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 31, 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	(Commission File Number)	(IRS Employer Identification No.)
of incorporation)

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))

TABLE OF CONTENTS

EX-10.1

EX-10.2

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

(e) On December 31, 2008, Agilysys, Inc. (the “Company”) entered into an Amendment to Change of Control Agreement and Non-Competition Agreement with Martin F. Ells, President and CEO (the “Ellis Amendment”), and an Amendment to Change of Control Agreement and Non-Competition Agreement with Richard A. Sayers, II, Executive Vice President and Chief Human Resources Officer (the “Sayers Amendment”).

     Mr. Ellis’ Change of Control Agreement was originally executed on June 30, 2003, and amended in April 2005 and October 2008, and the Non-Competition Agreement was originally executed on May 31, 2005, and amended in May 2007 and October 2008. Each of Mr. Sayers’ Non-Competition Agreement and Change of Control Agreement with the Company was effective as of February 25, 2000, and was subsequently amended in 2003, April 2007 and October 2008. Mr. Ellis’ Non-Competition Agreement was included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June 6, 2005. Mr. Ellis’ Change of Control Agreement was included as Exhibit 10(hh) to the Company’s Annual Report on Form 10-K for the year ended March 31, 2004, with a single amendment to Mr. Ellis’ Change of Control Agreement included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 6, 2005. The Non-Competition Agreement and Change of Control Agreement with Mr. Sayers were each included as Exhibit 10(ee) and 10(dd), respectively, to the Company’s Annual Report on Form 10-K for the year ended March 31, 2006, and a single amendment to both of Mr. Sayers’ 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, 2006.

     The Ellis Amendment and the Sayers Amendment modified the severance payment terms of the respective Non-Competition Agreements and the Change of Control Agreements to comply with Section 409A of the Internal Revenue Code of 1986 to enable Messrs. Ellis and Sayers to avoid certain negative tax consequences that might otherwise be triggered by our payment of either benefit to them. Under both the Ellis Amendment and the Sayers Amendment, the Company modified the payment structure of the severance payments and the change of control payments to be the same. In the case either benefit payment is triggered, subject to a six-month delay if necessary to comply with Section 409A, the Company will make payments on regularly scheduled intervals for one year after termination and, within thirty days after the one year anniversary of the termination date, the Company will pay the remainder of the total amount owed in a lump sum.

     The Ellis Amendment is attached hereto as Exhibit 10.1 and is incorporated by reference herein. The description of the Ellis Amendment is not complete and is qualified in its entirety by reference to the full text of the Ellis Amendment filed as Exhibit 10.1 to this Form 8-K.

     The Sayers Amendment is attached hereto as Exhibit 10.2 and is incorporated by reference herein. The description of the Sayers Amendment is not complete and is qualified in its entirety by reference to the full text of the Sayers Amendment filed as Exhibit 10.2 to this Form 8-K.

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 Martin F. Ellis, effective December 31, 2008.
10.2	Amendment to Change of Control Agreement and Non-Competition Agreement, between Agilysys, Inc. and Richard A. Sayers, II, effective December 31, 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: January 7, 2009

Exhibit Index

Exhibit Number	Description
10.1	Amendment to Change of Control Agreement and Non-Competition Agreement, between Agilysys, Inc. and Martin F. Ellis, effective December 31, 2008.
10.2	Amendment to Change of Control Agreement and Non-Competition Agreement, between Agilysys, Inc. and Richard A. Sayers, II, effective December 31, 2008.

EX-10.1

Exhibit 10.1

December 31, 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 Martin F. Ellis (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 June 30, 2003, 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 April 28, 2005, as subsequently amended (the “Non-Competition Agreement”); 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; 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 — OMNIBUS AMENDMENT TO AGREEMENTS

     1. For purposes of this Part I, references to the “Agreements” shall refer to the Change of Control Agreement and the Non-Competition Agreement, collectively. Capitalized terms not otherwise defined in this Part I shall have the meanings ascribed to them in the Change of Control Agreement or Non-Competition Agreement, as applicable.

