Document:

EX-10.2

Exhibit 10.2

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 Peter J. Coleman (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.

 

 

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 paragraph
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.”

     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 A. 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-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, 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.”

     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, 2008freds8k122308ex101.htm

    Exhibit
10.1

      AMENDMENT
TO

       

      EMPLOYMENT
AGREEMENT

       

      OF

       

      MICHAEL J.
HAYES

       

      

       

      

       

      THIS
AMENDMENT, dated as of December 16, 2008 by and between FRED’S, INC., a
Tennessee corporation, with offices at 4300 New Getwell Road, Memphis, Tennessee
38118 (“Company”) and MICHAEL J. HAYES, currently residing at Riverbluff
Condominiums, 355-I Riverbluff Place, Memphis, Tennessee 38103
(“Executive”).

       

      WHEREAS,
the parties hereto entered into an Employment Agreement dated as of April 30,
2003 (the “Agreement”); and

       

      WHEREAS,
the Executive and Company desire to amend the Agreement in order to comply with
the provisions of Section 409A of the Internal Revenue Code (“Section
409A”).

       

      NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
conditions herein set forth, the parties hereto and each of them agree as
follows:

       

      1.           The
last sentence of Section 3 of the Agreement is hereby deleted and the following
substituted in lieu thereof:

       

      In
addition, Executive shall (i) be considered for any bonus awards on the same
basis as are other executives of Company, and (ii) be considered for and granted
qualified options and other consideration based upon shares of Company’s Common
Stock on the same basis as are other executives of Company; provided, however,
that Company shall establish the terms of such bonus awards, qualified options
or other consideration so as not to subject Executive to additional taxes under
Section 409A.

       

      2.           All
references in the Agreement to a termination of employment or a termination of
the Agreement shall hereafter instead refer to a “Separation from Service” (as
defined in new Section 8(a) added by this Amendment).

       

      3.           The
following new sentence is added at the end of Section 5(c) of the
Agreement:

       

      Any
compensation payable under Section 5(c)(i) which does not constitute a deferral
of compensation under Treas. Reg. §1.409A-1(b) shall be paid at the same time
and in the same installments as would apply if no Separation from Service had
occurred.  Any compensation payable under Section 5(c)(i) and which is
a deferral of compensation under Treas. Reg. §1.409A-1(b) shall be paid in
accordance with any applicable plan subject to Section
5(f).  Compensation paid pursuant to Section 5(c)(ii) or (iii) shall
be subject to Section 5(g).

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

       

      4.           The
following new sentence is hereby added at the end of Section 5(d) of the
Agreement:

       

      Subject
to Section 5(f), compensation payable under this Section 5(d) shall be paid at
the same time and in the same installments as would apply if no Separation from
Service had occurred, and the foregoing monthly allowance of $6,000 shall be
paid on the first of each month.

       

      5.           The
following new subsections are added at the end of Section 5 of the
Agreement:

       

      (f)           Notwithstanding
any provision of this Agreement to the contrary, if Executive is a “Specified
Employee” (as hereinafter defined) as of the date Executive incurs a Separation
from Service, payment of any amount shall, to the extent subject to Treas. Reg.
§1.409A-3(i)(2), be made no earlier than the first day of the seventh month
following the month in which such Separation from Service occurs.  On
such date, Executive shall receive all payments that would have been made on or
before such date but for the provisions of this Section 5(f), and the terms of
this Section 5(f) shall not affect the timing or amount of any payments to be
made after such date under the other provisions of this Agreement.

       

      (g)           Compensation
subject to this Section 5(g) is intended to meet the requirements for a fixed
schedule of payment under Treas. Reg. §1.409A-3(i)(1)(iv) and shall be construed
in accordance with such regulation.  Accordingly, neither party shall
have any discretion to change the definition of expenses eligible for
reimbursement or being provided in kind or to change the period specifically
described herein for the reimbursement of expenses or the provision of in-kind
benefits; the amount of expenses eligible for reimbursement or in-kind benefits
provided during any calendar year may not affect the expenses eligible for
reimbursement or in-kind benefits to be provided in any other calendar year; the
reimbursement of any eligible expense shall be made on or before the last day of
the calendar year following the calendar year in which any expense was incurred;
and the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for any other benefit.  In addition, such
compensation shall be subject to Section 5(f) to the extent
applicable.

       

      6.           The
following new sections 8, 9 and 10 are hereby added to the Agreement, and the
original Section 8 and all subsequent sections of the Agreement are renumbered
accordingly:

       

      8.           The
following definitions shall apply for purposes of this Agreement:

       

      (a)           “Separation
from Service” shall be determined in accordance with Section 409A, and the
following rules shall apply:

       

      (i)           Except
if Executive is on a bona fide leave of absence as provided below, Executive
shall be deemed to have incurred a Separation from Service if Company and
Executive reasonably anticipate that the level of services to be performed by
Executive after a date certain would be reduced to twenty percent (20%) or less
of the average services rendered by Executive during the immediately preceding
thirty-six (36) month period disregarding periods during which Executive was on
a bona fide leave of absence.

