that it has retained Friedman, Billings, Ramsey Group as its
financial advisor to assist the Board of Directors in actively exploring
strategic alternatives to maximize shareholder value. The law firm of Hogan &
Hartson L.L.P. has also been retained to advise in connection with this review.
No assurance can be given that any transaction will be entered into or
consummated as a result of this review.
About S1
S1 Corporation (Nasdaq: SONE) delivers customer interaction software for
financial and payment services and offers unique solution sets for financial
institutions, retailers, and processors. S1 employs 1,500 people in operations
throughout North America, Europe and Middle East, Africa, and Asia-Pacific
regions. Worldwide, more than 3,000 customers use S1 software solutions, which
are comprised of applications that address virtually every market segment and
delivery channel. S1 partners with best-in-class organizations to provide
flexible and extensible software solutions for its customers. Additional
information about S1 is available at www.s1.com.
Forward Looking Statements
This press release contains forward-looking statements within the safe harbor
provisions of the Private Securities Litigation Reform Act. These statements
include statements with respect to our financial condition, results of
operations and

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business. The words “believes,” “expects,” “may,” “will,” “should,” “projects,”
“contemplates,” “anticipates,” “forecasts,” “intends” or similar terminology
identify forward-looking statements. These statements are based on our beliefs
as well as assumptions made using information currently available to us. Because
these statements reflect our current views concerning future events, they
involve risks, uncertainties and assumptions. Therefore, actual results may
differ significantly from the results discussed in the forward-looking
statements. The risk factors included in our reports filed with the Securities
and Exchange Commission (and available on our web site at www.s1.com or the
SEC’s web site at www.sec.gov ) provide examples of risks, uncertainties and
events that may cause our actual results to differ materially from the
expectations we describe in our forward-looking statements. Except as provided
by law, we undertake no obligation to update any forward-looking statement.
Contacts:
Investors:
John Stone, Chief Financial Officer
404-923-3500
john.stone@s1.com
Press:
Mike Pascale/Rhonda Barnat of The Abernathy MacGregor Group
212-371-5999
mmp@abmac.com/rb@abmac.com

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