EX-10.1







Exhibit 10.1




December 31, 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 Martin F. Ellis (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
June 30, 2003, 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
April 28, 2005, as subsequently amended (the “Non-Competition Agreement”); 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; 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 — OMNIBUS AMENDMENT TO AGREEMENTS




     1. For purposes of this Part I, references to the “Agreements” shall refer to the Change of
Control Agreement and the Non-Competition Agreement, collectively. Capitalized terms not otherwise
defined in this Part I shall have the meanings ascribed to them in the Change of Control Agreement
or Non-Competition Agreement, as applicable.



     2. The Agreements are 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 (the “Code”).



     3. For purposes of Section 409A of the Code, the “severance payments” (as defined in Section 3
of the Non-Competition Agreement) and the payments under Section 3.1 of the Change of Control
Agreement (collectively, such payments under the Agreements will be referred to as the “Severance
Payments”), are intended to constitute the right to a series of separate payments. If possible,
any Severance Payments made during the first six months following Employee’s termination of
employment without cause from the Company under Section 3 of the Non-Competition Agreement or
following Employee’s termination of employment without Cause or for Good Reason under Section 3.1
of the



 









 







Change of Control Agreement 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, or the “short-term deferral” exception under Treas. Reg. Section
1.409A-1(b)(4), if applicable.



     4. It is the intention of the Company and Employee that the provision of the auto allowance
and benefit coverage as severance payments in Section 3 of the Non-Competition Agreement or the
health insurance and retirement benefits in Section 3.1(d) in the Change of Control Agreement fit
into exemptions from Section 409A of the Code or otherwise comply with Section 409A of the Code,
including, but not limited to, the following:



     Reimbursements paid or in-kind benefits provided for the 24 months following Employee’s
termination will be paid in accordance with Treas. Reg. Section 1.409A-1(b)(9)(v); provided,
however, that from the end of the period during which Employee would be entitled to medical expense
reimbursements under Treas. Reg. Section 1.409A-1(b)(9)(v)(B) through the end of the 24-month
severance payment period, any reimbursements provided for medical expenses under Section 3 of the
Non-Competition Agreement or Section 3.1(d) under the Change of Control Agreement 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-kind benefits provided regarding such
medical expenses 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. If at the time of Employee’s termination of employment, he is a “specified employee” of the
Company as defined in and pursuant to Section 409A of the Code, then any of the Severance Payments
not fitting into an exemption described in Sections 3 or 4 above are required to be delayed for a
period of six months following his termination of employment (the “six-month period”). As such,
the payment of any cash amounts due under the Agreement during the first six months following
Employee’s termination date will be accumulated, held and distributed to Employee on the first
payroll payment date of the Company following the end of such six-month period (or, if earlier, no
later than 30 days following the date of Employee’s death). During the six-month period, any
amounts which Employee would normally submit for reimbursement by the Company may not be
reimbursed. Any amounts for such reimbursements that accumulate during the six-month period will
be paid in a lump sum to Employee on the first payroll payment date of the Company following the
end of such six-month period (or, if earlier, no later than 30 days following the date of
Employee’s death). After the six-month period, the Severance Payments due will be paid in
accordance with the terms specified in the Agreements as amended in this Amendment.



     6. Notwithstanding anything herein to the contrary, any reimbursements subject to Section 409A
of the Code provided under the Agreements, shall be made no later than the end of Employee’s
taxable year following the Employee’s taxable year in which such expense was incurred; in addition,
such amounts eligible for reimbursement, or in-kind benefits to be provided, during any one taxable
year under the Agreements may not affect the expenses eligible for reimbursement in any other
taxable year under the Agreements.



     7. The parties intend that the Agreements 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. 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



 









 







Amendment or the Agreement (other than as explicitly stated in the Agreement) and shall have no
responsibility or obligation for any tax gross-up relating to Section 409A of the Code.



     8. Utilizing the transition relief afforded under Section 409A of the Code, including under
IRS Notice 2007-86, the Company and Employee agree that the Severance Payments will be paid as set
forth in this Amendment. In accordance with the Section 409A of the Code transition relief, this
transition election does not shift amounts owed under the Agreements (or any aggregated
arrangement) into or out of 2008.



