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 Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 28, 2008

Agilysys, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Ohio	000-5734	34-0907152
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2255 Glades Road, Suite 425W, Boca Raton, Florida		33431
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (561) 999-8700

Not Applicable
______________________________________________
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:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  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 January 28, 2008, Agilysys, Inc. (the "Company") entered into an Amendment and Extension Agreement (the "Extension Agreement") with Arthur Rhein, Chairman of the Board of Directors, President and Chief Executive Officer of the Company. The Extension Agreement amends and extends the Amended and Restated Employment Agreement between the Company and Mr. Rhein, effective as of December 23, 2005 (the "Employment Agreement"), which was included as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 23, 2005. The Extension Agreement sets forth the terms and conditions pursuant to which the Company will extend Mr. Rhein's employment as Chairman of the Board, President and Chief Executive Officer. The Extension Agreement is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Among other items, the following is a description of the material terms and conditions of the Extension Agreement:

- Mr. Rhein's employme nt term shall be extended from April 1, 2009 to March 31, 2010 (the "Extension Term") and may be thereafter extended upon mutual agreement of the parties.

- During the Extension Term, Mr. Rhein shall be compensated at the same base compensation as is applicable for the final year of his Employment Agreement, shall receive all benefits and perquisites and participate in all plans as provided in his Employment Agreement and shall participate in the Company's Annual Incentive Plan.

- Mr. Rhein shall be granted 70,000 restricted shares of the Company's common shares on April 1, 2009, which shall vest on March 31, 2010 based solely on the performance vesting terms applicable to "EVP LTIP Awards" as authorized and approved by the Compensation Committee of the Board of Directors on June 29, 2007. Such restricted shares shall be subject to forfeiture.

- The Company's Board of Directors may elect to terminate Mr. Rhein's employment at any time during the Extension Term, subject to continuati on of his base and annual incentive compensation, and participation in all benefits, perquisites and plans as provided for in his Employment Agreement for the balance of the Extension Term, and the restricted shares granted under the Extension Agreement shall vest subject to satisfaction of any applicable performance conditions.

- If Mr. Rhein no longer holds the title of Chief Executive Officer of the Company during the Extension Term, he will not be entitled to the change-of-control benefits provided for in the Employment Agreement.

The Company's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 23, 2005 includes a description of the Employment Agreement.

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

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

10.1 Amendment and Extension Agreement between Agilysys, Inc. and Arthur Rhein, effective January 28, 2008.

99.1 Press Release, dated January 30, 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.
January 30, 2008	By:	/s/ Rita A. Thomas
		Name: Rita A. Thomas
		Title: Vice President, Corporate Counsel and Assistant Secretary

Exhibit Index

Exhibit No.	Description
10.1	Amendment and Extension Agreement between Agilysys, Inc. and Arthur Rhein, effective January 28, 2008.
99.1	Press Release, dated January 30, 2008.

EX-10.1

Exhibit 10.1
January 28, 2008

AMENDMENT AND EXTENSION AGREEMENT

This Amendment and Extension Agreement (the “Amendment”) to the Amended and Restated Employment Agreement (the “Employment Agreement”) between Agilysys, Inc. (the “Company”) and Arthur Rhein (“Rhein”) is executed and effective as of January 28, 2008 (the “Effective Date”), by and between the Company and Rhein.

WHEREAS, the Employment Agreement provides for an Employment Term which ends on March 31, 2009;

WHEREAS, the Company and Rhein desire to extend and amend the Employment Agreement as provided for below to allow for the continued employment of Rhein beyond the term provided for in the Employment Agreement to enable the Company to implement its strategic plan and successfully recruit and hire a replacement Chief Executive Officer.

NOW THEREFORE, in consideration of the foregoing premises and the agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Except as otherwise stated in this Amendment, all initially capitalized terms used in this Amendment will have the respective defined meanings stated in the Employment Agreement.

2. The Employment Term is extended for an additional year, from April 1, 2009 through March 31, 2010 (the “Extension Term”). It may be thereafter extended if the parties mutually agree to do so.

3. During the Extension Term the Company may hire an executive to assume any or all of the duties of Chief Executive Officer, President, and Chairman of the Board, may elect such executive to any or all of such titles, may disclose and effect such filings as reasonable with respect same and may relieve Rhein of such assumed responsibilities, obligations and titles, all without default under the Employment Agreement, severance, change-in-control, or other cost to the Company under the Employment Agreement, or payment or incremental benefit to Rhein.

4. During the Extension Term Rhein will report to the Board of the Company and the Board of the Company may elect to retain Rhein to provide such service and perform such duties and responsibilities as it may determine; provided, that none of such duties and responsibilities will be inconsistent with the type customarily performed by executive officers generally.

5. Alternatively, at any time during the Extension Term, the Board may elect to terminate Rhein’s employment, subject to continuation of compensation, benefits, perquisites and plan participation as provided in Paragraph 7 below.

6. On April 1, 2009, Rhein shall be granted 70,000 restricted shares of the Company’s Common Shares, which shall vest on March 31, 2010 based solely on the performance vesting terms applicable to “EVP LTIP Awards” as authorized and approved by the Compensation Committee of the Company’s Board in its special telephonic meeting of June 29, 2007; however, if Rhein retires, terminates without Good Reason or is terminated for Cause, Rhein will forfeit these restricted shares.

