Exhibit 10.1

March 11, 2009
SETTLEMENT AGREEMENT
     This Settlement Agreement (this “Agreement”) is made and entered into as of
March 11, 2009, by and among Agilysys, Inc., an Ohio corporation (“Agilysys” or
the “Company”), and each of the entities and natural persons listed on Exhibit A
hereto (such entities and natural persons, collectively, the “Ramius Group” and
each, individually, a “member” of the Ramius Group) which presently are or may
be deemed to be members of a “group” with respect to the beneficial ownership of
the common stock of the Company, no par value (the “Common Stock”), pursuant to
Rule 13d-5 promulgated by the Securities and Exchange Commission (the “SEC”)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
RECITALS:
     WHEREAS, the Company and the Ramius Group have engaged in various
discussions and communications concerning the Company’s business, financial
performance and strategic plans;
     WHEREAS, the Ramius Group duly submitted a nomination letter to the Company
on June 20, 2008 (the “Nomination Letter”) nominating a slate of three
(3) director candidates for election to the Company’s board of directors (the
“Board”) at the 2008 annual meeting of shareholders of the Company (including
any adjournment or postponement thereof (the “2008 Annual Meeting”);
     WHEREAS, on February 18, 2009, the Ramius Group filed a definitive proxy
statement on Schedule 14A, as amended (the “Ramius Proxy”), with the SEC related
to the matters set forth in the Nomination Letter; and
     WHEREAS, the Company and the members of the Ramius Group have determined to
come to an agreement with respect to certain matters related to the 2008 Annual
Meeting, the 2009 annual meeting of shareholders of the Company (the “2009
Annual Meeting”) and certain other matters, as provided in this Agreement.
     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
     1 Board Matters; Board Appointments; 2008 Annual Meeting; 2009 Annual
Meeting; 2010 Annual Meeting;

 