     2. The Agreements are 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 (the “Code”).

     3. For purposes of Section 409A of the Code, the “severance payments” (as defined in Section 3 of the Non-Competition Agreement) and the payments under Section 3.1 of the Change of Control Agreement (collectively, such payments under the Agreements will be referred to as the “Severance Payments”), are intended to constitute the right to a series of separate payments. If possible, any Severance Payments made during the first six months following Employee’s termination of employment without cause from the Company under Section 3 of the Non-Competition Agreement or following Employee’s termination of employment without Cause or for Good Reason under Section 3.1 of the

Change of Control Agreement 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, or the “short-term deferral” exception under Treas. Reg. Section 1.409A-1(b)(4), if applicable.

     4. It is the intention of the Company and Employee that the provision of the auto allowance and benefit coverage as severance payments in Section 3 of the Non-Competition Agreement or the health insurance and retirement benefits in Section 3.1(d) in the Change of Control Agreement fit into exemptions from Section 409A of the Code or otherwise comply with Section 409A of the Code, including, but not limited to, the following:

     Reimbursements paid or in-kind benefits provided for the 24 months following Employee’s termination will be paid in accordance with Treas. Reg. Section 1.409A-1(b)(9)(v); provided, however, that from the end of the period during which Employee would be entitled to medical expense reimbursements under Treas. Reg. Section 1.409A-1(b)(9)(v)(B) through the end of the 24-month severance payment period, any reimbursements provided for medical expenses under Section 3 of the Non-Competition Agreement or Section 3.1(d) under the Change of Control Agreement 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 medical expenses 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. If at the time of Employee’s termination of employment, he is a “specified employee” of the Company as defined in and pursuant to Section 409A of the Code, then any of the Severance Payments not fitting into an exemption described in Sections 3 or 4 above are required to be delayed for a period of six months following his termination of employment (the “six-month period”). As such, the payment of any cash amounts due under the Agreement during the first six months following Employee’s termination date will be accumulated, held and distributed to Employee on the first payroll payment date of the Company following the end of such six-month period (or, if earlier, no later than 30 days following the date of Employee’s death). During the six-month period, any amounts which Employee would normally submit for reimbursement by the Company may not be reimbursed. Any amounts for such reimbursements that accumulate during the six-month period will be paid in a lump sum to Employee on the first payroll payment date of the Company following the end of such six-month period (or, if earlier, no later than 30 days following the date of Employee’s death). After the six-month period, the Severance Payments due will be paid in accordance with the terms specified in the Agreements as amended in this Amendment.

     6. Notwithstanding anything herein to the contrary, any reimbursements subject to Section 409A of the Code provided under the Agreements, shall be made no later than the end of Employee’s taxable year following the Employee’s taxable year in which such expense was incurred; in addition, such amounts eligible for reimbursement, or in-kind benefits to be provided, during any one taxable year under the Agreements may not affect the expenses eligible for reimbursement in any other taxable year under the Agreements.

     7. The parties intend that the Agreements 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. 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

Amendment or the Agreement (other than as explicitly stated in the Agreement) and shall have no responsibility or obligation for any tax gross-up relating to Section 409A of the Code.

     8. Utilizing the transition relief afforded under Section 409A of the Code, including under IRS Notice 2007-86, the Company and Employee agree that the Severance Payments will be paid as set forth in this Amendment. In accordance with the Section 409A of the Code transition relief, this transition election does not shift amounts owed under the Agreements (or any aggregated arrangement) into or out of 2008.

PART II — CHANGE OF CONTROL AMENDMENT

     1. Part II 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 II shall have the meanings ascribed to them in the Change of Control Agreement.

