8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report: December 17, 2008
(Date of earliest event reported)

AGILYSYS, INC.

(Exact name of registrant as specified in its charter)

Ohio	000-5734	34-0907152
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

28925 Fountain Parkway, Solon, Ohio	44139
(Address of principal executive offices)	(ZIP Code)

Registrant’s telephone number, including area code: (440) 519-8700

N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) On October 22, 2008, the Company announced that Peter J. Coleman — Executive Vice President of the Company, and Robert J. Bailey — Executive Vice President of the Company, left the Company after their positions were eliminated as part of a strategic realignment of the Company. Each of Messrs. Bailey and Coleman entered into a Non-Competition Agreement with the Company, effective as of February 25, 2000, as subsequently amended in 2003, pursuant to which the Company would continue to pay monthly base salary, target incentive and benefit coverage for twenty-four (24) months for each of Messrs. Coleman and Bailey.

     Mr. Bailey’s Non-Competition Agreement, as well as a Change of Control Agreement with Mr. Bailey were each included as Exhibit 10(w) and 10(x), respectively, to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001, and a single amendment to both of Mr. Bailey’s agreements was incorporated by reference to Exhibit 10(ee) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2003. Mr. Coleman’s Change of Control Agreement, as well as a Non-Competition Agreement with Mr. Coleman were each included as Exhibit 10(y) and 10(z), respectively, to the Company’s Annual Report on Form 10-K for the year ended March 31, 2001, and a single amendment to both of Mr. Coleman’s agreements was incorporated by reference to Exhibit 10(ff) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2003.

     By amendment to Mr. Bailey’s Non-Competition Agreement and Change of Control Agreement, dated December 17, 2008 (the “Bailey Amendment”), the Company terminated Mr. Bailey’s Change of Control Agreement. The Company also amended the severance payment terms of Mr. Bailey’s Non-Competition Agreement to comply with Section 409A of the Internal Revenue Code of 1986 to enable Mr. Bailey to avoid certain negative tax consequences that might otherwise be triggered by our payment of severance benefits to him. The Company extended the duration of the payment of Mr. Baileys’ severance benefits (without increasing those benefits) from twenty-four months to thirty-eight months and eleven days to enable Mr. Bailey to reach age 55 during the severance period so that he will be eligible to take early retirement benefits under the Company’s Supplemental Executive Retirement Plan (“SERP”). The SERP is a nonqualified defined benefit plan that the Company implemented on April 1, 2000. In return for these changes, Mr. Bailey has agreed not to compete with us for thirty-eight months and eleven days from October 21, 2008.

     The Bailey Amendment is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

     By amendment to Mr. Coleman’s Non-Competition Agreement and Change of Control Agreement, dated December 17, 2008 (the “Coleman Amendment”), the Company terminated Mr. Coleman’s Change of Control Agreement. The Company also amended the severance payment terms of Mr. Coleman’s Non-Competition Agreement to comply with Section 409A of the Internal Revenue Code of 1986 to enable Mr. Coleman to avoid certain negative tax consequences that might otherwise be triggered by our payment of severance benefits to him. In return for these changes, Mr. Coleman has agreed not to compete with us for twenty-four months from October 21, 2008.

     The Coleman Amendment is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

     The description of the Bailey Amendment as set forth in this Item 5.02 is not complete and is qualified in its entirety by reference to the full text of the Bailey Amendment filed as Exhibit 10.1 to this Form 8-K.

     The description of the Coleman Amendment as set forth in this Item 5.02 is not complete and is qualified in its entirety by reference to the full text of the Coleman Amendment filed as Exhibit 10.2 to this Form 8-K.

Item 8.01. Other Events.

     The Annual Meeting of the Shareholders (the “Annual Meeting”) of Agilysys, Inc. (the “Company”) has been tentatively scheduled to occur in March 2009. As such, the date of the Annual Meeting will have changed by more than 30 days from the anniversary of the Company’s 2007 Annual Meeting. In accordance with Rule 14a-5(f) and Rule 14a-8(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company will consider shareholder proposals submitted pursuant to Rule 14a-8 for inclusion in the Company’s proxy materials for

the Annual Meeting to have been submitted in a timely fashion if such proposals are received by the Company no later than January 9, 2009. Such proposals should be delivered to the Company’s executive offices at 28925 Fountain Parkway, Solon, Ohio 44139 and directed to the attention of the Company’s Vice President and Corporate Counsel.

     In addition, in light of the foregoing and in accordance with Rule 14a-5(e)(2) and Rule 14a-5(f) under the Exchange Act, in order for shareholder proposals submitted outside of Rule 14a-8 in connection with the Annual Meeting to be considered “timely” for purposes of Rule 14(a)-4(c) under the Exchange Act, such proposals must be received by the Company no later than January 9, 2009. Such proposals should be delivered to the Company’s executive offices at 28925 Fountain Parkway, Solon, Ohio 44139 and directed to the attention of the Company’s Vice President and Corporate Counsel.

Item 9.01 Financial Statements and Exhibits.

(d)  Exhibits

10.1	Amendment to Change of Control Agreement and Non-Competition Agreement, between Agilysys, Inc. and Robert J. Bailey, effective December 17, 2008.
10.2	Amendment to Change of Control Agreement and Non-Competition Agreement, between Agilysys, Inc. and Peter J. Coleman, effective December 17, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AGILYSYS, INC.
By:	/s/ Kenneth J. Kossin, Jr.
	Kenneth J. Kossin, Jr.
	Senior Vice President and Chief Financial Officer

Date: December 23, 2008

EX-10.1

Exhibit 10.1

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 Robert J. Bailey (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/ 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, 2008

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, 2008