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          (a) The Company hereby confirms that effective as of the execution of
this Agreement two current members of the Board, other than R. Andrew Cueva,
have resigned as members of the Board and that the Board has appointed Steve
Tepedino and John Mutch to serve as directors of the Board, each in a Class to
be determined by the Board, but in no event in the Class of directors whose
terms expire at the 2010 annual meeting of shareholders of the Company (Steve
Tepedino and John Mutch and any of their Replacement Directors, collectively,
the “Ramius Directors”).
          (b) The Company agrees that the Ramius Directors shall be nominated
for re-election, together with the other members of their respective Class, at
either the 2008 Annual Meeting or the 2009 Annual Meeting, as the case may be,
and that the Company will recommend, support and solicit proxies for the
election of the Ramius Directors in the same manner as for the Company’s other
nominees up for election at such annual meeting.
          (c) The Company agrees to use its commercially reasonable efforts to
(i) hold the 2008 Annual Meeting no later than March 31, 2009, (ii) hold the
2009 Annual Meeting no later than September 30, 2009, and (iii) hold the 2010
annual meeting of shareholders of the Company (the “2010 Annual Meeting”) no
later than September 30, 2010.
          (d) The Company agrees that it will not increase the size of the Board
to more than nine (9) directors at any time before the Company’s 2010 Annual
Meeting.
          (e) The Company has disbanded the Special Committee of the Board
formed to oversee an evaluation of the Company’s strategic alternatives. The
Company agrees that one of the Ramius Directors will be included as a member of
any special committee that is established by the Board while the Ramius
Directors are serving as directors of the Board.
          (f) The Company agrees to disband the Executive Committee of the Board
no later than the next regularly scheduled meeting of the Board.
          (g) The Company agrees that from the date hereof up to and including
the date of the 2010 Annual Meeting, the Company will not take any action to
limit or restrict the rights of its shareholders by amending the Company’s
Amended Code of Regulations or otherwise.
          (h) If either of the Ramius Directors leaves the Board (whether by
resignation or otherwise) before the 2010 Annual Meeting, the Ramius Group will
be entitled to recommend to the Nominating and Corporate Governance Committee of
the Board replacement director(s) who will qualify as “independent” pursuant to
NASDAQ listing standards. The Nominating and Corporate Governance Committee will
not unreasonably withhold acceptance of any replacement director(s) recommended
by the Ramius Group; provided however, that it shall at all times act in
accordance with its fiduciary duties. In the event the Nominating and Corporate
Governance Committee does not accept a replacement director(s) recommended by
the Ramius Group, the Ramius Group will have the right to recommend additional
replacement director(s) for consideration by the Nominating and Corporate
Governance Committee. Upon the acceptance of a replacement director nominee by
the Nominating and Corporate Governance Committee, the Board will appoint such
replacement director to the Board no later than five (5) business days after the
Nominating and Corporate Governance Committee’s recommendation of such
replacement director (the “Replacement Director”).
          (i) Notwithstanding anything to the contrary contained in
Section 1(h), if, during the Standstill Period (as such term is defined below),
the total number of shares of Common Stock held in the aggregate by the members
of the Ramius Group falls below an amount equal to 3% of the shares of Common
Stock then outstanding, one of Messrs. Mutch or Tepedino (or their Replacement
Directors) shall tender to the Company an irrevocable resignation letter in a
form satisfactory to the Company, pursuant to which he shall resign from the
Board and the right of the Ramius Group to recommend a Replacement Director to
fill the vacancy caused by the resignation of Messrs. Mutch or Tepedino (or
their Replacement Directors) pursuant to Section 1(h) shall automatically
terminate, provided, however, that nothing herein shall limit the ability of the
Ramius Group to recommend a Replacement Director pursuant to Section 1(h) with
respect to the remaining Ramius Director. The Ramius Group has obtained the
conditional resignation letters from the Ramius Directors necessary to
effectuate the provisions of this Section 1(i).
          (j) Each member of the Ramius Group agrees that it will vote in favor
of the Director nominees recommended to shareholders by the Company’s Board of
Directors at the Company’s 2008 and 2009 Annual Meetings of Shareholders. No
member of the Ramius Group shall take any position, make any statement or take
any action inconsistent with the foregoing.
     2 Standstill
          (a) Each member of the Ramius Group agrees that, from the date of this
Agreement until ten (10) business days prior to the deadline set for the
submission of shareholder proposals for the 2010 Annual Meeting of Shareholders
of the Company established in connection with the 2010 Annual Meeting (such
period, the “Standstill Period”), neither it nor any of its Affiliates or
Associates under its control or direction will, and it will cause each of its
Affiliates and Associates under its control not to, directly or indirectly, in
any manner:

 