7. During the Extension Term, Rhein shall be compensated at the same base compensation rate as is applicable for the final year of the Employment Term, shall receive all benefits and perquisites and participate in all plans as provided for in the Employment Agreement, and shall participate in the Company’s Annual Incentive Plan, subject to applicable performance targets, thresholds and similar terms. In the event the Board elects to terminate Rhein’s employment during the Extension Term pursuant to Paragraph 5 above, he shall continue to receive his base and annual incentive compensation and continue in all plan participation, benefits and perquisites provided for in the Employment Agreement for the balance of the Extension Term and shall vest in the shares granted pursuant to Paragraph 6 above subject to satisfaction of the applicable performance conditions.

8. If, during the Extension Term, Rhein no longer holds the title of Chief Executive Officer of the Company he will not be entitled thereafter to the change-in-control benefits provided for in the Employment Agreement.

9. Rhein’s address for purposes of notices is hereby changed to:

Arthur Rhein

101 Plaza Real South, #918

Boca Raton, FL 33432

10. All of the terms and provisions of this Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.

11. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument.

12. Other than as provided above, the terms of the Employment Agreement shall continue during the Employment Term and the Extension Term, including with respect to change-in-control, retirement, death, good reason, cause and disability provisions; provided, that all such terms shall apply and be interpreted consistently with the foregoing and any inconsistencies or conflicts shall be resolved in favor of the terms and intent of this Amendment.

13. Except as amended, modified and supplemented hereby, the provisions of the Employment Agreement are and shall remain in full force and effect.

INTENDING TO BE LEGALLY BOUND, the parties have executed this Amendment and Extension Agreement as of the date first written above.

Agilysys, Inc.

By: /s/ Howard V. Knicely
Name: Howard V. Knicely
Its: Compensation Committee Chair

/s/ Arthur Rhein
Arthur Rhein

Exhibit 99.1

FOR IMMEDIATE RELEASE

Agilysys Extends Employment Agreement with Chairman,
President and CEO, Arthur Rhein

BOCA RATON, Fla. – January 30, 2008 – Agilysys, Inc. (Nasdaq: AGYS), a leading provider of innovative IT solutions, announced today it has extended its existing employment agreement with Arthur Rhein, the company’s chairman, president and chief executive officer, consistent with the execution of the company’s strategic plan and previously communicated financial goals. Rhein’s employment agreement was extended for an additional year, from April 1, 2009 to March 31, 2010, at his current salary, and includes a grant of 70,000 performance shares vesting solely on the achievement of financial targets established for the executive officer long-term incentive plan.

The Board of Directors indicated the extension demonstrates its strong endorsement of Rhein’s leadership, and the successful track record of the management team, in strategically transforming the business and profitably redeploying the company’s asset base to seize growth opportunities and generate shareholder value.

Rhein was named president and chief executive officer in April 2002 and chairman in April 2003. Under his leadership, the company has implemented a series of acquisitions and divestitures to move higher up the IT value scale where it can further differentiate itself and realize higher margins.

In March 2007, the company divested its KeyLink Systems Distribution Business. Management has made significant progress toward its aggressive financial goals stated at the time of the divestiture. These goals include doubling sales to $1 billion by the end of fiscal 2009 (which ends March 31, 2009) and tripling sales to $1.5 billion by fiscal 2010, achieving gross margins in excess of 20% and EBITDA margins of 6%. As a result of strong organic growth and the four acquisitions the company has completed since January 2007, its annual revenue run rate is now approximately $850 million.

Interested parties can review details of the extension agreement by consulting the Form 8-K filed today with the Securities and Exchange Commission.

Forward-Looking Language
Portions of this release, particularly the statements that are not historical facts, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current assumptions and expectations, and are subject to risks and uncertainties, many of which are beyond the control of Agilysys. Many factors could cause Agilysys’ actual results to differ materially from those anticipated by the forward-looking statements. These factors include those referenced in the Annual Report on Form 10-K or as may be described from time to time in Agilysys’ subsequent SEC filings.

Potential factors that could cause actual results to differ materially from those expressed or implied by such statements include, but are not limited to, those relating to Agilysys’ anticipated revenue gains, sales volume, margin improvements, cost savings, and new product introductions.

Other associated risks include geographic factors, political and economic risks, the actions of Agilysys’ competitors, changes in economic or industry conditions or in the markets served by Agilysys, and the ability to appropriately integrate acquisitions, strategic alliances, and joint ventures.

In addition, this release contains time-sensitive information and reflects management’s best analysis only as of the date of this release. Agilysys does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release. Information on the potential factors that could affect Agilysys’ actual results of operations is included in its filings with the SEC, including, but not limited to, its Annual Report on Form 10-K for the fiscal year ended March 31, 2007. Interested persons can obtain it free at the SEC’s website, which is located at www.sec.gov.

About Agilysys, Inc.
Agilysys is a leading provider of innovative IT solutions to corporate and public-sector customers, with special expertise in select markets, including retail and hospitality. The company uses technology – including hardware, software and services – to help customers resolve their most complicated IT needs. The company possesses expertise in enterprise architecture and high availability, infrastructure optimization, storage and resource management, identity management and business continuity; and provides industry-specific software, services and expertise to the retail and hospitality markets. Headquartered in Boca Raton, Fla., Agilysys operates extensively throughout North America, with additional sales offices in the United Kingdom and China. For more information, visit http://www.agilysys.com.

Contact: 

Martin Ellis
Executive Vice President, Treasurer and Chief Financial Officer
Agilysys, Inc.
561-999-8780
martin.ellis@agilysys.com

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