EX-10.1






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;



 









 





          (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:




 









 








               (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.



 









 





     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




 









 








     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.



 









 





     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,
	 	 






 









 






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	 






 









 






EXHIBIT B









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.




 









 







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)