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               (i) engage in any solicitation of proxies or consents or become a
“participant” in a “solicitation” (as such terms are defined in Regulation 14A
under the Securities Exchange Act of 1934, as amended or the rules or
regulations thereunder) of proxies or consents (including, without limitation,
any solicitation of consents to call a special meeting of shareholders), in each
case, with respect to securities of the Company, except in accordance with
Sections 1(b) above;
               (ii) seek to advise, encourage, support or influence any person
with respect to the voting or disposition of any securities of the Company at
the 2008 Annual Meeting and 2009 Annual Meeting, except in accordance with
Sections 1(b) above;
               (iii) initiate, propose or otherwise “solicit” stockholders of
the Company for the approval of any stockholder proposal;
               (iv) form, join or in any way participate in any “group” pursuant
to Rule 13d-5 promulgated by the SEC under the Exchange Act with respect to any
securities of the Company, 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; or
               (v) deposit any securities of the Company in a voting trust or
subject any securities of the Company to any arrangement or agreement with
respect to the voting of the securities of the Company.
          (b) As used in this Agreement, the terms “Affiliate” and “Associate”
shall have the respective meanings set forth in Rule 12b-2 promulgated by the
SEC under the Exchange Act; the terms “beneficial owner” and “beneficial
ownership” shall have the same meanings as set forth in Rule 13d-3 promulgated
by the SEC under the Exchange Act; and the terms “person” or “persons” shall
mean any individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization or other entity of any kind or nature.
          (c) In the event that the Company is in breach of its obligations
under this Agreement, including, without limitation, a failure to comply in any
respect with the provisions of Sections 1 or 7 of this Agreement, and such
breach is not cured within 30 days after written notice thereof is provided to
the Company by the Ramius Group, then in addition to any other remedies that the
members of the Ramius Group may have, the provisions of Section 2 shall also
terminate.
          (d) In the event that the Ramius Group is in breach of its obligations
under this Agreement, and such breach is not cured within 30 days after written
notice thereof is provided to the Ramius Group by the Company, then in addition
to any other remedies that the Company may have, the provisions of
Sections 1(c), 1(d), 1(e), 1(f), 1(g), 1(h) and 1(i) shall also terminate.
     3 Representations and Warranties of the Company. The Company represents and
warrants to the Ramius Group that (a) the Company has the corporate power and
authority to execute the Agreement and to bind it thereto, (b) this Agreement
has been duly and validly authorized, executed and delivered by the Company,
constitutes a valid and binding obligation and agreement of the Company, and is
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles and
(c) the execution, delivery and performance of this Agreement by the Company
does not and will not violate or conflict with (i) any law, rule, regulation,
order, judgment or decree applicable to it, or (ii) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both could become a default) under or pursuant to, or result in the loss
of a material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, or any material
agreement, contract, commitment, understanding or arrangement to which the
Company is a party or by which it is bound.
     4 Representations and Warranties of the Ramius Group. The Ramius Group
shall cause its Affiliates to comply with the terms of this Agreement. Each
member of the Ramius Group listed herein, on behalf of himself or itself, as
applicable, represents and warrants to the Company that (a) as of the date
hereof, the Ramius Group and each member of the Ramius Group beneficially owns
only the number of shares of Common Stock as described opposite his or its name
on Exhibit A and Exhibit A includes all Affiliates of any members of the Ramius
Group that own any securities of the Company beneficially or of record, (b) this
Agreement has been duly and validly authorized, executed and delivered by such
member, and constitutes a valid and binding obligation and agreement of such
member, enforceable against such member in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles,
(c) 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 and (d) the execution,
delivery and performance of this Agreement by each member of the Ramius Group
does not and will not violate or conflict with (i) any law, rule, regulation,
order, judgment or decree applicable to it, or (ii) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both could become a default) under or pursuant to, or result in the loss
of a material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which such member is a
party or by which it is bound.
     5 Public Announcements. Following the execution of this Agreement, the
Company shall issue the press release announcing the terms of this Agreement, in
the form attached hereto as Exhibit B (the “Press Release”), and shall file a
Current Report on Form 8-K with the SEC disclosing the terms of this Agreement
and attaching as exhibits this Agreement and the Press Release.

 

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     6 Specific Performance. Each of the members of the Ramius Group, on the one
hand, and the Company, on the other hand, acknowledges and agrees that
irreparable injury to the other party hereto may occur in the event any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be
adequately compensable in damages. It is accordingly agreed that the members of
the Ramius Group or any of them, on the one hand, and the Company, on the other
hand (the “Moving Party”), shall each be entitled to specific enforcement of,
and injunctive relief to prevent any violation of, the terms hereof, and the
other party hereto will not take action, directly or indirectly, in opposition
to the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity.
     7 Expenses. The Company shall reimburse the Ramius Group for its
reasonable, documented out-of-pocket fees and expenses incurred (including legal
expenses) in connection with the Schedule 13D, matters related to the 2008
Annual Meeting and the negotiation and execution of this Agreement, provided
that such reimbursement shall not exceed $200,000 in the aggregate.
     8 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that the parties would have executed
the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, void or unenforceable. In
addition, the parties agree to use their best efforts to agree upon and
substitute a valid and enforceable term, provision, covenant or restriction for
any of such that is held invalid, void or enforceable by a court of competent
jurisdiction.
     9 Notices. Any notices, consents, determinations, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
          If to the Company:
Agilysys, Inc.
28925 Fountain Parkway
Solon, Ohio 44139
Attention: Martin F. Ellis
Facsimile: 440-519-8643
          With a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, OH 44114-2688
Attention: Arthur C. Hall III
Facsimile: 216-241-0816
          If to the Ramius Group or any member of the Ramius Group:
RCG Starboard Advisors, LLC
c/o Ramius LLC
599 Lexington Avenue, 20th Floor
New York, New York 10022
Attention: Mark Mitchell and Owen Littman
Facsimile: 212-845-7995
          With a copy to:
Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
Attention: Steven Wolosky, Esq.
Facsimile: (212) 451-2222

