AMENDMENT TO CHANGE OF CONTROL AGREEMENT AND NON-COMPETITION AGREEMENT
Exhibit 10.1
December 17, 2008
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 Xxxxxx X. Xxxxxx (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 paragraphs
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.
Utilizing the transition relief afforded under Section 409A of the Code, including
under IRS Notice 2007-86, the Company and Employee agree to extend the length of
Employee’s Severance Payments payable January 1, 2009 through October 20, 2010 until
December 31, 2011 (but without increasing the amount of the aggregate Severance
Payments owed to Employee during that time). With respect to such extension and in
accordance with the Section 409A of the Code transition relief, this transition
election does not shift amounts owed under this Agreement (or any aggregated
arrangement) into or out of 2008. The amounts owed from January 1, 2009 through
December 31, 2011 will be paid in accordance with the normal payroll practices of
the Company and are reflected on Attachment A.”
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 B. 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 and the extension of the length of the Severance Payments
hereunder, 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/ Xxxxxx X. Xxxxxx
|
By: | /s/ Xxxxxxx X Xxxxxx, XX |
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Xxxxxx X. Xxxxxx
|
Name: | Xxxxxxx X. Xxxxxx, XX | ||||||
| Its: | EVP, Chief Human Resources and Compliance Officer | |||||||
Dated: December 17, 2008 |
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