       

       

       

      
        
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      (ii)           If
Executive is absent from work due to military leave, sick leave or other bona
fide leave of absence, Executive shall incur a Separation from Service on the
first day immediately following the later of (A) the six month anniversary of
the commencement of the leave or (B) the expiration of Executive’s right, if
any, to re-employment or to return to work under statute or
contract.

       

      (iii)           For
purposes of determining whether a Separation from Service has occurred, Company
and its affiliates shall be treated as a single employer.  For this
purpose, an affiliate means a corporation, trade or business that, together with
Company, is treated as a single employer under Section 414(b) or (c) of the
Code, except for the foregoing purposes, common ownership of at least fifty
percent (50%) shall be determinative.

       

      (iv)           The
Board of Directors of Company specifically reserves the right to determine
whether a sale or a disposition of substantial assets to an unrelated party
constitutes a Separation from Service with respect to Executive if Executive
provides service to the seller immediately prior to the transaction and provides
services to the buyer after the transaction.  Such determination shall
be made in accordance with the requirements of Section 409A.

       

      (b)           “Specified
Employee” means a person who, as of the date of his Separation from Service, is
a “key employee” of Company or any affiliate, any stock of which is actively
traded on an established securities market or otherwise.  A person is
a key employee if he meets the requirements of Section 416(i)(1)(A)(i), (ii) or
(iii) of the Code, (applied in accordance with applicable regulations thereunder
and without regard to Section 416(i)(5)) at any time during the 12-month period
ending on the Specified Employee Identification Date. Such person shall be
treated as a key employee for the entire 12-month period beginning on the
Specified Employee Effective Date.

       

      For purposes of determining whether a
person is a Specified Employee, the compensation of such person shall be
determined in accordance with the definition of compensation provided under
Treas. Reg. §1.415(c)-2(d)(3) (wages within the meaning of Section 3401(a) of
the Code for purposes of income tax withholding at the source, plus amounts
excludible from gross income under Section 125(a), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit the
remuneration included in wages based on the nature or location of the employment
or the services performed).

       

      Notwithstanding anything in this
paragraph to the contrary, (i) if a different definition of compensation has
been designated by Company with respect to another nonqualified deferred
compensation plan in which a key employee participates, the definition of
compensation shall be the definition provided in Treas. Reg. §1.409A-1(i)(2),
and (ii) Company may through action that is legally binding with respect to all
nonqualified deferred compensation plans maintained by Company, elect to use a
different definition of compensation.

       

       

       

      
        
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      In the event of corporate transactions
described in Treas. Reg. §1.409A-1(i)(6), the identification of Specified
Employees shall be determined in accordance with the default rules described
therein, unless Company elects to utilize the available alternative methodology
through designations made within the timeframes specified therein.

       

      (c)           “Specified
Employee Identification Date” means September 30, unless Company has elected a
different date through action that is legally binding with respect to all
nonqualified deferred compensation plans maintained by Company.

       

      (d)           “Specified
Employee Effective Date” means the first day of the fourth month following the
Specified Employee Identification Date, or such earlier date as is selected by
the Board of Directors.

       

      9.           Notwithstanding
any provision of this Agreement to the contrary, neither Company nor its Board
of Directors may accelerate the time or form of payment of any benefit due to
Executive hereunder unless such acceleration is permitted under Treas. Reg.
§1.409A-3(j)(4) or other applicable authority under Section
409A.  Neither Company nor its Board of Directors may delay the time
for payment of any benefit due to Executive hereunder except to the extent
permitted under Treas. Reg. §1.409A-2(b)(7) or other applicable authority under
Section 409A.

       

      10.           The
foregoing provisions of this Agreement are intended to conform with the
requirements of Section 409A of the Code, including the regulations thereunder,
and the provisions of this Agreement shall be construed in accordance with that
intention.  If any provision of this Agreement shall be inconsistent
or in conflict with the applicable requirements of Section 409A, then such
requirements shall be deemed to override and supersede the inconsistent or
conflicting provision.  Any provision required for compliance with
Section 409A that is omitted from this Agreement shall be incorporated herein by
reference and shall apply retroactively, if necessary, and be deemed part of
this Agreement to the same extent as though expressly set forth
herein.  Company will bear no responsibility for any determination by
any other person or persons that the terms, arrangements or administration of
this Agreement has given rise to any tax liability under Section 409A of the
Code.

       

      

       

       

       

       

      
        
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      7.           The
following new sentence is hereby added at the end of Schedule A of the
Agreement:

       

      Paragraphs
2-4 of this Schedule A shall be subject to Section 5(g).

       

      8.           Except
as expressly amended hereby, the Agreement shall remain in full force and
effect.

       

      

       

      IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

       

       

      
      

       

      
        	WITNESS: 	FRED'S,
      INC. 
	 	 
	 	 
	/s/
      Anita L. Parvin 	By: /s/ Charles S.
    Vail 
	 	Title:
      Secretary 
	 	 
	 	 
	WITNESS: 	 
	 	 
	 	 
	/s/
      Anita L. Parvin 	/s/
      Michael J. Hayes 
	 	MICHAEL J. HAYES,
      Executive 

      

       

       

       

      
 

       

       

       

       

       

       

       

       

       

       

       

       

       

      5

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