 

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     10 Applicable Law. This Agreement is governed by and construed in
accordance with the internal laws of the State of New York applicable to
contracts made and to be performed therein, without regard to the conflict of
laws principles. Each party submits to exclusive jurisdiction and venue of
federal or state courts in New York, New York and agrees not to institute
litigation in any other forums in respect of the interpretation or enforcement
of this Agreement (except for proceedings to obtain enforcement of an order of a
New York, New York federal or state court).
     11 Counterparts. This Agreement and any amendments hereto may be executed
and delivered in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when counterparts have been signed by each
party hereto and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart. In the event that any signature
to this Agreement or any amendment hereto is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof.
     12 Entire Agreement; Amendment and Waiver; Successors and Assigns. This
Agreement contains the entire understanding of the parties hereto with respect
to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the parties other
than those expressly set forth herein. This Agreement may be amended only by a
written instrument duly executed by the parties hereto or their respective
successors or assigns. No failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law. The
terms and conditions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties hereto and their respective
successors, heirs, executors, legal representatives, and permitted assigns. No
party shall assign this Agreement or any rights or obligations hereunder
without, with respect to any member of the Ramius Group, the prior written
consent of the Company, and with respect to the Company, the prior written
consent of the Ramius Group.

 

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     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized signatories of the parties as of the date hereof.

            AGILYSYS, INC.
      By:   /s/ Martin F. Ellis         Name:   Martin F. Ellis        Title:  
President & CEO     

THE RAMIUS GROUP:

     
RAMIUS VALUE AND OPPORTUNITY MASTER FUND LTD
  RCG STARBOARD ADVISORS, LLC
By: RCG Starboard Advisors, LLC,
  By: Ramius LLC,
its investment manager
       its sole member  
PARCHE, LLC
  RAMIUS ADVISORS, LLC
By: RCG Starboard Advisors, LLC,
  By: Ramius LLC,
     its managing member
       its sole member  
RCG PB, LTD.
  RAMIUS LLC
By: Ramius Advisors, LLC,
  By: C4S & Co., L.L.C.,
     its investment manager
       as managing member     C4S & CO., L.L.C.
RAMIUS ENTERPRISE MASTER FUND LTD
   
By: Ramius Advisors, LLC,
   
its investment manager
   

                  By:   /s/ Jeffrey M. Solomon         Name:   Jeffrey M.
Solomon        Title:   Authorized Signatory     

     
/s/ Jeffrey M. Solomon
 
JEFFREY M. SOLOMON
   
Individually and as attorney-in-fact for Peter A.
   
Cohen, Morgan B. Stark and Thomas W. Strauss,
   

 

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EXHIBIT A
The Ramius Group

         
Parche, LLC
    323,761  
Ramius Value and Opportunity Master Fund Ltd
    2,342,130  
 
       
Ramius Enterprise Master Fund Ltd
    323,761  
 
       
RCG PB, Ltd.
    277,103  
 
       
Ramius Advisors, LLC
    600,864  
 
       
RGC Starboard Advisors, LLC
    2,665,891  
Ramius LLC
    2,942,994  
C4S & CO., LLC
    2,942,994  
Peter A. Cohen
    2,942,994  
Morgan B. Stark
    2,942,994  
Jeffrey M. Solomon
    2,942,994  
Thomas W. Strauss
    2,942,994  

 

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EXHIBIT B
(AGILYSYS LOGO) [l35866al3586600.gif]
FOR IMMEDIATE RELEASE
Agilysys Announces Settlement Agreement with Ramius

  •   Board Appoints John Mutch and Steve Tepedino as Directors to Fill
Vacancies Created by Resignations of Two Existing Directors     •   Ramius
Agrees to Support Agilysys Slate of Directors for the 2008 and 2009 Annual
Meetings

