SETTLEMENT AGREEMENT
Exhibit 99.2
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. Xxxxxx Xxxxx, have resigned as
members of the Board and that the Board has appointed Xxxxx Xxxxxxxx and Xxxx
Xxxxx 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 (Xxxxx Xxxxxxxx and Xxxx
Xxxxx 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 Xxxxx 00, 0000, (xx) 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 Xxxxxxxx (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 Xxxxxxxx (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) and agrees to provide one of the resignation letters to the Company
when required by this Section 1(i).
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(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.
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2.
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Standstill
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(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.
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(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.
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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:
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If to the
Company:
Agilysys,
Inc.
00000
Xxxxxxxx Xxxxxxx
Xxxxx,
Xxxx 00000
Attention: Xxxxxx
X. Xxxxx
Facsimile: 000-000-0000
With a
copy to:
Xxxxxx, Xxxxxx & Xxxxxxxx
XXX
0000 XxXxxxxx Xxxxxxxxxx
Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Attention: Xxxxxx X. Xxxx
III
Facsimile: 000-000-0000
If to the
Ramius Group or any member of the Ramius Group:
RCG
Starboard Advisors, LLC
c/o
Ramius LLC
000
Xxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx Xxxxxxxx and Xxxx Xxxxxxx
Facsimile:
000-000-0000
With a
copy to:
Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park
Avenue Tower
00 Xxxx
00xx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxxx, Esq.
Facsimile:
(000) 000-0000
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.
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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.
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AGILYSYS,
INC.
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By:
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Name:
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Title:
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THE RAMIUS GROUP:
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RAMIUS
VALUE AND OPPORTUNITY MASTER FUND LTD
By:
RCG Starboard Advisors, LLC,
its
investment manager
PARCHE,
LLC
By:
RCG Starboard Advisors, LLC,
its managing member
RCG
PB, LTD
By:
Ramius Advisors, LLC,
its investment manager
RAMIUS
ENTERPRISE MASTER FUND LTD
By:
Ramius Advisors, LLC,
its investment manager
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RCG
STARBOARD ADVISORS, LLC
By:
Ramius LLC,
its sole member
RAMIUS
ADVISORS, LLC
By:
Ramius LLC,
its sole member
By:
C4S & Co., L.L.C.,
as managing member
C4S
& CO., L.L.C.
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By:
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Name:
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Xxxxxxx
X. Xxxxxxx
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Title:
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Authorized
Signatory
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XXXXXXX
X. XXXXXXX
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Individually
and as attorney-in-fact for Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxxx X.
Xxxxxxx
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EXHIBIT
A
The Ramius
Group
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Parche,
LLC
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323,761
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Ramius
Value and Opportunity Master Fund Ltd
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2,342,130
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Ramius
Enterprise Master Fund Ltd
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323,761
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RCG
PB, Ltd.
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277,103
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Ramius
Advisors, LLC
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600,864
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RGC
Starboard Advisors, LLC
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2,665,891
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2,942,994
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C4S
& CO., LLC
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2,942,994
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Xxxxx
X. Xxxxx
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2,942,994
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Xxxxxx
X. Xxxxx
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2,942,994
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Xxxxxxx
X. Xxxxxxx
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2,942,994
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Xxxxxx
X. Xxxxxxx
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2,942,994
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EXHIBIT
B
[PRESS
RELEASE]
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