     2. The Change of Control Agreement is hereby amended by the deletion of subsections (a), (b) and (c) of Section 3.1 and the substitution in lieu thereof of the following:

     “(a) for the one year period from the date of such termination of employment, the Company shall pay to the Employee:

     (i) the greater of the Employee’s (x) highest monthly base salary paid or payable by the Company during the twelve (12) month period immediately preceding the Effective Date, or (y) the highest monthly salary paid or payable by the Company at any time from the ninety (90) day period preceding the Effective Date through the date of termination (the “Highest Base Salary”) in accordance with its then current payroll practice for paying executive officers;

     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee at the time of termination (“Target Annual Bonus”) payable in equal monthly amounts; and

     (iii) the monthly amount paid or payable to the Employee by the Company as an auto allowance as in effect immediately preceding the Effective Date (“Monthly Auto Allowance”); and

     (b) Within thirty (30) days following the date which is one (1) year from the date of such termination of employment, the Company shall pay to the Employee, in a single sum, an amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Highest Base Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12) times his Monthly Auto Allowance; and

     (c) [Reserved]

     3. With respect to any payments that the Company promises to pay under Section 3.1(f) relating to an excise tax gross-up (that also constitute a “tax gross up payment” as defined under Section 409A of the Code), such payment shall be made by the Company to Employee no later than the end of

Employee’s taxable year next following Employee’s taxable year in which Employee remits the related taxes.

PART III — NON-COMPETITION AGREEMENT AMENDMENT

     1. Part III of this Amendment shall amend the Non-Competition Agreement as set forth herein. Capitalized terms not otherwise defined in this Part III shall have the meaning ascribed to them in the Non-Competition Agreement.

     2. Section 3 of the Non-Competition Agreement shall be deleted, and the following shall be inserted therefor:

     “3. Duration. Employee may terminate this Agreement at any time and such termination shall be effective on the date of his or her notice, unless otherwise mutually agreed. Similarly, the Company has the right to terminate this Agreement and Employee’s employment at any time, with or without advance notice or cause. Should the Company terminate the Employee’s employment without cause:

     (a) for the one year period from the date of such termination of employment, the Company shall pay to the Employee:

     (i) the Employee’s monthly base salary paid or payable by the Company in effect on the date of his termination of employment (“Monthly Base Salary”) in accordance with its then current payroll practice for paying executive officers;

     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee at the time of his termination of employment (“Target Annual Bonus”) payable in equal monthly amounts; and

     (iii) the monthly amount paid or payable to the Employee by the Company as an auto allowance as in effect on the date of his termination of employment (“Monthly Auto Allowance”); and

     (b) Within thirty (30) days following the date which is one (1) year from the date of such termination of employment, the Company shall pay the Employee, in a single sum, an amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Monthly Base Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12) times his Monthly Auto Allowance; and

     (c) For the twenty-four months after his termination of employment, the Company shall pay for the benefit coverage in effect on the date of his termination of employment.

The amounts in (a), (b) and (c) are the Employee’s severance payments (‘severance payments’) hereunder.

In the event that (1) Employee’s employment is terminated for cause or (2) Employee voluntarily resigns from employment with the Company, then the Company shall have no obligation for severance payments under this provision. Absolutely no one except the Board or an authorized committee of the Board may change this ‘at will’ relationship, and then only in writing. Employee acknowledges that any reliance on any representations, oral or otherwise, contrary to ‘at will’ employment is unreasonable and shall not form the basis for any actions or forbearances on his or her part.”

     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/ Martin F. Ellis	By:	/s/ Richard A Sayers, II
Martin F. Ellis		Name: Richard A. Sayers, II
		Its: EVP, Chief Human Resources
		and Compliance Officer

Dated: December 31, 2008

EX-10.2

Exhibit 10.2

December 31, 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 Richard A. Sayers II (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 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; 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 — OMNIBUS AMENDMENT TO AGREEMENTS

     1. For purposes of this Part I, references to the “Agreements” shall refer to the Change of Control Agreement and the Non-Competition Agreement, collectively. Capitalized terms not otherwise defined in this Part I shall have the meanings ascribed to them in the Change of Control Agreement or Non-Competition Agreement, as applicable.