CLEVELAND, March 11 /PRNewswire-FirstCall/ — Agilysys, Inc. (Nasdaq: AGYS), a
leading provider of innovative IT solutions, announced that it has reached an
agreement with Ramius LLC and its affiliates (“Ramius”) relating to the
Company’s 2008 Annual Meeting of Shareholders scheduled for March 26, 2009. The
Agilysys Board of Directors believes this settlement is in the best interests of
shareholders because it allows the company to avoid the continuing distraction
and cost of a proxy contest. Ramius holds approximately 13% of the company’s
outstanding shares. Prior to reaching the agreement, Ramius had nominated its
own slate of three directors for election at the company’s 2008 annual meeting.
As part of the settlement agreement, the Agilysys Board appointed John Mutch and
Steve Tepedino, both of whom were nominated by Ramius, to fill the vacancies
created by the resignations of Charles F. Christ and Eileen Rudden from the
Board. The company agreed to nominate and support Mutch and Tepedino for
re-election at the company’s 2009 annual meeting of shareholders. Ramius agreed
to support the company’s slate of directors for the 2008 and 2009 annual
meetings. The company agreed that it will not expand its Board beyond its
current size of nine directors.
“We are pleased to announce this resolution and look forward to having John
Mutch and Steve Tepedino join the Board as we continue to focus our full
attention and resources on driving improved profitability and long-term value
for our shareholders,” said Martin Ellis, president and chief executive officer
of Agilysys. “I also want to thank Charlie and Eileen for their outstanding
contributions and long-standing dedication as members of our Board.”
“We believe the addition of John Mutch and Steve Tepedino will add valuable
experience to the Board to help drive positive change and improved financial
performance for the benefit of all Agilysys shareholders. We are grateful to
have reached this settlement in cooperation with Agilysys and look forward to
continuing our constructive dialogue,” said Mark R. Mitchell, a Partner of
Ramius LLC.
The agreement also provides that Ramius will abide by certain standstill
provisions through the period ending 10 business days prior to the deadline for
submitting shareholder proposals for the company’s 2010 Annual Meeting of
Shareholders. The complete agreement between Agilysys and Ramius will be
included as an exhibit to Agilysys’ Form 8-K to be filed with the SEC.
Mutch (age 52) is the founder and a Managing Partner of MV Advisors, LLC, a firm
that provides focused investment and strategic guidance to small- and mid-cap
technology companies. In March 2003, Mutch was appointed to the Board of
Directors of Peregrine Systems Inc. (“Peregrine”), a global enterprise software
provider, to assist Peregrine and its management in development of a plan of
reorganization, which ultimately led to Peregrine’s emergence from bankruptcy.
Mutch served as President and Chief Executive Officer of Peregrine from
August 2003 to December 2005 through its acquisition by Hewlett-Packard. Mutch
is currently a director of Edgar Online, Inc., Adaptec, Inc. and Aspyra, Inc.
Tepedino (age 47) is a co-founder of Channel Savvy LLC, a management consulting
firm specializing in technology channels, where he has served as President and
Chief Executive officer since May 2006. Additionally, since that time Tepedino
served as a Member of JET Creative LLC, a management consulting company
specializing in the information technology industry. From 1984 to 2006, Tepedino
worked in various positions at Avnet, Inc., a Fortune 500 company focused on
global technology distribution.

 

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About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and
public-sector customers, with special expertise in select markets, including
retail and hospitality. The company uses technology — including hardware,
software and services — to help customers resolve their most complicated IT
needs. The company possesses expertise in enterprise architecture and high
availability, infrastructure optimization, storage and resource management,
identity management and business continuity; and provides industry-specific
software, services and expertise to the retail and hospitality markets.
Headquartered in Cleveland, Agilysys operates extensively throughout North
America, with additional sales offices in the United Kingdom and China. For more
information, visit www.agilysys.com.
Investor contact:
Curtis Stout
Vice President and Treasurer
Agilysys, Inc.
440-519-8635
curtis.stout@agilysys.com
Media contact:
Shawn Turner
Communications Manager
Agilysys, Inc.
440-519-8627
shawn.turner@agilysys.com
SOURCE Agilysys, Inc.
CONTACT:
Investors,
Curtis Stout,
Vice President and Treasurer,
+1-440-519-8635,
curtis.stout@agilysys.com,
or Media,
Shawn Turner,
Communications Manager,
+1-440-519-8627,
shawn.turner@agilysys.com,
both of Agilysys, Inc.
(AGYS AGYS)