PART II — CHANGE OF CONTROL AMENDMENT




     1. Part II 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 II shall have the meanings
ascribed to them in the Change of Control Agreement.



     2. The Change of Control Agreement is hereby amended by the deletion of subsections (a), (b)
and (c) of Section 3.1 and the substitution in lieu thereof of the following:




     “(a) for the one year period from the date of such termination of employment, the
Company shall pay to the Employee:




     (i) the greater of the Employee’s (x) highest monthly base salary paid or
payable by the Company during the twelve (12) month period immediately preceding the
Effective Date, or (y) the highest monthly salary paid or payable by the Company at
any time from the ninety (90) day period preceding the Effective Date through the
date of termination (the “Highest Base Salary”) in accordance with its then current
payroll practice for paying executive officers;




     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee
at the time of termination (“Target Annual Bonus”) payable in equal monthly amounts;
and




     (iii) the monthly amount paid or payable to the Employee by the Company as an
auto allowance as in effect immediately preceding the Effective Date (“Monthly Auto
Allowance”); and




     (b) Within thirty (30) days following the date which is one (1) year from the date of
such termination of employment, the Company shall pay to the Employee, in a single sum, an
amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Highest Base
Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12)
times his Monthly Auto Allowance; and




     (c) [Reserved]



     3. With respect to any payments that the Company promises to pay under Section 3.1(f) relating
to an excise tax gross-up (that also constitute a “tax gross up payment” as defined under Section
409A of the Code), such payment shall be made by the Company to Employee no later than the end of



 









 







Employee’s taxable year next following Employee’s taxable year in which Employee remits the
related taxes.



PART III — NON-COMPETITION AGREEMENT AMENDMENT




     1. Part III of this Amendment shall amend the Non-Competition Agreement as set forth herein.
Capitalized terms not otherwise defined in this Part III shall have the meaning ascribed to them in
the Non-Competition Agreement.



     2. Section 3 of the Non-Competition Agreement shall be deleted, and the following shall be
inserted therefor:




     “3. Duration. Employee may terminate this Agreement at any time and such
termination shall be effective on the date of his or her notice, unless otherwise mutually
agreed. Similarly, the Company has the right to terminate this Agreement and Employee’s
employment at any time, with or without advance notice or cause. Should the Company
terminate the Employee’s employment without cause:




     (a) for the one year period from the date of such termination of employment, the
Company shall pay to the Employee:




     (i) the Employee’s monthly base salary paid or payable by the Company in effect
on the date of his termination of employment (“Monthly Base Salary”) in accordance
with its then current payroll practice for paying executive officers;




     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee
at the time of his termination of employment (“Target Annual Bonus”) payable in
equal monthly amounts; and




     (iii) the monthly amount paid or payable to the Employee by the Company as an
auto allowance as in effect on the date of his termination of employment (“Monthly
Auto Allowance”); and




     (b) Within thirty (30) days following the date which is one (1) year from the date of
such termination of employment, the Company shall pay the Employee, in a single sum, an
amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Monthly Base
Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12)
times his Monthly Auto Allowance; and




     (c) For the twenty-four months after his termination of employment, the Company shall
pay for the benefit coverage in effect on the date of his termination of employment.




The amounts in (a), (b) and (c) are the Employee’s severance payments (‘severance payments’)
hereunder.



 









 






In the event that (1) Employee’s employment is terminated for cause or (2) Employee
voluntarily resigns from employment with the Company, then the Company shall have no
obligation for severance payments under this provision. Absolutely no one except the Board
or an authorized committee of the Board may change this ‘at will’ relationship, and then
only in writing. Employee acknowledges that any reliance on any representations, oral or
otherwise, contrary to ‘at will’ employment is unreasonable and shall not form the basis for
any actions or forbearances on his or her part.”



     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/ Martin F. Ellis

	 	 	 	By:
	 	      /s/ Richard A Sayers, II	 	 
	 

Martin F. Ellis

	 	 	 	 	 	 

      Name: Richard A. Sayers, II
	 	 
	 

	 	 	 	 	 	      Its: EVP, Chief Human Resources	 	 
	 

	 	 	 	 	 	            and Compliance Officer	 	 






Dated: December 31, 2008