     2. The Agreements are 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 (the “Code”).

     3. For purposes of Section 409A of the Code, the “severance payments” (as defined in Section 3 of the Non-Competition Agreement) and the payments under Section 3.1 of the Change of Control Agreement (collectively, such payments under the Agreements will be referred to as the “Severance Payments”), are intended to constitute the right to a series of separate payments. If possible, any Severance Payments made during the first six months following Employee’s termination of employment

without cause from the Company under Section 3 of the Non-Competition Agreement or following Employee’s termination of employment without Cause or for Good Reason under Section 3.1 of the Change of Control Agreement 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, or the “short-term deferral” exception under Treas. Reg. Section 1.409A-1(b)(4), if applicable.

     4. It is the intention of the Company and Employee that the provision of the auto allowance and benefit coverage as severance payments in Section 3 of the Non-Competition Agreement or the health insurance and retirement benefits in Section 3.1(d) in the Change of Control Agreement fit into exemptions from Section 409A of the Code or otherwise comply with Section 409A of the Code, including, but not limited to, the following:

     Reimbursements paid or in-kind benefits provided for the 24 months following Employee’s termination will be paid in accordance with Treas. Reg. Section 1.409A-1(b)(9)(v); provided, however, that from the end of the period during which Employee would be entitled to medical expense reimbursements under Treas. Reg. Section 1.409A-1(b)(9)(v)(B) through the end of the 24-month severance payment period, any reimbursements provided for medical expenses under Section 3 of the Non-Competition Agreement or Section 3.1(e) under the Change of Control Agreement 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 medical expenses 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. If at the time of Employee’s termination of employment, he is a “specified employee” of the Company as defined in and pursuant to Section 409A of the Code, then any of the Severance Payments not fitting into an exemption described in Sections 3 or 4 above are required to be delayed for a period of six months following his termination of employment (the “six-month period”). As such, the payment of any cash amounts due under the Agreement during the first six months following Employee’s termination date will be accumulated, held and distributed to Employee on the first payroll payment date of the Company following the end of such six-month period (or, if earlier, no later than 30 days following the date of Employee’s death). During the six-month period, any amounts which Employee would normally submit for reimbursement by the Company may not be reimbursed. Any amounts for such reimbursements that accumulate during the six-month period will be paid in a lump sum to Employee on the first payroll payment date of the Company following the end of such six-month period (or, if earlier, no later than 30 days following the date of Employee’s death). After the six-month period, the Severance Payments due will be paid in accordance with the terms specified in the Agreements as amended in this Amendment.

     6. Notwithstanding anything herein to the contrary, any reimbursements subject to Section 409A of the Code provided under the Agreements, shall be made no later than the end of Employee’s taxable year following the Employee’s taxable year in which such expense was incurred; in addition, such amounts eligible for reimbursement, or in-kind benefits to be provided, during any one taxable year under the Agreements may not affect the expenses eligible for reimbursement in any other taxable year under the Agreements.

     7. The parties intend that the Agreements 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. 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 Amendment or the Agreement (other than as explicitly stated in the Agreement) and shall have no responsibility or obligation for any tax gross-up relating to Section 409A of the Code.

     8. Utilizing the transition relief afforded under Section 409A of the Code, including under IRS Notice 2007-86, the Company and Employee agree that the Severance Payments will be paid as set forth in this Amendment. In accordance with the Section 409A of the Code transition relief, this transition election does not shift amounts owed under the Agreements (or any aggregated arrangement) into or out of 2008.

PART II — CHANGE OF CONTROL AMENDMENT

     1. Part II 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 II shall have the meanings ascribed to them in the Change of Control Agreement.

     2. The Change of Control Agreement is hereby amended by the deletion of subsections (a), (b) and (c) of Section 3.1 and the substitution in lieu thereof of the following:

     “(a) for the one year period from the date of such termination of employment, the Company shall pay to the Employee:

     (i) the greater of the Employee’s (x) highest monthly base salary paid or payable by the Company during the twelve (12) month period immediately preceding the Effective Date, or (y) the highest monthly salary paid or payable by the Company at any time from the ninety (90) day period preceding the Effective Date through the date of termination (the “Highest Base Salary”) in accordance with its then current payroll practice for paying executive officers;

     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee at the time of termination (“Target Annual Bonus”) payable in equal monthly amounts; and

     (iii) the monthly amount paid or payable to the Employee by the Company as an auto allowance as in effect immediately preceding the Effective Date (“Monthly Auto Allowance”); and

     (b) Within thirty (30) days following the date which is one (1) year from the date of such termination of employment, the Company shall pay to the Employee, in a single sum, an amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Highest Base Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12) times his Monthly Auto Allowance; and

     (c) [Reserved]

     3. With respect to any payments that the Company promises to pay under Section 3.1(d) relating to an excise tax gross-up (that also constitute a “tax gross up payment” as defined under Section 409A of the Code), such payment shall be made by the Company to Employee no later than the end of Employee’s taxable year next following Employee’s taxable year in which Employee remits the related taxes.

PART III — NON-COMPETITION AGREEMENT AMENDMENT

     1. Part III of this Amendment shall amend the Non-Competition Agreement as set forth herein. Capitalized terms not otherwise defined in this Part III shall have the meaning ascribed to them in the Non-Competition Agreement.

     2. Section 3 of the Non-Competition Agreement shall be deleted, and the following shall be inserted therefor:

     “3. Duration. Employee may terminate this Agreement at any time and such termination shall be effective on the date of his or her notice, unless otherwise mutually agreed. Similarly, the Company has the right to terminate this Agreement and Employee’s employment at any time, with or without advance notice or cause. Should the Company terminate the Employee’s employment without cause:

     (a) for the one year period from the date of such termination of employment, the Company shall pay to the Employee:

     (i) the Employee’s monthly base salary paid or payable by the Company in effect on the date of his termination of employment (“Monthly Base Salary”) in accordance with its then current payroll practice for paying executive officers;

     (ii) the Annual Incentive Plan (“AIP”) target bonus applicable to the Employee at the time of his termination of employment (“Target Annual Bonus”) payable in equal monthly amounts; and

     (iii) the monthly amount paid or payable to the Employee by the Company as an auto allowance as in effect on the date of his termination of employment (“Monthly Auto Allowance”); and

     (b) Within thirty (30) days following the date which is one (1) year from the date of such termination of employment, the Company shall pay the Employee, in a single sum, an amount equal to the sum of (i) a lump sum amount equal to twelve (12) times his Monthly Base Salary plus (ii) his Target Annual Bonus, plus (iii) a lump sum amount equal to twelve (12) times his Monthly Auto Allowance; and

     (c) For the twenty-four months after his termination of employment, the Company shall pay for the benefit coverage in effect on the date of his termination of employment.

The amounts in (a), (b) and (c) are the Employee’s severance payments (‘severance payments’) hereunder.

In the event that (1) Employee’s employment is terminated for cause or (2) Employee voluntarily resigns from employment with the Company, then the Company shall have no obligation for severance payments under this provision. Absolutely no one except the President and Chief Executive Officer of the Company may change this ‘at will’ relationship, and then only in writing. Employee acknowledges that any reliance on any representations, oral or otherwise, contrary to ‘at will’ employment is unreasonable and shall not form the basis for any actions or forbearances on his or her part.”

     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/ Richard A. Sayers, II	By:	/s/ Martin F. Ellis
Richard A. Sayers, II		Name: Martin F. Ellis
		Its: President and CEO

Dated: December 31, 2008